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12/19/2019
Thursday, December 19, 2019 6:00 PM City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 Main Library - Council Chambers City Council Meeting Agenda December 19, 2019City Council Meeting Agenda Welcome. We are glad to have you join us. If you wish to address the Council, please complete a Comment Card. Comment Cards are on the right-hand side of the dais by the City Clerk. When recognized, please hand your card to the Clerk, approach the podium and state your name. Persons speaking before the City Council shall be limited to 3 minutes unless otherwise noted under Public Hearings. For other than "Citizens to be heard regarding items not on the Agenda," a spokesperson for a group may speak for 3 minutes plus an additional minute for each person in the audience that waives their right to speak, up to a maximum of 10 minutes. Prior to the item being presented, please obtain the form to designate a spokesperson from the City Clerk. Up to 60 minutes of public comment will be allowed for an agenda item. No person shall speak more than once on the same subject unless granted permission by the City Council. The City of Clearwater strongly supports and fully complies with the Americans with Disabilities Act (ADA). Please advise us at least 48 hours prior to the meeting if you require special accommodations at 727-562-4090. Assisted Listening Devices are available. Kindly refrain from using cell phones and electronic devices during the meeting. 1. Call to Order 2. Invocation 3. Pledge of Allegiance 4. Special recognitions and Presentations (Proclamations, service awards, or other special recognitions. Presentations by governmental agencies or groups providing formal updates to Council will be limited to ten minutes.) 4.1 December Service Awards 4.2 The Arc Tampa Bay Foundation’s Festival of Trees - Madison Orr Hauenstein, Executive Director; Kiersten Finchum, Event Co-Chair; Kim Kurey, Event Co-Chair 4.3 Recognition of Human Resources Director Jennifer Poirrier as a 2019 People First Honoree - Bill Horne, City Manager 4.4 2019 Citizen Satisfaction Survey - Joelle Castelli, Public Communications Director 5. Approval of Minutes 5.1 Approve the minutes of the December 5, 2019 City Council Meeting as submitted in written summation by the City Clerk. 6. Citizens to be heard re items not on the agenda Page 2 City of Clearwater Printed on 12/19/2019 December 19, 2019City Council Meeting Agenda 7. Consent Agenda The Consent Agenda contains normal, routine business items that are very likely to be approved by the City Council by a single motion. These items are not discussed, and may all be approved as recommended on the staff reports. Council questions on these items were answered prior to the meeting. The Mayor will provide an opportunity for a Councilmember or a member of the public to ask that an item be pulled from the Consent Agenda for discussion. Items pulled will receive separate action. All items not removed from the Consent Agenda will be approved by a single motion of the council. 7.1 Award a contract for Gas Utility rate studies and other professional services for the five-year period ending December 31, 2024, to Raftelis Financial Consultants, Inc. (Raftelis) for a not-to-exceed amount of $184,000 and authorize the appropriate officials to execute same. (consent) 7.2 Approve settlement of automobile bodily injury liability claim 18-00162 for payment of $95,000, inclusive of attorney fees and costs, for Zoe Applegate, with a general release of all claims and authorize the appropriate officials to execute same. (consent) 7.3 Authorize a sole source award for a renewal subscription to the ISO ClaimSearch for Non-Insurers Database, effective January 1, 2020 through December 31, 2020, for a not-to-exceed total of $15,000 for the annual membership fee and as-needed claim search fees, pursuant to Clearwater Code of Ordinances Section 2.564(1)(b) and authorize the appropriate officials to execute same. (consent) 7.4 Approve a Facility Encroachment Agreement with CSX Transportation, Inc. for the installation of an underground natural gas main in the CSX right-of-way and authorize the appropriate officials to execute same. (consent) 7.5 Authorize a purchase order to Angelo’s Recycled Materials of St. Petersburg, FL, for debris disposal (yard trash, Class III, and construction and demolition debris), in the not-to-exceed amount of $275,000 for the period of December 1, 2019 through September 30, 2021, with one additional two-year renewal term at an annual not-to-exceed amount of $150,000 at the City’s discretion, pursuant to Clearwater Code of Ordinances Section 2.564(1)(d) Cooperative Contracts and authorize the appropriate officials to execute same. (consent) 7.6 Authorize award of Invitation to Bid 03-20, Landscaping Maintenance Services, to Botanical Dimensions, Dean’s Environmental, Earth Designs, Gamco Properties, MMM Property Maintenance, and Valleycrest Landscape, for a nine month not-to-exceed amount of $500,000 for the period of January 1, 2020 through September 30, 2020, with the option for two one-year term extensions and authorize the appropriate officials to execute same. (consent) Page 3 City of Clearwater Printed on 12/19/2019 December 19, 2019City Council Meeting Agenda 7.7 Authorize award of Request for Proposal 31-19, Special Events Production Services, to American Mobile Staging of Schaumburg, IL and RCS Corporation of Clearwater, FL in an annual not to exceed amount of $100,000 with three one-year renewal options at the City's discretion and authorize the appropriate officials to execute same. (consent) 7.8 Approve a professional services agreement and design work order with Wannemacher Jenson Architects, Inc. (WJA) of St. Petersburg, FL for the design of Fire Station 46 (18-0028-FD) in the amount of $734,109 and authorize the appropriate officials to execute same. (consent) 7.9 Approve a proposal from Precision Sidewalk Safety Corporation of Ocala, Florida for Sidewalk Grinding (16-0016-EN) in the amount of $250,000.00 in accordance with Clearwater Code of Ordinances, Section 2.564 (1)(d) Other Government Entities Bids and authorize the appropriate officials to execute same. (consent) 7.10 Approve Request for Qualifications (RFQ) 52-19 agreement with Construction Manager at Risk (CMAR) Skanska USA Building, Inc., of Tampa, FL and Preconstruction Proposal, in the amount of $425,000, for Imagine Clearwater and authorize the appropriate officials to execute same. (consent) 7.11 Authorize award of Invitation to Bid 01-20, Code Inspection and Plan Review Services to Quorum Services of Tampa, FL, Joe Payne Inc., of Tampa, FL and NOVA Engineering and Environmental, LLC of Tampa, FL for an annual not-to-exceed amount of $500,000.00, effective January 1, 2020 through December 31, 2020, with the option for two one-year term extensions, and authorize the appropriate officials to execute same. (consent) 7.12 Authorize the piggyback of Florida State Contract 4323000-NASPO-16-ACS-SVAR, Software Value Added Reseller (SVAR) Services, to CDW-G, of Vernon Hills, IL, in the amount of $460,581, pursuant to Clearwater Code of Ordinances Section 2.564(1)(d) Exceptions to Bid - Other Government Entities’ Bids and authorize lease purchase under the City's Master Lease Purchase Agreement or internal financing via an interfund loan from the Capital Improvement Fund, whichever is deemed to be in the City's best interests and authorize the appropriate officials to execute same. (consent) 7.13 Approve the Interlocal Agreement between Pinellas County and the Cities of Clearwater, Dunedin, Gulfport, Largo, Oldsmar, Pinellas Park, Safety Harbor, St. Petersburg, and Tarpon Springs for funding the Tampa Bay Estuary Program match of a Florida Department of Environmental Protection Grant to develop a social marketing campaign focused on reducing sanitary sewer overflows and authorize the appropriate officials to execute same. (consent) Page 4 City of Clearwater Printed on 12/19/2019 December 19, 2019City Council Meeting Agenda 7.14 Authorize the award of Invitation to Bid 12-20, Liquid Aluminum Sulfate, to Thatcher Chemical of Florida, Inc., in an annual not-to-exceed amount of $235,000, with the option for two one-year extensions at the City’s discretion and authorize the appropriate officials to execute same. (consent) Public Hearings - Not before 6:00 PM 8. Administrative Public Hearings - Presentation of issues by City staff - Statement of case by applicant or representative (5 min.) - Council questions - Comments in support or opposition (3 min. per speaker or 10 min maximum as spokesperson for others that have waived their time) - Council questions - Final rebuttal by applicant or representative (5 min.) - Council disposition 8.1 Declare surplus, for the purpose of donation for development of affordable housing, two parcels of real property located at 1002 LaSalle Street and 1011 LaSalle Street; approve the Real Property Donation Agreement between the City and Habitat for Humanity of Pinellas County, Inc., and authorize the appropriate officials to execute same, together with all other instruments required to affect closing. (APH) 8.2 Declare surplus, for the purpose of donation for development of affordable housing, real property located at 912 Nicholson Street, approve the Real Property Donation Agreement between the city and Emerge Community Economic Development Corporation, and authorize the appropriate officials to execute same, together with all other instruments required to affect closing. (APH) 8.3 Approve the City of Clearwater’s Fiscal Year 2018-2019 Consolidated Annual Performance and Evaluation Report (CAPER). (APH) 8.4 Approve the request from Edgewater Valor Capital LLC, (Applicant) to vacate a portion of a 5 foot-wide platted utility easement as recorded in Plat Book 31, Page 12 of the Public Records of Pinellas County, Florida, and a portion of a 10 foot-wide platted alley, as recorded in Plat Book 4, Page 56 of the Public Records of Pinellas County, Florida, and pass Ordinance 9352-20 on first reading. (VAC2020-01) Page 5 City of Clearwater Printed on 12/19/2019 December 19, 2019City Council Meeting Agenda 8.5 Approve amendments to the Community Development Code to adopt the International Property Maintenance Code with Certain Local Amendments in Section 3-1502 in place of Chapter 47, Article VII, Unsafe Buildings and Systems and Chapter 49, Housing Code and expanding the powers of the Building/Flood Board of Adjustment and Appeals to hear violations and appeals related to the International Property Maintenance Code, and pass Ordinance 9349-20 on first reading. (TA2019-10005) 9. Second Readings - Public Hearing 9.1 Adopt Ordinance 9343-19 on second reading, annexing certain real property whose post office address is 1725 Owen Drive, Clearwater, Florida 33759, into the corporate limits of the city and redefining the boundary lines of the city to include said addition. 9.2 Adopt Ordinance 9344-19 on second reading, amending the future land use element of the Comprehensive Plan to designate the land use for certain real property whose post office address is 1725 Owen Drive, Clearwater, Florida 33759, upon annexation into the City of Clearwater, as Residential Low (RL) and Water/Drainage Feature Overlay. 9.3 Adopt Ordinance 9345-19 on second reading, amending the Zoning Atlas of the city by zoning certain real property whose post office address 1725 Owen Drive, Clearwater, Florida 33759, upon annexation into the City of Clearwater, as Low Medium Density Residential (LMDR). 9.4 Adopt Ordinance 9351-19 on second reading, vacating a 20 foot wide alley described as all of the platted alley abutting Lots 6 and 7 of Block D, as described in the plat titled “McVeigh Subdivision,” as recorded in Plat Book 30 Page 83 of the Public Records of Pinellas County, Florida. 9.5 Adopt Ordinance 9353-19 on second reading, submitting to the city electors proposed amendments to the City Charter amending Section 2.01(d)(5) to increase the size of city owned real property that can be donated or sold for less than fair market value to five acres for the purpose of affordable housing and to allow for the donation of sale for less than market value uneconomic remainders to adjacent property owners. 9.6 Adopt Ordinance 9354-19 on second reading, submitting to the city electors amendments to the City Charter making non-substantive organizational amendments; deleting Section 2.01(d)(8) because it has expired; amending Section 2.06(c) to be consistent with state law; amending section 3.03(f) to require the City Manager to submit to the council a report on the state of the city every November. Page 6 City of Clearwater Printed on 12/19/2019 December 19, 2019City Council Meeting Agenda 9.7 Adopt Ordinance 9355-19 on second reading, submitting to the city electors amendments to the City Charter, amending Section 7.02 to require the City Council to appoint a Charter Review Committee at least every eight years. 10. City Manager Reports 10.1 Amend the Clearwater Code of Ordinances, Chapter 25 - Public Transportation Carriers, Article I - Public Conveyances to define commercial megacycles and definitions to establish standards for commercial megacycles, to require a license for commercial mega cycles to be operated in the city and to add penalties and pass Ordinance 9356-20 on first reading. 10.2 Authorize the negotiated sale of not to exceed $25,000,000 Water and Sewer Revenue Refunding Bonds, Series 2020 and adopt Resolution 19-37. 10.3 Accept a Natural Gas Easement over, under, across and through a portion of property conveyed by NNP-BEXLEY, LLC, whose principal address is 777 South Harbour Island Blvd, Tampa, FL, given in consideration of receipt of $1.00 and the benefits to be derived therefrom, and adopt Resolution 19-41. 10.4 Accept a Natural Gas Easement over, under, across and through a portion of property conveyed by Bryan Craig Bexley, Successor Trustee of the Bexley Ranch Land Trust, whose principal address is P.O. Box 10, Sumterville, FL, given in consideration of receipt of $1.00 and the benefits to be derived therefrom, and adopt Resolution 19-19. 10.5 Approve co-sponsorship and waiver of requested city fees and service charges for Fiscal Year 2019/20 for a new event sponsored by Clearwater High School, the Unity Walk, in the amount of $3,330 and authorize the appropriate officials to execute same. 10.6 Imagine Clearwater - Public Input Survey 11. City Attorney Reports 12. Closing comments by Councilmembers (limited to 3 minutes) 13. Closing Comments by Mayor 14. Adjourn Page 7 City of Clearwater Printed on 12/19/2019 Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7223 Agenda Date: 12/19/2019 Status: Agenda ReadyVersion: 1 File Type: Special recognitions and Presentations (Proclamations, service awards, or other special recognitions. Presentations by government agencies or groups providing formal updates to Council will be limited to ten minutes.) In Control: Council Work Session Agenda Number: 4.1 SUBJECT/RECOMMENDATION: December Service Awards SUMMARY: December Employee of the Month Kelly Calhoun Page 1 City of Clearwater Printed on 12/19/2019 Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7219 Agenda Date: 12/19/2019 Status: Agenda ReadyVersion: 1 File Type: Special recognitions and Presentations (Proclamations, service awards, or other special recognitions. Presentations by government agencies or groups providing formal updates to Council will be limited to ten minutes.) In Control: Council Work Session Agenda Number: 4.2 SUBJECT/RECOMMENDATION: The Arc Tampa Bay Foundation’s Festival of Trees - Madison Orr Hauenstein, Executive Director; Kiersten Finchum, Event Co-Chair; Kim Kurey, Event Co-Chair SUMMARY: APPROPRIATION CODE AND AMOUNT: USE OF RESERVE FUNDS: Page 1 City of Clearwater Printed on 12/19/2019 Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7241 Agenda Date: 12/19/2019 Status: Agenda ReadyVersion: 1 File Type: Special recognitions and Presentations (Proclamations, service awards, or other special recognitions. Presentations by government agencies or groups providing formal updates to Council will be limited to ten minutes.) In Control: Council Work Session Agenda Number: 4.3 SUBJECT/RECOMMENDATION: Recognition of Human Resources Director Jennifer Poirrier as a 2019 People First Honoree - Bill Horne, City Manager SUMMARY: APPROPRIATION CODE AND AMOUNT: USE OF RESERVE FUNDS: Page 1 City of Clearwater Printed on 12/19/2019 Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7258 Agenda Date: 12/19/2019 Status: Agenda ReadyVersion: 1 File Type: Special recognitions and Presentations (Proclamations, service awards, or other special recognitions. Presentations by government agencies or groups providing formal updates to Council will be limited to ten minutes.) In Control: Council Work Session Agenda Number: 4.4 SUBJECT/RECOMMENDATION: 2019 Citizen Satisfaction Survey - Joelle Castelli, Public Communications Director SUMMARY: APPROPRIATION CODE AND AMOUNT: USE OF RESERVE FUNDS: Page 1 City of Clearwater Printed on 12/19/2019 2955 Valmont Road Suite 300 777 North Capitol Street NE Suite 500 Boulder, Colorado 80301 Washington, DC 20002 n-r-c.com • 303-444-7863 icma.org • 800-745-8780 Clearwater, FL Trends over Time 2019 1 Summary The National Community Survey™ (The NCS™) is a collaborative effort between National Research Center, Inc. (NRC) and the International City/County Management Association (ICMA). The survey and its administration are standardized to assure high quality research methods and directly comparable results across The NCS communities. The NCS captures residents’ opinions within the three pillars of a community (Community Characteristics, Governance and Participation) across eight central facets of community (Safety, Mobility, Natural Environment, Built Environment, Economy, Recreation and Wellness, Education and Enrichment and Community Engagement). This report discusses trends over time, comparing the 2019 ratings for the City of Clearwater to its previous survey results in 2008, 2014 and 2017. Additional reports and technical appendices are available under separate cover. Trend data for Clearwater represent important comparison data and should be examined for improvements or declines. Deviations from stable trends over time, especially, represent opportunities for understanding how local policies, programs or public information may have affected residents’ opinions. Meaningful differences between survey years have been noted within the following tables as being “higher” or “lower” if the differences are greater than six percentage points between the 2017 and 2019 surveys, otherwise the comparisons between 2017 and 2019 are noted as being “similar.” Additionally, benchmark comparisons for all survey years are presented for reference. Changes in the benchmark comparison over time can be impacted by various trends, including varying survey cycles for the individual communities that comprise the benchmarks, regional and national economic or other events, as well as emerging survey methodologies. Overall, ratings in Clearwater for 2019 generally remained stable. Of the 123 items for which comparisons were available, 97 items were rated similarly in 2017 and 2019, 20 items showed a decrease in ratings and six showed an increase in ratings. Notable trends over time included the following: • Various Community Characteristics and aspects of Governance within the facet of Economy declined in 2019 compared to 2017 including the quality of business and services, Clearwater as a place to work and economic development services, among others. Residents gave lower quality ratings to the cost of living and affordable quality housing in Clearwater in 2019 compared to 2017 and more residents indicated they were under housing cost stress. • While fewer residents reported carpooling in 2019 compared to 2017, the quality ratings for ease of travel by car and by public transportation increased. • Fewer residents gave high marks to Clearwater as a place to live and fewer residents would recommend Clearwater to others in 2019 compared to 2017. The National Community Survey™ 2 Table 1: Community Characteristics General Percent rating positively (e.g., excellent/good) 2019 rating compared to 2017 Comparison to benchmark 2008 2014 2017 2019 2008 2014 2017 2019 Overall quality of life 75% 78% 84% 79% Similar Similar Similar Similar Similar Overall image 67% 72% 69% 68% Similar Similar Similar Similar Similar Place to live 83% 85% 90% 83% Lower Similar Similar Similar Similar Neighborhood 76% 74% 80% 74% Similar Similar Similar Similar Similar Place to raise children 60% 68% 71% 68% Similar Much lower Similar Similar Similar Place to retire 67% 75% 81% 80% Similar Higher Similar Higher Higher Overall appearance 67% 72% 75% 72% Similar Similar Similar Similar Similar Table 2: Community Characteristics by Facet Percent rating positively (e.g., excellent/good, very/somewhat safe) 2019 rating compared to 2017 Comparison to benchmark 2008 2014 2017 2019 2008 2014 2017 2019 Safety Overall feeling of safety NA 69% 71% 74% Similar NA Similar Similar Similar Safe in neighborhood 92% 90% 91% 88% Similar Similar Similar Similar Similar Safe downtown/commercial area 77% 68% 74% 73% Similar Lower Lower Lower Lower Mobility Overall ease of travel NA 57% 59% 63% Similar NA Lower Similar Similar Paths and walking trails 65% 65% 65% 65% Similar Higher Similar Similar Similar Ease of walking 51% 56% 52% 54% Similar Lower Similar Similar Similar Travel by bicycle 44% 48% 43% 45% Similar Similar Similar Similar Similar Travel by public transportation NA 33% 27% 35% Higher NA Lower Similar Similar Travel by car 42% 43% 45% 52% Higher Much lower Lower Lower Similar Public parking NA 35% 32% 37% Similar NA Lower Lower Lower Traffic flow 29% 29% 34% 36% Similar Much lower Lower Similar Similar Natural Environment Overall natural environment 61% 73% 70% 72% Similar Lower Similar Similar Similar Cleanliness 64% 71% 73% 72% Similar Lower Similar Similar Similar Air quality 59% 72% 74% 71% Similar Similar Similar Similar Similar Built Environment Overall built environment NA 52% 50% 50% Similar NA Similar Similar Similar New development in Clearwater 50% 40% 43% 43% Similar Lower Lower Similar Similar Affordable quality housing 29% 46% 38% 27% Lower Similar Similar Similar Similar Public places NA 64% 67% 63% Similar NA Similar Similar Similar Economy Overall economic health NA 54% 64% 61% Similar NA Similar Similar Similar Vibrant downtown/commercial area NA 30% 33% 32% Similar NA Lower Lower Lower Business and services 60% 59% 65% 53% Lower Similar Similar Similar Similar Cost of living NA 41% 43% 35% Lower NA Similar Similar Similar Shopping opportunities 75% 76% 77% 72% Similar Much higher Higher Higher Higher The National Community Survey™ 3 Percent rating positively (e.g., excellent/good, very/somewhat safe) 2019 rating compared to 2017 Comparison to benchmark 2008 2014 2017 2019 2008 2014 2017 2019 Employment opportunities 34% 35% 47% 44% Similar Similar Similar Similar Similar Place to visit NA 88% 90% 87% Similar NA Higher Much higher Higher Place to work 50% 58% 69% 62% Lower Lower Similar Similar Similar Recreation and Wellness Health and wellness NA 74% 70% 70% Similar NA Similar Similar Similar Mental health care NA 50% 43% 43% Similar NA Similar Similar Similar Preventive health services 51% 63% 67% 63% Similar Similar Similar Similar Similar Health care 46% 64% 64% 56% Lower Similar Similar Similar Similar Food 59% 69% 71% 68% Similar Similar Similar Similar Similar Recreational opportunities 74% 74% 76% 69% Lower Much higher Similar Similar Similar Fitness opportunities NA 74% 72% 69% Similar NA Similar Similar Similar Education and Enrichment Education and enrichment opportunities NA 64% 60% 59% Similar NA Similar Similar Similar Cultural/arts/music activities 62% 66% 66% 64% Similar Higher Similar Similar Similar Adult education NA 59% 55% 57% Similar NA Similar Similar Similar K-12 education 54% 51% 57% 53% Similar Much lower Lower Lower Lower Child care/preschool 34% 54% 51% 49% Similar Lower Similar Similar Similar Community Engagement Neighborliness NA 52% 55% 56% Similar NA Similar Similar Similar Openness and acceptance 56% 57% 58% 56% Similar Similar Similar Similar Similar Opportunities to participate in community matters 59% 58% 62% 55% Lower Similar Similar Similar Similar Opportunities to volunteer 76% 72% 76% 69% Lower Similar Similar Similar Similar Table 3: Governance General Percent rating positively (e.g., excellent/good) 2019 rating compared to 2017 Comparison to benchmark 2008 2014 2017 2019 2008 2014 2017 2019 Services provided by Clearwater 70% 75% 77% 70% Lower Similar Similar Similar Similar Customer service 75% 71% 73% 69% Similar Similar Similar Similar Similar Value of services for taxes paid 48% 48% 53% 48% Similar Much lower Similar Similar Similar Overall direction 47% 50% 52% 47% Similar Much lower Similar Similar Similar Welcoming citizen involvement 43% 46% 50% 47% Similar Much lower Similar Similar Similar Confidence in City government NA 44% 49% 44% Similar NA Similar Similar Similar Acting in the best interest of Clearwater NA 47% 48% 46% Similar NA Similar Similar Similar Being honest NA 49% 52% 46% Similar NA Similar Similar Similar Treating all residents fairly NA 45% 50% 46% Similar NA Similar Similar Similar Services provided by the Federal Government 40% 40% 38% 46% Higher Similar Similar Similar Similar The National Community Survey™ 4 Table 4: Governance by Facet Percent rating positively (e.g., excellent/good) 2019 rating compared to 2017 Comparison to benchmark 2008 2014 2017 2019 2008 2014 2017 2019 Safety Police 76% 76% 81% 76% Similar Similar Similar Similar Similar Fire 92% 90% 90% 91% Similar Similar Similar Similar Similar Ambulance/EMS 88% 90% 90% 88% Similar Similar Similar Similar Similar Crime prevention 59% 60% 66% 67% Similar Similar Similar Similar Similar Fire prevention 70% 67% 75% 76% Similar Lower Similar Similar Similar Emergency preparedness 73% 73% 72% 75% Similar Much higher Similar Similar Similar Mobility Traffic enforcement 59% 55% 60% 57% Similar Lower Similar Similar Similar Street repair 51% 40% 45% 46% Similar Similar Similar Similar Similar Street cleaning 63% 58% 65% 67% Similar Similar Similar Similar Similar Sidewalk maintenance 57% 53% 50% 52% Similar Similar Similar Similar Similar Traffic signal timing 42% 35% 38% 42% Similar Lower Lower Similar Similar Natural Environment Garbage collection 89% 84% 79% 76% Similar Much higher Similar Similar Similar Recycling 77% 84% 78% 74% Similar Higher Similar Similar Similar Yard waste pick-up 79% 82% 75% 80% Similar Much higher Similar Similar Similar Drinking water 50% 52% 49% 55% Higher Much lower Lower Lower Lower Open space NA 53% 51% 53% Similar NA Similar Similar Similar Built Environment Storm drainage 60% 67% 59% 60% Similar Higher Similar Similar Similar Sewer services 69% 72% 68% 68% Similar Similar Similar Similar Similar Clearwater Gas utility NA 75% 60% 75% Higher NA Similar Lower Similar Utility billing NA 60% 70% 58% Lower NA Similar Similar Similar Land use, planning and zoning 38% 43% 44% 42% Similar Similar Similar Similar Similar Code enforcement 42% 37% 45% 40% Similar Similar Similar Similar Similar Cable television 68% 55% 47% 49% Similar Much higher Similar Similar Similar Economy Economic development 36% 40% 48% 40% Lower Lower Similar Similar Similar Recreation and Wellness City parks 82% 76% 81% 78% Similar Higher Similar Similar Similar Recreation programs 74% 76% 74% 71% Similar Higher Similar Similar Similar Recreation centers 76% 77% 75% 72% Similar Higher Similar Similar Similar Education and Enrichment Special events NA 66% 68% 63% Similar NA Similar Similar Similar Public libraries 88% 81% 83% 86% Similar Higher Similar Similar Similar Community Engagement Public information 71% 63% 70% 71% Similar Higher Similar Similar Similar The National Community Survey™ 5 Table 5: Participation General Percent rating positively (e.g., always/sometimes, more than once a month, yes) 2019 rating compared to 2017 Comparison to benchmark 2008 2014 2017 2019 2008 2014 2017 2019 Sense of community 47% 49% 46% 44% Similar Much lower Lower Similar Lower Recommend Clearwater 82% 85% 88% 81% Lower Similar Similar Similar Similar Remain in Clearwater 84% 83% 85% 84% Similar Similar Similar Similar Similar Contacted Clearwater employees 53% 40% 46% 45% Similar Much lower Similar Similar Similar Table 6: Participation by Facet Percent rating positively (e.g., always/sometimes, more than once a month, yes) 2019 rating compared to 2017 Comparison to benchmark 2008 2014 2017 2019 2008 2014 2017 2019 Safety Stocked supplies for an emergency NA 57% 49% 82% Higher NA Much higher Higher Much higher Did NOT report a crime NA 74% 75% 79% Similar NA Similar Similar Similar Was NOT the victim of a crime 84% 87% 88% 88% Similar Similar Similar Similar Similar Mobility Carpooled instead of driving alone NA 38% 35% 27% Lower NA Similar Similar Lower Walked or biked instead of driving NA 58% 57% 52% Similar NA Similar Similar Similar Natural Environment Conserved water NA 88% 91% 82% Lower NA Similar Similar Similar Made home more energy efficient NA 80% 75% 79% Similar NA Similar Similar Similar Recycled at home 80% 85% 87% 78% Lower Similar Similar Similar Similar Built Environment Did NOT observe a code violation NA 47% 54% 47% Lower NA Similar Similar Similar NOT under housing cost stress NA 67% 69% 59% Lower NA Similar Similar Similar Economy Purchased goods or services in Clearwater NA 96% 97% 91% Similar NA Similar Similar Similar Economy will have positive impact on income 10% 24% 33% 38% Similar Much lower Similar Similar Similar Work in Clearwater NA 43% 45% 38% Lower NA Similar Similar Similar Recreation and Wellness Used Clearwater recreation centers 55% 58% 54% 52% Similar Similar Similar Similar Similar Visited a City park 86% 79% 81% 82% Similar Similar Similar Similar Similar Ate 5 portions of fruits and vegetables NA 83% 81% 78% Similar NA Similar Similar Similar Participated in moderate or vigorous physical activity NA 88% 84% 81% Similar NA Similar Similar Similar In very good to excellent health NA 61% 61% 62% Similar NA Similar Similar Similar Education and Enrichment Used Clearwater public libraries 76% 64% 51% 53% Similar Higher Similar Lower Similar Attended a City-sponsored event NA 47% 49% 45% Similar NA Similar Similar Similar The National Community Survey™ 6 Percent rating positively (e.g., always/sometimes, more than once a month, yes) 2019 rating compared to 2017 Comparison to benchmark 2008 2014 2017 2019 2008 2014 2017 2019 Community Engagement Campaigned for an issue, cause or candidate NA 22% 25% 20% Similar NA Similar Similar Similar Contacted Clearwater elected officials NA 15% 20% 15% Similar NA Similar Similar Similar Volunteered 38% 40% 35% 37% Similar Lower Similar Similar Similar Participated in a club 32% 27% 24% 28% Similar Similar Similar Similar Similar Talked to or visited with neighbors NA 92% 89% 88% Similar NA Similar Similar Similar Done a favor for a neighbor NA 83% 83% 83% Similar NA Similar Similar Similar Attended a local public meeting 24% 14% 20% 16% Similar Lower Similar Similar Similar Watched a local public meeting 56% 31% 25% 27% Similar Much higher Similar Similar Similar Read or watched local news NA 90% 87% 81% Lower NA Similar Similar Similar Voted in local elections NA 82% 79% 80% Similar NA Similar Similar Similar 2955 Valmont Road Suite 300 777 North Capitol Street NE Suite 500 Boulder, Colorado 80301 Washington, DC 20002 n-r-c.com • 303-444-7863 icma.org • 800-745-8780 Clearwater, FL Community Livability Report 2019 The National Community Survey™ © 2001-2019 National Research Center, Inc. The NCS™ is presented by NRC in collaboration with ICMA. NRC is a charter member of the AAPOR Transparency Initiative, providing clear disclosure of our sound and ethical survey research practices. Contents About .............................................................................................. 1 Quality of Life in Clearwater ............................................................. 2 Community Characteristics ............................................................... 3 Governance ..................................................................................... 5 Participation .................................................................................... 7 Special Topics .................................................................................. 9 Conclusions ................................................................................... 13 1 About The National Community Survey™ (The NCS™) report is about the “livability” of Clearwater. The phrase “livable community” is used here to evoke a place that is not simply habitable, but that is desirable. It is not only where people do live, but where they want to live. Great communities are partnerships of the government, private sector, community-based organizations and residents, all geographically connected. The NCS captures residents’ opinions within the three pillars of a community (Community Characteristics, Governance and Participation) across eight central facets of community (Safety, Mobility, Natural Environment, Built Environment, Economy, Recreation and Wellness, Education and Enrichment and Community Engagement). The Community Livability Report provides the opinions of a representative sample of 504 residents of the City of Clearwater. The margin of error around any reported percentage is 4% for all respondents. The full description of methods used to garner these opinions can be found in the Technical Appendices provided under separate cover. Communitiesare partnerships among... Residents Community-based organizations Government Private sector 2 Quality of Life in Clearwater Most residents rated the quality of life in Clearwater as excellent or good. This rating was similar to the national comparison (see Appendix B of the Technical Appendices provided under separate cover). Shown below are the eight facets of community. The color of each community facet summarizes how residents rated it across the three sections of the survey that represent the pillars of a community – Community Characteristics, Governance and Participation. When most ratings across the three pillars were higher than the benchmark, the color for that facet is the darkest shade; when most ratings were lower than the benchmark, the color is the lightest shade. A mix of ratings (higher and lower than the benchmark) results in a color between the extremes. In addition to a summary of ratings, the image below includes one or more stars to indicate which community facets were the most important focus areas for the community. As in 2014 and 2017, residents identified Safety and Economy as priorities for the Clearwater community in the coming two years. Ratings for all eight facets of community livability were positive and similar to other communities across the nation. This overview of the key aspects of community quality provides a quick summary of where residents see exceptionally strong performance and where performance offers the greatest opportunity for improvement. Linking quality to importance offers community members and leaders a view into the characteristics of the community that matter most and that seem to be working best. Details that support these findings are contained in the remainder of this Livability Report, starting with the ratings for Community Characteristics, Governance and Participation and ending with results for Clearwater’s unique questions. Excellent26% Good54%Fair18% Poor 3% Overall Quality of Life Education and Enrichment Community Engagement Mobility Natural Environment Recreation and Wellness Built Environment Safety Economy Legend Higher than national benchmark Similar to national benchmark Lower than national benchmark Most important 3 Community Characteristics What makes a community livable, attractive and a place where people want to be? Overall quality of community life represents the natural ambience, services and amenities that make for an attractive community. How residents rate their overall quality of life is an indicator of the overall health of a community. In the case of Clearwater, 83% rated the City as an excellent or good place to live. Respondents’ ratings of Clearwater as a place to live similar to ratings in other communities across the nation. In addition to rating the City as a place to live, respondents rated several aspects of community quality including Clearwater as a place to raise children and to retire, their neighborhood as a place to live, the overall image or reputation of Clearwater and its overall appearance. Overall, about 7 in 10 or more residents felt favorably about each of these aspects of the community, providing ratings that tended to be similar to benchmark comparisons. About 8 in 10 respondents gave high marks to Clearwater as a place to retire, which were higher than evaluations provided in communities across the U.S. However, residents’ scores for Clearwater as a place to live decreased in 2019 compared to 2017, returning to levels seen in prior years (see Trends over Time report provided under a separate cover for more details). Delving deeper into Community Characteristics, survey respondents rated over 40 features of the community within the eight facets of Community Livability. Generally, ratings for community characteristics in Clearwater were strong and similar to those given in comparison communities. About 7 in 10 or more of residents gave positive marks to all aspects of Safety and Natural Environment. Economy-related aspects were mixed with as many as 87% of residents offering positive marks to Clearwater as a place to visit (a rating higher than the national average) while only one-third of residents offered positive marks to vibrant downtown/commercial area (lower than the national average) and cost of living (similar to the national average). Mobility-related ratings were also mixed with two-thirds of residents giving positive marks to overall ease of travel and paths and walking trails and one-third giving positive marks to traffic flow, public parking and ease of travel by public transportation. 80%68%74%68%72% Overall image Neighborhood Place to raise children Place to retire Overall appearance Higher Similar Lower Comparison to national benchmarkPercent rating positively (e.g., excellent/good) Excellent35% Good48% Fair15% Poor 2% Place to Live The National Community Survey™ 4 Figure 1: Aspects of Community Characteristics 87% 72% 69% 55% 56% 56% 49% 57% 64% 59% 69% 69% 68% 56% 63% 43% 70% 62% 44% 35% 53% 61% 63% 27% 43% 50% 71% 72% 72% 36% 52% 35% 45% 54% 65% 63% 88% 74% 53% 32% 37% 73% Opportunities to volunteer Opportunities to participate in community matters Openness and acceptance Neighborliness COMMUNITY ENGAGEMENT Child care/preschool K-12 education Adult education Cultural/arts/music activities Education and enrichment opportunities EDUCATION AND ENRICHMENT Fitness opportunities Recreational opportunities Food Health care Preventive health services Mental health care Health and wellness RECREATION AND WELLNESS Place to work Place to visit Employment opportunities Shopping opportunities Cost of living Business and services Vibrant downtown/commercial area Overall economic health ECONOMY Public places Affordable quality housing New development in Clearwater Overall built environment BUILT ENVIRONMENT Air quality Cleanliness Overall natural environment NATURAL ENVIRONMENT Traffic flow Public parking Travel by car Travel by public transportation Travel by bicycle Ease of walking Paths and walking trails Overall ease of travel MOBILITY Safe downtown/commercial area Safe in neighborhood Overall feeling of safety SAFETY Higher Similar Lower Percent rating positively (e.g., excellent/good, very/somewhat safe) Comparison to national benchmark 5 Governance How well does the government of Clearwater meet the needs and expectations of its residents? The overall quality of the services provided by Clearwater as well as the manner in which these services are provided is a key component of how residents rate their quality of life. Seventy percent of residents gave favorable ratings to the overall quality of services provided by the City of Clearwater, whereas only about 46% assigned excellent or good reviews to the Federal Government. Ratings for both sets of services were similar to national averages; however, the rating for the City of Clearwater decreased in 2019 compared to 2017 while the rating for the Federal government increased. Survey respondents also rated various aspects of Clearwater’s leadership and governance. In general, close to half of Clearwater residents rated each aspect positively. Scores for customer services provided by Clearwater employees was an exception with 7 in 10 residents offering positive scores. All ratings were similar to other communities nationwide. Respondents evaluated over 25 individual services and amenities available in Clearwater. Service ratings in Clearwater were rated positively by at least 4 in 10 residents and all but one service were rated similarly to the national benchmarks (drinking water was rated lower than the national average; however, it was rated higher in 2019 compared to 2017). Safety housed two of the three highest rated services (ambulance/EMS and fire) while Education and Enrichment housed the third (public libraries). The lowest rated services were spread across a few facets: Mobility (traffic signal timing), Built Environment (land use, planning and zoning and code enforcement) and Economy (economic development). When compared to ratings given in 2017, Governance ratings were generally stable. 48%47%47%44%46%46%46% 69% 46% Value of services for taxes paid Overall direction Welcoming citizen involvement Confidence in City government Acting in the best interest of Clearwater Being honest Treating all residents fairly Customer service Services provided by the Federal Government Higher Similar Lower Comparison to national benchmarkPercent rating positively (e.g., excellent/good) Excellent19% Good 51% Fair23% Poor7% Overall Quality of City Services The National Community Survey™ 6 Figure 2: Aspects of Governance 71% 63% 86% 72% 71% 78% 40% 49% 40% 42% 58% 75% 68% 60% 53% 80% 74% 76% 42% 52% 67% 46% 57% 75% 76% 67% 88% 91% 76% 55% Public information COMMUNITY ENGAGEMENT Special events Public libraries EDUCATION AND ENRICHMENT Recreation centers Recreation programs City parks RECREATION AND WELLNESS Economic development ECONOMY Cable television Code enforcement Land use, planning and zoning Utility billing Clearwater Gas utility Sewer services Storm drainage BUILT ENVIRONMENT Open space Drinking water Yard waste pick-up Recycling Garbage collection NATURAL ENVIRONMENT Traffic signal timing Sidewalk maintenance Street cleaning Street repair Traffic enforcement MOBILITY Emergency preparedness Fire prevention Crime prevention Ambulance/EMS Fire Police SAFETY Higher Similar Lower Percent rating positively (e.g., excellent/good) Comparison to national benchmark 7 Participation Are the residents of Clearwater connected to the community and each other? An engaged community harnesses its most valuable resource, its residents. The connections and trust among residents, government, businesses and other organizations help to create a sense of community, a shared sense of membership, belonging and history. Less than half of residents gave excellent or good marks to the sense of community in Clearwater and this was lower than those given in comparison communities. The survey included over 30 activities and behaviors for which respondents indicated how often they participated in or performed each, if at all. Levels of participation tended to vary widely across the different facets, making the comparisons to the benchmarks useful for interpreting the results. Generally, participation rates in Clearwater tended to be similar to those observed in other communities. Clearwater residents were more likely than those who lived elsewhere to have stocked supplies for an emergency (an increased rate in 2019 compared to 2017). However, they were less likely to have carpooled instead of driving alone (a decreased rate in 2019 compared to 2017). 81%84% 45% Recommend Clearwater Remain in Clearwater Contacted Clearwater employees Higher Similar Lower Percent rating positively (e.g., very/somewhat likely, yes) Comparison to national benchmark Excellent10% Good 34% Fair 37% Poor19% Sense of Community The National Community Survey™ 8 Figure 3: Aspects of Participation 82% 80% 81% 27% 16% 83% 88% 28% 37% 15% 20% 45% 53% 62% 81% 78% 82% 52% 38% 38% 91% 59% 47% 78% 79% 82% 52% 88% 79% 27% Voted in local elections Read or watched local news Watched a local public meeting Attended a local public meeting Done a favor for a neighbor Talked to or visited with neighbors Participated in a club Volunteered Contacted Clearwater elected officials Campaigned for an issue, cause or candidate COMMUNITY ENGAGEMENT Attended a City-sponsored event Used Clearwater public libraries EDUCATION AND ENRICHMENT In very good to excellent health Participated in moderate or vigorous physical activity Ate 5 portions of fruits and vegetables Visited a City park Used Clearwater recreation centers RECREATION AND WELLNESS Work in Clearwater Economy will have positive impact on income Purchased goods or services in Clearwater ECONOMY NOT under housing cost stress Did NOT observe a code violation BUILT ENVIRONMENT Recycled at home Made home more energy efficient Conserved water NATURAL ENVIRONMENT Walked or biked instead of driving Carpooled instead of driving alone MOBILITY Was NOT the victim of a crime Did NOT report a crime Stocked supplies for an emergency SAFETY Higher Similar Lower Percent rating positively (e.g., yes, more than once a month, always/sometimes) Comparison to national benchmark 9 Special Topics The City of Clearwater included six questions of special interest on The NCS, including gauging reliance on various sources of information about the community and gauging various dimensions of recycling from frequency to knowledge about programs. City residents indicated their level of reliance on sources of information about the City by indicating how much of a source each of the eight listed items was to them. About 9 in 10 reported using local media outlets and slightly fewer reported using the City website as minor or major sources of information while about three-quarters relied on word-of-mouth. The least relied upon source was talking with City officials as 18% indicated this as a major source; it was still utilized as a minor source by about 3 in 10 respondents. Figure 4: Information Sources Please indicate how much of a source, if at all, you consider each of the following to be for obtaining information about the City government and its activities, events and services: 18% 20% 19% 24% 24% 28% 30% 57% 52% 31% 34% 36% 38% 38% 38% 45% 27% 39% 50% 45% 45% 38% 37% 34% 25% 15% 9% Talking with City officials The local government cable channel CView City Council meetings and other public meetings City communications via social media (Facebook, Twitter, and… Nextdoor City newsletter in the water bill Word-of-mouth City website (www.myclearwater.com) Local media outlets (newspapers, radio, local television stations) Major source Minor source Not a source The National Community Survey™ 10 While about half of respondents reported that they always recycled, 2 in 10 reported that they rarely or never recycled at home. Those that rarely or never recycled were asked for their reasons; 4 in 10 reported that they didn’t have a recycling bin and 3 in 10 didn’t have the option to recycle. No one reported that they did not know what was recyclable. Figure 5: Frequency of Recycling How often, if at all, do you recycle at home, considering all of the times you could? Figure 6: Reasons for NOT Recycling If you do not recycle at home, please indicate your primary reason for not recycling: This question was only asked of those who report recycling at home at least sometimes. Always54% Usually 18% Sometimes 6% Rarely 11% Never 11% 0% 2% 6% 7% 17% 28% 41% I don't know what's recyclable Takes too much time/effort I don't have space for a bin I don't think it helps the environment Some other reason I don't have the option to recycle I don't have a recycling bin The National Community Survey™ 11 Residents generally reported knowledge of what was acceptable for the curbside recycling program and what was not; however about 3 in 10 residents were unsure whether each of the following were accepted items: aerosol cans, Styrofoam, recyclables within plastic bags and electronics. Figure 7: Curbside Recycling Which of the following does the City accept in its curbside recycling program? About half of survey respondents had never heard of the City's electronic waste drop-off center at the Solid Waste facility and one-quarter had heard of it but never used it and only 15% had used it. About 1 in 10 respondents had heard of it but needed more information regarding location and/or hours. Figure 8: Familiarity with City's Electronic Waste Drop-off Center Before taking this survey, how familiar, if at all, were you with the City's electronic waste drop-off center at the Solid Waste facility on Hercules Avenue that is available on the last Wednesday of every month? 9% 25% 26% 27% 34% 82% 82% 84% 84% 85% 86% 62% 45% 46% 42% 49% 4% 6% 4% 5% 3% 1% 29% 30% 28% 32% 17% 14% 12% 12% 11% 13% 13% Electronics Recyclables within plastic bags Styrofoam Aerosal cans Plastic bags or plastic wrap Mixed paper Milk/juice cartons Glass bottles Plastic containers Metal cans Cardboard Does accept Does NOT accept Not sure 5% 7% 15% 24% 49% Had heard of it, but didn't know when it wasopen Had heard of it, but didn't know where it was Knew about it and had used it Knew about it, but had never used it Had never heard of it The National Community Survey™ 12 When given the opportunity to write-in a response about possible changes to the current recycling program, about 2 in 10 residents suggested expanding collection of items accepted and slightly fewer wrote in comments related to education/communication or commented that they do not recommend changes and that it is great as-is. About 1 in 10 felt changes to cost/fees would be an appropriate change as well as more accessibility. About 1 in 10 were unsure. Figure 9: Changes to Recycling Program If you could choose one thing to change about the City of Clearwater recycling program, what would it be? Survey respondents had the opportunity to write-in a response. Please see The NCS Open-end Report for more details. 13% 9% 2% 3% 3% 5% 10% 11% 14% 14% 17% Don't know/N/A/Unsure Other Accountability Increase service Mandatory More curbside collection More accessibility Cost/fees Education/communication Nothing, great as is Expand collection of items accepted 13 Conclusions Clearwater residents enjoy a positive quality of life but aspects of livability and cost could be an area of focus. Most residents gave positive ratings to all aspects of quality of life in Clearwater. Most residents rated the overall quality of life in Clearwater as excellent or good, a rating similar to the national average. About 7 in 10 or more residents positively rated Clearwater as a place to live and to raise children, their neighborhood as a place to live, the overall image and the overall appearance of the community; these ratings were similar to the national averages. When it came to Clearwater as a place to retire, about 8 in 10 respondents gave high marks which were higher than evaluations provided in communities across the U.S. However, residents’ scores for Clearwater as a place to live decreased in 2019 compared to 2017 and fewer residents would recommend Clearwater as a place to live. Residents gave lower quality ratings to the cost of living and affordable quality housing in Clearwater in 2019 compared to 2017 and more residents indicated they were under housing cost stress. While Clearwater as a place to visit shines, other aspects of Economy could be an area of opportunity. Economy was identified by residents as an important area of focus for the Clearwater community in the next two years and various ratings shine (Clearwater as a place to visit and shopping opportunities both rated higher than the national averages); however, some ratings offer insight into a potential focus on aspects of the local economy. About one-third of residents offered positive marks to vibrant downtown/commercial area (lower than the national benchmark) and when compared to 2017, ratings declined in 2019 for the quality of business and services, Clearwater as a place to work and economic development services. Local governance and service delivery were generally strong, similar to comparison communities, and stable over time. Survey respondents rated various aspects of Clearwater’s leadership and governance. In general, about half rated each aspect positively and scores for customer services provided by Clearwater employees was an exception with 7 in 10 residents offering positive scores; all ratings were similar to other communities nationwide. While the rating for overall service delivery declined in 2019 compared to 2017, it maintained a similar benchmark rating and was positively rated by 7 in 10 residents. Thirty individual services were rated: 29 were similar to the national norm and one was lower; three were higher in 2019 compared to 2017, three were lower and 24 were similar overtime. 2955 Valmont Road Suite 300 777 North Capitol Street NE Suite 500 Boulder, Colorado 80301 Washington, DC 20002 n-r-c.com • 303-444-7863 icma.org • 800-745-8780 Clearwater, FL Dashboard Summary of Findings 2019 1 Summary The National Community Survey™ (The NCS™) is a collaborative effort between National Research Center, Inc. (NRC) and the International City/County Management Association (ICMA). The survey and its administration are standardized to assure high quality research methods and directly comparable results across The NCS communities. The NCS captures residents’ opinions within the three pillars of a community (Community Characteristics, Governance and Participation) across eight central facets of community (Safety, Mobility, Natural Environment, Built Environment, Economy, Recreation and Wellness, Education and Enrichment and Community Engagement). This report summarizes Clearwater’s performance in the eight facets of community livability with the “General” rating as a summary of results from the overarching questions not shown within any of the eight facets. The “Overall” represents the community pillar in its entirety (the eight facets and general). By summarizing resident ratings across the eight facets and three pillars of a livable community, a picture of Clearwater’s community livability emerges. Below, the color of each community facet summarizes how residents rated each of the pillars that support it – Community Characteristics, Governance and Participation. When most ratings were higher than the benchmark, the color is the darkest shade; when most ratings were lower than the benchmark, the color is the lightest shade. A mix of ratings (higher and lower than the benchmark) results in a color between the extremes. This information can be helpful in identifying the areas that merit more attention. As in 2017, ratings for dimensions of livability were similar to other communities across the nation. Figure 1: Dashboard Summary Community Characteristics Governance Participation Higher Similar Lower Higher Similar Lower Higher Similar Lower Overall 3 42 4 0 39 1 1 31 2 General 1 6 0 0 3 0 0 3 0 Safety 0 2 1 0 6 0 1 2 0 Mobility 0 7 1 0 5 0 0 1 1 Natural Environment 0 3 0 0 4 1 0 3 0 Built Environment 0 4 0 0 7 0 0 2 0 Economy 2 5 1 0 1 0 0 3 0 Recreation and Wellness 0 7 0 0 3 0 0 5 0 Education and Enrichment 0 4 1 0 2 0 0 2 0 Community Engagement 0 4 0 0 8 0 0 10 1 National Benchmark Higher Similar Lower The National Community Survey™ Legend ↑↑ Much higher ↑ Higher ↔ Similar ↓ Lower ↓↓ Much lower * Not available 2 Figure 2: Detailed Dashboard Community Characteristics Trend Benchmark Percent positive Governance Trend Benchmark Percent positive Participation Trend Benchmark Percent positive General Overall appearance ↔ ↔ 72% Customer service ↔ ↔ 69% Recommend Clearwater ↓ ↔ 81% Overall quality of life ↔ ↔ 79% Services provided by Clearwater ↓ ↔ 70% Remain in Clearwater ↔ ↔ 84% Place to retire ↔ ↑ 80% Services provided by the Federal Government ↑ ↔ 46% Contacted Clearwater employees ↔ ↔ 45% Place to raise children ↔ ↔ 68% Place to live ↓ ↔ 83% Neighborhood ↔ ↔ 74% Overall image ↔ ↔ 68% Safety Overall feeling of safety ↔ ↔ 74% Police ↔ ↔ 76% Was NOT the victim of a crime ↔ ↔ 88% Safe in neighborhood ↔ ↔ 88% Crime prevention ↔ ↔ 67% Did NOT report a crime ↔ ↔ 79% Safe downtown/commercial area ↔ ↓ 73% Fire ↔ ↔ 91% Stocked supplies for an emergency ↑ ↑↑ 82% Fire prevention ↔ ↔ 76% Ambulance/EMS ↔ ↔ 88% Emergency preparedness ↔ ↔ 75% Mobility Traffic flow ↔ ↔ 36% Traffic enforcement ↔ ↔ 57% Carpooled instead of driving alone ↓ ↓ 27% Travel by car ↑ ↔ 52% Street repair ↔ ↔ 46% Walked or biked instead of driving ↔ ↔ 52% Travel by bicycle ↔ ↔ 45% Street cleaning ↔ ↔ 67% Ease of walking ↔ ↔ 54% Sidewalk maintenance ↔ ↔ 52% Travel by public transportation ↑ ↔ 35% Traffic signal timing ↔ ↔ 42% Overall ease travel ↔ ↔ 63% Public parking ↔ ↓ 37% Paths and walking trails ↔ ↔ 65% Natural Environment Overall natural environment ↔ ↔ 72% Garbage collection ↔ ↔ 76% Recycled at home ↓ ↔ 78% Air quality ↔ ↔ 71% Recycling ↔ ↔ 74% Conserved water ↓ ↔ 82% Cleanliness ↔ ↔ 72% Yard waste pick-up ↔ ↔ 80% Made home more energy efficient ↔ ↔ 79% Drinking water ↑ ↓ 55% Open space ↔ ↔ 53% Built Environment New development in Clearwater ↔ ↔ 43% Sewer services ↔ ↔ 68% NOT experiencing housing cost stress ↓ ↔ 59% Affordable quality housing ↓ ↔ 27% Storm drainage ↔ ↔ 60% Did NOT observe a code violation ↓ ↔ 47% Overall built environment ↔ ↔ 50% Clearwater Gas utility ↑ ↔ 75% Public places ↔ ↔ 63% Utility billing ↓ ↔ 58% Land use, planning and zoning ↔ ↔ 42% Code enforcement ↔ ↔ 40% Cable television ↔ ↔ 49% The National Community Survey™ Legend ↑↑ Much higher ↑ Higher ↔ Similar ↓ Lower ↓↓ Much lower * Not available 3 Community Characteristics Trend Benchmark Percent positive Governance Trend Benchmark Percent positive Participation Trend Benchmark Percent positive Economy Overall economic health ↔ ↔ 61% Economic development ↓ ↔ 40% Economy will have positive impact on income ↔ ↔ 38% Shopping opportunities ↔ ↑ 72% Purchased goods or services in Clearwater ↔ ↔ 91% Employment opportunities ↔ ↔ 44% Work in Clearwater ↓ ↔ 38% Place to visit ↔ ↑ 87% Cost of living ↓ ↔ 35% Vibrant downtown/commercial area ↔ ↓ 32% Place to work ↓ ↔ 62% Business and services ↓ ↔ 53% Recreation and Wellness Fitness opportunities ↔ ↔ 69% City parks ↔ ↔ 78% In very good to excellent health ↔ ↔ 62% Recreational opportunities ↓ ↔ 69% Recreation centers ↔ ↔ 72% Used Clearwater recreation centers ↔ ↔ 52% Health care ↓ ↔ 56% Recreation programs ↔ ↔ 71% Visited a City park ↔ ↔ 82% Food ↔ ↔ 68% Ate 5 portions of fruits and vegetables ↔ ↔ 78% Mental health care ↔ ↔ 43% Participated in moderate or vigorous physical activity ↔ ↔ 81% Health and wellness ↔ ↔ 70% Preventive health services ↔ ↔ 63% Education and Enrichment K-12 education ↔ ↓ 53% Public libraries ↔ ↔ 86% Used Clearwater public libraries ↔ ↔ 53% Cultural/arts/music activities ↔ ↔ 64% Special events ↔ ↔ 63% Attended a City-sponsored event ↔ ↔ 45% Child care/preschool ↔ ↔ 49% Adult education ↔ ↔ 57% Overall education and enrichment ↔ ↔ 59% Community Engagement Opportunities to participate in community matters ↓ ↔ 55% Public information ↔ ↔ 71% Sense of community ↔ ↓ 44% Opportunities to volunteer ↓ ↔ 69% Overall direction ↔ ↔ 47% Voted in local elections ↔ ↔ 80% Openness and acceptance ↔ ↔ 56% Value of services for taxes paid ↔ ↔ 48% Talked to or visited with neighbors ↔ ↔ 88% Neighborliness ↔ ↔ 56% Welcoming citizen involvement ↔ ↔ 47% Attended a local public meeting ↔ ↔ 16% Confidence in City government ↔ ↔ 44% Watched a local public meeting ↔ ↔ 27% Acting in the best interest of Clearwater ↔ ↔ 46% Volunteered ↔ ↔ 37% Being honest ↔ ↔ 46% Participated in a club ↔ ↔ 28% Treating all residents fairly ↔ ↔ 46% Campaigned for an issue, cause or candidate ↔ ↔ 20% Contacted Clearwater elected officials ↔ ↔ 15% Read or watched local news ↓ ↔ 81% Done a favor for a neighbor ↔ ↔ 83% 2955 Valmont Road Suite 300 777 North Capitol Street NE Suite 500 Boulder, Colorado 80301 Washington, DC 20002 n-r-c.com • 303-444-7863 icma.org • 800-745-8780 Clearwater, FL Comparisons by Demographic Subgroups 2019 1 About The National Community Survey™ (The NCS™) is a collaborative effort between National Research Center, Inc. (NRC) and the International City/County Management Association (ICMA). The survey and its administration are standardized to assure high quality research methods and directly comparable results across The NCS communities. Communities conducting The NCS can choose from a number of optional services to customize the reporting of survey results. Clearwater’s Comparisons by Demographic Subgroups is part of a larger project for the City and additional reports are available under separate cover. This report discusses differences in opinion of survey respondents by age, sex, race/ethnicity, housing tenure (rent or own) and housing unit type (attached or detached). Understanding the Tables For most of the questions, one number appears for each question. Responses have been summarized to show only the proportion of respondents giving a certain answer; for example, the percent of respondents who rated the quality of life as “excellent” or “good,” or the percent of respondents who participated in an activity at least once. It should be noted that when a table that does include all responses (not a single number) for a question that only permitted a single response does not total to exactly 100%, it is due to the common practice of percentages being rounded to the nearest whole number. The subgroup comparison tables contain the crosstabulations of survey questions by selected respondent characteristics. Chi-square or ANOVA tests of significance were applied to these breakdowns of survey questions. A “p-value” of 0.05 or less indicates that there is less than a 5% probability that differences observed between groups are due to chance; or in other words, a greater than 95% probability that the differences observed in the selected categories of the sample represent “real” differences among those populations. As subgroups vary in size and each group (and each comparison to another group) has a unique margin of error, statistical testing is used to determine whether differences between subgroups are statistically significant. Statistical testing was not performed on multiple response questions. Each column in the following tables is labeled with a letter for each subgroup being compared. The “Overall” column, which shows the ratings for all respondents, also has a column designation of “(A)”, but no statistical tests were done for the overall rating. For each pair of subgroups ratings within a row (a single question item) that has a statistically significant difference, an upper case letter denoting significance is shown in the cell with the larger column proportion. The letter denotes the subgroup with the smaller column proportion from which it is statistically different. Subgroups that have no upper case letter denotation in their column and that are also not referred to in any other column were not statistically different. For example, in Figure 1 below, respondents age 55 and over (C) gave significantly higher rating to the overall quality of life than those age 18 to 34 (A) and 35 to 54 (B), as denoted by the “A B” listed in the cell of the ratings for those 55+. This was also true of women (A) over men (B); people who were white alone, not Hispanic (A) over those who were Hispanic and/or other race (B); homeowners (B) over renters (A); and those living in detached housing (A) over those living in attached housing (B). Figure 1: Community Characteristics – General (Example Only) The National Community Survey™ 2 Findings Notable differences between demographic subgroups included the following: • Where differences emerged, residents aged 18 to 34 generally offered lower quality ratings to Community Characteristics and aspects of Governance compared to residents aged 35 and older; they also tended to be the least engaged community members (i.e., least likely to use libraries or their services, to attend a City- sponsored event, participate in a club and vote in local elections). • Homeowners were more likely than renters to offer positive evaluations of general characteristics of the community but were less positive when it came to Mobility-related characteristics (i.e., traffic flow on major streets and ease of travel by car). • Aspects of local governance and leadership were generally given higher ratings by residents who lived in attached housing units and were aged 35 or older compared to their counterparts. The National Community Survey™ 3 Table 1: Community Characteristics - General Percent rating positively (e.g., excellent/good) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) The overall quality of life in Clearwater 59% 84% A 85% A 78% 80% 81% B 73% 72% 84% A 77% 82% 79% Overall image or reputation of Clearwater 58% 75% A 69% A 69% 67% 70% 66% 63% 71% 65% 72% 68% Clearwater as a place to live 70% 84% A 88% A 82% 84% 82% 90% A 77% 86% A 80% 86% 83% Your neighborhood as a place to live 46% 76% A 85% A 71% 75% 79% B 59% 59% 83% A 75% 73% 74% Clearwater as a place to raise children 61% 69% 72% 68% 68% 67% 70% 62% 72% A 70% 67% 68% Clearwater as a place to retire 78% 81% 80% 78% 82% 79% 86% 79% 80% 76% 84% A 80% Overall appearance of Clearwater 50% 83% A 76% A 68% 76% 71% 75% 68% 74% 72% 72% 72% Table 2: Community Characteristics - Safety Percent rating positively (e.g., excellent/good, very/somewhat safe) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Overall feeling of safety in Clearwater 54% 76% A 82% A 74% 72% 76% B 66% 68% 77% A 73% 74% 74% In your neighborhood during the day 81% 85% 95% A B 83% 94% A 90% 86% 85% 90% 90% 87% 88% In Clearwater's downtown/commercial area during the day 58% 75% A 80% A 72% 76% 74% 71% 77% 71% 71% 75% 73% The National Community Survey™ 4 Table 3: Community Characteristics - Mobility Percent rating positively (e.g., excellent/good, very/somewhat safe) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Overall ease of getting to the places you usually have to visit 56% 67% 65% 66% 61% 60% 76% A 66% 61% 61% 66% 63% Traffic flow on major streets 28% 35% 41% A 35% 37% 33% 47% A 42% B 32% 29% 42% A 36% Ease of public parking 36% 35% 38% 37% 36% 35% 41% 37% 37% 33% 40% 37% Ease of travel by car in Clearwater 63% C 52% 49% 49% 57% 49% 65% A 59% B 48% 48% 56% 52% Ease of travel by public transportation in Clearwater 24% 43% A 35% 37% 32% 35% 39% 43% B 29% 25% 42% A 35% Ease of travel by bicycle in Clearwater 41% 47% 46% 44% 48% 40% 66% A 51% 41% 39% 52% A 45% Ease of walking in Clearwater 34% 59% A 60% A 50% 57% 49% 68% A 51% 56% 56% 52% 54% Availability of paths and walking trails 61% 65% 69% 59% 71% A 64% 69% 63% 65% 65% 65% 65% Table 4: Community Characteristics - Natural Environment Percent rating positively (e.g., excellent/good, very/somewhat safe) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18- 34 35- 54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Quality of overall natural environment in Clearwater 57% 74% A 78% A 65% 79% A 70% 80% A 71% 72% 69% 75% 72% Air quality 57% 74% A 76% A 68% 73% 71% 72% 66% 73% 71% 71% 71% Cleanliness of Clearwater 48% 83% A 75% A 67% 76% A 72% 71% 67% 74% 72% 71% 72% The National Community Survey™ 5 Table 5: Community Characteristics - Built Environment Percent rating positively (e.g., excellent/good, very/somewhat safe) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Overall "built environment" of Clearwater (including overall design, buildings, parks and transportation systems) 32% 55% A 57% A 51% 49% 49% 57% 55% 47% 43% 57% A 50% Public places where people want to spend time 49% 73% A 64% A 60% 66% 64% 61% 70% B 58% 56% 69% A 63% Availability of affordable quality housing 15% 23% 38% A B 20% 33% A 30% 20% 18% 33% A 28% 26% 27% Overall quality of new development in Clearwater 40% 45% 44% 42% 44% 45% 39% 43% 43% 41% 46% 43% Table 6: Community Characteristics - Economy Percent rating positively (e.g., excellent/good, very/somewhat safe) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18- 34 35- 54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Overall economic health of Clearwater 55% 65% 62% 60% 62% 62% 61% 56% 63% 59% 63% 61% Clearwater as a place to work 51% 67% A 65% A 63% 60% 65% 55% 57% 65% 64% 60% 62% Clearwater as a place to visit 74% 89% A 92% A 88% 85% 87% 86% 82% 90% A 87% 87% 87% Employment opportunities 31% 48% A 50% A 47% 40% 42% 53% 43% 45% 44% 44% 44% Shopping opportunities 74% 69% 75% 72% 72% 73% 72% 78% B 69% 68% 77% A 72% Cost of living in Clearwater 27% 33% 42% A 32% 38% 38% 30% 29% 39% A 32% 39% 35% Overall quality of business and service establishments in Clearwater 43% 51% 60% A 60% B 45% 54% 48% 51% 54% 49% 57% 53% Vibrant downtown/commercial area 37% 37% C 26% 31% 32% 31% 36% 39% B 28% 27% 37% A 32% The National Community Survey™ 6 Table 7: Community Characteristics - Recreation and Wellness Percent rating positively (e.g., excellent/good, very/somewhat safe) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Health and wellness opportunities in Clearwater 55% 73% A 75% A 68% 70% 72% 64% 63% 74% A 70% 70% 70% Fitness opportunities (including exercise classes and paths or trails, etc.) 58% 75% A 71% A 67% 70% 70% 65% 68% 69% 72% 66% 69% Recreational opportunities 47% 73% A 76% A 70% 67% 71% 62% 66% 70% 69% 68% 69% Availability of affordable quality food 58% 68% 74% A 66% 70% 67% 71% 71% 67% 64% 72% A 68% Availability of affordable quality health care 35% 50% A 72% A B 56% 55% 59% 50% 51% 58% 52% 59% 56% Availability of preventive health services 50% 63% A 70% A 64% 61% 66% 56% 57% 66% 62% 64% 63% Availability of affordable quality mental health care 29% 41% 53% A 39% 47% 43% 44% 42% 42% 42% 42% 43% Table 8: Community Characteristics - Education and Enrichment Percent rating positively (e.g., excellent/good, very/somewhat safe) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Overall opportunities for education and enrichment 41% 64% A 65% A 62% 55% 61% 55% 60% 59% 58% 60% 59% Availability of affordable quality child care/preschool 39% 48% 56% A 46% 48% 44% 60% A 54% 46% 44% 57% 49% K-12 education 47% 49% 60% 53% 52% 50% 59% 52% 53% 54% 51% 53% Adult educational opportunities 42% 61% A 61% A 58% 53% 57% 54% 57% 57% 57% 57% 57% Opportunities to attend cultural/arts/music activities 42% 72% A 69% A 65% 62% 68% B 51% 60% 66% 62% 66% 64% The National Community Survey™ 7 Table 9: Community Characteristics - Community Engagement Percent rating positively (e.g., excellent/good, very/somewhat safe) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Opportunities to volunteer 45% 76% A 75% A 70% 68% 72% B 59% 60% 74% A 70% 68% 69% Opportunities to participate in community matters 32% 60% A 63% A 57% 52% 59% B 44% 50% 58% 55% 56% 55% Openness and acceptance of the community toward people of diverse backgrounds 52% 59% 56% 55% 56% 61% B 40% 51% 59% 56% 56% 56% Neighborliness of residents in Clearwater 55% 57% 57% 58% 54% 59% 48% 55% 57% 56% 57% 56% Table 10: Governance - General Percent rating positively (e.g., excellent/good) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18- 34 35- 54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) The City of Clearwater 49% 78% A 76% A 75% B 66% 73% 65% 69% 71% 67% 74% 70% The value of services for the taxes paid to Clearwater 28% 51% A 56% A 51% 45% 51% 40% 45% 49% 45% 52% 48% The overall direction that Clearwater is taking 33% 48% A 55% A 51% 43% 51% 41% 49% 46% 40% 56% A 47% The job Clearwater government does at welcoming citizen involvement 31% 48% A 54% A 49% 44% 50% 37% 50% 45% 40% 55% A 47% Overall confidence in Clearwater government 29% 45% A 50% A 45% 44% 47% 37% 50% 41% 34% 56% A 44% Generally acting in the best interest of the community 32% 45% 53% A 47% 45% 49% 38% 54% B 42% 33% 60% A 46% Being honest 38% 46% 50% 45% 47% 48% 42% 52% 43% 36% 58% A 46% Treating all residents fairly 30% 47% A 54% A 41% 50% 48% 39% 48% 45% 38% 56% A 46% Overall customer service by Clearwater employees (police, receptionists, planners, etc.) 45% 77% A 75% A 73% 64% 72% B 61% 66% 71% 66% 72% 69% The Federal Government 39% 48% 49% 50% 43% 44% 56% A 58% B 39% 35% 58% A 46% The National Community Survey™ 8 Table 11: Governance - Safety Percent rating positively (e.g., excellent/good) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Police services 50% 79% A 87% A 78% 75% 83% B 59% 67% 81% A 76% 77% 76% Fire services 73% 94% A 97% A 89% 92% 94% B 81% 88% 93% 94% B 88% 91% Ambulance or emergency medical services 75% 88% A 94% A 85% 92% 91% B 81% 87% 89% 89% 87% 88% Crime prevention 42% 69% A 77% A 72% B 61% 72% B 55% 61% 71% 67% 68% 67% Fire prevention and education 60% 77% A 82% A 77% 74% 77% 70% 75% 77% 74% 79% 76% Emergency preparedness (services that prepare the community for natural disasters or other emergency situations) 57% 79% A 82% A 84% B 65% 77% 69% 70% 78% 72% 78% 75% Table 12: Governance - Mobility Percent rating positively (e.g., excellent/good) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Traffic enforcement 32% 62% A 66% A 60% 54% 60% B 48% 53% 60% 54% 61% 57% Street repair 36% 53% A 46% 45% 47% 46% 47% 51% 44% 42% 51% 46% Street cleaning 66% 72% 64% 61% 73% A 67% 70% 66% 68% 69% 66% 67% Sidewalk maintenance 39% 59% A 53% A 42% 62% A 52% 53% 49% 54% 53% 52% 52% Traffic signal timing 50% 37% 44% 41% 44% 37% 61% A 53% B 36% 35% 50% A 42% The National Community Survey™ 9 Table 13: Governance - Natural Environment Percent rating positively (e.g., excellent/good) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Garbage collection 62% 79% A 84% A 74% 80% 76% 81% 76% 78% 77% 77% 76% Recycling 62% 80% A 76% A 73% 74% 73% 79% 71% 76% 77% 71% 74% Yard waste pick-up 69% 82% A 83% A 78% 81% 80% 82% 77% 82% 83% 77% 80% Drinking water 33% 66% A 60% A 50% 61% A 58% 49% 56% 56% 58% 54% 55% Clearwater open space 30% 62% A 56% A 56% 49% 54% 50% 53% 53% 47% 59% A 53% Table 14: Governance - Built Environment Percent rating positively (e.g., excellent/good) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18- 34 35- 54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Storm drainage 40% 75% A C 61% A 57% 62% 58% 63% 57% 62% 63% 57% 60% Sewer services 47% 75% A 75% A 64% 71% 69% 65% 64% 70% 70% 67% 68% Clearwater Gas utility 76% 78% 74% 70% 82% A 78% 71% 76% 76% 78% 72% 75% Utility billing 36% 60% A 70% A 55% 63% 60% 54% 51% 63% A 60% 57% 58% Land use, planning and zoning 42% 52% C 37% 36% 49% A 43% 44% 52% B 38% 37% 49% A 42% Code enforcement (weeds, abandoned buildings, etc.) 18% 48% A 47% A 35% 44% 40% 44% 41% 39% 36% 44% 40% Cable television 52% 49% 48% 47% 51% 52% 43% 57% B 44% 41% 57% A 49% The National Community Survey™ 10 Table 15: Governance - Economy Percent rating positively (e.g., excellent/good) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Economic development 26% 41% A 49% A 41% 40% 41% 41% 39% 42% 38% 43% 40% Table 16: Governance - Recreation and Wellness Percent rating positively (e.g., excellent/good) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18- 34 35- 54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) City parks 71% 84% A 77% 74% 81% 77% 79% 78% 78% 79% 77% 78% Recreation programs or classes 59% 76% A 75% A 72% 69% 73% 65% 61% 77% A 74% 68% 71% Recreation centers or facilities 56% 81% A 76% A 74% 70% 76% B 63% 66% 76% 73% 72% 72% Table 17: Governance - Education and Enrichment Percent rating positively (e.g., excellent/good) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18- 34 35- 54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Public library services 79% 91% A 84% 85% 85% 86% 85% 93% B 82% 81% 91% A 86% City-sponsored special events 48% 70% A 65% A 68% B 57% 65% 58% 61% 64% 61% 65% 63% Table 18: Governance - Community Engagement Percent rating positively (e.g., excellent/good) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Public information services 80% 74% 67% 72% 70% 72% 68% 82% B 66% 63% 80% A 71% The National Community Survey™ 11 Table 19: Participation General Percent rating positively (e.g., always/sometimes, more than once a month, yes) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Sense of community 31% 44% A 52% A 43% 45% 44% 48% 45% 44% 40% 48% 44% Recommend living in Clearwater to someone who asks 66% 83% A 88% A 79% 83% 81% 82% 80% 82% 77% 85% A 81% Remain in Clearwater for the next five years 65% 85% A 92% A 83% 84% 86% B 77% 67% 93% A 90% B 78% 84% Contacted the City of Clearwater (in-person, phone, email or web) for help or information 35% 49% A 47% A 46% 43% 49% B 35% 36% 50% A 54% B 35% 45% Table 20: Participation - Safety Percent rating positively (e.g., always/sometimes, more than once a month, yes) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Was NOT the victim of a crime 98% B C 80% 90% B 85% 92% A 88% 89% 91% 87% 87% 90% 88% Did NOT report a crime 83% B 73% 81% 77% 81% 78% 79% 78% 79% 76% 82% 79% Stocked supplies in preparation for an emergency 87% B 76% 83% 87% B 76% 82% 80% 82% 83% 84% 79% 82% Table 21: Participation - Mobility Percent rating positively (e.g., always/sometimes, more than once a month, yes) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Walked or biked instead of driving 42% 62% A C 51% 53% 50% 51% 53% 46% 57% A 51% 55% 52% Carpooled with other adults or children instead of driving alone 33% 25% 24% 34% B 17% 23% 37% A 22% 29% 27% 27% 27% The National Community Survey™ 12 Table 22: Participation - Natural Environment Percent rating positively (e.g., always/sometimes, more than once a month, yes) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) How often, if at all, do you recycle at home, considering all of the times you could? 62% 79% A 85% A 79% 75% 81% B 69% 72% 82% A 82% 74% 78% Made efforts to make your home more energy efficient 76% 77% 81% 80% 79% 79% 78% 73% 82% A 85% B 73% 79% Made efforts to conserve water 69% 85% A 88% A 85% 80% 85% B 73% 73% 88% A 91% B 74% 82% Table 23: Participation - Built Environment Percent rating positively (e.g., always/sometimes, more than once a month, yes) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) NOT under housing cost stress 61% 59% 59% 51% 68% A 63% B 49% 46% 68% A 68% B 51% 59% Did NOT observe a code violation 30% 46% A 56% A B 48% 46% 49% 42% 41% 50% A 46% 48% 47% Table 24: Participation - Economy Percent rating positively (e.g., always/sometimes, more than once a month, yes) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18- 34 35- 54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Purchase goods or services from a business located in Clearwater 75% 98% A 96% A 93% 89% 96% B 78% 85% 95% A 91% 92% 91% Economy will have positive impact on income 48% B C 31% 37% 33% 42% A 35% 45% 39% 38% 37% 39% 38% Work in Clearwater 45% C 46% C 28% 40% 36% 35% 50% A 35% 41% 44% B 33% 38% The National Community Survey™ 13 Table 25: Participation - Recreation and Wellness Percent rating positively (e.g., always/sometimes, more than once a month, yes) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Used Clearwater recreation centers or their services 47% 57% 50% 49% 53% 49% 61% A 48% 54% 54% 49% 52% Visited a neighborhood park or City park 93% C 87% C 73% 82% 81% 79% 87% 83% 81% 84% 79% 82% Eat at least 5 portions of fruits and vegetables a day 75% 76% 81% 78% 77% 77% 83% 75% 80% 71% 84% A 78% Participate in moderate or vigorous physical activity 73% 86% A 81% 78% 84% 83% 76% 76% 84% A 82% 79% 81% Reported being in "very good" or "excellent" health 68% 61% 60% 62% 63% 65% B 54% 49% 70% A 68% B 57% 62% Table 26: Participation - Education and Enrichment Percent rating positively (e.g., always/sometimes, more than once a month, yes) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18- 34 35- 54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Used Clearwater public libraries or their services 34% 59% A 56% A 51% 52% 50% 56% 52% 52% 51% 54% 53% Attended a City-sponsored event 25% 59% A C 45% A 45% 44% 45% 41% 45% 45% 45% 44% 45% Table 27: Participation - Community Engagement Percent rating positively (e.g., always/sometimes, more than once a month, yes) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Campaigned or advocated for an issue, cause or candidate 5% 21% A 26% A 22% 17% 21% 14% 15% 22% 24% B 15% 20% Contacted Clearwater elected officials (in-person, phone, email or web) to express your opinion 5% 17% A 18% A 16% 14% 18% B 8% 13% 16% 20% B 10% 15% Volunteered your time to some group/activity in Clearwater 32% 38% 39% 36% 36% 34% 46% A 32% 40% 40% 34% 37% Participated in a club 8% 29% A 37% A 29% 27% 30% B 20% 20% 33% A 27% 29% 28% The National Community Survey™ 14 Percent rating positively (e.g., always/sometimes, more than once a month, yes) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Talked to or visited with your immediate neighbors 75% 89% A 94% A 88% 88% 92% B 78% 82% 92% A 92% B 84% 88% Done a favor for a neighbor 68% 85% A 89% A 84% 82% 82% 85% 78% 86% A 87% B 79% 83% Attended a local public meeting 7% 17% A 20% A 14% 19% 17% 14% 11% 20% A 17% 16% 16% Watched (online or on television) a local public meeting 21% 26% 31% 25% 28% 23% 39% A 31% 24% 24% 29% 27% Read or watch local news (via television, paper, computer, etc.) 61% 82% A 90% A B 80% 81% 83% B 73% 77% 84% A 85% B 76% 81% Vote in local elections 60% 81% A 90% A B 79% 80% 84% B 67% 66% 88% A 87% B 73% 80% Table 28: Community Focus Areas Percent rating positively (e.g., essential/very important) Age Sex Race/ethnicity Rent or own Detached or attached Overall 18- 34 35- 54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Overall feeling of safety in Clearwater 85% 86% 94% A B 94% B 85% 90% 88% 90% 89% 87% 93% A 90% Overall ease of getting to the places you usually have to visit 84% 80% 89% B 87% 82% 87% B 77% 85% 85% 84% 86% 85% Quality of overall natural environment in Clearwater 90% 83% 86% 90% B 80% 86% 82% 81% 88% A 87% 84% 85% Overall "built environment" of Clearwater (including overall design, buildings, parks and transportation systems) 83% 77% 81% 85% B 74% 78% 85% 82% 79% 77% 82% 80% Health and wellness opportunities in Clearwater 70% 69% 82% A B 85% B 62% 74% 77% 78% 72% 70% 79% A 75% Overall opportunities for education and enrichment 79% B 66% 81% B 84% B 65% 72% 86% A 83% B 71% 70% 81% A 76% Overall economic health of Clearwater 93% 87% 92% 93% B 87% 90% 89% 92% 89% 89% 91% 90% Sense of community 60% 64% 83% A B 79% B 61% 71% 72% 72% 71% 67% 75% 71% The National Community Survey™ 15 Table 29: Question 10 Custom Line Item Please rate the quality of each of the following services in Clearwater: (Percent rating as "excellent" or "good"). Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) Recreation trails 58% 87% A C 77% A 77% 75% 77% 72% 73% 78% 74% 78% 75% Table 30: Information Sources Please indicate how much of a source, if at all, you consider each of the following to be for obtaining information about the City government and its activities, events and services: (Percent rating as "major source" or "minor source"). Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached (A) (A) (B) (C) (A) (B) (A) (B) (A) (B) (A) (B) City website (www.myclearwater.com) 81% 91% A C 82% 85% 83% 86% 79% 82% 86% 87% 83% 85% Local media outlets (newspapers, radio, local television stations) 93% 87% 92% 89% 92% 92% 87% 85% 94% A 91% 90% 91% The local government cable channel CView 49% 52% 61% A 49% 61% A 52% 62% 60% 51% 52% 57% 55% City newsletter in the water bill 61% 67% 69% 64% 69% 67% 65% 57% 72% A 80% B 53% 66% City Council meetings and other public meetings 42% 53% 63% A 56% 53% 55% 51% 54% 54% 53% 56% 55% Talking with City officials 36% 46% 60% A B 54% 45% 50% 48% 51% 48% 48% 51% 50% City communications via social media (Facebook, Twitter, and YouTube) 84% B C 63% C 50% 63% 61% 61% 67% 71% B 55% 54% 68% A 62% Nextdoor 63% 56% 67% B 66% 60% 61% 70% 58% 65% 67% 58% 63% Word-of-mouth 71% 69% 81% B 75% 76% 76% 72% 65% 81% A 83% B 67% 75% The National Community Survey™ 16 Table 31: Frequency of Recycling Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached How often, if at all, do you recycle at home, considering all of the times you could? Always 17% 34% 49% 57% 43% 77% 23% 30% 70% 57% 43% 100% Usually 21% 33% 46% 39% 61% 87% 13% 37% 63% 43% 57% 100% Sometimes 21% 27% 52% 72% 28% 65% 35% 64% 36% 33% 67% 100% Rarely 64% 14% 21% 52% 48% 67% 33% 59% 41% 48% 52% 100% Never 15% 47% 38% 45% 55% 66% 34% 38% 62% 36% 64% 100% Table 32: Reasons for NOT Recycling Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached If you do not recycle at home, please indicate your primary reason for not recycling: Takes too much time/effort 0% 0% 100% 0% 100% 100% 0% 0% 100% 0% 100% 100% I don't think it helps the environment 0% 0% 100% 0% 100% 100% 0% 46% 54% 15% 85% 100% I don't have a recycling bin 33% 45% 22% 72% 28% 57% 43% 83% 17% 0% 100% 100% I don't have space for a bin 0% 0% 100% 100% 0% 100% 0% 33% 67% 0% 100% 100% I don't know what's recyclable 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% I don't have the option to recycle 0% 29% 71% 41% 59% 95% 5% 62% 38% 0% 100% 100% Some other reason 81% 0% 19% 19% 81% 100% 0% 94% 6% 87% 13% 100% The National Community Survey™ 17 Table 33: Curbside Recycling Which of the following does the City accept in its curbside recycling program? Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached Cardboard Does accept 22% 34% 44% 54% 46% 76% 24% 32% 68% 56% 44% 100% Does NOT accept 0% 38% 62% 80% 20% 53% 47% 0% 100% 80% 20% 100% Electronics Does accept 25% 19% 56% 37% 63% 64% 36% 59% 41% 49% 51% 100% Does NOT accept 18% 40% 42% 53% 47% 76% 24% 27% 73% 62% 38% 100% Mixed paper Does accept 24% 32% 44% 54% 46% 75% 25% 32% 68% 55% 45% 100% Does NOT accept 25% 50% 25% 66% 34% 60% 40% 66% 34% 54% 46% 100% Metal cans Does accept 23% 34% 43% 57% 43% 76% 24% 32% 68% 57% 43% 100% Does NOT accept 0% 64% 36% 39% 61% 56% 44% 70% 30% 17% 83% 100% Plastic bags or plastic wrap Does accept 34% 34% 32% 44% 56% 58% 42% 51% 49% 45% 55% 100% Does NOT accept 16% 35% 49% 60% 40% 83% 17% 21% 79% 68% 32% 100% Aerosal cans Does accept 17% 29% 53% 52% 48% 77% 23% 34% 66% 56% 44% 100% Does NOT accept 23% 39% 39% 55% 45% 80% 20% 23% 77% 70% 30% 100% Plastic containers Does accept 24% 35% 42% 53% 47% 75% 25% 33% 67% 56% 44% 100% Does NOT accept 35% 23% 42% 60% 40% 84% 16% 51% 49% 60% 40% 100% Milk/juice cartons Does accept 26% 33% 41% 55% 45% 74% 26% 36% 64% 54% 46% 100% Does NOT accept 0% 42% 58% 40% 60% 89% 11% 11% 89% 75% 25% 100% Styrofoam Does accept 33% 34% 33% 53% 47% 65% 35% 46% 54% 46% 54% 100% Does NOT accept 12% 39% 49% 53% 47% 85% 15% 20% 80% 70% 30% 100% Glass bottles Does accept 24% 34% 42% 55% 45% 75% 25% 31% 69% 57% 43% 100% Does NOT accept 28% 15% 58% 56% 44% 88% 12% 71% 29% 42% 58% 100% Recyclables within plastic bags Does accept 23% 43% 35% 47% 53% 66% 34% 53% 47% 36% 64% 100% Does NOT accept 19% 32% 49% 60% 40% 81% 19% 22% 78% 70% 30% 100% The National Community Survey™ 18 Table 34: Familiarity with City's Electronic Waste Drop-off Center Age Sex Race/ethnicity Rent or own Detached or attached Overall 18-34 35-54 55+ Female Male White alone, not Hispanic Hispanic and/or other race Rent Own Detached Attached Before taking this survey, how familiar, if at all, were you with the City's electronic waste drop-off center at the Solid Waste facility on Hercules Avenue that is available on the last Wednesday of every month? Had never heard of it 34% 30% 35% 53% 47% 68% 32% 49% 51% 41% 59% 100% Had heard of it, but didn't know where it was 18% 20% 62% 65% 35% 87% 13% 45% 55% 40% 60% 100% Had heard of it, but didn't know when it was open 5% 51% 45% 57% 43% 83% 17% 22% 78% 62% 38% 100% Knew about it, but had never used it 17% 44% 38% 50% 50% 81% 19% 29% 71% 58% 42% 100% Knew about it and had used it 0% 24% 76% 54% 46% 90% 10% 16% 84% 68% 32% 100% 2955 Valmont Road Suite 300 777 North Capitol Street NE Suite 500 Boulder, Colorado 80301 Washington, DC 20002 n-r-c.com • 303-444-7863 icma.org • 800-745-8780 Clearwater, FL Comparisons by Geographic Subgroups 2019 1 Summary The National Community Survey™ (The NCS™) is a collaborative effort between National Research Center, Inc. (NRC) and the International City/County Management Association (ICMA). The survey and its administration are standardized to assure high quality research methods and directly comparable results across The NCS communities. Communities conducting The NCS can choose from a number of optional services to customize the reporting of survey results. Clearwater’s Comparisons by Geographic Subgroups is part of a larger project for the City and additional reports are available under separate cover. This report discusses differences in opinion of survey respondents by geographic area. Understanding the Tables For most of the questions, one number appears for each question. Responses have been summarized to show only the proportion of respondents giving a certain answer; for example, the percent of respondents who rated the quality of life as “excellent” or “good,” or the percent of respondents who participated in an activity at least once. It should be noted that when a table that does include all responses (not a single number) for a question that only permitted a single response does not total to exactly 100%, it is due to the common practice of percentages being rounded to the nearest whole number. The subgroup comparison tables contain the crosstabulations of survey questions by geographic area. Chi-square or ANOVA tests of significance were applied to these breakdowns of survey questions. A “p-value” of 0.05 or less indicates that there is less than a 5% probability that differences observed between groups are due to chance; or in other words, a greater than 95% probability that the differences observed in the selected categories of the sample represent “real” differences among those populations. As subgroups vary in size and each group (and each comparison to another group) has a unique margin of error, statistical testing is used to determine whether differences between subgroups are statistically significant. Statistical testing was not performed on multiple response questions. Each column in the following tables is labeled with a letter for each subgroup being compared. The “Overall” column, which shows the ratings for all respondents, also has a column designation of “(A)”, but no statistical tests were done for the overall rating. For each pair of subgroup ratings within a row (a single question item) that has a statistically significant difference, an upper case letter denoting significance is shown in the cell with the larger column proportion. The letter denotes the subgroup with the smaller column proportion from which it is statistically different. Subgroups that have no upper case letter denotation in their column and that are also not referred to in any other column were not statistically different. For example, in Figure 1 below, respondents in Districts 1 (A) and 2 (B) gave significantly lower ratings to overall quality of life than respondents in Districts 3 (C) and 4 (D), as denoted by the “A B” listed in the cell of the ratings for Districts 3 and 4. The overall quality of life rating in District 4 (D) also was significantly lower than that of District 3 (C) (as indicated by the “D” in the rating for District 3). Figure 1: Community Characteristics – General (Example Only) The National Community Survey™ 2 Five subareas were tracked for comparison and the number of completed surveys for each are in the figure below. Figure 2: Geographic Areas Geographic Area Number of Completed Surveys Countryside 88 Clearwater Beach/Island Estates/Sand Key 77 Downtown and surrounding 159 Morningside/Central Clearwater 115 East Clearwater 65 Findings Notable differences between geographic areas included the following: • Residents in the Clearwater Beach/Island Estates/Sand Key area tended to offer more positive reviews of general Community Characteristics (i.e., neighborhood as a place to live and Clearwater as a place to retire) compared to their counterparts; they were also most likely to remain in Clearwater for the next five years. • Economy-related characteristics were generally given more positive ratings from residents in the Countryside and Morningside/Central Clearwater areas compared to residents in other parts of the community. • Aspects of local governance and leadership were generally given lower ratings by residents in the Downtown and surrounding area compared to their counterparts. • Rates of Participation in community events and activities were generally highest among residents in the Clearwater Beach/Island Estates/Sand Key area (i.e., participation in a club, attendance at City-sponsored events and voting in local elections). The National Community Survey™ 3 Table 1: Community Characteristics - General Percent rating positively (e.g., excellent/good) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) The overall quality of life in Clearwater 86% E 93% C D E 76% 80% E 66% 79% Overall image or reputation of Clearwater 77% C 80% C E 62% 67% 64% 68% Clearwater as a place to live 89% C E 98% C D E 78% 83% 75% 83% Your neighborhood as a place to live 81% C 99% A C D E 63% 73% 70% 74% Clearwater as a place to raise children 84% B D E 58% 73% B D 57% 65% 68% Clearwater as a place to retire 87% E 93% C D E 81% E 78% E 63% 80% Overall appearance of Clearwater 76% 77% 72% 68% 72% 72% Table 2: Community Characteristics - Safety Percent rating positively (e.g., excellent/good, very/somewhat safe) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Overall feeling of safety in Clearwater 87% C E 87% C E 67% 75% E 60% 74% In your neighborhood during the day 96% C E 98% C E 81% 93% C E 82% 88% In Clearwater's downtown/commercial area during the day 75% 83% D E 77% E 66% 62% 73% Table 3: Community Characteristics - Mobility Percent rating positively (e.g., excellent/good, very/somewhat safe) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Overall ease of getting to the places you usually have to visit 63% 53% 66% 66% 62% 63% Traffic flow on major streets 30% 38% 32% 47% A C E 30% 36% Ease of public parking 52% B C D E 27% 38% 32% 34% 37% The National Community Survey™ 4 Percent rating positively (e.g., excellent/good, very/somewhat safe) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Ease of travel by car in Clearwater 56% 41% 56% B E 59% B E 40% 52% Ease of travel by public transportation in Clearwater 32% 36% 38% 35% 31% 35% Ease of travel by bicycle in Clearwater 41% 42% 53% E 45% 34% 45% Ease of walking in Clearwater 52% 67% D E 61% D E 47% 37% 54% Availability of paths and walking trails 57% 63% 68% E 75% A E 53% 65% Table 4: Community Characteristics - Natural Environment Percent rating positively (e.g., excellent/good, very/somewhat safe) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Quality of overall natural environment in Clearwater 76% E 80% E 69% 77% E 60% 72% Air quality 65% 77% E 73% 75% 61% 71% Cleanliness of Clearwater 74% 79% D 72% 65% 70% 72% Table 5: Community Characteristics - Built Environment Percent rating positively (e.g., excellent/good, very/somewhat safe) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Overall "built environment" of Clearwater (including overall design, buildings, parks and transportation systems) 47% 52% 51% 50% 49% 50% Public places where people want to spend time 71% 56% 62% 67% 58% 63% Availability of affordable quality housing 26% 31% 29% 24% 23% 27% Overall quality of new development in Clearwater 51% 43% 44% 42% 35% 43% The National Community Survey™ 5 Table 6: Community Characteristics - Economy Percent rating positively (e.g., excellent/good, very/somewhat safe) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Overall economic health of Clearwater 69% C 63% 53% 62% 68% C 61% Clearwater as a place to work 76% B E 56% 63% E 66% E 46% 62% Clearwater as a place to visit 88% E 97% C E 86% E 88% E 77% 87% Employment opportunities 40% 34% 47% 50% 41% 44% Shopping opportunities 86% B C E 65% 64% 82% B C E 69% 72% Cost of living in Clearwater 37% C 40% C 24% 49% C E 35% 35% Overall quality of business and service establishments in Clearwater 65% B C 43% 47% 59% B 55% 53% Vibrant downtown/commercial area 48% B C D E 24% 33% 27% 28% 32% Table 7: Community Characteristics - Recreation and Wellness Percent rating positively (e.g., excellent/good, very/somewhat safe) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Health and wellness opportunities in Clearwater 76% D E 82% D E 73% E 62% 55% 70% Fitness opportunities (including exercise classes and paths or trails, etc.) 73% 59% 68% 71% 73% 69% Recreational opportunities 77% 71% 68% 66% 64% 69% Availability of affordable quality food 71% E 69% 63% 83% C E 55% 68% Availability of affordable quality health care 62% 76% C D E 49% 53% 50% 56% Availability of preventive health services 77% C D 76% C D 56% 57% 62% 63% Availability of affordable quality mental health care 52% 56% D 41% 34% 41% 43% The National Community Survey™ 6 Table 8: Community Characteristics - Education and Enrichment Percent rating positively (e.g., excellent/good, very/somewhat safe) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Overall opportunities for education and enrichment 65% E 54% 59% 66% E 46% 59% Availability of affordable quality child care/preschool 65% B C 22% 38% 60% B C 59% B C 49% K-12 education 61% B 25% 52% B 59% B 57% B 53% Adult educational opportunities 71% B E 41% 57% 65% B E 44% 57% Opportunities to attend cultural/arts/music activities 70% 69% 59% 64% 62% 64% Table 9: Community Characteristics - Community Engagement Percent rating positively (e.g., excellent/good, very/somewhat safe) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Opportunities to volunteer 73% 71% 69% 71% 62% 69% Opportunities to participate in community matters 64% 54% 51% 61% 51% 55% Openness and acceptance of the community toward people of diverse backgrounds 79% C D E 61% 48% 52% 51% 56% Neighborliness of residents in Clearwater 72% C D E 62% 53% 51% 48% 56% Table 10: Governance - General Percent rating positively (e.g., excellent/good) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) The City of Clearwater 79% C E 76% 64% 72% 63% 70% The value of services for the taxes paid to Clearwater 60% C 47% 40% 50% 52% 48% The overall direction that Clearwater is taking 68% B C D E 50% C 34% 51% C 49% 47% The job Clearwater government does at welcoming citizen involvement 59% C 41% 32% 61% B C 57% C 47% Overall confidence in Clearwater government 58% C E 44% 32% 55% C E 38% 44% The National Community Survey™ 7 Percent rating positively (e.g., excellent/good) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Generally acting in the best interest of the community 60% C E 51% C 34% 54% C 40% 46% Being honest 64% C E 52% C 35% 49% 38% 46% Treating all residents fairly 62% C 52% C 31% 53% C 47% C 46% Overall customer service by Clearwater employees (police, receptionists, planners, etc.) 80% C E 80% C E 66% E 68% E 52% 69% The Federal Government 43% 49% 39% 61% A C E 37% 46% Table 11: Governance - Safety Percent rating positively (e.g., excellent/good) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Police services 85% C E 89% C E 67% 84% C E 64% 76% Fire services 96% E 95% E 90% 93% E 82% 91% Ambulance or emergency medical services 93% C E 93% C E 81% 99% C E 79% 88% Crime prevention 72% 86% C D E 60% 64% 63% 67% Fire prevention and education 79% 85% E 72% 85% C E 64% 76% Emergency preparedness (services that prepare the community for natural disasters or other emergency situations) 75% 90% A C D E 74% 74% 61% 75% Table 12: Governance - Mobility Percent rating positively (e.g., excellent/good) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Traffic enforcement 58% 72% C D 50% 56% 57% 57% Street repair 47% 54% 44% 48% 38% 46% Street cleaning 73% 72% 65% 67% 59% 67% The National Community Survey™ 8 Percent rating positively (e.g., excellent/good) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Sidewalk maintenance 51% 58% 45% 61% C 49% 52% Traffic signal timing 35% 42% 41% 55% A C E 33% 42% Table 13: Governance - Natural Environment Percent rating positively (e.g., excellent/good) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Garbage collection 69% 88% A C E 72% 87% A C E 67% 76% Recycling 69% 74% 73% 83% A E 65% 74% Yard waste pick-up 78% 86% 76% 81% 86% 80% Drinking water 54% 70% D E 56% 53% 48% 55% Clearwater open space 48% 63% E 50% 59% 43% 53% Table 14: Governance - Built Environment Percent rating positively (e.g., excellent/good) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Storm drainage 64% B 46% 60% 62% 63% 60% Sewer services 69% 73% 62% 71% 71% 68% Clearwater Gas utility 89% C 83% C 65% 74% 84% C 75% Utility billing 47% 74% A E 60% 58% 54% 58% Land use, planning and zoning 43% 44% 36% 59% C E 27% 42% Code enforcement (weeds, abandoned buildings, etc.) 42% 53% D E 38% 36% 31% 40% Cable television 56% 45% 43% 60% C E 42% 49% The National Community Survey™ 9 Table 15: Governance - Economy Percent rating positively (e.g., excellent/good) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Economic development 49% 54% C D 37% 35% 37% 40% Table 16: Governance - Recreation and Wellness Percent rating positively (e.g., excellent/good) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) City parks 77% 85% E 78% 77% 70% 78% Recreation programs or classes 75% 81% E 74% 65% 59% 71% Recreation centers or facilities 69% 78% 72% 75% 65% 72% Table 17: Governance - Education and Enrichment Percent rating positively (e.g., excellent/good) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Public library services 93% E 86% E 85% E 94% E 70% 86% City-sponsored special events 75% E 63% 60% 65% 51% 63% Table 18: Governance - Community Engagement Percent rating positively (e.g., excellent/good) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Public information services 87% B C E 67% 63% 83% C E 60% 71% The National Community Survey™ 10 Table 19: Participation General Percent rating positively (e.g., always/sometimes, more than once a month, yes) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Sense of community 45% 45% 41% 46% 47% 44% Recommend living in Clearwater to someone who asks 87% E 90% C E 77% 83% E 71% 81% Remain in Clearwater for the next five years 79% 97% A C D E 86% D 75% 85% 84% Contacted the City of Clearwater (in-person, phone, email or web) for help or information 44% 54% 43% 47% 43% 45% Table 20: Participation - Safety Percent rating positively (e.g., always/sometimes, more than once a month, yes) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Was NOT the victim of a crime 92% E 89% 84% 96% C E 82% 88% Did NOT report a crime 80% E 80% E 76% E 93% A B C E 63% 79% Stocked supplies in preparation for an emergency 81% 72% 84% B 78% 93% B D 82% Table 21: Participation - Mobility Percent rating positively (e.g., always/sometimes, more than once a month, yes) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Walked or biked instead of driving 38% 62% A D 53% A 45% 67% A C D 52% Carpooled with other adults or children instead of driving alone 38% B D 20% 28% 23% 24% 27% The National Community Survey™ 11 Table 22: Participation - Natural Environment Percent rating positively (e.g., always/sometimes, more than once a month, yes) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) How often, if at all, do you recycle at home, considering all of the times you could? 75% 75% 76% 78% 88% C 78% Made efforts to make your home more energy efficient 68% 80% 84% A D 71% 88% A D 79% Made efforts to conserve water 79% 85% D 85% D 72% 93% A D 82% Table 23: Participation - Built Environment Percent rating positively (e.g., always/sometimes, more than once a month, yes) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) NOT under housing cost stress 67% C 70% C 52% 61% 54% 59% Did NOT observe a code violation 47% 47% 44% 40% 64% A B C D 47% Table 24: Participation - Economy Percent rating positively (e.g., always/sometimes, more than once a month, yes) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Purchase goods or services from a business located in Clearwater 91% 95% 88% 93% 93% 91% Economy will have positive impact on income 54% C D E 52% C D E 30% 31% 36% 38% Work in Clearwater 45% B 19% 41% B 37% B 44% B 38% Table 25: Participation - Recreation and Wellness Percent rating positively (e.g., always/sometimes, more than once a month, yes) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Used Clearwater recreation centers or their services 52% 56% 48% 53% 53% 52% Visited a neighborhood park or City park 81% 72% 83% 84% 85% B 82% The National Community Survey™ 12 Percent rating positively (e.g., always/sometimes, more than once a month, yes) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Eat at least 5 portions of fruits and vegetables a day 72% 91% A C 71% 81% 83% C 78% Participate in moderate or vigorous physical activity 82% 94% C D 77% 73% 88% D 81% Reported being in "very good" or "excellent" health 60% 78% A C D 55% 59% 66% 62% Table 26: Participation - Education and Enrichment Percent rating positively (e.g., always/sometimes, more than once a month, yes) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Used Clearwater public libraries or their services 50% 56% 58% 48% 46% 53% Attended a City-sponsored event 37% 59% A D E 46% 43% 40% 45% Table 27: Participation - Community Engagement Percent rating positively (e.g., always/sometimes, more than once a month, yes) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Campaigned or advocated for an issue, cause or candidate 14% 29% A D 25% D 8% 26% D 20% Contacted Clearwater elected officials (in-person, phone, email or web) to express your opinion 7% 22% A D 13% 8% 32% A C D 15% Volunteered your time to some group/activity in Clearwater 30% 42% 38% 40% 33% 37% Participated in a club 26% 49% A C D E 21% 21% 35% C D 28% Talked to or visited with your immediate neighbors 95% C 95% C 81% 86% 94% C 88% Done a favor for a neighbor 82% 88% 82% 79% 87% 83% Attended a local public meeting 13% 33% A C D 12% 11% 22% D 16% Watched (online or on television) a local public meeting 12% 32% A 25% A 34% A 33% A 27% Read or watch local news (via television, paper, computer, etc.) 80% 97% A C D 71% 75% 93% A C D 81% Vote in local elections 75% 97% A C D 70% 80% C 93% A C D 80% The National Community Survey™ 13 Table 28: Community Focus Areas Percent rating positively (e.g., essential/very important) Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Overall feeling of safety in Clearwater 96% C E 94% E 87% 91% E 82% 90% Overall ease of getting to the places you usually have to visit 89% 93% C D 80% 81% 91% C 85% Quality of overall natural environment in Clearwater 87% 93% D 84% 79% 89% 85% Overall "built environment" of Clearwater (including overall design, buildings, parks and transportation systems) 81% 94% A C D 75% 75% 86% C 80% Health and wellness opportunities in Clearwater 71% 78% 74% 76% 75% 75% Overall opportunities for education and enrichment 75% 64% 75% 81% B 78% 76% Overall economic health of Clearwater 93% 93% 88% 87% 95% 90% Sense of community 72% 78% D 77% D 63% 65% 71% Table 29: Question 10 Custom Line Item Please rate the quality of each of the following services in Clearwater: (Percent rating as "excellent" or "good"). Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Recreation trails 70% 76% 67% 87% A C 81% C 75% Table 30: Information Sources Please indicate how much of a source, if at all, you consider each of the following to be for obtaining information about the City government and its activities, events and services: (Percent rating as "major source" or "minor source"). Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) City website (www.myclearwater.com) 91% E 84% E 87% E 85% E 72% 85% Local media outlets (newspapers, radio, local television stations) 93% 94% 88% 91% 90% 91% The local government cable channel CView 57% 62% 55% 52% 50% 55% City newsletter in the water bill 67% 64% 71% D 55% 74% D 66% City Council meetings and other public meetings 57% 63% E 52% 58% 46% 55% The National Community Survey™ 14 Please indicate how much of a source, if at all, you consider each of the following to be for obtaining information about the City government and its activities, events and services: (Percent rating as "major source" or "minor source"). Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater (A) (A) (B) (C) (D) (E) Talking with City officials 42% 55% 49% 53% 49% 50% City communications via social media (Facebook, Twitter, and YouTube) 73% C E 60% 55% 69% C 57% 62% Nextdoor 57% 70% 62% 61% 65% 63% Word-of-mouth 70% 91% A C D E 74% 75% 71% 75% Table 31: Frequency of Recycling Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater How often, if at all, do you recycle at home, considering all of the times you could? Always 12% 13% 33% 24% 18% 100% Usually 28% 15% 26% 20% 11% 100% Sometimes 11% 12% 42% 17% 18% 100% Rarely 22% 11% 42% 23% 1% 100% Never 14% 20% 31% 21% 14% 100% Table 32: Reasons for NOT Recycling Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater If you do not recycle at home, please indicate your primary reason for not recycling: Takes too much time/effort 0% 100% 0% 0% 0% 100% I don't think it helps the environment 0% 25% 0% 29% 46% 100% I don't have a recycling bin 6% 9% 28% 57% 0% 100% I don't have space for a bin 33% 67% 0% 0% 0% 100% I don't know what's recyclable 0% 0% 0% 0% 0% 0% I don't have the option to recycle 0% 29% 40% 30% 0% 100% Some other reason 87% 0% 0% 13% 0% 100% The National Community Survey™ 15 Table 33: Curbside Recycling Which of the following does the City accept in its curbside recycling program? Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater Cardboard Does accept 17% 14% 34% 20% 15% 100% Does NOT accept 19% 22% 59% 0% 0% 100% Electronics Does accept 28% 12% 27% 14% 19% 100% Does NOT accept 14% 14% 37% 22% 14% 100% Mixed paper Does accept 17% 13% 33% 21% 16% 100% Does NOT accept 7% 9% 70% 11% 3% 100% Metal cans Does accept 17% 13% 34% 20% 16% 100% Does NOT accept 9% 11% 65% 15% 0% 100% Plastic bags or plastic wrap Does accept 15% 8% 36% 23% 18% 100% Does NOT accept 15% 16% 38% 19% 13% 100% Aerosal cans Does accept 18% 11% 35% 18% 18% 100% Does NOT accept 16% 17% 40% 14% 14% 100% Plastic containers Does accept 15% 13% 36% 21% 15% 100% Does NOT accept 38% 12% 37% 10% 3% 100% Milk/juice cartons Does accept 16% 13% 35% 21% 16% 100% Does NOT accept 14% 20% 49% 14% 2% 100% Styrofoam Does accept 19% 11% 35% 13% 22% 100% Does NOT accept 16% 16% 35% 19% 14% 100% Glass bottles Does accept 15% 13% 35% 22% 15% 100% Does NOT accept 33% 10% 36% 4% 16% 100% Recyclables within plastic bags Does accept 23% 10% 32% 20% 15% 100% Does NOT accept 15% 15% 41% 16% 13% 100% The National Community Survey™ 16 Table 34: Familiarity with City's Electronic Waste Drop-off Center Geographic Area Overall Countryside Clearwater Beach/Island Estates/Sand Key Downtown and surrounding Morningside/Central Clearwater East Clearwater Before taking this survey, how familiar, if at all, were you with the City's electronic waste drop-off center at the Solid Waste facility on Hercules Avenue that is available on the last Wednesday of every month? Had never heard of it 15% 12% 35% 23% 15% 100% Had heard of it, but didn't know where it was 9% 20% 22% 35% 14% 100% Had heard of it, but didn't know when it was open 16% 3% 33% 14% 34% 100% Knew about it, but had never used it 17% 14% 39% 18% 12% 100% Knew about it and had used it 19% 18% 26% 22% 14% 100% CLEARWATER Community Survey Report Dec. 19, 2019 SURVEY OVERVIEW YEARS 2017 2019 2014 2008 Liveability National Research Center & ICMA Benchmark of 64K-150K Residents SURVEY OVERVIEW 504 SURVEY OVERVIEW RESPONDENTS 19% RESPONSE RATE 4% ERROR RATE COMMUNITY LIVEABILITY Community Characteristics Governance Participation 3 Pillars of Community 8 Facets of Community 80% Rated Excellent or Good Priorities: Safety & Economy All 8 Facets Rated Favorably Similar to Other Benchmark Communities QUALITY OF LIFE Excellent or Good Place to Live (83%) Rated Excellent or Good: Place to Raise Children (68%) Place to Retire (80%) (higher) Neighborhood as a Place to Live (74%) Image/Reputation (68%) Appearance (72%) Similar to Benchmark COMMUNITY CHARACTERISTICS All 40 Aspects Rated Positively Strong & Comparable 70% Positive Marks for Safety, Natural Environment Economy: Place to Visit (87%, higher) Shopping Opportunities (72%, higher) Vibrant Downtown (32%, lower) Cost of Living (35%) COMMUNITY CHARACTERISTICS Ease of Travel (63%) Ease of Travel by Car (52%) Traffic Flow (36%) Public Parking (37%, lower) Public Transportation (35%) Shopping Opportunities (72%, higher) Quality of Education (59%) Quality of K-12 Education (53%, lower) COMMUNITY CHARACTERISTICS Positive Ratings on City Services (70%) Positive Ratings on Federal Services (46%) Similar to National Averages City Rating Lower Than 2017 Rating Leadership & Governance All Aspects Rated Positively (50%) Customer Service Rated Positively (69%) Similar to National Benchmark GOVERNANCE 25 Services & Amenities Rated Positively (4 in 10 Residents) All Similar to Benchmarks Exception: Drinking Water Rated Lower than National Average Rating is Higher in 2019 Than in 2017 GOVERNANCE Highest Rated Services: Fire (91%) Ambulance/EMS (88%) Public Libraries (86%) Lowest Rated Services (Similar to Benchmark): Traffic Signal Timing (42%) Land Use, Planning & Zoning (42%) Code Enforcement (40%) Economic Development (40%) GOVERNANCE Overall Positive Ratings of Sense of Community (44%, lower) 30 Participation Activities Similar to Benchmarks Stock Supplies/Emergency (82%, higher) Less Likely to Carpool (27%, lower) PARTICIPATION SERVICE RATINGS SERVICE RATINGS 2019 2017 2014 2008 Benchmark Quality of Life 80% 84% 78% 75% Similar Overall Image 68% 69% 72% 67% Similar Place to Live 83% 89% 85% 83% Similar Neighborhood 74% 80% 74% 76% Similar Place/Raise Kids 68% 71% 68% 60% Similar Place/Retire 80% 81% 75% 67% Higher Appearance 72% 75% 72% 67% Similar SPECIAL TOPICS INFORMATION SOURCES HOW OFTEN DO YOU RECYCLE? REASONS FOR NOT RECYCLING CURBSIDE RECYCLING MATERIALS ELECTRONIC DROPOFF CENTER RECYCLING PROGRAM CHANGES KEY TAKEAWAYS Positive Quality of Life Liveability & Cost as Potential Future Focus Positive Place to Visit Economy as Area of Opportunity Governance & Service Delivery Strong & Stable Similar to Comparison Communities Communication of Recycling Messages TAKEAWAYS CLEARWATER Community Survey Report Dec. 19, 2019 Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7230 Agenda Date: 12/19/2019 Status: Agenda ReadyVersion: 1 File Type: MinutesIn Control: City Council Agenda Number: 5.1 SUBJECT/RECOMMENDATION: Approve the minutes of the December 5, 2019 City Council Meeting as submitted in written summation by the City Clerk. SUMMARY: APPROPRIATION CODE AND AMOUNT: USE OF RESERVE FUNDS: Page 1 City of Clearwater Printed on 12/19/2019 City Council Meeting Minutes December 5, 2019 Page 1 City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 Meeting Minutes Thursday, December 5, 2019 6:00 PM Main Library - Council Chambers City Council City Council Meeting Minutes December 5, 2019 Page 2 Roll Call Present: 5 - Mayor George N. Cretekos, Councilmember Jay Polglaze, Councilmember Hoyt Hamilton, Vice Mayor Bob Cundiff and Councilmember David Allbritton Also Present: William B. Horne II – City Manager, Micah Maxwell – Assistant City Manager, Michael Delk – Assistant City Manager, Pamela K. Akin City Attorney and Nicole Sprague – Official Records & Legislative Services Coordinator. To provide continuity for research, items are listed in agenda order although not necessarily discussed in that order. 1. Call to Order The meeting was called to order at 6:00 p.m. in Council Chambers at the Main Library. 2. Invocation – Pastor Jonathan Thacker from New Destiny Worship Center 3. Pledge of Allegiance – Vice Mayor Cundiff 4. Special recognitions and Presentations (Proclamations, service awards, or other special recognitions. Presentations by governmental agencies or groups providing formal updates to Council will be limited to ten minutes.) – Given. 4.1 Environmental Advisory Board Annual Presentation - Jared Leone, EAB Chair 4.2 Clearwater Ferry Services Transportation Alternatives - Patricia Rodriguez, Clearwater Ferry Services In response to questions, Ms. Rodriguez said the bigger hotels have not closed their parking garages to their employees. Two years ago there were approximately 12,000 employees on the beach. Marine and Aviation Director Ed Chesney said the ferry is using existing infrastructure and if the City is going to be in the ferry business, ferry infrastructure is needed. There is a grant opportunity with an application deadline of December 13, 2019 through Forward Pinellas for $1 million. Mr. Chesney said he is not comfortable applying for the grant this year as he needs to look at all aspects of the application and talk with staff and determine the City’s City Council Meeting Minutes December 5, 2019 Page 3 financial commitment. The grant will be available for subsequent years and funding can be used for planning, drawings, permitting, etc. Comment was made that an application would be stronger if the City waited. Mr. Chesney said he heard about the grant opportunity in November. 5. Approval of Minutes 5.1 Approve the minutes of the November 21, 2019 City Council Meeting as submitted in written summation by the City Clerk. Councilmember Allbritton moved to approve the November 21, 2019 City Council Meeting Minutes as submitted in written summation by the City Clerk. The motion was duly seconded and carried unanimously. 6. Citizens to be heard re items not on the agenda Mark Bunker expressed concerns regarding a Tampa Bay Times article about a meeting between city officials and the Church of Scientology. He said there was a missed opportunity for the City to ask questions about the Church's future plans in the city. He cautioned the City about treating the Church as a partner and said they have been sucking money out of downtown for years. Mike Riordon said he is in favor of council districts and the City should consider getting community feedback on the subject. 7. Consent Agenda – Approved as submitted. 7.1 Authorize the purchase of nineteen additional police vehicles for a not-to-exceed amount of $745,000, per the recommended contracts in accordance with Clearwater Code of Ordinances Section 2.564 (1)(d) Other Government Entities; declare surplus and authorize for disposal at auction the vehicles being replaced in accordance with Clearwater Code of Ordinances Section 2.622; authorize an increase to the current purchase order with Enforcement One Inc., of Oldsmar, Florida in the amount of $150,000 to provide police upfitting services for a new not to exceed amount of $450,000; authorize lease purchase under the City's Master Lease Purchase Agreement or internal financing via an interfund loan from the Capital Improvement Fund, whichever is deemed to be in the City's best interests and authorize the appropriate officials to execute same. (consent) 7.2 Approve an Engineer of Record (EOR) work order to HW Lochner of Tampa, FL for design of the Memorial Causeway Bridge lighting in the amount of $166,656 and City Council Meeting Minutes December 5, 2019 Page 4 authorize the appropriate officials to execute same. (consent) 7.3 Appoint Phil Henderson to the Marine Advisory Board as the Ex Officio member with term to expire December 31, 2023. (consent) 7.4 Appoint Andrew Lorenti to the Library Board to fill the remainder of an unexpired term through February 28, 2021. (consent) 7.5 Appoint Kelli O’Donnell to the Airpark Advisory Board as an Ex Officio member with term to expire December 31, 2023. (consent) 7.6 Appoint Kerry Fuller to the Municipal Code Enforcement Board to fill the remainder of an unexpired term through October 31, 2021. (consent) 7.7 Disband the Charter Review Committee. (consent) Councilmember Polglaze moved to approve the consent agenda as submitted and authorize the appropriate officials to execute same. The motion was duly seconded and carried unanimously. Public Hearings - Not before 6:00 PM 8. Administrative Public Hearings 8.1 Approve the request from the owners of property addressed as 901 S. Missouri Avenue and 1209 Jasmine Way, Clearwater, to vacate all of the platted alley abutting Lots 6 and 7 of Block D, as described in the plat titled McVeigh Subdivision as recorded in Plat Book 30, Page 83, of the Public Records of Pinellas County, Florida and pass Ordinance 9351-19 on first reading. (VAC2019-16) The property owners of 901 S. Missouri Avenue and 1209 Jasmine Way, Clearwater have requested that the City vacate a 20-foot-wide alley between their properties. The purpose of this vacation will be to allow for future development on the owner’s property. All city departments have reviewed this alley vacation and have no objection. The City of Clearwater will retain a Utility Easement on the south 6 feet of the plated alley proposed to be vacated, for the installation and maintenance of any and all public utilities to support existing and future facilities. Vice Mayor Cundiff moved to approve the request from the owners of property addressed as 901 S. Missouri Avenue and 1209 Jasmine Way, Clearwater, to vacate all of the platted alley abutting Lots 6 and 7 of Block D, as described in the plat titled McVeigh Subdivision as City Council Meeting Minutes December 5, 2019 Page 5 recorded in Plat Book 30, Page 83, of the Public Records of Pinellas County, Florida. The motion was duly seconded and carried unanimously. Ordinance 9351-19 was presented and read by title only. Councilmember Hamilton moved to pass Ordinance 9351-19 on first reading. The motion was duly seconded and upon roll call, the vote was: Ayes: 5 - Mayor Cretekos, Councilmember Polglaze, Councilmember Hamilton, Vice Mayor Cundiff and Councilmember Allbritton 8.2 Approve the annexation, initial Future Land Use Map designations of Residential Low (RL) and Water/Drainage Feature Overlay and initial Zoning Atlas designation of Low Medium Density Residential (LMDR) District for 1725 Owen Drive and pass Ordinances 9343-19, 9344-19 and 9345-19 on first reading. (ANX2019-10023) This voluntary annexation petition involves a 0.200-acre property consisting of one parcel of land occupied by a single-family dwelling. The parcel is located on the east side of Owen Drive approximately 365 feet north of SR 590. The applicant is requesting annexation in order to receive sanitary sewer and solid waste service from the City. The property is located within an enclave and is contiguous to existing city limits to the east. It is proposed that the property be assigned Future Land Use Map designations of Residential Low (RL) and Water/Drainage Feature Overlay and a Zoning Atlas designation of Low Medium Density Residential (LMDR). The Planning and Development Department determined that the proposed annexation is consistent with the provisions of Clearwater Community Development Code Section 4-604.E as follows: • The property currently receives water service from Pinellas County. Collection of solid waste will be provided to the property by the City. The closest sanitary sewer line is located in the adjacent Owen Drive right-of-way, and the owner is aware that the required sewer impact and assessment fees must be paid in full prior to connection and of the additional costs to extend City sewer service to the property. Collection of solid waste will be provided to the property by the City. The property is located within Police District III and service will be administered through the district headquarters located at 2851 N. McMullen Booth Road. Fire and emergency medical services will be provided to this property by Station #48 located at 1700 Belcher Road. The City has adequate capacity to serve this property with sanitary sewer, solid waste, police, fire and EMS service. Water service will continue to be provided by Pinellas County. The proposed annexation will not have an adverse effect on public facilities and their levels of service; and • The proposed annexation is consistent with and promotes the following City Council Meeting Minutes December 5, 2019 Page 6 objectives and policy of the Clearwater Comprehensive Plan: Objective A.6.4 Due to the built-out character of the City of Clearwater, compact urban development within the urban service area shall be promoted through application of the Clearwater Community Development Code. Objective A.7.2 Diversify and expand the City’s tax base through the annexation of a variety of land uses located within the Clearwater Planning Area. Policy A.7.2.3 Continue to process voluntary annexations for single-family residential properties upon request. • The proposed Residential Low (RL) Future Land Use Map category is consistent with the current Countywide Plan designation of this property. This designation primarily permits residential uses at a density of 5 units per acre. The Water/Drainage Feature Overlay proposed to be applied to the property will recognize the existing drainage easement on the property. The proposed zoning district to be assigned to the property is Low Medium Density Residential (LMDR). The use of the subject property is consistent with the uses allowed in the District and the property exceeds the District’s minimum dimensional requirements. The proposed annexation is therefore consistent with the Countywide Plan and the City’s Comprehensive Plan and Community Development Code; and • The property proposed for annexation is contiguous to existing city limits to the east. Therefore, the annexation is consistent with Florida Statutes Chapter 171.044. Councilmember Allbritton moved to approve the annexation, initial Future Land Use Map designations of Residential Low (RL) and Water/Drainage Feature Overlay and initial Zoning Atlas designation of Low Medium Density Residential (LMDR) District for 1725 Owen Drive. The motion was duly seconded and carried unanimously. Ordinance 9343-19 was presented and read by title only. Councilmember Polglaze moved to pass Ordinance 9343-19 on first reading. The motion was duly seconded and upon roll call, the vote was: Ayes: 5 - Mayor Cretekos, Councilmember Polglaze, Councilmember Hamilton, Vice Mayor Cundiff and Councilmember Allbritton City Council Meeting Minutes December 5, 2019 Page 7 Ordinance 9344-19 was presented and read by title only. Vice Mayor Cundiff moved to pass Ordinance 9344-19 on first reading. The motion was duly seconded and upon roll call, the vote was: Ayes: 5 - Mayor Cretekos, Councilmember Polglaze, Councilmember Hamilton, Vice Mayor Cundiff and Councilmember Allbritton Ordinance 9345-19 was presented and read by title only. Councilmember Hamilton moved to pass Ordinance 9345-19 on first reading. The motion was duly seconded and upon roll call, the vote was: Ayes: 5 - Mayor Cretekos, Councilmember Polglaze, Councilmember Hamilton, Vice Mayor Cundiff and Councilmember Allbritton 9. Second Readings - Public Hearing 9.1 Adopt Ordinance 9328-19 on second reading, annexing certain real property whose post office address is 2048 The Mall, Clearwater, Florida 33755, into the corporate limits of the city and redefining the boundary lines of the city to include said addition. Ordinance 9328-19 was presented and read by title only. Councilmember Allbritton moved to adopt Ordinance 9328-19 on second and final reading. The motion was duly seconded and upon roll call, the vote was: Ayes:5 - Mayor Cretekos, Councilmember Polglaze, Councilmember Hamilton, Vice Mayor Cundiff and Councilmember Allbritton 9.2 Adopt Ordinance 9329-19 on second reading, amending the future land use plan element of the Comprehensive Plan of the city to designate the land use for certain real property whose post office address is 2048 The Mall, Clearwater, Florida 33755, upon annexation into the City of Clearwater as Residential Urban (RU). Ordinance 9329-19 was presented and read by title only. Councilmember Polglaze moved to adopt Ordinance 9329-19 on second and final reading. The motion was duly seconded and upon roll call, the vote was: Ayes:5 - Mayor Cretekos, Councilmember Polglaze, Councilmember Hamilton, Vice Mayor Cundiff and Councilmember Allbritton 9.3 Adopt Ordinance 9330-19 on second reading, amending the Zoning Atlas of the city by zoning certain real property whose post office address is 2048 The Mall, Clearwater, Florida 33755, upon annexation into the City of Clearwater as Low Medium Density Residential (LMDR). Ordinance 9330-19 was presented and read by title only. Vice Mayor Cundiff moved to adopt Ordinance 9330-19 on second City Council Meeting Minutes December 5, 2019 Page 8 and final reading. The motion was duly seconded and upon roll call, the vote was: Ayes: 5 - Mayor Cretekos, Councilmember Polglaze, Councilmember Hamilton, Vice Mayor Cundiff and Councilmember Allbritton 9.4 Adopt Ordinance 9331-19 on second reading, annexing certain real property whose post office address is 2765 Avocado Drive, Clearwater, Florida 33759, into the corporate limits of the city and redefining the boundary lines of the city to include said addition. Ordinance 9331-19 was presented and read by title only. Councilmember Hamilton moved to adopt Ordinance 9331-19 on second and final reading. The motion was duly seconded and upon roll call, the vote was: Ayes: 5 - Mayor Cretekos, Councilmember Polglaze, Councilmember Hamilton, Vice Mayor Cundiff and Councilmember Allbritton 9.5 Adopt Ordinance 9332-19 on second reading, amending the future land use element of the Comprehensive Plan to designate the land use for certain real property whose post office address is 2765 Avocado Drive, Clearwater, Florida 33759, upon annexation into the City of Clearwater, as Residential Low (RL) Ordinance 9332-19 was presented and read by title only. Councilmember Allbritton moved to adopt Ordinance 9332-19 on second and final reading. The motion was duly seconded and upon roll call, the vote was: Ayes: 5 - Mayor Cretekos, Councilmember Polglaze, Councilmember Hamilton, Vice Mayor Cundiff and Councilmember Allbritton 9.6 Adopt Ordinance 9333-19 on second reading, amending the Zoning Atlas of the city by zoning certain real property whose post office address is 2765 Avocado Drive, Clearwater, Florida 33759, upon annexation into the City of Clearwater, as Low Medium Density Residential (LMDR). Ordinance 9333-19 was presented and read by title only. Councilmember Allbritton moved to adopt Ordinance 9333-19 on second and final reading. The motion was duly seconded and upon roll call, the vote was: Ayes:5 - Mayor Cretekos, Councilmember Polglaze, Councilmember Hamilton, Vice Mayor Cundiff and Councilmember Allbritton 9.7 Adopt Ordinance 9334-19 on second reading, annexing certain real property whose post office address is 1717 Grove Drive, Clearwater, Florida 33759, into the corporate limits of the city and redefining the boundary lines of the city to include said addition. City Council Meeting Minutes December 5, 2019 Page 9 Ordinance 9334-19 was presented and read by title only. Vice Mayor Cundiff moved to adopt Ordinance 9334-19 on second and final reading. The motion was duly seconded and upon roll call, the vote was: Ayes:5 - Mayor Cretekos, Councilmember Polglaze, Councilmember Hamilton, Vice Mayor Cundiff and Councilmember Allbritton 9.8 Adopt Ordinance 9335-19 on second reading, amending the future land use plan element of the Comprehensive Plan of the city to designate the land use for certain real property whose post office address is 1717 Grove Drive, Clearwater, Florida 33759, upon annexation into the City of Clearwater as Residential Low (RL). Ordinance 9335-19 was presented and read by title only. Councilmember Hamilton moved to adopt Ordinance 9335-19 on second and final reading. The motion was duly seconded and upon roll call, the vote was: Ayes: 5 - Mayor Cretekos, Councilmember Polglaze, Councilmember Hamilton, Vice Mayor Cundiff and Councilmember Allbritton 9.9 Adopt Ordinance 9336-19 on second reading, amending the Zoning Atlas of the city by zoning certain real property whose post office address is 1717 Grove Drive, Clearwater, Florida 33759, upon annexation into the City of Clearwater as Low Medium Density Residential (LMDR). Ordinance 9336-19 was presented and read by title only. Councilmember Allbritton moved to adopt Ordinance 9336-19 on second and final reading. The motion was duly seconded and upon roll call, the vote was: Ayes: 5 - Mayor Cretekos, Councilmember Polglaze, Councilmember Hamilton, Vice Mayor Cundiff and Councilmember Allbritton 9.10 Adopt Ordinance 9340-19 on second reading, amending Beach By Design: A Preliminary Design for Clearwater Beach and Design Guidelines to update the public boardwalk standards in “Marina District Boardwalk Design Guidelines and Specifications.” Ordinance 9340-19 was presented and read by title only. Councilmember Polglaze moved to adopt Ordinance 9340-19 on second and final reading. The motion was duly seconded and upon roll call, the vote was: Ayes:5 - Mayor Cretekos, Councilmember Polglaze, Councilmember Hamilton, Vice Mayor Cundiff and Councilmember Allbritton 9.11 Adopt Ordinance 9348-19 on second reading, amending the Code of Ordinances, City Council Meeting Minutes December 5, 2019 Page 10 Chapter 25 - Public Transportation Carriers, Article I - Public Conveyances to define micromobility device, motorized scooter, and shared mobility device provider and make other amendments to related definitions, to establish standards for micromobility devices, to require a license for shared mobility devices offered for rent within the city, and to add penalties. Ordinance 9348-19 was presented and read by title only. Vice Mayor Cundiff moved to adopt Ordinance 9348-19 on second and final reading. The motion was duly seconded and upon roll call, the vote was: Ayes: 5 - Mayor Cretekos, Councilmember Polglaze, Councilmember Hamilton, Vice Mayor Cundiff and Councilmember Allbritton 10. City Manager Reports 10.1 Accept a sidewalk easement over portions of Lots 10, 11 and 12, Block 4, of Carter, Honaker and Bare’s Lincoln Place Addition to Clearwater as recorded in Plat Book 3, Page 27, of the Public Records of Pinellas County, Florida, conveyed to the City by the Property Owner, adopt Resolution 19-38, and authorize the appropriate officials to execute same. The sidewalk easement will allow the City rights for repair and maintenance of a sidewalk as Clearwater Neighborhood Housing Services develops the site for single family housing. Councilmember Hamilton moved to accept a sidewalk easement over portions of Lots 10, 11 and 12, Block 4, of Carter, Honaker and Bare’s Lincoln Place Addition to Clearwater as recorded in Plat Book 3, Page 27, of the Public Records of Pinellas County, Florida, conveyed to the City by the Property Owner. The motion was duly seconded and carried unanimously. Resolution 19-38 was presented and read by title only. Councilmember Allbritton moved to adopt Resolution 19-38. The motion was duly seconded and upon roll call, the vote was: Ayes: 5 - Mayor Cretekos, Councilmember Polglaze, Councilmember Hamilton, Vice Mayor Cundiff and Councilmember Allbritton 10.2 Amend the Clearwater Code of Ordinances, Chapter 25 - Public Transportation Carriers, Article I - Public Conveyances to define commercial megacycles and definitions to establish standards for commercial megacycles, to require a license for commercial mega cycles to be operated in the city and to add penalties and pass Ordinance 9356-20 on first reading. In August of 2019 staff was tasked with examining the feasibility of permitting City Council Meeting Minutes December 5, 2019 Page 11 the operation of megacycles in the City of Clearwater. After conducting research on a local and state level, staff developed a pilot program to determine the viability of the program. It has been determined that an amendment to the Clearwater Code of Ordinances, Chapter 25 - Public Transportation Carriers, Article I - Public Conveyances would be needed to administer the pilot program. In response to questions, Assistant to the City Manager Jim Halios said the pilot program is for the downtown area. The City Manager said staff is presenting the program as Council directed. A suggestion was made that the pilot program be extended to areas on Clearwater Beach. Comment was made that there is already significant traffic congestion on the beach and megacycles would add to the problem. The City Manager said staff does not recommend placing the megacycles on the beach. Two individuals spoke in support of expanding the pilot program to the beach. One individual spoke in opposition of allowing the program on the beach. Comment was made that if the megacycles on the beach show a hinderance to beach traffic, the program does not have to be extended beyond the six- month pilot program. Staff was directed to bring the item back to the next worksession with an expanded operating area to include north and south Clearwater Beach with the understanding that the megacycles will be prohibited in the roundabout. 11. City Attorney Reports 11.1 Approve referendum questions to appear on the ballot March 17, 2020 regarding changes to the City Charter and pass Ordinances 9353-19, 9354-19 and 9355-19 on first reading. The Charter Review Committee is appointed by the City Council every five years to review the City Charter and recommend changes thereto. This year's Charter Review Committee recommends the following changes: Ordinance 9353-19 would increase the size of city owned real property that may be donated or sold for less than fair market value to five acres for the purpose of workforce housing and allow the donation or sale for less than fair market value of uneconomic remainders to adjacent property holders; Ordinance 9354-19 would make non-substantive changes to the Charter, City Council Meeting Minutes December 5, 2019 Page 12 deleting language allowing the lease of certain city property to the Clearwater Marine Aquarium because it has expired; amending Section 2,.06(c) to be consistent with state law; and to require the City Manager to submit a report on the state of the city every November instead of September; Ordinance 9355-19 would require the Charter Review Committee to meet at least every eight years instead of the current every five years; Upon being adopted, each of these ordinances would be presented as a ballot question on the March 17, 2020 ballot for referendum vote by the citizens of the City of Clearwater. Each ordinance would become effective only upon being approved at referendum. Vice Mayor Cundiff moved to approve referendum questions to appear on the ballot March 17, 2020 regarding changes to the City Charter. The motion was duly seconded and carried unanimously. Ordinance 9353-19 was presented and read by title only. Councilmember Hamilton moved to pass Ordinance 9353-19 on first reading. The motion was duly seconded and upon roll call, the vote was: Ayes: 5 - Mayor Cretekos, Councilmember Polglaze, Councilmember Hamilton, Vice Mayor Cundiff and Councilmember Allbritton Ordinance 9354-19 was presented and read by title only. Councilmember Allbritton moved to pass Ordinance 9354-19 on first reading. The motion was duly seconded and upon roll call, the vote was: Ayes: 5 - Mayor Cretekos, Councilmember Polglaze, Councilmember Hamilton, Vice Mayor Cundiff and Councilmember Allbritton Ordinance 9355-19 was presented and read by title only. Councilmember Polglaze moved to pass Ordinance 9355-19 on first reading. The motion was duly seconded and upon roll call, the vote was: Ayes: 5 - Mayor Cretekos, Councilmember Polglaze, Councilmember Hamilton, Vice Mayor Cundiff and Councilmember Allbritton 12. Closing comments by Councilmembers (limited to 3 minutes) Vice Mayor Cundiff said he toured the Monin Factory on Range Road; the Monin product started in Bourges, France and Clearwater is in the process of starting a Sister City relationship with Bourges. Their shipping and labeling supplies are green and they hire people who are on the autism spectrum. City Council Meeting Minutes December 5, 2019 Page 13 Councilmember Polglaze said Clearwater has the most recreation facilities and opportunities than any other city in Florida. Former Parks and Recreation Director Kevin Dunbar had a vision that no child should drown and created a $10 swim lesson program for all children in Pinellas County and provided the lesson for free if the fee created a financial burden on the family. Councilmember Allbritton said there was a great turnout for the Imagine Clearwater public meetings; it gives a good idea of what the park will look like when it is finished. Councilmember Hamilton said he had worked with the former Parks and Recreation Director for years and while there were unfortunate circumstances leading to his resignation, he deserves credit for the overall quality of the department. 13. Closing Comments by Mayor Mayor Cretekos reviewed recent and upcoming events. 14. Adjourn The meeting adjourned at 7:33 p.m. Mayor City of Clearwater Attest City Clerk Citizen Comment Card Name: ir\ )/ ( Address: ) eAn Ci / LY) City. Ci2 k1U zip• .33-1s-5 Telephone Number: (727)13 6 7Cf Email Address: 149.,1(IShar lOn y vo•corn Speaking under citizens to be heard re items not on the agenda? E Agenda item(s) to which you wish to speak: G .4-y-w1`cue ncvne Cboci-vrnan What is your position on the item? For Against Citizen Comment Card Name:- j/LL, \Jo/OSQ/U Address: Cr, (A), City: CG.E/i4(t AT L Zip: 33 G ( ( Telephone Number: 7R Email Address:It t- D4/S € USA-, '=E T Speaking under citizens to be hard re items not on the agenda? rUr Agenda item(s) to which you wish to speak. l C X)0 4CCA-*/ l Aq-e -7-,Afethp What is your position on the item? For Against Citizen Comment Card Name: 1 }Z/(69 ,Q20WAJ (iftil dell Address: 20 Ko 9 77, City: C(,v, Zip• 33 9s--6 Telephone Number: 7— 5-7.5--" 957 f Email Address: G9"1+46.- c -or,,, Speaking under citizens to be heard re items not on the agenda? Agenda item(s) to which you wish to speak. CO i-4/ PO -i K What is your position on the item? For X -Ai9Against% Name: Citizen Comment Card Address: v 17 1 City. -G(4'kCt ` Zip: -S3L7 Telephone Number: Email Address: Speaking under citizens to be heard re items not on the agenda?% Agenda item(s) to which you wish to speak. t 3 1 What is your position on the item? For Against My name is Sarah Brown Caudell, I have been in Downtown all 74 years of my life. I've seen millions spent on studies, all with words like, jump start, catalyst, revitalization, etc. I've seen small and large business owners come and go, many with hopes and dreams dashed. The "Beautification and/or Build it they will come" mentality has never done anything to make down town boom again, it has to coincide with Shops, convenient Parking and Public Garages. A multi car Tram should run continuously picking up people to take them up and down the hill to Coachman Park, to and from the Marina and Downtown business areas. Our Bayfront does need improvement, but I do not believe in selling or swapping our Bluff or below Properties to anyone. We should retain them, they belong to all our city taxpaying citizens. When you send out the Requests For Proposals nationally to developers to consider the Bluff Properties for multi -use, do so with reconsideration for a Hotel with convention facilities, shopping, restaurants and bars on Leased Bluff Land. I voted to redo Coachman Park, but since the original meetings things changed. I did not vote for a Pagoda. I suggest instead, a Large American Flag flying over a Sculpture/monument dedicated to Veterans, Police and First Responders. The Pedestrian overpass? I was told at public meetings that tall trees will be planted so viewing from the overpass to look at the stage or sunsets will be impeded. I know the 4000 seats will be sold, but what about other times when 6000 or more people show up, will they have a view from the Pedestrian overpass? If they don't, why build it? We have had Lakes before, this lake with bridge and pagoda takes up a large area that would better be used for people in attendance. I also believe in keeping the name Coachman Park NOT Coachman Commons! A way to bring both ends of Cleveland Street together is to remove the Islands from the center and have Angle and Horizontal Parking on ALL of Cleveland Street. With a straightened Street, Parades could once again be from the East End all the way West to Coachman Park. All of Clearwater would come and enjoy a Parade for Veterans, Fun n Sun, Christmas, MLK, LGBTQ, Cinco de Mayo & more. Speaking from my heart I would like for Council, Staff and Mr. Miscavige, to open your hearts and put back a little of our city's Grass Roots. 1 cannot "imagine" that Mr. Miscavige and Parishioners that own property downtown cannot Lease their storefronts to retail. I know they could, but why won't they? There is plenty of room for many types of businesses to open and thrive, but it takes communication, honest negotiations and working together to get it done! We need Upscale, Outlet and Variety type stores, more restaurants, bars, and Parking. So I ask you, Council, Staff, Mr. Miscavige, ALL Property Owners and Residents, please come together and stop this "Strife" that has been going on all these years. Thank You and Merry Christmas! Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7213 Agenda Date: 12/19/2019 Status: Consent AgendaVersion: 1 File Type: Action ItemIn Control: Finance Agenda Number: 7.1 SUBJECT/RECOMMENDATION: Award a contract for Gas Utility rate studies and other professional services for the five-year period ending December 31, 2024, to Raftelis Financial Consultants, Inc. (Raftelis) for a not-to-exceed amount of $184,000 and authorize the appropriate officials to execute same. (consent) SUMMARY: Raftelis was selected to provide rate study services as the top-rated consultant of three firms responding to RFP 58-19. Raftelis has valuable experience performing rate studies for municipal gas utilities and has one of the country’s leading governmental utility rate and financial planning practices. The five-year contract includes plans for up to three rate studies, as detailed on the Exhibit A schedule and cost recap. The schedule for the rate studies is an estimate and may vary with the issuance of utility revenue bonds and other factors. The contract price is all-inclusive including travel costs. An additional $27,500 for optional meetings and hourly consulting services, on an as-needed basis, is included in the not-to-exceed amount. Services include: prepare a five-year forecast of revenues and revenue requirements to evaluate existing rates ability to meet operating costs, capital costs, and debt services costs with an adequate level of working capital reserves; prepare a class cost of service study to determine the cost associated with providing service to each customer class and compare this cost of service to the current revenues; and recommend rates sufficient to meet the gas utility’s forecasted revenue requirements and reflect cost of service and other policy considerations. The rate studies include one-on-one interactive presentations to Council members and professional recommendations for rate adjustments as necessary. The last rate study for the Clearwater Gas System was completed in 2014 by Black & Veatch. APPROPRIATION CODE AND AMOUNT: Funding of $50,000 is available in Gas Utility Fund object code 530100 for fiscal year 2020. A fiscal year 2020 first quarter budget amendment will increase object code 530100 (professional services) by $15,680, to be funded from budgeted Gas Utility Fund revenues. Funding will be budgeted in the Gas Utility Fund professional services expenditure line items for future years. Page 1 City of Clearwater Printed on 12/19/2019 File Number: ID#19-7213 Page 2 City of Clearwater Printed on 12/19/2019 Schedule and Cost Recap:Exhibit A Calendar 2020 Calendar 2021 Calendar 2022 Calendar 2023 Calendar 2024 Total Rate and Financial Planning Study 58,500$ 48,000$ 50,000$ 156,500$ Optional Meeting 4,500$ 4,700$ 4,900$ 14,100$ Contingency for Hourly Consulting 2,680$ 2,680$ 2,680$ 2,680$ 2,680$ 13,400$ Totals 65,680$ 2,680$ 55,380$ 2,680$ 57,580$ 184,000$ Utility Rate Study Services - Gas Utility System PROPOSAL / RFP #58-19 / OCTOBER 17, 2019 / COPY ClearwaterCity of Raftelis is registered with the U.S. Securities and Exchange Commission (SEC) and the Municipal Securities Rulemaking Board (MSRB) as a Municipal Advisor. Registration as a Municipal Advisor is a requirement under the Dodd-Frank Wall Street Reform and Consumer Protection Act. All firms that provide financial forecasts that include assumptions about the size, timing, and terms for possible future debt issues, as well as debt issuance support services for specific proposed bond issues, including bond feasibility studies and coverage forecasts, must be registered with the SEC and MSRB to legally provide financial opinions and advice. Raftelis’ registration as a Municipal Advisor means our clients can be confident that Raftelis is fully qualified and capable of providing financial advice related to all aspects of utility financial planning in compliance with the applicable regulations of the SEC and the MSRB. Table of Contents 01 Letter of Transmittal 35 References 03 Experience and Qualifications 37 Cost of Services 39 Other Forms 27 Project Approach, Methodology, and Schedule for Completion This page intentionally left blank to facilitate two-sided printing 341 N. Maitland Avenue, Suite 300 Maitland, FL 32751 WWW.RAFTELIS.COM October 16, 2019 City of Clearwater Purchasing Office 100 S. Myrtle Ave., 3rd Floor Clearwater, FL 33756 Subject: Proposal for Utility Rate Study Services – Gas Utility System (RFP #58-19) Dear Members of the Selection Committee: Raftelis in association with Tom Sullivan of Navillus Utility Consulting, LLC (Navillus) (together, the Raftelis Team) are pleased to submit this proposal to conduct a natural gas rate study for the City of Clearwater (City). We believe that our unique combination of qualifications, experience, and resources will ensure a value-added project that will benefit the City and its customers. With a combination of one of the country’s leading governmental utility rate and financial planning practices and Navillus’ extensive experience working previously with the City and in the natural gas sector, we offer the City maximum value for several key reasons, including: •We have unparalleled experience providing similar services to numerous utilities in Florida, throughout the Southeast, and across the country. •We can deliver efficient and effective solutions by leveraging Navillus’ natural gas pricing experience and Raftelis’ vast resources as it relates to utility financial planning, cost of service, and rate design. •Raftelis is registered with the U.S. Securities and Exchange Commission (SEC) and the Municipal Securities Rulemaking Board (MSRB) as a Municipal Advisor. This registration is a requirement under the Dodd-Frank Wall Street Reform and Consumer Protection Act and is necessary to provide advice on the timing and size of future debt issuance, which would be critical for any future debt issuances the City may need to pursue. Raftelis was established in 1993 to provide financial, rate, and management consulting services of the highest quality to gov- ernmental utilities. Raftelis has the largest and most experienced utility rate and financial consulting practice in the country. No one in the industry can equal Raftelis’ combination of size, efficiencies, and corporate independence. Our mission has always been focused on assisting our clients from an objective viewpoint as we have no “stake” in the scope and depth of a utility’s capital investments and are, thus, able to avoid potential conflicts of interest. Navillus is a utility management consulting firm established in 2011 by Tom Sullivan. Mr. Sullivan has experience providing management and financial consulting services to both public and private natural gas, electric, water, and wastewater utilities. The services provided by Navillus include revenue requirements, rates and cost of service, depreciation rate analysis, utility accounting, valuation, financial and economic feasibility, contract negotiation (both supplier and customer), demand and supply analysis, debt issuance support, and expert witness testimony. 01LETTER OF TRANSMITTAL To assist the City on this project, we have selected a team with extensive experience and a reputation for quality service. I will serve as Project Manager and will be responsible for managing the day-to-day aspects of the project to ensure it is within budget, on schedule, and achieves the City’s objectives. I have been with Raftelis since 2002, am a Municipal Advisor Princi- pal, and manage numerous projects throughout the Southeast in helping utilities address economic and financial issues. Mr. Sullivan will serve as a Technical Advisor on various cost of service and rate design elements of the study. Collin Drat will lead project analytics and provide oversight to staff. Staff support will be provided out of our office in Maitland, FL. Henry Thomas will also serve as a Technical Advisor. Mr. Thomas has more than 40 years of experience providing utility rate and financial planning services predominantly in Florida. We are proud of the resources that we can offer and welcome the opportunity to assist to the City in this engagement. Should you have any questions, please do not hesitate to contact me using the contact information below. Bart Kreps, Vice President 227 W. Trade Street, Suite 1400, Charlotte, NC 28202 Office: 704.936.4438 / Mobile: 704.968.3278 / Email: bkreps@raftelis.com Very truly yours, Bart Kreps Vice President 341 N. Maitland Avenue, Suite 300 Maitland, FL 32751 WWW.RAFTELIS.COM CITY OF CLEARWATER02 RAFTELIS IS THE TRUSTED ADVISOR TO UTILITIES AND THE PUBLIC SECTOR. + Visit www.raftelis.com to learn more WHO IS Raftelis Raftelis provides utilities and public- sector organizations with insights and expertise to help them operate as high-performing, sustainable entities providing essential services to their citizens. We help our clients solve their finance, organizational, and technology challenges, achieve their objectives, and, ultimately, make their communities better places to live, work, and play. Raftelis and PRMG On July 1, 2019, Raftelis acquired PRMG. The entire PRMG staff is now part of the Raftelis family. Over the past 25 years, PRMG and Raftelis have followed similar paths—focusing on delivering lasting business solutions for public-sector agencies. The combination of our two firms provides our clients with the capabilities and resources of Raftelis, the nation’s largest and most experienced practice focused on financial and management consulting for public-sector utilities, coupled with the regional insights and understanding of PRMG, Florida’s leading utility financial, rate, and business solutions consultancy. You will now have the expertise of more than 100 of the country’s leading utility and public-sector consultants, including many of the nation’s foremost authorities in finance and rates, along with additional capabilities in the areas of organizational and management consulting, data and technol- ogy services, and communication and public outreach, to help address your most challenging issues. We know that our combined capabilities and resources will provide added value to the City, and we’re looking forward to what we can accomplish together. 03EXPERIENCE AND QUALIFICATIONS The Right Fit THE CITY& RAFTELIS We believe that Raftelis is the right fit for this project. We provide several key factors that will benefit the City and help to make this project a success. RESOURCES & EXPERTISE This project will require the resources necessary to effectively staff the project and the skillsets to complete all of the required components. With more than 100 consultants, Raftelis has the largest public- sector utility financial and rate consulting practice in the nation. Our depth of resources will allow us to provide the City with the technical expertise necessary to meet your objectives. In addition to having many of the industry’s leading rate consultants, we also have experts in key related areas, like stakeholder engagement and data analytics, to provide additional insights as needed. DEFENSIBLE RECOMMENDATIONS When your Board and customers are considering the validity and merit of recommended changes, they want to be confident that they were developed by experts using the latest industry standard methodology. Our senior staff are involved in shaping industry standards by chairing various committees within the American Water Works Association (AWWA) and the Water Environment Federation (WEF). Raftelis’ staff members have also co-authored many industry standard books regarding utility finance and rate setting. Being so actively involved in the industry will allow us to keep the City informed of emerging trends and issues, and to be confident that our recommendations are insightful and founded on sound industry principles. In addition, with Raftelis’ registration as a Municipal Advisor, you can be confident that we are fully qualified and capable of providing financial advice related to all aspects of utility financial planning in compliance with federal regulations. CITY OF CLEARWATER04 RATES THAT ARE ADOPTED For the study to be a success, rates must be successfully approved and implemented. Even the most comprehensive rate study is of little use if the recommendations are not approved and implemented. Raftelis has assisted numerous agencies with getting proposed rates successfully adopted. We develop a message regarding the changes that is politically acceptable and convey that message in an easy-to-understand manner. We focus on effectively communicating with elected officials about the financial consequences and rationale behind recommendations to ensure stakeholder buy-in and successful rate adoption. USER-FRIENDLY MODELING A modeling tool that your staff can use for scenario analysis and financial planning now and into the future will be key for the City going forward. Raftelis has developed some of the most sophisticated yet user-friendly financial/rate models available in the industry. Our models are tools that allow us to examine different policy options and cost allocations and their financial/ customer impacts in real time. Our models are non-proprietary and are developed with the expectation that they will be used by the client as a financial planning tool long after the project is complete. HISTORY OF SIMILAR SUCCESSES An extensive track record of past similar work will help to avoid potential pitfalls on this project and provide the know-how to bring it across the finish line. Raftelis staff have assisted 1,000+ utilities throughout the U.S. with financial and rate consulting services, with wide-ranging needs and objectives. Our extensive experience along with Navillus’ experience in the natural gas sector will allow us to provide innovative and insightful recommendations to the City and will provide validation for our proposed methodology ensuring that industry best practices are incorporated. RAFTELIS 05 This map and the matrix on the following pages show some of the utility clients that we have assisted. 25 % Raftelis has provided financial/organizational/technology assistance to utilities serving more than of the U.S. population. Our staff have assisted more than 1,000 utilities across the U.S., including some of the largest and most complex agencies in the nation. In the past year alone, Raftelis worked on more than 600 financial/organizational/technology consulting projects for over 400 water, wastewater, and/or stormwater utilities in 40 states, the District of Columbia, and Canada. Experience RAFTELIS HAS THE MOST EXPERIENCED MUNICIPAL UTILITY FINANCIAL AND MANAGEMENT CONSULTING PRACTICE IN THE NATION. CITY OF CLEARWATER06 Rate Studies & PricingWholesale Rates Enterprise ConsolidationFinancial PlanningImpact Fees Management Consulting Valuation Litigation Support Management Accounting Contracts / Ordinances Debt Issuance Assistance City of Alachua City of Arcadia City of Auburndale Babcock Ranch Community Independent Special District (BRCISD) Boca Raton Bonita Springs Utilities City of Cape Canaveral Charlotte County City of Clermont Collier County City of DeLand City of Davie Destin Water Users City of Edgewater City of Eustis Florida Keys Aqueduct Authority Town of Fort Myers Beach City of Fort Walton Beach City of Groveland Hernando County Hillsborough County Indian River County Village of Islamorada Town of Jupiter Town of Lauderdale-by-the-Sea City of Lake Alfred City of Largo City of Lake Wales Lee County Manatee County City of Marathon City of Margate Martin County FLORIDA EXPERIENCE The Raftelis team has extensive experience serving Florida public sector agencies. This matrix shows some of the Florida public-sector entities/utilities that the Raftelis team have served. RAFTELIS 07 Rate Studies & PricingWholesale Rates Enterprise ConsolidationFinancial PlanningImpact Fees Management Consulting Valuation Litigation Support Management Accounting Contracts / Ordinances Debt Issuance Assistance City of Mascotte City of Melbourne City of Miami Beach City of Miramar Town of Oakland Oakland Park City of Ocala City of Oldsmar City of Orlando City of Oviedo Town of Palm Beach Village of Palm Springs City of Panama City Pinellas County City of Plant City City of Pompano Beach City of Port St. Lucie St. Johns County City of Sanford Sarasota County South Walton Utility Co., Inc. City of Sunrise Village of Tequesta Tohopekaliga Water Authority City of Tampa City of Tavares Volusia County Village of Wellington City of West Palm Beach City of Wilton Manors City of Winter Haven City of Zepyrhills CITY OF CLEARWATER08 Project Team PROJECT MANAGER Bart Kreps LEAD CONSULTANT Collin Drat STAFF CONSULTANT TECHNICAL ADVISOR Henry Thomas NATURAL GAS RATE / COST OF SERVICE TECHNICAL ADVISOR Tom Sullivan Jr., PE CITY OF CLEARWATER WE HAVE DEVELOPED A TEAM OF CONSULTANTS WHO SPECIALIZE IN THE SPECIFIC ELEMENTS THAT WILL BE CRITICAL TO THE SUCCESS OF THE CITY’S PROJECT. Raftelis is the nation’s largest and most experienced practice focused on financial and management consulting for public sector utilities. We have been providing utilities and public sector organizations with insights and expertise to help solve finance, organizational, communication, and technology challenges for over 40 years. Our partnership with Navillus Consulting leverages these resources with over 35 years of experience providing rate, financial, and management consulting in the natural gas sector. Raftelis and Navillus have collaborated successfully on numerous engagements to provide maximum value to the client. Project Team members including Bart Kreps, Project Manager; Tom Sullivan, Natural Gas Cost technical advisor; and Collin Drat, Lead Consultant have developed a strong working relationship and a proven track-record for delivering comprehensive solutions with exceptional client service. Our team includes senior-level professionals to provide experienced project leadership with support from talented consultant staff. This close-knit group has frequently collaborated on similar successful projects, providing the City with confidence in our capabilities. Here, we have included an organizational chart showing the structure of our project team. On the following pages, we have included detailed resumes and project roles for each of our team members. RAFTELIS 09 SPECIALTIES • Utility cost of service and rate studies • Bond forecasts and feasibility studies • Capital financing plan development • Development and impact fee studies • Economic feasibility studies • Regionalization studies • Alternative project delivery studies PROFESSIONAL HISTORY • Raftelis: Vice President (2018-present); Senior Manager (2014-2017); Manager (2010-2013); Senior Consultant (2005-2009); Staff Consultant (2002-2004) • Wells Fargo Securities: Fixed Income Analyst (1998-2000) EDUCATION • Master of Business Administration in Finance & Environmental Management - The University of Tennessee (2002) • Bachelor of Business Administration in Finance - James Madison University (1998) PROFESSIONAL MEMBERSHIPS • North Carolina AWWA • Tennessee/Kentucky AWWA • Virginia AWWA • Virginia AWWA/WEF Utility Management Committee - Financial Management Subcommittee lead CERTIFICATIONS • Series 50 Municipal Advisor Representative • Series 54 Municipal Advisor Principal Bart Kreps Project Manager Vice President (Raftelis) ROLE: Will serve as Project Manager and will manage the day-to-day aspects of the project ensuring it is within budget, on schedule, and effectively meets the City’s objectives. He will also lead the consulting staff in conducting analyses and preparing deliverables for the project. PROFILE: Mr. Kreps has been with Raftelis since 2002, managing a variety of projects to assist water, wastewater, stormwater, and natural gas utilities in addressing economic and financial issues. Key areas of focus include: utility rate, cost of service, and financial planning studies; capital financing plan development; bond forecast and feasibility stud- ies; economic impact assessments; and system development fees studies. Mr. Kreps has extensive experience in financial forecasting and modeling including the application of advanced techniques in risk management. Mr. Kreps’ background is focused predom- inantly on public finance. He has assisted many utilities in designing optimal capital financing plans and has developed numerous financial feasibility reports and forecasts related to more than $1 billion in revenue bond sales. Mr. Kreps is the current lead of the Virginia AWWA/WEA Financial Management Subcommittee. He also authored a chapter entitled, “Evaluating Risk in Capital Planning, Financing, and Rate Setting,” for the Fourth Edition of the industry guidebook, Water and Wastewater Finance and Pricing: The Changing Landscape. Prior to joining Raftelis, Mr. Kreps served as fixed income analyst for Wells Fargo Securities, in the company’s Capital Markets Group. RELEVANT PROJECT EXPERIENCE City of Clarksville (TN) Raftelis in conjunction with Navillus Utility Consulting, LLC (the project team) prepared financial planning, cost of service, and rate design analyses for the City of Clarksville’s (City) natural gas utility. A key driver of the study was the anticipated construction of the Texas Gas Pipeline interconnect. The project team evaluated gas revenues at exist- ing rates and determined the adjustments required to ensure the City would continue to meet its debt covenants following the issuance of the debt for the project. Another critical aspect of the project involved forecasting demand for the City’s various customer classes. The project team evaluated recent years of historical natural gas demand as well as historical heating degree days to develop a normalized usage forecast to inform the financial plan and cost of service study. Raftelis has also provided similar services for the City’s water and wastewater utilities. City of Cookeville (TN) Mr. Kreps served as Project Manager on a water, wastewater, and natural gas rate and financial planning study for the City of Cookeville, Tennessee. The study was designed to address a number of financial and pricing objectives including, in particular, recommen- dations for cost justified rates that fully support system operations and maintenance, asset repair and replacement, debt service, and debt service coverage requirements. Additional recommendations were also provided related to water and wastewater capacity charges that support growth related projects to ensure that new customers are making an equita- ble contribution toward the capital investment in the capacity to accommodate growth. Mr. Kreps also developed a rate and financial planning model to forecast annual revenue requirements and rates over a five-year planning period. CITY OF CLEARWATER10 City of Richmond (VA) In 2007, Mr. Kreps managed the development of a comprehen- sive rate and financial planning model (Model) for the City of Richmond Department of Public Utilities (DPU). The Model incorporates all utility systems: water, wastewater, natural gas, street lighting, and stormwater. DPU currently uses the Model to set rates, determine optimal capital financing scenarios, and report on utility system financial conditions. The financial planning output from includes a projection of units of service (customer accounts and usage), operating expenses and capital expenditures, as well as a projection of net revenues available for debt service and debt service coverage. The Model provides the flexibility to evaluate the impacts of various capital funding sources includ- ing revenue bonds, general obligation bonds, Virginia Resource Authority (VRA) loans, and grants. In 2010, Mr. Kreps managed a comprehensive cost of service study for the DPU’s natural gas, water, wastewater, stormwater, and natural gas utilities. The results of the study included numerous recommended rate structure changes to better align DPU’s rates and charge with its pricing objectives. A comprehensive affordabil- ity analysis was also conducted resulting in the recommendation and implementation of several customer assistance programs. Mr. Kreps currently provides the DPU with various rate, financial, and management services on an ongoing basis. City of Akron (OH) In 2013, the City of Akron (City) engaged Raftelis to perform a comprehensive cost of service, rate design, and financial plan- ning study to assist them in managing the costs related to their combined sewer overflow (CSO) consent decree. Mr. Kreps is the Project Manager for this engagement and prepared the financial and rate model used to project the City’s operating and capital financing requirements over a 30-year horizon. This engagement included detailed analysis of customer bill impacts arising from various rate structure alternatives and capital financing scenarios. Subsequent to this study, the City opened a dialogue with the EPA to utilize integrated planning in meeting regulatory requirements. Franklin County (OH) Mr. Kreps served as Project Manager for an engagement to assist the Franklin County (County) Department of Sanitary Engineering (FCSE) with a utility structure, operations, cost of service, and water and wastewater rate analysis. As a result of an expansive geographic service area and limited economies of scale, FCSE is facing a number of challenges in limiting the cost of providing utility services. FCSE is also faced with significant capital investment needs over the next 10 years to ensure continued and reliable services. Raftelis worked with FCSE to develop a 10-year financial plan and recommended rates that are consistent with industry pricing standards and fully support system operations and maintenance, asset repair and replacement, debt service, and debt service coverage requirements. Raftelis is also conducted an operational assessment to evaluate the efficiency and effectiveness of the organization, as well as an evalu- ation of the current strengths and weaknesses of the existing utility structure and alternative options for consideration. City of Buffalo (NY) Mr. Kreps provided financial advisory services for a comprehensive cost of service and rate study for the Buffalo Water Board (Board). The Board’s primary pricing objectives were revenue sufficiency and equitable cost recovery from all customer classes. To achieve these objectives, Mr. Kreps performed a cost of service study and developed two alternatives to the existing three-tiered, declining block rate structure. The results of the cost of service study indi- cated that the discount being realized by large volume customers was not cost-justified and that only a minor portion of consump- tion was within the middle rate block. Mr. Kreps recommended a phased approach to bringing the discount for consumption in the third rate block closer to a cost-justified level and phasing out the middle rate block. Both the Board and the City’s Common Council unanimously approved the recommendations. Hallsdale-Powell Utility District (TN) Mr. Kreps has served as Project Manager on many engagements for the Hallsdale-Powell Utility District (HPUD) in Knoxville, Ten- nessee. HPUD has faced significant challenges related to capital infrastructure repair and replacement to meet the demands of its growing system. Mr. Kreps developed a water and wastewater rate model that has served as a financial planning tool for the District over the past 12 years. The model was designed to evaluate a variety of financing assumptions and operating scenarios with the ultimate goal of recommending an appropriate program of rate adjustments to meet HPUD’s projected revenue requirements. Most recently, Mr. Kreps developed the financial forecast and opinion letter for inclusion in HPUD’s Series 2006 and Series 2008 Revenue Bonds, as well as a Rural Utility Service loans in both 2009, 2011, and 2014. York County (SC) Mr. Kreps served as Project Manager on several studies for York County, South Carolina (County). Initially, the County engaged Raftelis to calculate a wholesale or bulk rate for water purchased by the City of York and Tega Cay from the City of Rock Hill to be delivered through the County transmission system. Mr. Kreps developed a cost allocation methodology and associated rate for delivering water through the County system that considered alter- native options for the assessment of capital costs. Mr. Kreps also provided direction related to developing the contractual agree- ment that will govern these transmission services provided by the County. In 2017, Mr. Kreps assisted the County with a compre- hensive water and wastewater rate and financial planning study. The study involved development of projected revenues and reve- nue requirements over a 10-year period. Recommendations also included various changes to the County’s water and wastewater retail rate structure. Watauga Regional Water and Sewer Authority (TN) Mr. Kreps served as Lead Consultant on an engagement with the Watauga Regional Water and Sewer Authority (WRRWA). The WRRWA commissioned Raftelis to conduct a study to evaluate the economic impact of designing, engineering, and constructing a regional water treatment facility and associated transmission system. Mr. Kreps developed an economic feasibility model that RAFTELIS 11 evaluated both the unit cost impact and average customer bill impact of two regional plan alternatives. Mr. Kreps, in association with a national engineering firm, assessed both the quantitative and qualitative impacts of both alternatives, which ultimately lead to the selection and recommendation of a preferred regional plant alternative. White House Utility District (TN) Mr. Kreps served as Project Manager on many engagements for the White House Utility District, Tennessee (WHUD). Mr. Kreps has conducted numerous water and wastewater rate and financial planning studies consisting of defining and evaluating the existing and projected cost basis for utility operations, allocating costs based on cost of service principles, and recommending updated water and wastewater fees for retail customers. Mr. Kreps also assisted WHUD with an evaluation of the appropriateness of its existing rate meth- odology for charging water service on a wholesale basis. Mr. Kreps participated in discussions with WHUD’s wholesale water customer to re-negotiate a rate that was both reasonable and equitable. City of Johnson City (TN) Mr. Kreps served as Lead Consultant for the City of Johnson City (City) in developing a ten-year financial plan and program of water and wastewater rate adjustments to meet the anticipated require- ments of a substantial wastewater capital improvements plan. The City had not adjusted its water or wastewater rates in approxi- mately ten years when it engaged Raftelis in 2003. Previously, the City had employed a short-term (one-year) planning process which implemented rate adjustments in reaction to annual capital and budget requirements. As part of our assistance, Raftelis rec- ommended modifications to the City’s water and wastewater rate structures to eliminate the minimum usage allowances and intro- duce base charges for both water and wastewater. Additionally, Raftelis developed a plan to gradually eliminate the declining block wastewater volume rates by consolidating the declining block rates into one uniform volume wastewater rate over a ten-year period. The elimination of the declining blocks was recommended to pro- vide more consistency with current industry rate-setting practices as the recent decline in the City’s manufacturing and industrial customer base no longer warranted a rate structure that provided incentives for large industrial wastewater users. The elimination of the declining blocks also allowed the City to phase out the current subsidy provided from the water utility to the wastewater utility and move towards a more financially self-sufficient wastewater utility. Other recommendations involved implementation of a consistent outside-city differential for all rates and charges assessed to outside-city water and wastewater cus- tomers, and developing a program of rates and charges that would achieve a target level of debt service coverage of 1.20x in order to protect the utility’s financial position and access to debt markets. Raftelis also worked with the City to determine the appropriate costs for providing potable water to wholesale customers under the Utility Approach to rate-setting and provided sample calculations of wholesale water rates for two potential types of wholesale cus- tomer contracts. These customer types included a customer who would not require City water services on a consistent basis and a customer who would require City water services as its primary source of water and would agree to “buy-in” to a portion of the City’s available capacity. Raftelis has been engaged by the City in 2007, 2008, 2009, 2014, and 2017 to update the rate and financial planning model. Paulding County (GA) Paulding County (County) is located in northwest Georgia with an estimated population of 148,232. The County is part of the Atlanta Metropolitan Area. Water service is provided to approximately 43,000 customers through a network of distribution infrastruc- ture. Potable water is currently purchased on a wholesale basis from the Cobb County-Marietta Water Authority (CCMWA). Mr. Kreps served as Project Manager assisting the County with a financial and economic impact analysis of the Richland Creek Water Supply Project, which will supplement the current wholesale water purchases and eventually supply up to 35 million gallons per day (MGD) of the County’s long-term (50-year) need of 53 MGD supporting a population of 500,000. Raftelis was engaged by the County to conduct a detailed examination and evaluation of the Richland Creek Water Supply Project to determine the most advan- tageous strategy for financing and delivering the project. The major components of the analysis included the determination of a capital financing plan and development of an economic forecast model. The economic forecast model included a long-term projection of revenue requirements and development of quantitative evaluation metrics for various capital planning alternatives. Subsequent to this study, Mr. Kreps assisted the County with development of a comprehensive rate and financial planning study including a pro- jection of rates, revenues, and revenue requirements over a 10-year planning period. Mr. Kreps also prepared a financial feasibility report for inclusion in the Official Statement of the County’s Series 2016 revenue bonds. Northeast Ohio Regional Sewer District (Cleveland, OH) Mr. Kreps served as Project Manager in the development of a com- prehensive financial plan for the five-year period 2007-2011 and 2012-2016, as well as various other engagements for the District since 2004. The District was facing a $3.2 billion capital program, and it was critical to develop an optimal financing plan that bal- anced revenue requirements and customer impacts. The financial plan included projections of customers, water usage and revenues under the existing rates, projections of operating and maintenance expense, debt service on existing bonds and additional bonds nec- essary to fund the capital improvement program, and reserve fund deposits. In addition, Raftelis recommended a rate adjustment pro- gram over the five year study period to meet the projected revenue requirements and maintain the District’s financial sustainability. A user-friendly computer model was also developed for use by District staff to analyze different planning scenarios. Town of Oak Island (NC) Mr. Kreps served as Project Manager on several engagements with CITY OF CLEARWATER12 the Town of Oak Island, North Carolina. (Town) to provide finan- cial feasibility consulting services related to its Series 2008 Utility System Revenue Bonds (Series 2008 Bonds), the Series 2009 Utility System Revenue Bonds (Series 2009 Bonds), and the Series 2011 Utility System Revenue Bonds (Series 2011 Bonds). The bonds were issued to fund the design and construction of a wastewater collec- tion system to provide centralized service to the remaining 85% of the Town’s residents that receive wastewater service from septic systems. The wastewater collection system includes approximately 85 miles of vacuum collector sewers, nine vacuum stations, one main pump station, and a force main transmission line to deliver wastewater to the West Brunswick Regional Wastewater Treatment Facility. The collection system was constructed in two phases at a total cost of $150 million. In order to assist the Town in securing the necessary funds for its capital initiatives, Raftelis prepared a financial feasibility report that was included in the Official Statement for the Series 2008 Bonds, the Series 2009 Bonds, and the Series 2011 Bonds. The feasibility reports included a five-year projection of revenues, expenses, debt service and debt service coverage, along with spe- cific documentation of significant forecast assumptions. Raftelis continues to provide the Town with ongoing rate and financial planning assistance. City of Peoria (AZ) The City of Peoria (City) has experienced fast-paced growth and heavy development pressure as the City’s population has more than doubled since 1990. As a result, demand for water and wastewater services has also increased at a rapid pace. Concurrently, the State of Arizona (State) enacted the Groundwater Management Act and the Assured Water Supply rules to limit the use of groundwater and to encourage the use of alternative water supply sources. As a result, the State mandated that the City reduce its reliance on mined groundwater and increase its use of renewable water resources. To comply with these regulatory requirements, the City developed an aggressive capital plan to reduce its former 100% use of groundwater through a combination of its existing water supply sources, maximization of reclaimed water for non-potable use, and a continued commitment to water resource conservation. To effectively address these growth and regulatory related issues and concerns, the City sought assistance in reviewing and updat- ing its existing water and wastewater rate structure and developing a 10-year financing plan for its extensive capital requirements. In February 1998, the City engaged Raftelis to conduct a comprehen- sive water and wastewater rate and financial planning study, which incorporated a water and wastewater utility rate study, an update of its water and wastewater development fees, the development of a water resource fee, and the development of an appropriate financial plan and bond feasibility forecast. Following these initial engagements, Raftelis has assisted the City in updating its water and wastewater rates, utility financial plan, and utility develop- ment fees on a biennial basis (2000, 2002, 2004 and 2006). As part of these updates, the City implemented a uniform service area approach to determining its development fees. In 2003, Raftelis further assisted the City in determining utility development fees for a separate service area located west of the Aqua Fria River. Although the City assesses uniform water and wastewater development fees to customers in all other areas of its water and wastewater system, proposed development in this independent service area requires significant investments in capital improvements and certain portions of the required infrastructure will be financed through a Community Facilities District. Since these fees will be separate and unique from the fees assessed to other customers within the City’s current service area, the City requested that Raftelis calculate the fees based upon the specific costs for the infrastructure they are intended to recover. Pima County (AZ) Mr. Kreps served as Project Manager or Lead Consultant on mul- tiple engagements for Pima County, Arizona (County). In 2005, Raftelis was engaged by the County to provide strategic financial and analytical support related to the long-term revenue and rate implications associated with the investment of approximately $1.4 billion in its wastewater system over the next 15 years. The County is faced with an extraordinary challenging of improving a signifi- cant portion of its wastewater system in order to comply with more stringent effluent quality standards imposed by State and Federal regulators and to meet the needs of a growing customer base. Raft- elis, in association with Greeley & Hansen, developed an economic planning model to assess, at a high level, the long-term rate and customer impacts of various capital investment strategies and system configurations designed to adequately address regulatory requirements and provide sufficient capacity to serve both existing and projected demand. Raftelis also developed a financing plan for the capital program that considered the use of traditional public financing instruments, and the use of non-traditional, alternative financing options, both public and private, that could provide a more cost-effective strategy for funding certain components of the capital program. Based on the results of the capital planning analysis, Raftelis was retained by the County, in two separate engagements, to develop its fiscal year (FY) 2008 Financial Plan and conduct a more detailed economic analysis of alternative project delivery options. The development of the FY 2008 Financial Plan included a compre- hensive rate study and creation of a Rate and Financial Planning Model (Rate Model), to be updated on an annual basis, covering the Department’s Operating and Maintenance (O&M) and capital improvement financing over a 10-year forecast period. The Finan- cial Plan was designed to serve as road-map for funding capital improvements and basis for developing rates and charges that are fair and equitable. In 2008, Raftelis was retained by the County to update its FY 2009 Financial Plan. Both the FY 2008 and FY 2009 Financial Plans assumed the use of more traditional public financing instruments, such as reve- nue bonds and State Revolving Fund (SRF) loans, to financing the proposed capital improvements, and assumed a more tradi- tional Design-Bid-Build (DBB) project delivery model. However, the County was interested in understanding both the economic RAFTELIS 13 and non-economic implications of alternative financing options and approaches to project delivery, including Design-Build (DB), Design-Build-Operate (DBO) and Design-Build-Operate-Finance (DBFO) delivery models. One of the largest projects in the capital program was the construction of a new 32 million gallon per day (MGD) water reclamation facility designed to meet all new efflu- ent discharge requirements. It was determined that this project, in particular, should be evaluated in terms of the potential risks and benefits of alternative project delivery options, to determine which option under consideration could provide the least risk and lowest probable cost. To facilitate the quantitative aspects of the alternative project deliv- ery analysis, Raftelis develop a Multiple Criteria Risk Model (Risk Model) to project operating and capital costs and calculate Net Present Value (NPV) life cycle costs for design and construction of the new water reclamation facility under a base case (DBB), DB, DBO, and DBFO project delivery alternatives. Raftelis participated in several workshops with County staff to identify specific variables and risk parameters that could be quantified. These variables and risk parameters were incorporated into the Risk Model, which used Monte Carlo simulations over 5,000 trials to project risk adjusted NPV life cycle costs for each project delivery alternative. Specific variables considered included construction schedule, tax-exempt interest rates, private interest rates, private cost of equity, operat- ing cost inflation, capital cost inflation and discount rate, among numerous others. The results of the quantitative analysis identified DBO as the project delivery alternative with the lowest risk and NPV life cycle cost. Other services provided to the County by Raftelis include the val- uation of a small water reclamation facility serving a community in the County’s outlying service area. The study was conducted to support the County in negotiations with the community, as it was evaluating the implications of seeking ownership of this facility. Raftelis is currently conducting an analysis of the County’s meth- odology used to assess connection fees. City of Durham (NC) Mr. Kreps served as Project Manager on numerous engagements with the City of Durham, North Carolina (City) related to water and wastewater finance and pricing. In 2007, he assisted the City with a cost of service water and wastewater rate study focusing primarily on water conservation pricing. Due to an extreme drought in 2007, the City was faced with an unprecedented chal- lenge related to preserving its water supply, and the addition of a pricing mechanism within its water rate structure became an immediate priority. Mr. Kreps worked closely with the City to develop defensible, cost-justified tiered water rates that included pricing incentives to promote the efficient use of water resources. Mr. Kreps developed a comprehensive cost of service based rate model that is currently used by the City as a financial planning tool and prepared financial forecast and opinion letter related to the City’s $60.0 million 2011 Utility Revenue and Revenue Refund- ing Bonds. Mr. Kreps also provided valuation services to the City related to the potential acquisition of Durham County’s wastewater treatment facility. Most recently, Mr. Kreps developed a recapital- ized value of both the water and wastewater system to support a calculation of the City’s capacity fees. City of Lakewood (OH) Mr. Kreps served as Project Manager on a comprehensive water and sewer rate study for the City of Lakewood, Ohio (City). The City was facing multiple challenges in developing its financial plan including, for example, declining consumption, rising costs, and significant capital needs related to its Long-Term Combined Sewer Overflow Control (LTCSO) Plan. Mr. Kreps assisted the City in evaluating the revenue sufficiency and cost equity of its rate structure for providing water and sewer services. The focus of the analysis involved the development of a financial plan that fully supported system operations and maintenance, asset rein- vestment, debt service, and debt service coverage requirements. Mr. Kreps developed recommendations that provided a projection of utility rate adjustments necessary to meet forecasted revenue requirements over a five-year planning period. For planning pur- poses, a long-term, 20-year forecast was also developed to assess, in particular, the potential impacts of the City LTCSO Plan, with specific emphasis on measuring rate affordability. Bowling Green Municipal Utilities (KY) Mr. Kreps served as Project Manager on a water and wastewater rate and cost of service study for the Bowling Green Municipal Utilities (BGMU). BGMU was seeking a comprehensive analysis of the existing and projected cost basis of utility operations and an evaluation of the appropriateness of its existing rate structure for providing water and sewer services. BGMU is facing signifi- cant capital expenditures related to asset repair and replacement and system improvements to address aging infrastructure and to meet regulatory requirements. Mr. Kreps developed a rate and financial planning model to provide a forecast of rates, revenues, expenses, debt service, debt service coverage, and reserves over a 5-year forecast period. The rate model included specific metrics for tracking reserves to increase liquidity, mitigate operational risk, and enhance the credit profile of the utility. City of Philadelphia (PA) Mr. Kreps has assisted the City of Philadelphia’s (City) water and wastewater utilities (Philadelphia Water) with debt issuance sup- port services. These services included the preparation of a financial feasibility report for the City’s Series 2016 Revenue Bonds and Bring Down Letters for the City’s Series 2017A and Series 2017B Revenue Bonds. Raftelis is currently assisting Philadelphia Water with imple- mentation of its tiered income customer assistance program. City of Alcoa (TN) Mr. Kreps has served as manager on multiple engagements with the City of Alcoa, Tennessee (City). In 2008, Raftelis developed a wholesale water exchange rate for an emergency connection between the City and the City of Maryville, Tennessee, as well as a wholesale water rate for the service provided to the Tuckaleechee Utility District. In 2010, Raftelis was engaged to conduct a compre- hensive rate and financial planning study covering both the water and wastewater utilities. The City was seeking financing from the CITY OF CLEARWATER14 Tennessee Drinking Water Revolving Loan Program to fund a new finished water storage facility. The State requested that the City conduct a rate study prior to awarding the funding source, to ensure the City’s rates were sufficient to maintain a positive change in net assets, which is a requirement of the Tennessee Utility Man- agement Review Board. OTHER RELEVANT EXPERIENCE •Berkeley County (SC) – Development Impact Fee Study, Indus- trial Water and Sewer Rate Study, and Industrial Rate Update •City of Buffalo (NY) – Water Cost of Service Study •Borough of Carlisle (PA) – Water and Wastewater Rate Study •Chester Wastewater Recover (SC) – Wastewater Rate and Finan- cial Planning •City of Concord (NC) – Wholesale Wheeling Charge Study •Clark County (OH) – Water and Wastewater Rate Study •D.C. Water (DC) – Water and Wastewater Cost of Service Study •District of Sooke (British Columbia) – Contract Operations Review •Durham County (NC) – Bond Feasibility Study and Rate Model Update •Erie County (NY) – Wastewater Utility Consolidation Study •City of Florence (SC) – Capital Planning Analysis •Gloucester County (VA) – Water and Wastewater Organiza- tional Assessment •Greenville Water (SC) – Rate and Financial Planning •Hardin County Water District #1 (KY) – Water and Wastewater Rate Study and PSC Filing •City of Hopewell (VA) – Wholesale Cost of Service Study •City of Kinston (NC) – Water and Wastewater Rate Study •City of Manassas (VA) – Water and Wastewater Valuation •City of Maryville (TN) – Wholesale Water Rate Analysis •City of Myrtle Beach (SC) – Water and Wastewater Rate Study •Rivanna Water and Sewer Authority (VA) – Wholesale Rate Review •San Diego County Water Authority (CA) – Wholesale Wheeling Charge Study •Sewanee Utility District (TN) – Water and Wastewater Rate Study and Developer Charge Study •City of Smyrna (GA) – Water, Wastewater, and Stormwater Rate Study •Stanly County (NC) – Water and Wastewater Rate Study •Town of Sahuarita (AZ) – Wastewater Rate Study •United States Navy – Privatization Procurement •Water and Sewer Authority of Cabarrus County (NC) – Water Consolidation Study •Webb Creek Utility District (TN) – Water and Wastewater Rate Study •City of Wilmington (DE) – Litigation Support SPEAKING ENGAGEMENTS •“2006 Water and Wastewater Rate Survey Results and Indus- try Trends”: Tennessee/Kentucky AWWA Annual Conference, 2006; Virginia AWWA Annual Conference, 2006 •“Financing and Prioritizing Your Utility’s Capital Needs”: Ten- nessee/Kentucky AWWA Annual Conference, 2008 •“Are Your Rates Affordability?”: WEF Webcast – Managing Rates and Charges in Challenging Economic Times, 2009 •“Pima County Regional Optimization Financial Plan”: WEST- CAS Fall Conference, 2009 •“Securing Financing in Challenging Economic Times – Case Study: Town of Oak Island, NC”: North Carolina AWWA Annual Conference, 2009 •“Quantify Risk in Project Procurement”: Utility Management Conference, 2010. •“Creative Financial Strategies for Virginia Utilities”: AWWA/ WEF Webcast, 2011. •“Rates 101: Basic Fundamentals of Financial Planning and Rate Setting”: Virginia Rural Water Association Annual Conference, 2012. •“Strategies for Financing a $3.0 Billion Long-Term CSO Control Plan”: Utility Management Conference, 2012. •“Fixed vs. Variable Charges: Finding a Balance”: VA AWWA | WEA Webcast, 2013; WEF Webcast, 2013 •“Addressing Affordability Challenges with Data Driven Man- agement”: Water Finance Conference, 2015 •“Customer Data Mining for Gold: Affordability and Integrated Planning”: Utility Management Conference, 2016 •“The City of Richmond: Integration, Innovation, and Afforda- bility”: NACWA Winter Conference, 2017 •“Infrastructure: “So Much to Do and Not Enough Money to Do It With”: TN/KY Utility Management Conference, 2017 •“A New Water Rate Structure for DC Water Prioritizing Infra- structure and Affordability”: Water Finance Conference, 2018 PUBLICATIONS •“Municipal Advisor Registration: What You Need to Know”: AWWA Journal, March 2013 •“The Cost of Borrowing: Understanding Credit Ratings”: AWWA Journal, November 2105 •“Evaluating Risk in Capital Planning, Financing, and Rate Set- ting,” for the Fourth Edition of the industry guidebook, Water and Wastewater Finance and Pricing: The Changing Landscape. RAFTELIS 15 SPECIALTIES • Business/Strategic Plans • Cost of Service and Rate Studies • Bond Financing • Water Conservation Rates • Contract Negotiation • Utility Acquisitions • Development Fees • Municipal Impact Fees PROFESSIONAL HISTORY • Raftelis: Vice President (2019-present) • Public Resources Management Group (PRMG): (1995-2019) • CH2M Hill: (1993-1994) • R.W Beck and Associates: (1986-1992) • Lee County Electric Cooperative (1981- 1986) • R. W. Beck and Associates: (1978-1980) EDUCATION • Bachelor of Science in Business Administration, Economics – University of Florida (1977) PROFESSIONAL MEMBERSHIPS • Florida Government Finance Officers Association • American Water Works Association Henry Thomas Technical Advisor Vice President (Raftelis) ROLE: Will provide technical advice and counsel particularly as it relates to governmental accounting and finance in Florida. PROFILE: Mr. Thomas has more than 40 years of rate and financial consulting experi- ence focusing on business issues facing water, wastewater, solid waste, natural gas, electric, and stormwater utilities. Mr. Thomas’ experience includes directing financial consulting services for publicly-owned utilities and governmental entities. He has been responsible for preparing utility rate and cost of service studies, business plans, and bond feasibility stud- ies; designing water conservation rates, connection and development fees, and municipal impact fees; developing utility financial policies; as well as assisting with the acquisition of utility properties and other management consulting services. During his career, Mr. Thomas has served more than 120 clients including county and municipal governments as well as publicly-owned utility districts, authorities, and cooperatives. RELEVANT PROJECT EXPERIENCE City of Lakeland (FL) Mr. Thomas has served the City of Lakeland since 2009 providing utility rate, financial planning, and management consulting services to the water and wastewater utility systems. On behalf of the City, Mr. Thomas has directed a comprehensive cost of service/rate study and annual revenue sufficiency updates. Major issues addressed for the City include water conservation rates and rate structures that promote revenue stability and evaluating the size and timing of capital projects. Polk County (FL) Mr. Thomas has served Polk County since 2013 providing utility rate, financial planning, and management consulting services to the water and wastewater systems. His experience includes directing utility rate and cost of service studies including the development of water conservation rate structures and preparing bond feasibility studies. Charlotte County (FL) Mr. Thomas has served the Charlotte County Utilities since 1996 providing utility rate, financial planning, and management consulting services to the County’s water and waste- water systems. As part of this ongoing engagement Mr. Thomas has directed comprehensive water and wastewater rate studies, bond feasibility studies, utility valuations, impact fee studies and assisted in the development of water conservation rates and utility expansion policies and the evaluation of wholesale rate issues related to the Peace River/Manasota Water Supply. Valdosta (GA) Mr. Thomas has worked for the City of Valdosta, Georgia since 1998 providing utility rate and financial planning services to the City’s water and sewer system. His experience with the City of Valdosta includes preparing a water and sewer master plan capital funding analysis, a comprehensive water and sewer rate study, including implementation of signif- icant water conservation rate structures phased-in over a multi-year period, and several rate sufficiency updates to ensure that the City’s water and sewer utility rates are adequate to fund operating and capital needs, and maintain a sound financial position. CITY OF CLEARWATER16 City of Ocala (FL) Mr. Thomas has served the City of Ocala since 1992 providing util- ity rate, financial planning, and management consulting services to the water and wastewater systems. Mr. Thomas has directed comprehensive water and wastewater cost of service/rate studies and annual revenue sufficiency updates for the City. He has also been involved in the development of system development charges, water conservation rates and strategies related to providing incen- tives for growth and economic development. City of Tampa (FL) Mr. Thomas has served the City of Tampa since 2005. He has directed comprehensive, water, wastewater and solid waste rate studies, and annual revenue sufficiency updates, developed capital charges related to new development, participated in City’s water and wastewater master planning process to evaluate the financial impact of capital projects and prepared bond feasibility studies associated with the issuance of long-term debt. City of Titusville (FL) Mr. Thomas has served the City of Titusville, Florida since 2000. He has directed comprehensive water and wastewater rate studies and annual revenue sufficiency updates. In addition, he has been involved in providing capital funding plans for State Revolving Loans from the State of Florida, Department of Environmental Protection (FDEP) and assisted in negotiations related to the formation of a joint public/private entity to provide future water supplies for the City. OTHER RELEVANT PROJECT EXPERIENCE •City of Apopka (FL) •City of Auburn (AL) •City of Bartow (FL) •City of Town of Bedford (NH) •City of Cape Coral (FL) •City of Casselberry (FL) •Citrus County Utilities (FL) •City of Clermont (FL) •City of Cocoa Beach (FL) •City of Crystal River (FL) •City of Dade City (FL) •City of Dania Beach (FL) •City of Town of Davie (FL) •Destin Water Users (FL) •City of Dundee (FL) •City of Edgewater (FL) •Enterprise, CDD (FL) •Fort Pierce Utilities Authority (FL) •City of Fort Walton Beach (FL) •Gasparilla Island Water Association (FL) •City of Town of Goffstown (NH) •Greater Pine Island Water Association (FL) •City of Groveland (FL) •City of Haines City (FL) •City of Hallandale Beach (FL) •City of Helena (MT) •Immokalee Water and Sewer District (FL) •City of Inverness (FL) •Jacksonville Electric Authority (FL) •City of Largo (FL) •Lee County Electric Cooperative (FL) •City of Leesburg (FL) •City of Maitland (FL) •City of Melbourne (FL) •Midway Water System (FL) •City of Miramar (FL) •City of Mount Dora (FL) •New Smyrna Beach Utilities Commission (FL) •City of Newberry (SC) •City of North Port (FL) •City of Oakland Park (FL) •City of Ocoee (FL) •Okeechobee Utility Authority (FL) •City of Oldsmar (FL) •City of Orange City (FL) •Orlando Utilities Commission (FL) •City of Oviedo (FL) •City of Palatka (FL) •City of Palm Bay (FL) •City of Palm Coast (FL) •City of Panama City (FL) •City of Panama City Beach (FL) •City of Pembroke Pines (FL) •City of Plant City (FL) •City of Port Orange (FL) •Regional Utilities of Walton County (FL) •City of Sanford (FL) •South Walton County Utilities (FL) •City of Stuart (FL) •City of Sunrise (FL) •City of Umatilla (FL) •City of Vero Beach (FL) •Virgin Islands Water & Power Authority (U.S. Virgin Islands) •Volusia County Utilities (FL) •Wabash Valley Power Association (IN) •City of Warner Robins (GA) •City of West Melbourne (FL) •City of Winter Springs (FL) REGULATORY/LITIGATION EXPERIENCE Mr. Thomas has directed regulatory rate cases for the Virgin Islands Water and Power Authority and Charlotte County, Florida and has testified before the Florida Public Service Commission, the Indiana Public Service Commission, the Virgin Islands Public Ser- vices Commission, and District Courts in Florida and Michigan. RAFTELIS 17 PRESENTATIONS •National Rural Electric Cooperative Association, “Electric Util- ity Rates in a Competitive Environment”, NRECA Managers Conference; Denver, Colorado, 1995 •National Rural Electric Cooperative Association, “Innovative Electric Rates”, NRECA Marketing, Member Services and Com- munication Conference; Portland, Oregon, 1995 •National Rural Electric Cooperative Association, “Electric Utility Rate Making”, NRECA National Directors Conference; Nashville, Tennessee, 1996 •South Carolina Section of the American Water Works Associa- tion, “Water and Wastewater Impact Fees “, 2001 Management Forum, 2001 •Florida Water Resources Association, “Water Rates and Con- servation Practices”, 2007 Florida Water Resources Conference •Florida Rural Water Association, “Communicating Water Util- ity Rate Needs”, 2010 Florida Rural Water Association’s Annual Technical and Training Conference •North Florida Section of the American Water Works Associa- tion, “Innovative Water Rates”, July 2011 •American Water Works Association, “Utility Impact Fees: Prac- tices and Challenges” with Bryan Mantz, Awarded AWWA’s Management and Leadership Divisions Best Paper Award for 2013 AWARDS •AWWA Management and Leadership Division’s 2013 Best Paper Award CITY OF CLEARWATER18 SPECIALTIES • Gas and Electric Utility Financial and Management Consulting PROFESSIONAL HISTORY • Year Career Started – 1980 EDUCATION • M. B. A., University of Missouri – Kansas City, 1985 • B. S., Civil Engineering, University of Missouri - Rolla (Missouri University of Science and Technology) –1980 PROFESSIONAL MEMBERSHIPS • American Public Gas Association • American Society of Civil Engineers • Tau Beta Pi • Phi Kappa Phi • Chi Epsilon • Beta Gamma Sigma PROFESSIONAL REGISTRATIONS • P.E. Missouri Tom Sullivan, Jr. PE Natural Gas Rate / Cost of Service Technical Advisor President (Navillus) ROLE: Will provide oversight and support for the gas, cost of service, and rate design portions of the project. PROFILE: Mr. Sullivan has worked on a broad range of projects involving gas and elec- tric utilities. His engagements include numerous functionalized (unbundled) and class cost of service studies, accounting and management information systems, rate design, long-term electric and natural gas demand and energy forecasts, economic feasibility of utility acquisitions, valuation analyses, cost recovery mechanisms, and depreciation rate studies. Mr. Sullivan has prepared direct and rebuttal testimony and supporting exhibits on numerous occasions for expert witnesses. He has testified on revenue requirements, rate design, class cost of service, class peak day demand requirements, weather normal- ization, and depreciation rates. Following is a representative summary of some of his relevant project experience. RELEVANT PROJECT EXPERIENCE Department of Public Utilities, Orangeburg, South Carolina | Competition Services, Load Studies, Rate Design, Cost of Service Analysis | 1982-Present Mr. Sullivan has served as a project manager on numerous projects for the gas, electric, water, and wastewater divisions for the DPU. Mr. Sullivan recently provided assistance in connection with Carolina Gas Transmission’s (CGT) (formerly South Carolina Pipeline Corporation (SCPC)) open access filing first before the South Carolina Public Service Commission and then before the Federal Energy Regulatory Commission (FERC) and the subsequent negotiation of the first firm transportation service contract for a distribu- tion utility on CGT’s system. Mr. Sullivan provided assistance to the DPU in negotiating lower power supply costs which led to the development of lower electric rates in anticipa- tion of competition. Mr. Sullivan assisted the DPU in the implementation of accounting and management information GIS systems for all four divisions to better manage costs and price services in a competitive environment. Mr. Sullivan recently completed a compensation survey of comparable municipal utilities in the Southwest for the DPU. The gas related assistance has included gas supply and demand studies, development of purchased gas cost tracking models, feasibility studies, cost of service, rate design, and assistance with the DPU’s intervention in South Carolina Pipeline rate filings. The electric related assistance has included electric supply and demand studies, assistance with power supply negotiations, purchased power cost analysis, cost of service and rate design, assistance in South Carolina Electric & Gas Co. rate filings, and assistance with regards to pole connection charges to Time-Warner. Water and wastewater assistance has included cost of service and rate design. Black Hills (f/k/a Aquila, Inc., UtiliCorp United and Peoples Natural Gas Company, SourceGas, Kinder Morgan, and K N Energy, Inc.)| Cost of Service, Rate Design and Weather Normalization Studies, Iowa, Kansas, Missouri, Minnesota, Michigan, Colorado, Wyoming and Nebraska| 1985-Present Mr. Sullivan has developed and sponsored as an Expert Witness class cost of service, rate design, depreciation, decoupling riders, and weather normalization analyses in connection with filings for gas rate increases before the Iowa Utilities Board, The Public RAFTELIS 19 Utilities Commission of the State of Colorado, the Kansas Cor- poration Commission, the Michigan Public Service Commission, the Missouri Public Service Commission, the Nebraska Public Service Commission, the Minnesota Public Service Commission, the Wyoming Public Service Commission, the Federal Energy Regulatory Commission, and municipalities in Nebraska. Mr. Sullivan developed the cost of service study and rate design for the Company’s rate filing for its Colorado intrastate pipeline, Rocky Mountain Natural Gas Company. Other responsibilities have included assistance with property valuation, feasibility studies, energy efficiency plan filings, electric load forecasting, depreciation rate studies, determination of remaining life of assets, assessment of corporate overheads, development of computer model, litigation assistance, and competition. Interstate Power and Light Company (IPL) | Cost of Service and Weather Normalization, Cedar Rapids, Iowa | 2012-Present Mr. Sullivan has served as an Expert Witness for IPL in connec- tion with a rate proceeding before the Iowa Utilities Board. Mr. Sullivan developed and sponsored IPL’s weather normalization adjustment and class cost of service study. In addition, Mr. Sulli- van provided analysis and input into IPL’s proposed rate design. Bamberg Board of Public Works | Cost of Service and Rate Design, Bamberg, South Carolina | 1995-Present Mr. Sullivan performed the BPW’s recent gas, electric, water, and wastewater cost of service and rate study. This study included the development of unbundled electric rates. Prior assistance has included the development of cost of gas models to track purchased gas costs and the development of unbundled gas rates to pass along monthly changes in purchased gas costs. Mr. Sullivan recently assisted the Bamberg Board of Public Works in negotiating a long- term power supply agreement with Santee Cooper. Mr. Sullivan has also assisted Bamberg Board of Public Works in natural gas pipeline matters before the South Carolina Public Service Commission and the FERC, and with power supply contract negotiations. The Empire District Gas Company and Empire District Electric Company | Depreciation Rate Study, Joplin, Missouri | 2009-Present Mr. Sullivan served as Project Director in connection with the development of a depreciation rate studies for both the Empire Gas and Empire Electric systems for filing with the Missouri Public Service Commission. He has also filed expert witness testimony on behalf of Empire concerning depreciation expense rate issues before the Missouri Public Service Commission and the Oklahoma Commerce Commission. Natural Gas Processing | Revenue Requirements, Cost of Service, Rate Design, and Weather Normalization, Wyoming and New Mexico | 1985-Present Mr. Sullivan has developed and sponsored as an Expert Wit- ness revenue requirements, class cost of service, rate design, and weather normalization analyses in connection with a filing for gas rate increases on behalf of Natural Gas Processing’s Zia Natural Gas Company before the New Mexico Public Regulation Commis- sion. Mr. Sullivan has also developed and sponsored as an Expert Witness: revenue requirements, class cost of service, rate design, and weather normalization analyses in connection with a filing for gas rate increases on behalf of Natural Gas Processing’s Wyoming Gas Company before the Wyoming Public Service Commission. Clearwater Gas System | Rate Study, Clearwater, Florida | 2007-Present Mr. Sullivan has performed the last three natural gas rate studies for Clearwater Gas System (“CGS”). These studies recommended redesign of CGS’s base rates to collect more fixed costs through customer charges, modifications to CGS’s rider of collecting reg- ulatory costs, and an expansion of their weather normalization adjustment to include conservation and inflation. Midwest Energy, Inc.| Class Cost of Service and Rate Study, Hayes, Kansas | 2016-Present Mr. Sullivan has performed class cost of service and rate studies for Midwest Energy’s gas utility system. Mr. Sullivan presented the results of these studies before Midwest Energy’s Board of Directors. Missouri Gas Energy (MGE) | Depreciation Rate Study, Kansas City, Missouri | 1995-2015 Mr. Sullivan served as Project Director in connection with the development of depreciation rate studies for filing with the Mis- souri Public Service Commission. He has also filed expert witness testimony on behalf of MGE concerning depreciation expense rate issues before the Missouri Public Service Commission. Mr. Sullivan also developed depreciation rates for newly installed auto- mated meter reading (AMR) facilities. Greenville Utilities Commission | Gas Rate and Cost of Service Study, Greenville, North Carolina | 2011- 2015 Mr. Sullivan served as Project Director on the gas rate and cost of service study for the Gas Division of the Greenville Utilities Com- mission (GUC). In addition, Mr. Sullivan prepared an economic feasibility study of a proposed compressed natural gas (CNG) fueling station for GUC. The GUC was also one of the parties in North Carolina Natural Gas Corporation’s retail rate filing before the North Carolina Utilities Commission in Docket No. G-21 Sub 442 for whom Mr. Sullivan provided testimony regarding cost of service. Philadelphia Gas Works | Engineer’s Report, Philadelphia, Pennsylvania | 1999-2016 Mr. Sullivan served as Project Director on the engineer’s reports developed for PGW’s revenue bond issues totally approximately $3 billion. Proceeds from the bond issues funded needed capital improvements to PGW’s distribution system and LNG facilities, and the refunding of bonds to reduce interest costs. The engineer’s report summarized the findings of a study of PGW’s facilities, management, operations, gas supply, rates and marketing, and customer service, and assessed the financial feasibility of the bond CITY OF CLEARWATER20 issue. Mr. Sullivan also served as an Expert Witness before the Pennsylvania Public Utility Commission on PGW’s behalf, testify- ing on the appropriate level of PGW’s revenue requirement for rate making purposes. Mr. Sullivan has also prepared a depreciation rate study for PGW. Pensacola Energy | Rate Study and Annual Operations Report, Pensacola, Florida | 1998-2014 Mr. Sullivan serves as Project Director on the annual report prepared for Pensacola’s gas system. This annual report documents interviews, site visits, and review of records pertaining to the management and operation of Pensacola Energy to determine if the system is operated in a safe and reliable manner, is in compliance with State and Fed- eral regulations, and is in compliance with the covenants sets forth in the City’s bond resolutions. Mr. Sullivan performed Pensacola Energy’s most recent gas rate study and presented the results of this study to the Pensacola City Council. This study recommended base rate increases and modifications to Pensacola Energy’s cost of gas recovery model. In addition, Mr. Sullivan assisted Pensacola Energy in preparing its proposal to the Navy to purchase the gas distribution systems owned by the military and used to serve the three naval bases in the Pensacola area, and Mr. Sullivan has assisted Pensacola Energy in valuing pipeline assets it is and has acquired. EXPERT WITNESS TESTIMONY Peoples Natural Gas Company of South Carolina, South Carolina Public Service Commission Docket No. 88-52-G (1988) Natural gas utility revenue requirements and rate design. Peoples Natural Gas (UtiliCorp United, Inc.), Iowa Utilities Board Docket No. RPU-92-6 (1992) Natural gas utility class cost of service study and peak day demand requirements. Peoples Natural Gas (UtiliCorp United, Inc.), Kansas Corporation Commission Docket No. 193,787-U (1996) Natural gas utility class cost of service study, rate design, and peak day demand requirements. Southern Union Gas Company, Railroad Commission of Texas Gas Utilities Docket No. 8878 (1998) Natural gas utility depreciation rates. Southern Union Gas Company, City of El Paso (1999) Natural gas utility depreciation rates. UtiliCorp United, Inc., Kansas Corporation Commission Docket No. 00-UTCG-336-RTS (1999) Natural gas utility weather normalization, class cost of service, and rate design. Philadelphia Gas Works, Pennsylvania Public Utility Commission Docket No. R-00006042 (2001) Natural gas utility revenue requirements. Missouri Gas Energy, Missouri Public Service Commission Docket No. GR-2001-292 (2001) Natural gas utility depreciation rates. Aquila Networks, Iowa Utilities Board Docket No. RPU-02-5 (2002) Natural gas utility class cost of service study, rate design, and weather normalization adjustment. Aquila Networks (Michigan Gas Utilities), Michigan Public Service Commission Case No. U-13470 (2002) Natural gas utility class cost of service study, rate design, and weather normalization adjustment. Aquila Networks, Nebraska Public Service Commission Docket No. NG-0001, NG0002, NG0003 (2003) Natural gas utility weather normalization adjustment. Aquila Networks, Missouri Public Service Commission Docket No. GR-2003 (2003) Natural gas utility class cost of service study, rate design, annuali- zation adjustment, and weather normalization adjustment. North Carolina Natural Gas, North Carolina Utilities Commission Docket No. G 21 Sub 442 (2003) Filed intervenor testimony on behalf of the municipal customers regarding natural gas cost of service, and intrastate transmission service related cost of service. Texas Gas Service Company, Division of ONEOK, Railroad Commission of Texas Gas Utilities Docket No. 9465 (2004) Natural gas utility depreciation rates. Missouri Gas Energy, Missouri Public Service Commission Docket No. GR-2004-0209 (2004) Natural gas utility depreciation rates. Aquila Networks, Kansas Corporation Commission Docket No. 05-AQLG-367-RTS (2004) Natural gas utility class cost of service study, rate design, and weather normalization adjustment. Aquila Networks, Iowa Utilities Board Docket No. RPU-05-02 (2005) Natural gas utility class cost of service study, rate design, grain drying adjustment and weather normalization adjustment. RAFTELIS 21 PJM Interconnection, LLC, Federal Energy Regulatory Commission Docket No. ER05-1181 (2005) Operating cash reserve requirements. Kinder Morgan, Inc., Wyoming Public Service Commission Docket No. 30022-GR-6-73 (2006) Weather normalization adjustment, pro forma billing determi- nants, revenues under existing rates and depreciation rates. Missouri Gas Energy, Missouri Public Service Commission Docket No. GR-2006-0422 (2006) Natural gas utility depreciation rates. Kinder Morgan, Inc., Nebraska Public Service Commission Docket No. NG-0036 (2006) Weather normalization adjustment, pro forma billing determi- nants, revenues under existing rates and competitive rates. Aquila Networks, Kansas Corporation Commission Docket No. 07-AQLG-431-RTS (2006) Natural gas utility class cost of service study, rate design, irrigation adjustment, and weather normalization adjustment. Aquila Networks, Nebraska Public Service Commission Docket No. NG-0041 (2006) Natural gas utility jurisdictional class cost of service study, rate design, and synchronization adjustment. Zia Natural Gas Company, New Mexico Public Regulation Commission Case No. 08-00036-UT (2008) Natural gas utility billing determinants and revenues, weather normalization adjustment, customer growth adjustment, peak day analysis, revenue requirement, class cost of service study, and rate design. Source Gas Distribution LLC, The Public Utilities Commission of the State of Colorado Docket No. 08S-108G (2008) Natural gas utility weather normalization adjustment, irrigation adjustment, peak day analysis, test year billing determinants and revenues, and trends in customer usage. Aquila Networks, Iowa Utilities Board Docket No. RPU-08-3 (2008) Natural gas utility class cost of service study, rate design, grain drying adjustment and weather normalization adjustment. Black Hills/Colorado Gas Utility Company, LLC (f.n.a. Aquila Networks), The Public Utilities Commission of the State of Colorado Docket No. 08S-290G (2008) Natural gas utility class cost of service study, rate design, ther- mal billing, customer class redesign, and weather normalization adjustment. Wyoming Gas Company., Wyoming Public Service Commission Docket No. 30009-48-GR-08(2008) Revenue requirement, rate of return, weather normalization adjustment, pro forma billing determinants, revenues under exist- ing rates and rate design. Missouri Gas Energy., Missouri Public Service Commission Docket No. GR-2009-0355 (2009) Natural gas utility depreciation rates. The Empire District Gas Company, Missouri Public Service Commission Docket No. GR-2009-0434 (2009) Natural gas utility depreciation rates. SourceGas Distribution, LLC, Public Service Commission of the State of Nebraska Docket No. NG-60 (2009) Natural gas utility weather normalization adjustment factor, customer adjustment factor, use per customer adjustment factor, inflation adjustment factor, pro forma customer adjustment, pro forma use per customer adjustment, and competitive issues. Black Hills/Nebraska Gas Utility Company, LLC (f.n.a. Aquila Networks) Nebraska Public Service Commission Docket No. NG-0061 (2009) Natural gas utility jurisdictional class cost of service study, rate design, weather normalization adjustment, and synchronization adjustment. SourceGas Distribution, LLC, Wyoming Public Service Commission Docket No. 30022-148-GR-10 (2010) Natural gas utility use per customer adjustment factor, inflation adjustment factor, and uncollectible accounts factor and compet- itive issues. Black Hills/Nebraska Gas Utility Company, LLC (f.n.a. Aquila Networks) Iowa Utilities Board Docket No. RPU-2010-0002 (2010) Natural gas utility jurisdictional class cost of service study, rate design, weather normalization adjustment, grain dryer adjust- ment, annualization adjustment, ethanol plant adjustment, and synchronization adjustment. The Empire District Electric Company, Missouri Public Service Commission Docket No. ER-2011- 0004 (2010) Electric utility depreciation rates. The Empire District Electric Company, Oklahoma Commerce Commission Cause No. PUD 201100082 (2011) Natural gas utility depreciation rates. CITY OF CLEARWATER22 SourceGas Distribution, LLC, Public Service Commission of the State of Nebraska Docket No. NG-67 (2011) Natural gas utility jurisdictional and class cost of service study, rate design, customer adjustment factor rider, use per customer adjustment factor rider, and competitive issues. Interstate Power and Light Company, Iowa Utilities Board Docket No. RPU-2012-0002 (2012) Natural gas utility weather normalization adjustment and class cost of service study. The Empire District Electric Company, Missouri Public Service Commission Docket No. ER-2012- 0345 (2012) Electric utility depreciation rates. Rocky Mountain Natural Gas Company LLC, Public Utilities Commission of the State of Colorado Docket No. 13AL-0067G (2013) Intrastate natural gas pipeline cost of service study and rate design. Rocky Mountain Natural Gas Company LLC, Public Utilities Commission of the State of Colorado Docket No. 13AL-067G (2013) Safety and System Integrity Rider (SSIR). SourceGas Distribution LLC, Public Utilities Commission of the State of Colorado Docket No. 13AL-143G (2013) Tariff provisions to incorporate Docket No. 13AL-0067G unbun- dling and tariff changes. Black Hills/Kansas Gas Utility Company, LLC, Kansas Corporation Commission Docket No. 14-BHCG-502-RTS (2014) Natural gas utility class cost of service study, rate design, weather normalization adjustment, and bypass revenue rider. Wyoming Gas Company., Wyoming Public Service Commission Docket No. 30009-57-GI-14 (2015) Testified at hearing to consider Wyoming Gas Company’s motion for relief from filing a general rate case. The Empire District Electric Company, Missouri Public Service Commission Docket No. ER-2016- 0023 (2015) Electric utility depreciation rates. •Wyoming Gas Company, Wyoming Public Service Commission Docket No. 30009-60-GR-16 (2016). Natural gas utility weather normalization adjustment, test year billing determinants, reve- nues under existing and proposed rates, cost of capital, revenue requirement, class cost of service study, and rate design. •The Empire District Electric Company, The Corporation Commission of Oklahoma Cause No. PUD 201600468 (2016). Electric utility depreciation rates. •Zia Natural Gas Company, New Mexico Public Regulation Com- mission Case No. 18-00018-UT (2018). Natural gas utility cost of capital, billing determinants and revenues, weather normali- zation adjustment, peak day analysis, revenue requirement, class cost of service study, and rate design. •Kansas City Power & Light Company, Missouri Public Service Commission Case No. ER-2018-00145 (2018). Electric utility class cost of service study – production cost allocation. •KCP&L Greater Missouri Operations Company, Missouri Public Service Commission Case No. ER-2018-00146 (2018). Electric utility class cost of service study – production cost allocation. •Kansas City Power & Light Company, Kansas Corporation Commission Docket No. 18-KCPE- -RTS (2018). Electric utility class cost of service study – production cost allocation. •The Empire District Electric Company, Kansas Corporation Commission Docket No. 19-EPDE-223-RTS (2018). Electric utility depreciation rates. •Black Hills Colorado Gas, Inc., The Public Utilities Commission of the State of Colorado, Proceeding No. 19AL-0075G (2019). Natural gas utility weather normalization adjustment, class cost of service study, and rate design. •Black Hills Wyoming Gas, LLC d/b/a Black Hills Energy, Public Service Commission of the State of Wyoming, Docket No. 30026-2-GR-19 (2019). Natural gas utility class cost of service study and rate design. ARTICLES AND PUBLICATIONS “Expanding Natural Gas Service Territory” Co-authored with Mr. David Durgin, Winter 2013 Issue of “THE SOURCE”, Official Publication of the American Public Gas Association RAFTELIS 23 SPECIALTIES • Utility strategic financial planning • Cost of Service analysis • Water, wastewater, and stormwater rate design • Conservation rate design • Statistical analysis PROFESSIONAL HISTORY • Raftelis: Manager (2019-Present); Senior Consultant (2016- 2018); Consultant (2014-2015); Associate Consultant (2012-2013) PROFESSIONAL MEMBERSHIPS • American Water Works Association • Water Environment Federation EDUCATION • Master of Public Affairs (Public Finance) - Indiana University (2012) • Bachelor of Arts in International Relations – Wheaton College (2010) Collin Drat Lead Consultant Manager (Raftelis) ROLE: Will serve as the Lead Consultant and will conduct analyses and prepare deliverables for the project. PROFILE: Mr. Drat has a background in public finance and statistical modeling. Since join- ing Raftelis, he has had the opportunity to participate in an array of utility financial and rate consulting engagements involving water and wastewater demand analysis, financial planning, cost of service analysis, cost of service review and rate design. RELEVANT PROJECT EXPERIENCE City of Lawrence (KS) Mr. Drat served as the lead consultant for Raftelis’ engagement with the City of Lawrence. Raftelis completed its initial rate study for the City in 2017. That engagement involved the development of a comprehensive 10-year financial plan, water and wastewater cost of ser- vice studies, conservation rate designs and system development charges. When Raftelis was retained to update the analysis for the 2019 budget, Mr. Drat worked directly with City staff to obtain the necessary data, present the results and help prepare to present the results before the City Commission. City of Topeka (KS) Mr. Drat served as the Staff Consultant for the City of Topeka’s Office of Utilities and Trans- portation (City). Mr. Drat has assisted in the development of water and wastewater demand forecasts, various alternative financial planning scenarios for the each of the City’s utilities, cost of service analyses and rate design alternatives. The rate design services include the development of irrigation rates, readiness to serve charges, conservation rates, and system development charges. City of Junction City (KS) Mr. Drat served as the Lead Consultant for Raftelis’ engagement with the City of Junction City (City). The scope of work for this engagement involved the development of water and waste- water demand forecasts, comprehensive financial plans and rate design. A key aspect of this engagement involved financial planning and rate design which minimizes the financial impact of the City’s relatively large planned capital improvements, while encouraging conservation among the City’s customers. Mr. Drat and the project team worked collaboratively with the City’s engineering consultant to develop three alternative financial planning scenarios based on various levels of capital expenditures. The recommended financial planning scenario and associated rates were presented before and accepted by the City Commission. Detroit Water and Sewerage Department (MI) Mr. Drat serves as Lead Consultant for Raftelis’ engagement with the Detroit Water and Sewerage Department (the Department). The engagement involves financial planning and rate design for the water and sewer utilities. Key aspects of this engagement involve analyzing and projecting costs from wholesale provider the Great Lakes Water Authority (GLWA), analyzing customer afforda- bility and developing rates which mitigate the impact on lower income customers. Mr. Drat served as Lead Consultant for the development of the Department’s private fire line charge study. City of Saginaw (MI) Mr. Drat currently serves as the Lead Consultant for Raftelis’ engagement with the City of Sag- inaw (City). This engagement involves the update of the City’s water rate model to establish 24 CITY OF RICHMOND updated water service rates. A key aspect of this engagement involves the development of water service rates for the City’s 18 wholesale customers. This required the development of a five-year financial plan and an allocation of O&M, depreciation and return on rate base to each of the City’s wholesale customers, based on that customers unique contribution to the City’s operating and capital costs. The City’s wholesale customers currently pay a commodity charge which recovers the cost of providing water service based on their current demand and a capacity charge which recovers costs on the basis for their contracted average and maximum day demand. City of Marquette (MI) Mr. Drat served as the Lead Consultant for Raftelis’ engagement with the City of Marquette. This engagement involves the devel- opment of water, sewer and stormwater financial plans and rate designs. A key aspect of this engagement involved the evaluation and integration of the City’s performance management contract with Johnson Controls, Inc into the financial plans. Mr. Drat also worked closely with the City’s consulting engineer provid- ing support and documentation of the financial elements of the City’s Stormwater and Wastewater (SAW) asset management grant reporting requirements. Waukesha Water Utility (WI) Mr. Drat currently serves as the Lead Consultant on Raftelis’ engagement with the Waukesha Water Utility (WWU). WWU has faced challenges with radium in their current groundwater supply requiring them to construct the facilities necessary to attain water from Lake Michigan. The program is anticipated to cost in excess of $280M and will have a large impact on the customers of WWU. Mr. Drat has performed a wide variety of analyses for WWU including a risk focused comparison of two potential water suppliers, support in the development of WWU’s wholesale service agreements, and assistance developing potential rates to recover the costs of new program. The most critical aspect of this engagement has been a detailed review and critique of the cost of service models of potential wholesale water suppliers the City of Oak Creek and Milwaukee Water Works. City of Cookeville (TN) Mr. Drat serves as the Lead Consultant for Raftelis’ engagement with the City of Cookeville. This engagement involves the City’s water, sewer, natural gas and electric utilities. Mr. Drat is updating the City’s existing water and sewer financial plans, cost of ser- vice allocations and rate designs for a five-year forecast period. In addition, Mr. Drat is assisting in the development of rate structure alternative for the City’s natural gas utility. This involves a nor- malized forecast of customer throughput, via the use of weather and customer data and statistical techniques. This normalized usage will inform the development of alternative structures which recover the appropriate level of margin (i.e. gas distribution costs, excluding cost of gas) from City customers. City of Clarksville (TN) Mr. Drat served as the lead consultant for Raftelis’ engagement with the City of Clarksville. The engagement involved the devel- opment of a comprehensive financial plan, cost of service study and rate design for the City’s natural gas utility. A key driver of the study was the anticipated construction of the Texas Gas Pipeline interconnect. Mr. Drat plan evaluated gas revenues at existing rates and determined the adjustments required to ensure the City would continue to meet its debt covenants following the issuance of the debt for the project. Another critical aspect of the project involved forecasting demand for the City’s various customer classes. Mr. Drat evaluated recent years of historical natural gas demand as well as historical heating degree days to develop a normalized usage forecast to inform the financial plan and cost of service study. City of Round Rock (TX) Mr. Drat serves as the Lead Consultant for Raftelis’ engagement with the City of Round Rock (City). This engagement involves the development of water and wastewater financial planning, cost of service, rate design services. The project team began the engage- ment by assessing the rate model currently used by the City, and later produced an updated model to meet the City’s needs. A key component of the financial planning process involved planning for the additional capital expenditures associated with new assets constructed by the Brushy Creek Utility Authority, in which the City is a participant. The engagement also involved the preparation of wholesale water and wastewater rates based on the utility basis cost allocation methodology. City of Suffolk (VA) Mr. Drat currently serves as the Project Manager for Raftelis’ multi-year engagement with the City of Suffolk (City) to provide financial services to the City’s Department of Public Utilities (DPU). The scope of services includes an annual update of the ten-year comprehensive financial plan, determination of water and sewer costs of service, development of proposed water and sewer rates for the upcoming fiscal year, and an assessment of the City’s water and sewer system availability fees. In addition, Mr. Drat collaborates with utility staff in the development of an annual comprehensive water and wastewater demand forecast, as part of the annual rate study engagement. Each year the performance of this forecast is eval- uated on a monthly basis against the actual billing data received by the City and calibrated as necessary for the following year. Strathcona County Utilities (AB) Mr. Drat served as the Lead Consultant for Raftelis’ engagement with Strathcona County Utilities (SCU). This engagement involved the development of a comprehensive wastewater financial plan- ning model, cost of service analysis and rate design services. This engagement involved a thorough review of the SCU’s existing rate modeling practices, the development of an updated rate model and the development of several wastewater rate alternatives to meet the County’s objectives. Particular issues addressed by the study were a review of the County’s charges for third party wastewater treat- ment, an examination of fixed cost recovery, rate consolidation customers with similar service levels and pricing policy recom- mendations regarding customers with non-continuous wastewater usage (i.e. snowbirds). 25RAFTELIS Regional Water Customers Group (AB) Mr. Drat has served as Lead Consultant for Raftelis’ ongoing engagement with the Regional Water Customer Group (RWCG) since 2013. The Regional Water Customer Group (RWCG) is a consortium of nine water service providers located in suburban Edmonton who purchase treated water supplies from EPCOR Water Services Group, Inc. (EPCOR). Mr. Drat provided staff con- sulting support during the RWCG’s negotiations with wholesale provider EPCOR following litigation at the Alberta Utilities Com- mission. Mr. Drat reviews EPCOR’s prospective and actual cost of service models annually to ensure they comply with the agreed to methodology. Mr. Drat has also performed sensitivity analyses around RWCG’s peak usage, which heavily influences its allocated cost of service form EPCOR. This analysis aided the RWCG in weighing the cost of reducing peak usage (asking customers to conserve on peak days) with the potential financial benefit. Providence Water Supply Board (RI) Mr. Drat served as the Lead Consultant for the Providence Water Supply Board (PWSB), preparing schedules for the Board’s four most recent rate filings (Dk. 4571, Dk. 4406, Dk. 4571 and Dk. 4618) with the Rhode Island Public Utilities Commission (RIPUC). These filings involve the development of detailed rate year reve- nue requirements, updating cost of service allocations and rate design. Mr. Drat prepared calculated rates in accordance with PWSB’s existing rate structure as well as alternative rates designed to promote water conservation. In addition, Mr. Drat assisted in authoring expert testimony to the RIPUC, prepared responses to data requests and adjusted rate schedules as necessary. City of Aztec (NM) Mr. Drat served as the Lead Consultant for the Raftelis’ engagement with the City of Aztec. The engagement involves the development of water, wastewater and electric utility financial plans, cost of ser- vice studies and rate designs. A key aspect of this engagement has involved the development of multiple financial planning scenarios to support the City capital improvement program. The program involves future expenditures which greatly exceed the amount the City has expended in the past. Evaluating the various financing options has assisted the City in prioritizing water, wastewater and electric capital improvement projects. City of Bloomington (IL) Mr. Drat served as the Lead Consultant for Raftelis’ engagement with the City of Bloomington (City). This engagement involves the development of comprehensive wastewater and stormwater financial plans and planning models for the City’s use. The finan- cial plans involve a forecast of water and stormwater revenue, the development of a capital financing plan to fund improvements to the wastewater and stormwater systems and a detailed cash flow analysis for each utility indicating the rate adjustments necessary to ensure operational sustainability. A key component of this engagement will involve modeling the impact on rate adjustments of various levels of capital reinvestment. Marana Water (AZ) Mr. Drat serves as the Lead Consultant for Raftelis’ engagement with Marana Water, the utility providing water and wastewater service to the Town of Marana. This engagement has involved the development of water and wastewater financial plans, cost of ser- vice analyses and alternative rate designs. A unique aspect of this engagement has involved the development of multiple financial planning scenarios in order to aid Town staff in developing a plan which would balance the need for capital reinvestment against the impact to Marana Water customers. OTHER RELEVANT EXPERIENCE •City of Alexandria (VA) - Water Rate Litigation Support •City of Alpena (MI) - Wholesale Water and Sewer Rate Litiga- tion Support •City of Baltimore (MD) - Stormwater Utility Implementation •City of Clarksville (TN) – Natural Gas Rate Study •City of Flint (MI) - Water and Wastewater Financial Planning and Cost of Service Studies •City of Junction City (KS) – Water and Sewer Financial Planning and Cost of Service Study •City of Marquette and Marquette Township (MI) - Joint Water Rate Study •Gran Melia (PR) - Water Rate Litigation Support •Masonic Villages at Sewickley (PA) - Sewer Rate Litigation Support •Northwest Water Commission (IL) - Utility System Valuation, Wholesale Rate Methodology, Misc. Financial Analyses •Orangeburg Department of Public Utilities (SC) - Water, Waste- water, Nat. Gas, Electric Rate Study •Pennichuck East Utility (NH) - Water Cost of Service Study •Port Huron Township (MI) - Wheeling Rate Analysis •Silverleaf Resorts, Inc (MO, IL, TX) - Water and Sewer Rate Litigation Support •St. Louis Metropolitan Sewer District (MO) - Rate Analysis Support •State of Michigan Department of Treasury (MI) - Various Finan- cial Analysis for City of Flint Utilities •Tacoma Public Utilities (WA) - Econometric Water Demand Modeling CONFERENCE PRESENTATIONS •-”Which Came First? An Integrative and Iterative Approach to Funding Infrastructure in Junction City” (KWEA & KSAWWA Joint Annual Conference) •-”Ratemaking 101: Best Practices for the Financially Sustainable Utility” (KWEA & KSAWWA Joint Annual Conference) •-”Principals of Water, Wastewater and Stormwater Rate Setting” (NYAWWA Edwin C. Tifft Jr. Water Supply Symposium) •-”Financial Breakdown in the Vehicle City: Finding a Way Forward for Flint Finances in the Wake of the Water Crisis” (AWWA/WEF Utility Management Conference) 26 CITY OF RICHMOND Project Approach As indicated in the Request for Proposals (RFP), the proposed scope of work is to establish natural gas utility rate structures that are sufficient to meet the Clearwater Gas System’s (CGS) current and future revenue requirements, including projected operating costs, capital costs, debt service costs and coverage, and working capital reserve requirements. In summary, the following general tasks will be performed to meet these goals: • Prepare a five-year forecast of revenues and revenue requirements in order to evaluate the adequacy of existing rates to meet operating costs, capital costs, and debt service costs and maintain an adequate level of working capital reserves • Prepare a class cost of service study to determine the cost associated with providing service to each customer class and compare this cost of service to the current revenues • Recommend rates sufficient to meet CGS’ forecasted revenue requirements and reflect cost of service and other policy considerations TASK 1 Project Initiation and Data Collection Task 1.1 – Data Collection Prior to the kick-off meeting, Raftelis will provide a data request to CGS listing the principal information needed to perform the rate study. This request will include items such as historical billing data (number of customers, throughput, and revenues), audited financial statements, operating and capital budgets, reserve poli- cies, debt service requirements, plant accounting information, gas supplier and transportations bills, weather data, current natural gas tariff, etc. The goal is for Raftelis to review as much information as possible prior to the kick-off meeting so that time can be spent on specific questions related to this information. Task 1.2 – Kick-off Meeting Raftelis proposes that this meeting be on-site in Clearwater. The agenda for this meeting will include the following: •Review work plan and project schedule •Review data requirements •Discuss CGS’s policy goals and historical considerations •Discuss specific rate design goals TASK 2 Financial Analysis Task 2.1 – Develop Revenue Forecast Our project team will project Clearwater’s revenues over a five-year forecast period. Longer-term projections can also be developed for planning purposes. Revenues typically consist of operating and non-operating revenues. Operating revenues consist principally of rate revenues derived from the services provided by the utility to customers. Operating revenues are directly affected by the level of rates and charges, the service levels provided, and gas costs, which are passed through directly to customers. Since a rate anal- ysis is focused on determining the appropriate level of base rates (excluding gas costs), our analysis will assume that 100 percent of gas costs (gas supply, transportation, upstream storage, etc.) are collected through Clearwater’s Purchased Gas Adjustment (PGA). Other operating revenues include such items as connection and reconnection fees, late payment fees or forfeited discounts, gas piping, appliance sales, and other revenues incidental to provid- 27PROJECT APPROACH, METHODOLOGY, AND SCHEDULE FOR COMPLETION ing gas service. Non-operating revenues primarily relate to interest income. In order to prepare the reve- nue forecast, we will forecast the number of customers and throughput per customer under normal conditions. Our projections will be based on data obtained from CGS and discussion with management regarding marketing efforts and potential large load additions. The class throughput forecasts will be based on the product of the number of customers and the use per customer forecasts. For customer classes whose usage is weather dependent (res- idential and commercial), the use per customer forecasts will be developed based on regres- sion analyses of historical use per customer, heating degree- days, and time. The results of this regression analysis take into consideration changes in usage characteristics over time as well as variations in through- put resulting from variation in weather conditions. Normal (weather normalized) use per customer will then be forecast using the regression coefficients and normal heating degree- days for the forecast period. We typically forecast other operating revenues using a trend analysis with adjust- ments to reflect known changes historically experienced as well as changes anticipated to occur during the forecast period. We forecast non-operating rev- enues based on forecast debt reserves and other significant cash reserves. Task 2.2 – Develop Revenue Requirement Forecast Revenue requirements typically consist of operating expenses [operations and maintenance (O&M), administrative and general (A&G), bad debt cost, etc.], depreciation expenses debt service requirements (inter- est and principal payments on outstanding debt issued by CGS), and cash-financed normal capital improvements. Allowance can also be included for contributions or transfers to the City of Clearwater’s (City) general operating fund, debt service coverage requirements, and reserve requirements. The revenue requirements analysis will be based on the unbun- dling of the gas supply related costs (supply, transmission, and storage) from the costs of operating the distribution system. These costs are essen- tially the revenue requirements associated with the PGA. It is important in the analysis that the gas revenues and gas costs be synchronized such that the remaining costs can accurately reflect the level of costs to be recovered from the margin or base rates. These revenue requirements are forecasted over a five-year period. To the extent that CGS’s has budgets of future operations and capital improvements, we will consider them in our pro- jection. In the alternative, or as a supplement, we will forecast operating expenses based on historical trends while taking into consideration inflation and/or wage increases or other know increases (benefits and health care costs, for example). Depreciation expense is typi- cally calculated directly from plant investment. Therefore, a sub-element of our projection of revenue requirements will be a projection of plant in ser- vice (taking into consideration budgeted capital improvements and retirements). Debt service requirements can generally be obtained from debt service schedules. To the extent that a future bond offering is to be included, we will review CGS’s capital improvement plan and develop a capital financing approach to address the timing and size of future borrowings and related debt service and coverage costs. As a Registered Municipal Advisor, Rafte- lis will be able to work with CGS to craft a suitable capital financing plan considering CGS’s current debt profile and financial policy goals for equity financing. As it relates to future debt financing, options may be more general and based on levelized principal and interest payments or consideration may be given to alternative options for structuring debt such that a more customized debt profile can be utilized to help miti- gate the impact on customers. Registration as a Municipal Advisor is a requirement under the Dodd-Frank Wall Street Reform and Consumer Protec- tion Act. All firms that provide financial forecasts that include recommendations about the size, timing, and terms for possible future debt issues must be registered with the U.S. Securities and Exchange Commission (SEC) and the Municipal Securities Rulemak- ing Board (MSRB). Task 2.3 – Develop Capital Improvement Forecast As a part of the revenue requirements forecast, Raftelis will develop a five-year projec- tion of capital improvements with distinction being made between improvements that will be funded from current operations and improvements to be funded through debt issues. As discussed later in the rate design section of our proposal, we may also differen- tiate projects that are related to integrity management and/or projects that are related to reg- ulatory requirement or other governmental activities. Task 2.4 – Develop Financial Plan Once all the revenue require- ments have been projected, we will determine the net cash flow of the utility. Net cash flow is equal to total operat- ing revenues minus operating expenses, minus contributions or transfers to the City’s oper- ating fund, minus debt service (principal and interest), and minus cash financed capital improvements. To the extent that net cash flow is negative, the difference must be made up through rate increases. If applicable, we will perform a debt service coverage cal- culation to determine if debt service coverage requirements are being met. In determining the level of rate revenue deficiency, we will consider all of the following: •Amount needed to achieve positive net cash flow over the five-year period •Amount needed to meet cov- erage requirements over the five-year period •Amount needed to achieve a certain level of cash reserves over the five-year period The overall revenue deficiency is essentially the highest requirement of these three considerations. This level of deficiency and consideration of class cost of service and other policy considerations will form the basis for recom- mended rate changes. CITY OF CLEARWATER28 Task 2.5 – Review Results with City Staff Prior to commencing with the class cost of service study and rate design, we will provide CGS with the preliminary financial plan. Raftelis proposes to conduct a conference call to review these results and solicit City staff reaction and input. TASK 3 Class Cost of Service Study Task 3.1 – Develop Billing Determinants and Allocation Bases The principal allocation bases used in the class cost of service study are related to annual vol- umes, peak day requirements, and the number of custom- ers. The annual volumes and number of customers used are the same as those developed in the revenue forecast. The peak day forecast is typically based on a forecast of design day (highest expected demand) requirements. For customers whose primary use is space heating (residential and com- mercial), the peak demand forecast will be developed from the statistical analysis used to develop the normal usage essentially by using peak day heating degree-days rather than monthly or annual heat- ing degree-days. For classes whose usage is not weather dependent, the peak day requirements will be based on consideration of historical usage patterns and daily metered data (usually available for large cus- tomers and/or customers who are transporting their own gas). The allocation of customer-re- lated costs such as service lines, meters, and regulators will be based on the relative invest- ment required to provide these facilities to customers. The relative cost may be based on consideration of current typi- cal cost of such installations or the historical costs contained in CGS’s property records (if available). Task 3.2 – Develop Class Cost of Service Study Raftelis follows the standard three-step analysis process in performing a class cost of ser- vice study: 1) functionalization (supply, storage, distribution, general plant, meters/regula- tors, customer components) of rate base and revenue requirements; 2) classification of functionalized components (e.g., demand, commodity, or customer cost); and 3) alloca- tion of each component among the rate classes. The first step in the analysis is to select a test year that reflects typical operations of the nat- ural gas system. Test-year revenue requirements to be allocated to customer classes equal revenue under existing rates plus the required reve- nue increase. The appropriate allocation of cost provides a measure of the responsibility of each customer class for the total cost of utility service provided by CGS. A com- parison of these costs with rate revenues under existing rates provides a guide for the development of fair and equitable rates. In addition, our class cost of service study will determine unit cost of service, which can be used as a tool to design specific rate components such as demand, commodity, and customer charges. The functional classification of cost of service is based upon an analysis of the use of major plant elements. The major plant elements for a natural gas util- ity include mains, services, meters and regulators, general plant, and, in some cases, peak shaving facilities. We classify the major plant elements to functions and then use this allocation of plant as our basis to allocate O&M and A&G expenses to functions. Costs are allocated to cus- tomer classes in proportion to As a Registered Municipal Advisor, Raftelis will be able to work with CGS to craft a suitable capital financing plan considering CGS’s current debt profile and financial policy goals for equity financing. RAFTELIS 29 the class responsibility for the functional use of the natural gas system. Functional factors typically used include demand requirements (maximum daily use), volume of gas (through- put), and number of customers. Capacity-related facilities include a portion of natural gas distribution mains and distribution regulators. The investment in these facilities and the expenses associated with their opera- tions are mainly determined by customer peak demands. Costs related to throughput are those that tend to vary with the quantity of natural gas delivered. The commod- ity cost of purchased gas is a typical example of a through- put-related cost that applies to non-transportation customers. Customer-related costs are expenses associated with items such as service lines, meters, house regulators, customer billing, and accounting and tend to vary with the number of customers served. In order to allocate costs of service to customer classi- fications, test-year revenue requirements are separated between operating expense, depreciation expense, and capital costs. Transfers, normal capital additions, and/or reserve requirements may be considered separately. For purposes of class cost of service, current customer classifications are used. TASK 4 Rate Design Task 4.1 – Design Rates Adequacy of the existing rates for each class is tested by com- paring revenues under existing rates with allocated class cost of service. The class cost of service study will reflect an overall revenue requirement that includes the revenue defi- ciency as discussed in the prior section. Therefore, the class cost of service study will pro- vide the amount of deficiency for each class of customer. This will be one consideration in the rates recommended. In addition, since the class cost of service study will also provide unit cost of service, it can be used as a basis for things such as recommended levels of cus- tomer charges. In addition to the class cost of service study, the following additional factors will be considered in recom- mending rate adjustments: •The cash requirements over the entire five-year period, not just the test period used for the class cost of service study •Market or competitive factors •Historical rate relationships that may exist due to existing policy •Marketing efforts •Revenue stability and the amount of revenues collected through fixed (customer charges) and variable (volu- metric) rate components •Other policy considerations provided by CGS Task 4.2 – Other Rate Considerations and Riders In addition, Raftelis will also advise and assist CGS in developing alternate rate design and/or decoupling mechanisms. It is our under- standing that CGS already utilizes several rate riders including a Usage and Infla- tion Adjustment (UIA), an Energy Conservation Adjust- ment (ECA), and a Regulatory Imposition Adjustment (RIA). These rate riders are designed to mitigate risk associated with variability in consumption, declining per capita usage, Raftelis will develop a customized financial model for the City that incorporates a dashboard to allow you to easily run scenarios and see the impacts in real time. Shown here is a sample dashboard that we developed for another project. CITY OF CLEARWATER30 draft report. This report will include an executive summary highlighting major issues and recommendations including proposed rate tariff changes and supporting schedules. The draft report will be provided to City staff to obtain additional input to be incorporated into the report as appropriate. After incorporating any further changes, Raftelis will provide the draft report to City staff in advance of individual meetings with City Council members. It has been assumed these meetings will be conducted over a two-day period. Addi- tional comments received will then be incorporated into a draft final report. Raftelis will attend two meetings with the City Council (work session and regular meeting) to present the draft final report. Task 5.2 – Issue Final Report Comments received from the City Council will be incorpo- rated into the draft final report. A final rate study report will then be produced, and we will provide City staff with both printed and electronic copies. rising costs due to inflation, and increased regulatory costs. Raftelis will review all current alternative rate design and/ or decoupling mechanisms and make recommendations for any modifications or additional options, if appro- priate. Raftelis can also review other miscellaneous fees and charges contained in CGS‘s natural gas tariff. Task 4.3 – Develop Typical Bill Analysis In order to determine the impact of our proposed rates, we will prepare typical bill analyses showing the revenues under existing and proposed rates for various appropriate consumption levels. If CGS has regional rate surveys showing a typical bill for neighboring utilities, this analysis may also be included for comparative purposes. Task 4.4 – Review Results with City Staff Once we have preliminary results of the class cost of ser- vice study and rate design, we will provide City staff with the preliminary results. Prelimi- nary results will be discussed with City staff during an on-site meeting in Clearwater. Electronic copies and draft schedules of the preliminary results will be provided to City staff one to two weeks prior to this meeting. Feedback at this meeting will then be incorpo- rated as appropriate. A second (optional) meeting with City staff to review revised results can be conducted with City staff upon request. Once all comments have been incor- porated Raftelis will conduct a meeting with City staff, the City Manager, and/or Assis- tant City Manager to review draft project results. Electronic copies and schedules of the draft results will be provided one to two weeks in advance of this meeting. Comments and feedback from this meeting will then be used to prepare a draft report (see Task 5). TASK 5 Develop Report and Presentations Task 5.1 – Issue Draft Report and Present Study Results The results of the rate study and the methodologies used will be described in a detailed RAFTELIS 31 Project Schedule Raftelis will complete the scope of services within the timeframe shown in the schedule below. The proposed schedule assumes a notice-to-proceed by the beginning of December 2019, and that Raftelis will receive the needed data in a timely manner and be able to schedule meetings as necessary. Project completion is estimated for August 2020. Raftelis has the resources to expedite this schedule if necessary. 1. Project Initiation and Data Collection 2. Financial Analysis 3. Class Cost of Service Study 4. Rate Design 5. Develop Report and Presentation In-Person Meetings / Workshops Web Meetings Deliverables December AugustJuneJulyMayJanuaryFebruaryMarchApril CITY OF CLEARWATER32 Natural Gas Rate Study Draft Report / October 20, 2016 CLARKSVILLEGAS AND WATER 1031 S. Caldwell StreetSuite 100Charlotte, NC 28203 Phone 704.373.1199Fax704.373.1113 www.raftelis.com October 20, 2016Mr. Fred KleinChief Financial OfficerCity of Clarksville2215 Madison StreetClarksville, TN 37043-5237 Subject: Natural Gas Rate Study ReportDear Mr. Klein,Raftelis Financial Consultants, Inc. (RFC) is pleased to provide this Natural Gas Rate Study Report (Report) forthe City of Clarksville (City) to address the unique challenges and needs facing the City’s Gas Utility.The major objectives of the study include the following: »Examine unbundling the cost of gas from base rates which are intended to recover the cost of thedistribution system (margin) »Evaluate the adequacy of existing rate revenues to support the continued financial sustainability ofthe Gas Utility going forward »Determine the cost of serving each customer class in accordance with each class’s use of the gassystem »Recommend rate revenue adjustments to better align the cost of serving each class with the revenuesgenerated by that class »Recommend rate structure adjustments to better align the City’s rate structure with industry bestpractices for natural gas utility ratesTheReport summarizes our key findings and recommendations.It has been a pleasure working with you, and we thank you and the City staff for the support provided duringthe course of this study.Sincerely, RAFTELIS FINANCIAL CONSULTANTS, INC. J. Bart Kreps Thomas J. Sullivan, Jr. PESenior Manager (RFC)President (Navillus) Clarksville Gas and Water Natural Gas Rate Study [DRAFT] TABLE OF CONTENTS 1.EXECUTIVE SUMMARY ................................................................1 1.1 BACKGROUND AND SCOPE.....................................................................1 1.2 UNBUNDLED GAS RATES.........................................................................1 1.3 FINANCIAL PLAN .......................................................................................1 1.4 COST OF SERVICE STUDY........................................................................2 1.5 RATE DESIGN.............................................................................................3 2.CHAPTER 2 –INTRODUCTION ....................................................6 2.1 PURPOSE ...................................................................................................6 2.2 SCOPE ........................................................................................................6 3.CHAPTER 3 –FINANCIAL PLAN .................................................7 3.1 CUSTOMERS, USAGE AND REVENUE.....................................................7 3.1.1 Projected Customers.......................................................................................................7 3.1.2 Projected Usage...............................................................................................................7 3.1.3 Revenues under Existing Rates .....................................................................................8 3.2 CASH REVENUE REQUIREMENTS ...........................................................9 3.2.1 Cost of Gas.......................................................................................................................9 3.2.2 Operating Expenses (excluding Cost of Gas).............................................................10 3.2.3 Capital Improvements Plan...........................................................................................10 3.2.4 Debt Service ...................................................................................................................11 3.2.5 Payment in Lieu of Taxes (PILOT)................................................................................11 3.2.6 Fort Campbell .................................................................................................................11 3.2.7 Depreciation and Rate Base..........................................................................................12 3.3 PROJECTED REVENUES AND REVENUE REQUIREMENTS.................12 4.CHAPTER 4 –COST OF SERVICE STUDY................................15 4.1 COST OF SERVICE ..................................................................................15 4.2 COST FUNCTIONS ...................................................................................16 4.3 CUSTOMER CLASSIFICATIONS .............................................................19 4.4 ALLOCATION OF COST OF SERVICE ....................................................19 Clarksville Gas and Water Natural Gas Rate Study [DRAFT] 5.RATE ADJUSTMENTS ................................................................23 5.1 OVERALL INCREASE...............................................................................23 5.2 UNBUNDLED RATES ...............................................................................23 5.3 SIMPLIFY RATE STRUCTURE .................................................................23 5.3.1 Replace Minimum Bill with Customer Charge.............................................................23 5.3.2 Remove Inside/Outside and Seasonal Distinctions....................................................24 5.3.3 Eliminate Block Rates ...................................................................................................24 5.4 ADJUST REVENUE RECOVERY TO CAPTURE COST OF SERVICE ....24 5.5 PROPOSED RATES AND IMPACTS ........................................................25 Clarksville Gas and Water Natural Gas Rate Study [DRAFT] LIST OF TABLES Table 1-1: Cash Flows ($ Million)..........................................................................................................2 Table 1-2: Costs by Customer Class ($ Million)...................................................................................3 Table 1-3: Proposed Rates ....................................................................................................................4 Table 3-1: Historical and Projected Customers ...................................................................................7 Table 3-2: Historical and Projected Usage (Mcf)..................................................................................8 Table 3-3: Gas Cost Revenues..............................................................................................................9 Table 3-4: Margin Revenues..................................................................................................................9 Table 3-5: Other Revenues....................................................................................................................9 Table 3-6: Operating Expenses (Excluding Cost of Gas) ($ Million)................................................10 Table 3-7: Capital Improvements Plan ($ Million)..............................................................................10 Table 3-8: Existing and Projected Debt Service ($ Million)...............................................................11 Table 3-9: Payment in Lieu of Taxes (PILOT) ($ Million)...................................................................11 Table 3-10: Depreciation ($ Million)....................................................................................................12 Table 3-11: Rate Base ($ Million)........................................................................................................12 Table 3-12: Revenues and Revenue Requirements (No Rate Increase) ($ Million)..........................13 Table 3-13: Revenues and Revenue Requirements (Proposed Rates) ($ Million)...........................14 Table 4-1: Test Year FY 2017 Cost of Service ($ Million)...................................................................16 Table 4-2: Assignment of 2013 Test Year Cost of Service to Cost Functions ($ Million)................18 Table 4-3: Customer Units of Service.................................................................................................19 Table 4-4: Customer Class Allocation Factors ..................................................................................21 Table 4-5: Customer Class Cost Allocations ($ Million)....................................................................22 Table 5-1: 3-Year Rate Plan Margin Revenues ($ Million).................................................................25 Table 5-2: Proposed Rates ..................................................................................................................25 Table 5-3: Annual Bill Impacts (2017).................................................................................................26 LIST OF FIGURES Figure 1-1: Summer Bill* Comparison (6 Ccf**)...................................................................................5 Figure 1-2: Winter Bill* Comparison (102 Ccf**).................................................................................5 Figure 5-1: Summer Bill* Comparison (6 Ccf**).................................................................................26 Figure 5-2: Winter Bill* Comparison (102 Ccf**)................................................................................26 Clarksville Gas and Water Natural Gas Rate Study [DRAFT] This page intentionally left blank to facilitate two-sided printing. Natural Gas Rate Study [DRAFT]|1 1.EXECUTIVE SUMMARY 1.1 BACKGROUND AND SCOPEThe City of Clarksville (City) owns and operates Clarksville Gas and Water (the Gas Utility), which purchasesnatural gas and distributes it to residential, commercial and industrial customers throughout their servicearea. The City engaged Raftelis Financial Consultants, Inc. to develop a comprehensive financial plan, cost ofservice study and rate design. The objectives of the study are:1.Examine unbundling the cost of gas from base rates which are intended to recover the cost of thedistribution system (margin).2.Evaluate the adequacy of existing rate revenues to support the continued financial sustainability of thegas utility going forward (Financial Plan).3.Determine the cost of serving each customer class according to each class’s use of the gas system (Costof Service Study).4.Recommend rate adjustments to better align the cost of serving each class with the revenues generatedby that class.5.Recommend rate structure adjustments to better align the City’s rate structure with industry bestpractices for natural gas utility rates (Rate Design). 1.2 UNBUNDLED GAS RATESRevenues derived from the City’s existing rate structure recover two primary types of costs:margin costs, orthosecostsincurred to maintain the City’s gas distribution system and gas costs, which are incurred topurchase and transport natural gas to the customers.Currently the City recovers both through a combined(i.e. bundled)rate structure where a base cost of gas is included in the approved rates. The rates are adjustedevery month to reflect changes in the actual cost of gas relative to the base cost of gas included in the approvedrates.Periodically, any over or under recovery of actual gas cost versus the cost of gas recovered through ratesis “trued up” so that—in the long run—the City fully recovers the cost of gas in its rates.It is anticipated that, going forward, customers will pay the actual cost of gas (on a volumetric basis) plus themargin rate (a mix of fixed and variable charges). The margin rates will be adjusted annually as necessary andthe cost of gas will be adjusted monthly, similar to the City’s current policy. 1.3 FINANCIAL PLANThe first step in developing natural gas rates involves the development of a comprehensive financial plan. Thefinancial plan compares forecasted revenues at existing rates (i.e. in the absence of any rate adjustments) toprojected revenue requirements and evaluates whether any adjustments to overall rate revenues are needed.The financial plan is summarized in Table 1-1.The revenue forecast shown is based on unbundling the gas cost from the margin cost so that separate ratestructures can be used.In general, expenses are assumed to increase at an inflationary rate (3 percent), which represents aconservative estimate of inflation going forward.The biggest drivers of the financial plan are the addition of 2 |Clarksville Gas and Water [DRAFT] Hankook USA as an industrial gas customer and the construction costs associated with the Texas Gas PipelineInterconnect(the TGP Project).The TGP Project will provide the City with an additional transportation optionto acquire natural gas. The project is projected to cost $31million and will be financed with a mix of cash andrevenue bonds.In order to support the issuance of the debt for the TGP Project we are recommending a 3-year plan of raterevenue adjustments. Margin rates would be adjusted on January 1 of each year. In addition to increasing theoverall level of rate revenue generated, we are proposing rate structure adjustments (discussed in Section 1.5below), which impact the level of additional revenues generated in each year.The financial plan indicated below is based on maintaining the Gas Utility’s historically strong coverage andcash positions, with rate increases needed to recover costs associated with the TGP project, which will befinanced through a combination of cash and debt. Table 1-1:Cash Flows ($Million) 1.4 COST OF SERVICE STUDYWhile the financial plan determines the overall level of rate revenue necessary to support the gas system, thecost of service study determines what proportion of that overall requirement should be recovered from eachof the City’s customer classes.The driving principal of a cost of service study is allocate costs to users inproportion to their use of the gas system and services provided by the Gas Utility. For this study,costs werebroken down between commodity related costs (the cost of meeting annual system requirements), capacityrelated costs (the cost of meeting peak demand), customer related costs (the cost of connecting and serving Cash Flow ($M)FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 RevenuesMargin Revenue Existing 7.49$8.55$8.98$9.47$9.63$9.63$Additional Margin Revenue -0.97 1.15 1.03 1.25 1.57 Total Margin Revenue (Existing + Proposed)9.52$10.13$10.50$10.87$11.20$ Margin Revenue Increase %11.4%6.5%3.7%3.5%3.0%Gas Cost Revenues 18.50$21.53$23.19$25.07$25.65$25.65$Miscellaneous Revenue 0.94 0.94 0.94 0.94 0.94 0.94Ft. Campbell Revenues 0.57 0.59 0.60 0.62 0.64 0.66 Total Operating Revenue 27.51$32.57$34.87$37.13$38.11$38.45$ Revenue RequirementsCost of Gas 18.50$21.53$23.19$25.07$25.65$25.65$Operating Expenses 6.12 6.37 6.71 7.05 7.27 7.48Debt Service 1.26 1.50 2.26 2.50 2.50 2.50Rate Funded Capital 3.00 4.60 8.10 1.10 1.10 1.10PILOT0.67 0.76 0.86 0.92 0.93 0.93Ft. Campbell Expenses 0.45 0.46 0.48 0.49 0.51 0.52 Total: Revenue Requirements 30.01$35.22$41.60$37.14$37.96$38.19$ Operating PerformanceTransfer to Reserves - Surplus/(Deficit)(2.50)$(2.65)$(6.73)$(0.01)$0.15$0.26$Days O&M + PILOT (Excluding Cost of Gas)1,053 842 459 435 430 430Debt Service Coverage Ratio 1.93 2.81 1.98 1.80 1.87 1.92 Natural Gas Rate Study [DRAFT]|3 individual customers)and meters (the facilities associated with individual customers such as service lines andmeters and costs associated with meter reading and billing).Table 1-2 indicates the results of the cost ofservice study based on FY 2017 costs.The “Total $” represents the level of allocated costs based on use of thesystem. The “Current $” column represents the current level of revenue generated. These results suggest asubstantial variance between the level of revenue generated and the costs incurred, particularly in the case ofresidential and commercial customers. Table 1-2:Costs by Customer Class ($Million) 1.5 RATE DESIGNAfter determining the level of revenue required to support the gas system and determining each customerclass’s responsibility for costs based on use of the system, the final step involves designing rates which reflectcost of service and address the strategic objectives of the City.The City’s current rate structure is relativelycomplex, and while many aspect of the current structure had a rational basis when they were put in place,improvements could be made to better align revenue and cost generation as well as conformance with currentindustry practices. We recommend the following changes to the City’s rate structure:1.3-year rate plan, with adjustments on January 12.Unbundle rate for City gas distribution system (margin) from cost of purchased gas3.Eliminate the minimum usage allowance and increase fixed revenue recovery through a flat monthlycharge4.Remove inside outside and seasonal differentials5.Adjust rates to align revenue recovery with cost of service Table 1-3 indicates the proposed rates. Note that these rates do not include gas cost, which would berecovered by a separate volumetric rate and adjusted monthly.As indicated, this structure reflects theelimination of inside and outside city and seasonal differentials, as there is little cost justification for suchdistinctions. In addition, fixed charges have been increased and volume charges lowered to better align theway in which revenues are generated with the way costs are incurred (i.e. on a mostly fixed basis). Finally,rates have been adjusted to reflect cost of service. The results of the cost of service study suggest thatresidential customers are being heavily subsidized by commercial and industrial customers under the current Customer Class Cost Allocation ($M)Commodity $Capacity $Customer $Meters $Total $Current $Δ $Δ % Inside CityResidential 0.15$0.72$1.58$1.91$4.35$2.43$1.92$78.8%Commercial & Industrial 0.16 0.54 0.27 0.98 1.95 2.48 (0.54)-21.7%Large Commercial & Industrial 0.01 0.02 0.00 0.01 0.04 0.02 0.02 85.3%Total Inside City 0.32$1.28$1.85$2.90$6.34$4.94$1.40$28.3% Outside CityResidential 0.04$0.19$0.37$0.45$1.05$0.98$0.07$7.1%Commercial & Industrial 0.03 0.11 0.02 0.08 0.24 0.60 (0.36)-60.2%Large Commercial & Industrial 0.07 0.09 0.00 0.01 0.17 0.51 (0.34)-67.5% Total Outside City 0.14$0.40$0.39$0.53$1.46$2.09$(0.64)$-30.4% Transportation 0.27$0.44$0.00$0.02$0.73$0.70$0.03$4.4% Weighted Average Cost of Gas (WACOG)Inside City WACOG 0.07$0.07$0.00$0.05$0.19$0.18$0.01$5.1%Outside City WACOG 0.23 0.22 0.00 0.01 0.47 0.63 (0.16)-25.7%Total WACOG 0.30$0.29$0.00$0.06$0.66$0.81$(0.15)$-18.7% Grand Total 1.02$2.42$2.24$3.51$9.19$8.55$0.64$7.5% 4 |Clarksville Gas and Water [DRAFT] rate structure. Consequently, residential rates have been increased in each of the 3 years.Commercial andIndustrialrates have been set at an overall lower rate and will remain flat through 2019. Table 1-3:Proposed Rates The impact of these changes on the average residential customer can be seen in Figures 1-1 and 1-2. As weexamined the City’s current structure one aspect that stood out was the relatively low fixed revenue recovery.Low fixed revenues expose the utility to a significant amount of revenue volatility (primarily due to year-to-year variations in winter temperatures)and generally necessitate larger operating reserves. Given that themajority of the costs of operating the gas system (excluding cost of gas) are fixed, higher fixed charges arepreferredto balance costs and revenues.The proposed summer bill is at the higher end of the peer group due to the increased fixed charge. However,the decreased volumetric charge means that the winter bill has increased only slightly and remains at thelower end of the peer group. The impact of increasing the fixed charge is mitigated significantly by thedecrease in the volume charge. This benefits customers during the winter months when usage is highest. Proposed Rate Structure 1/1/2017 1/1/2018 1/1/2019 ResidentialMonthly Meter Charge 16.110$17.320$17.840$Usage Charge (per 100 cf)0.104$0.112$0.115$Commodity Charge (per 100 cf)Based on actual cost of gas Commercial & IndustrialMonthly Meter Charge 37.410$37.410$37.410$Usage Charge (per 100 cf)0.089$0.089$0.089$Commodity Charge (per 100 cf)Based on actual cost of gas Large Commercial & IndustrialMonthly Meter Charge 211.890$211.890$211.890$Usage Charge (per 100 cf)0.048$0.048$0.048$Commodity Charge (per 100 cf)Based on actual cost of gas TransportationMonthly Meter Charge 497.260$497.260$497.260$Usage Charge (per 100 cf)0.047$0.051$0.052$ WACOGMonthly Meter Charge 497.260$497.260$497.260$Usage Charge (per 100 cf)0.039$0.039$0.039$Commodity Charge (per 100 cf)Based on actual cost of gas Natural Gas Rate Study [DRAFT]|5 Figure 1-1:Summer Bill*Comparison (6 Ccf**) *Includes Gas Cost**Average July Usage Figure 1-2:Winter Bill*Comparison (102 Ccf**) *Includes Gas Cost**Average January Usage 6 |Clarksville Gas and Water [DRAFT] 2.CHAPTER 2 –INTRODUCTIONTheCity of Clarksville (City)owns and operates the gas system serving the Clarksville area. Service is providedto residences, businesses, industry, and institutions both inside and outside the City's corporate limits.TheGas Utility is a separate proprietary fund of the City, and produces financial statements independent of thewater and sewer utilities. That said, the Gas, Water and Sewer utilities frequently issue debt based on thecombined revenue pledge of all three utilities. 2.1 PURPOSEThe purpose of the study was to:1.Examine unbundling the cost of gas from base rates which are intended to recover the cost of thedistribution system (margin).2.Evaluate the adequacy of existing rate revenues to support the continued financial sustainability of thegas utility going forward (Financial Plan).3.Determine the cost of serving each customer class according to each class’s use of the gas system (Costof Service Study).4.Recommend rate adjustments to better align the cost of serving each class with the revenues generatedby that class.5.Recommend rate structure adjustments to better align the City’s rate structure with industry bestpractices for natural gas utility rates (Rate Design). 2.2 SCOPEThis report presents the results of a comprehensive study including:a projection of the financial position ofthe Gas Utility for the period 2017 through 20211, a cost of service analysis based on a fiscal year 2017 testyearto evaluate the cost responsibility for each of the various classes of customers served, and thedevelopment of recommended rates to recover the costs of providing service from respective classes ofcustomers.The projections of revenue requirements for the Gas Utility are based on the analysis of past costs incurred inproviding service and reflect current and anticipated future operating conditions and cost levels. Anticipatedfuture operating conditions and cost levels recognize the amount and degree of service, system expansion andreplacement, inflationary effects, and other factors.The cost of service analysis includes the functional classification of test year costs and allocation of functionalcosts to various classes of customers on the basis of the relative cost responsibility of each class. Allocated costof service is then compared with test year revenues under recommended rates to determine the level or rateincrease or decrease needed such that rates recover the cost to serve each customer class. 1 Clarksville Gas and Water operates on a fiscal year basis ending June 30. References in this report to a specific yearreflect the fiscal year ending on June 30 of that year unless otherwise noted. Natural Gas Rate Study [DRAFT]|7 3.CHAPTER 3 –FINANCIAL PLANThe development of the gas utility financial plan required 3 steps:1.Forecast the level of revenue under existing rates.2.Forecast operation and maintenance and capital expenditures.3.Compare revenue at existing rates to forecast expenditures and determine overall revenue excess ordeficiency. 3.1 CUSTOMERS,USAGE AND REVENUEThe forecast of revenue at existing rates is the baseline against which revenue adjustments are made. It isdetermined by forecasting the number of customer and usage for each year of the forecast period andmultiplying by the existing rates. 3.1.1 Projected Customers Table 3-1 indicates the historical change in the number of customers over the last 4 years. While the gassystem has experienced some growth recently, it is challenging to forecast how long that growth will besustained. For the sake of conservatism and to avoid being overly reliant on growth to support the systemfinancially, a flat forecast is used. To the extent that growth continues or increases, the City can adjust thefinancial plan, including some growth assumptions using the electronic rate model developed by RFC duringthe course of the Study. Table 3-1:Historical and Projected Customers 3.1.2 Projected UsageNatural gas usage is subject to significant fluctuations both within a given fiscal year, as well as over time.Going forward, the objective of the natural gas usage forecast was to determine normalized usage, or usagethat would be expected under normal weather conditions.For residential and commercial customers, historical usage was weather normalized. The process involvesperforming an ordinary least squares (OLS) regression where the dependent variable is historical usage percustomer(last five years)and the independent variable is historical actual heating degree-days (currentperiod and lagged one month to reflect the effect of cycle billing).These analyses determine the correlationbetween usage and heating degree-days. This correlation can then be used to project usage based on normalor expected heating degree-days.We have used the 30-year average of monthly heating degree-days asnormal.In other words, the projected period removes the fluctuations which occur due to weather variation. Accounts FY 2012 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022Residential21,138 22,267 22,267 22,267 22,267 22,267 22,267 22,267Commercial & Industrial 3,180 3,349 3,349 3,349 3,349 3,349 3,349 3,349Large Commercial & Industrial 6 7 6 6 6 6 6 6Transportation Customers 4 4 4 4 4 4 4 4Weighted Average Cost of Gas 12 12 12 12 12 12 12 12Total24,340 25,638 25,638 25,638 25,638 25,638 25,638 25,638 Annualized Growth Rate (%)1.3%0.0% 8 |Clarksville Gas and Water [DRAFT] Large industrial, transportation and weighted average cost of gas (“WACOG”)customers were forecast usingthe most recent year of historical data. These customer’s usage is not as heavily influenced by weather, and ismore a function of business processes, the general state of the economy,and production schedules within agiven year.In addition to forecasting the usage of the City’s existing customer base, usage for a new industrial user wasalso included.Hankook USA is a tire manufacturer that has recently begun operations in Clarksville.Representatives from the company provided estimates of monthly usage through FY 2020. At this point weassumed that the FY 2020 monthly usage would be representative of full operations at the plant, andmaintained that level of usage from FY 2020 going forward.Aside from the increased usage from the ramping up of Hankook USA’s usage, no change in use per customerwas assumed, resulting in a flat forecast for the remaining customer classes.Note that FY 2016 wasconsiderably warmer than a typical year for the City resulting in lower usage.Table 3-2 indicates the usageprojections for the Gas Utility. Table 3-2:Historical and Projected Usage (Mcf) 3.1.3 Revenues under Existing RatesRevenues consist principally of revenues from the sale of natural gas utility service to customers of the gasutility. In addition,revenues include penalties associated with late payment of bills, connection charges, andmiscellaneous sales and services.The two largest revenue components are margin revenues and gas costrevenues.Tables 3-3 through 3-5 indicates the various sources of Gas Utility revenue.Gas cost revenues recover the cost of gas purchased and transported for customers.On a monthly basis, theGas Utility changes rates to reflect increases and decreases in the cost of purchased gas.The authority to adjustrates monthly to reflect the cost of purchased gas and transportation (i.e. purchased gas adjustment) isprovided for by City ordinance.The financial plan indicated in this section assumes that the City is fullyrecovering the cost of purchased gas via its purchased gas adjustment.In practice, gas costs may be slightlyover or under-recovered in a given fiscal year. However, the mechanism used to charge customers for gascosts will credit any over-recovery or collect any under-recovery in subsequent periods such that over time,gas cost revenues equal gas costs.Margin revenues recover the cost of operating and maintaining the City’s gas distribution system. Adjustmentto margin rates requires council approval has not been done since FY 2002. Usage (Mcf)FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021Residential1,214,839 931,245 1,053,259 1,053,259 1,053,259 1,053,259 1,053,259Commercial & Industrial 1,072,030 895,165 1,037,897 1,037,897 1,037,897 1,037,897 1,037,897Large Commercial & Industrial 87,724 69,508 445,503 770,627 1,136,330 1,250,536 1,250,536Transportation Customers 1,512,580 1,512,580 1,512,580 1,512,580 1,512,580 1,512,580 1,512,580Weighted Average Cost of Gas 1,654,529 1,726,237 1,687,064 1,687,064 1,687,064 1,687,064 1,687,064Total5,541,702 5,134,734 5,736,303 6,061,427 6,427,130 6,541,336 6,541,336 Natural Gas Rate Study [DRAFT]|9 Consistent with the usage forecast, recovery of purchased gas (gas cost revenues) and margin revenue areassumed to increase until FY 2020 with the addition of Hankook USA and flat revenues assumed (at existingrates) going forward for the other customer classes. Table 3-3:Gas Cost Revenues Table 3-4:Margin Revenues Other revenues include miscellaneous revenues (e.g. connection fees, penalties and interest). Other revenuesare assumed to be consistent with the FY 2016 budget. Table 3-5:Other Revenues 3.2 CASH REVENUE REQUIREMENTS 3.2.1 Cost of GasAs discussed above, the City of Clarksville purchases and transports gas (over interstate pipelines), which itthen distributes to customers on the City owned transmission and distribution network.The published rateschedule is adjusted every month to reflect the change in the cost of purchasing and transporting gas fromupstream suppliers and upstream transmission systems. Generally, the goal of a natural gas utility should beto recover, on average, the cost of gas purchased to serve its retail customers. After reviewing the detailedcalculations involved in the City’s purchased gas adjustment model, we are able to confirm that this is the casefor the City. Consequently,the cost of gas expense is assumed to be equal to the revenue generated via the Cost of Gas Revenue ($M)FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021Residential5.87$4.92$5.51$5.51$5.51$5.51$5.51$Commercial & Industrial 5.14 4.53 5.24 5.24 5.24 5.24 5.24Large Commercial & Industrial 0.42 0.36 2.28 3.95 5.82 6.41 6.41Transportation Customers -------Weighted Average Cost of Gas 7.77 8.69 8.50 8.50 8.50 8.50 8.50Total19.20$18.50$21.53$23.19$25.07$25.65$25.65$ Margin Revenue ($M)FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021Residential3.61$3.21$3.42$3.42$3.42$3.42$3.42$Commercial & Industrial 3.27 2.72 3.08 3.08 3.08 3.08 3.08Large Commercial & Industrial 0.05 0.03 0.53 0.97 1.46 1.61 1.61Transportation Customers 0.70 0.70 0.70 0.70 0.70 0.70 0.70Weighted Average Cost of Gas 0.79 0.83 0.81 0.81 0.81 0.81 0.81Total8.43$7.49$8.55$8.98$9.47$9.63$9.63$ Miscellaneous Revenue ($M)FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021Connection Fees 0.08$0.08$0.08$0.08$0.08$0.08$Transfer Fee 0.17 0.17 0.17 0.17 0.17 0.17Returned Check Fee ------Forfeited Discounts & Penalties 0.45 0.45 0.45 0.45 0.45 0.45Tap Fees 0.08 0.08 0.08 0.08 0.08 0.08Turn-On Fees 0.00 0.00 0.00 0.00 0.00 0.00Gas Application Fee 0.01 0.01 0.01 0.01 0.01 0.01Bid Specs Fee ------Mis Operating Revenue 0.15 0.15 0.15 0.15 0.15 0.15Rev Collection from Over ------Total 0.94 0.94 0.94 0.94 0.94 0.94 10 |Clarksville Gas and Water [DRAFT] City’s existing rates (excluding the margin component). By distinguishing the cost of gas from other expenses,the financial plan can develop base rates around recovering the operating and capital costs of the City’sdistribution system (i.e. the margin).In general,the volume of gas purchased for the City’s customers isexpected to be relatively flat with the exception of the addition of Hankook USA, noted above. 3.2.2 Operating Expenses (excluding Cost of Gas)Excluding cost of gas, the City’s remaining operating expenses are associated with maintaining the City’s gasdistribution system. These expenses include the cost of labor, material, purchased supplies, and services.Asummary of forecast operating expenses is included in Table 3-6.Historically, operating expenses haveincreased at inflationary rates (2-3 percent annually). The operating expense forecast indicated below isbased on the FY 2017 budget provided by the City, with an assumed inflation adjustment of 3 percent annuallyfor most expenses. One exception to this general inflation rate is the distribution department, which isexpected to increase incrementally by $150,000 in both FY 2018 and FY 2019.The additional distributioncosts are related to the annual costs of operating the facilities associated with the Texas Gas PipelineInterconnectProject(discussed below). Table 3-6:Operating Expenses (Excluding Cost of Gas)($Million) 3.2.3 Capital Improvements PlanCash requirements associated with financing capital improvements include the funds required for routine ornormally recurring additions, extensions, and replacements. In addition, depending upon the method offinancing, the cost of major capital improvements may create a revenue requirement in the form of new debtservice. The estimated capital improvement program for the Gas Utility from FY 2016 to FY 2022 is detailedinTable 3-7. The right of way conflicts and miscellaneous gas mains are projects which generally occur at thesame level each year and are anticipated to be financed with cash.The Texas Gas Pipeline Interconnect project(the TGP Project)is a one-time project which will afford the City an additional interstate pipeline connectionprovidingaccess to additional natural gas supply as well as increased reliability of supply.Given the relativelylong asset life (50+ years) and the relatively high cost of the project, it is anticipated to be financed using a mixof cash financing and revenue bonds. These bonds are incorporated into the debt service projections andoverall financial plan indicated below. Table 3-7:Capital Improvements Plan ($ Million) O&M ($M)FY 2012 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021Distribution3.08$3.66$3.77$4.03$4.30$4.43$4.56$Administration 0.81 0.62 0.73 0.75 0.77 0.80 0.82Accounting1.12 0.58 0.59 0.60 0.62 0.64 0.66Customer Service 0.43 1.08 1.10 1.13 1.16 1.20 1.23Engineering0.17 0.19 0.19 0.19 0.20 0.21 0.21 Total 5.62$6.12$6.37$6.71$7.05$7.27$7.48$ Annualized Growth Rate 2.1% Capital Improvements Plan ($M)FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021Texas Gas Pipeline Interconnect 2.00$15.00$14.00$-$-$-$Normal Additions & Replacements 1.00 1.00 1.00 1.00 1.00 1.00Right of Way Conflicts -0.10 0.10 0.10 0.10 0.10 Total CIP Spending 3.00$16.10$15.10$1.10$1.10$1.10$ Natural Gas Rate Study [DRAFT]|11 3.2.4 Debt ServiceDebt service includes interest and principal payments on existing debt and, where applicable, on new bondissues.The City currently has three outstanding bond issues related to the combined water, sewer and gassystem. These bonds were issued in FY 2007, FY 2011 and FY 2012 respectively are based on a net revenuepledgeof the combined revenues of all three utilities.The debt service indicated below is the Gas Utilitiesallocated share of combined utility (Gas, Water and Sewer) debt service.As indicated above, the financial planis based on cash financing of normal replacements and additions and the right of way conflicts. The TGPProjectisassumed to be financed with a mix of cash and revenue bonds.Table 3-8 indicates the City’s existingdebt service, as well as the additional $1.4M in debt service payments associated with the new revenue bonds. Table 3-8:Existing and Projected Debt Service ($ Million) 3.2.5 Payment in Lieu of Taxes (PILOT)The City of Clarksville, like many municipalities charges a payment in lieu of taxes (PILOT) to the Gas Utility.The PILOT is intended to recover the cost of providing municipal services to the utility (i.e. police, fire andstreets) from which the utility and its customers benefit. If, for example, municipal police protection was notavailable in the City, the utility might have to incur the cost of utilizing a private firm to provide the sameservices. Consequently, since the Gas Utility and its customers benefit from municipal services, but do not payproperty taxes, a PILOT is used to recover these costs from the utility.Table 3-9 indicates the forecast PILOTbased on assessed value and gross net income. The primary driver of increases in the PILOT are revenueincreases (associated with anticipated rate adjustments and the addition of Hankook USA) and increases inassessed value (associated with the addition of the Texas Gas Pipeline Interconnect). Table 3-9:Payment in Lieu of Taxes (PILOT)($Million) 3.2.6 Fort CampbellFort Campbell is a military base located in Kentucky, whose distribution system is operated and maintainedby Clarksville Gas and Water.The City both incurs expenses associated with the system, as well as receivesrevenues. For financial planning purposes, both revenues and expenses are anticipated to increase at 3 Debt Service ($M)FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021Existing Debt Service 1.26$1.30$1.29$1.14$1.14$1.14$Proposed Debt Service -0.20 0.97 1.36 1.36 1.36 Total Debt Service 1.26$1.50$2.26$2.50$2.50$2.50$ Payment in Lieu of Taxes ($M)FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021Assessed Value ($M)24.35$32.47$39.67$38.67$37.72$36.80$Tax Rate (Per $100)1.18$1.18$1.18$1.18$1.18$1.18$PILOT (Part A)0.29$0.38$0.47$0.46$0.45$0.44$Gross Net Income (3 yr. Avg.)9.59$9.50$9.67$11.59$12.06$12.44$Tax Rate 4.00%4.00%4.00%4.00%4.00%4.00%PILOT (Part B)0.38$0.38$0.39$0.46$0.48$0.50$ Total PILOT 0.67$0.76$0.86$0.92$0.93$0.93$ 12 |Clarksville Gas and Water [DRAFT] percent annually. The financial impact of the Fort Campbell system is indicated in the cash flow presentationin the next section. 3.2.7 Depreciation and Rate BaseWhile depreciation does not represent a cash requirement in the financial plan, it is forecast—along with ratebase—in order to allocate the appropriate level of capital costs in the cost of service study.Table 3-10indicatesthe forecast of depreciation. In general,depreciation is expected to increase at a relatively constantpace as assets are added to the gas system. However,the addition of the TGP Project is anticipated to increaseannual depreciation on transmission mains substantially beginning in FY 2018.Rate base represents the level of investment in utility assets that the City has made to serve its customers.Similar to depreciation, rate base itself does not represent a cash requirement, but rather vehicle for allocatingcash capital costs in the cost of service study, via the return on rate base revenue requirement. This explainedin greater detail in Section 4.Table 3-11 summarizes the forecast level of Gas Utility rate base over theforecast period. Similar to depreciation increases to rate base are anticipated to be relatively modest, with theexception of the addition of the TGP Project. Table 3-10:Depreciation ($ Million) Table 3-11:Rate Base ($ Million) 3.3 PROJECTED REVENUES AND REVENUE REQUIREMENTSProjected revenues and revenue requirements under existing rates are shown in Table 3-12.As indicated,existing margin revenues are insufficient to meet the projected revenue requirements over the forecast period.While revenues increase somewhat with the addition of Hankook USA (even in the absence of a rateadjustment), the increase is not sufficient to keep pace with the projected revenue requirements.Additionally,in the absence of revenue adjustments, the Gas Utility would fall below the 1.5 times minimum debt servicecoverage target and 365-day reserve target. Maintaining strong debt service coverage ratios and cash reservesare critical to ensuring the City can meet its debt obligations. These financial targets can also be a factor incredit ratings decisions which may impact the cost of future debt issuances for the gas utility. Forecast Depreciation ($M)Useful Life FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022Transmission Mains 50 0.09$0.09$0.71$1.33$1.32$1.32$1.32$Distribution Mains 50 0.68 0.71 0.73 0.75 0.77 0.79 0.81Services/Meters/Regulators 40 0.44 0.44 0.44 0.43 0.42 0.40 0.39General Plant 15 0.45 0.45 0.43 0.37 0.29 0.21 0.17 Total System Depreciation 1.66$1.68$2.30$2.88$2.80$2.72$2.69$ Forecast Rate Base ($M)Useful Life FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022Transmission Mains 50 4.41$19.32$32.62$31.29$29.97$28.65$27.33$Distribution Mains 50 25.49 25.88 26.25 26.61 26.94 27.25 27.54Services/Meters/Regulators 40 10.00 9.56 9.12 8.69 8.27 7.87 7.48General Plant 15 3.36 2.91 2.48 2.11 1.82 1.61 1.44 Total Rate Base 43.26$57.67$70.47$68.70$67.00$65.37$63.78$ Natural Gas Rate Study [DRAFT]|13 Consequently, rate revenue adjustments are necessary in order to fund the utilities operating expenses,provide for sufficient reinvestment in the system as well as meet the City’s debt covenant requirements (e.g.debt service coverage). Table 3-13 indicates projected revenues and revenue requirements under the proposed rates.The proposedratesmaintain the strong financial position of the gas utility. The cash position of the gas utility is maintainedabove 365 days of operating expenses despite the anticipated use of some cash to finance the TGP Project.Debt service coverage is also forecast to remain strong,exceeding the City’s 1.5 times minimum target. BeyondFY 2019 it is anticipated that only inflationary increases will be required. Note that these adjustments wouldbe applied to the margin portion of the rates,with gas cost continuing to be recovered via the purchased gasadjustment mechanism. Table 3-12:Revenues and Revenue Requirements (No Rate Increase)($ Million) Cash Flow ($M)FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 RevenuesMargin Revenue Existing 7.49$8.55$8.98$9.47$9.63$9.63$Additional Margin Revenue ------ Total Margin Revenue (Existing + Proposed)8.55$8.98$9.47$9.63$9.63$ % Change (Margin Revenue)0.0%5.1%5.5%1.6%0.0%Gas Cost Revenues 18.50$21.53$23.19$25.07$25.65$25.65$Miscellaneous Revenue 0.94 0.94 0.94 0.94 0.94 0.94Ft. Campbell Revenues 0.57 0.59 0.60 0.62 0.64 0.66 Total Operating Revenue 27.51$31.60$33.72$36.10$36.86$36.88$ Revenue RequirementsCost of Gas 18.50$21.53$23.19$25.07$25.65$25.65$Operating Expenses 6.12 6.37 6.71 7.05 7.27 7.48Debt Service 1.26 1.50 2.26 2.50 2.50 2.50Rate Funded Capital 3.00 4.60 8.10 1.10 1.10 1.10PILOT0.67 0.75 0.83 0.88 0.88 0.88Ft. Campbell Expenses 0.45 0.46 0.48 0.49 0.51 0.52 Total: Revenue Requirements 30.01$35.21$41.57$37.10$37.91$38.14$ Operating PerformanceTransfer to Reserves - Surplus/(Deficit)(2.50)$(3.61)$(7.85)$(1.00)$(1.05)$(1.26)$Days O&M + PILOT (Excluding Cost of Gas)1,053 794 360 297 242 180Debt Service Coverage Ratio 1.93 2.16 1.47 1.39 1.37 1.29 14 |Clarksville Gas and Water [DRAFT] Table 3-13:Revenues2 and Revenue Requirements (Proposed Rates)($ Million) 2 Note that the increased margin revenue is a function of the change in rate structure as well as an increase inunderlying revenue. This is explained in further detail in Section 5. Cash Flow ($M)FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 RevenuesMargin Revenue Existing 7.49$8.55$8.98$9.47$9.63$9.63$Additional Margin Revenue -0.97 1.15 1.03 1.25 1.57 Total Margin Revenue (Existing + Proposed)9.52$10.13$10.50$10.87$11.20$ % Change (Margin Revenue)11.4%6.5%3.7%3.5%3.0%Gas Cost Revenues 18.50$21.53$23.19$25.07$25.65$25.65$Miscellaneous Revenue 0.94 0.94 0.94 0.94 0.94 0.94Ft. Campbell Revenues 0.57 0.59 0.60 0.62 0.64 0.66 Total Operating Revenue 27.51$32.57$34.87$37.13$38.11$38.45$ Revenue RequirementsCost of Gas 18.50$21.53$23.19$25.07$25.65$25.65$Operating Expenses 6.12 6.37 6.71 7.05 7.27 7.48Debt Service 1.26 1.50 2.26 2.50 2.50 2.50Rate Funded Capital 3.00 4.60 8.10 1.10 1.10 1.10PILOT0.67 0.76 0.86 0.92 0.93 0.93Ft. Campbell Expenses 0.45 0.46 0.48 0.49 0.51 0.52 Total: Revenue Requirements 30.01$35.22$41.60$37.14$37.96$38.19$ Operating PerformanceTransfer to Reserves - Surplus/(Deficit)(2.50)$(2.65)$(6.73)$(0.01)$0.15$0.26$Days O&M + PILOT (Excluding Cost of Gas)1,053 842 459 435 430 430Debt Service Coverage Ratio 1.93 2.81 1.98 1.80 1.87 1.92 Natural Gas Rate Study [DRAFT]|15 4.CHAPTER 4 –COST OF SERVICE STUDYWhile the financial plan determines the overall level of rate revenue required to support the gas utility, thecost of service study is one tool that can be used to determine each customer classes share of rate revenuebased on their proportionate share of the system (the customer class revenue requirement). There are 4 stepsrequired to arrive at each customer class’s cost of service:1.Summarize the overall revenue requirements for the test year, or the period for which rates are beingdeveloped.2.Functionalize the test year revenue requirements to the parameters representing the various servicesprovidedby the Gas Utility.3.Allocate the functionalized costs to customer classes in proportion to each classes proportionatecontribution to each cost function.4.Compare customer class revenue requirements to customer class revenues under existing rates. 4.1 COST OF SERVICECost of service allocations provide a measure of determining the proportionate responsibility of each customerclass for the service provided. Analysis of these costs provides guidelines for rate design and for comparingrevenue derived by the present rates from each class with the cost associated with providing service.Cost ofservice allocations are based upon conditions estimated for a test year that reflects typical operations of theGasUtility. Table 4-1 summarizes the FY 2017 test year cost of service. The “Cash Needs” column are the revenuerequirements from the financial plan in Section 3. The COS column is a restatement of these cash needs thataligns the cash needs (debt service, cash financed CIP, surplus/deficit) with the system investment and annualcost of that investment (return and depreciation). Note that total costs recovered are the same in either case.The difference is the use of depreciation and return on rate base to recover capital costs. Depreciation andreturn are used because detailed information is available about the various assets used to provide service tothe City’s customers. By using depreciation and return, capital costs can be recovered in proportion to theinvestment made in the Gas Utility and the costs can be directly determined from that investment and assignedto the various cost functions used in the cost of service study (as discussed later in this chapter). 16 |Clarksville Gas and Water [DRAFT] Table 4-1:Test Year FY 2017 Cost of Service ($ Million) Operating expenses are the costs incurred in the purchase of gas and in the operation and maintenance ofregulator stations, gas supply mains, and the propane air plant. Such expenses also include the costs associatedwith billing and collection and the PILOT payment.Miscellaneous revenues, primarily associated with billingand customer service are netted out of the test year cost of service.Depreciation expense is the loss, not restored by current maintenance, which occurs in the system due todecay, inadequacy and obsolescence. In this report, depreciation is based on gross plant investment lesscontributions.This amount is typically referred to as the return of investment and is used to fund normalannual renewals and replacements.Return is the balance of annual revenues after operating expenses, transfers, and depreciation expenseallowancesand is comparable to the net income available to cover interest expenses and reinvestment intothe system.This balance plus depreciation is available for payment of debt service and capital improvements. 4.2 COST FUNCTIONSThe functional classification of cost of service is the second step in the class cost of service study, the thirdbeing the allocation of functionalized costs to customer classes. The functionalization is based on assigningcosts to various functions or services provided by the Gas Utility. These cost functions include the commodity,capacity, and customer functions of transmission and distribution mains, the customer function of customerspecific facilities such as service lines and meters, and the customer function of metering reading, billing, andcollection.Commodity related costs are typically costs that vary with the amount of gas delivered through the system onan annual basis. Capacity related costs are costs that vary with the amount of capacity that is built into thesystem to serve customers on the peak day. Customer related costs are costs that vary with the number ofcustomers connected to the facilities (jointly used facilities such as a portion of the investment in mains) or Test Year FY 2017 COS ($M)Cash Needs COS OperatingCost of Gas 21.53$21.53$O&M + PILOT 7.10 7.10Miscellaneous Revenues (1.06)(1.06)$ Total 27.57$27.57$ CapitalDebt Service 1.50$Cash Funded CIP 4.60Surplus/(Deficit)(3.18)Mid-Year Adjustment 0.22Depreciation 1.68Return on Rate Base 1.46 Total 3.15$3.15$ Grand Total 30.72$30.72$ Natural Gas Rate Study [DRAFT]|17 are based on the specific requirements of individual customers (facilities such as service lines, meters andregulators). Generally, plant investment is first assigned to these cost functions,and this assignment drivesthe allocation of operating costs, depreciation, and return to the same functions. Plant is used because detailedinformation is available regarding the specific assets such as mains, service lines, meters and regulators thatdrive both investment and operating costs. Table 4-2 summarizes the assignment of test year operating expense, depreciation expense, and return tofunctional classifications.Cost of gas is assigned directly to customer classes such that the cost equals the costof gas portion of revenues for each class.Transmission mains are assigned 50 percent to the commodityfunction and 50 percent to the capacity function. Distribution mains are assigned 10 percent to the commodityfunction, 50 percent to the capacity function and 40 percent to the customer function. Services, meters andregulators are assigned 100 percent to the meters function. Customer service and customer accountingrelated costs are assigned 100 percent to the customer function. Engineering is allocated proportionally basedon the allocation of transmission, distribution, services, meters and regulators. PILOT is allocated based onthe allocation of return. Miscellaneous revenue is allocated 100 percent to the customer function. Finally,administration is allocated proportionally based on all other O&M costs (excluding cost of gas).Theassignment of costs between commodity, capacity, and customer is based on our experience with detailedstudies of these facilities, primarily for regulated utilities that are required to maintain much more detailregarding their distribution facilities. 18 |Clarksville Gas and Water [DRAFT] Table 4-2:Assignment of 2013 Test Year Cost of Service to Cost Functions ($ Million) Cost Functionalization Total Costs Commodity Capacity Customer Meters Direct Commodity Capacity Customer Meters Direct Operating ExpenseCost of Gas 21.53$0%0%0%0%100%-$-$-$-$21.53$Transmission 0.57 50%50%0%0%0%0.28 0.28 ---Distribution 1.13 10%50%40%0%0%0.11 0.57 0.45 --Services/Meters/Regulators 2.07 0%0%0%100%0%---2.07 -Administration 0.73 7%16%38%39%0%0.05 0.11 0.28 0.28 -Accounting 0.59 0%0%100%0%0%--0.59 --Customer Service 1.10 0%0%100%0%0%--1.10 --Engineering 0.19 11%23%12%55%0%0.02 0.04 0.02 0.10 -PILOT 0.77 18%40%22%21%0%0.14 0.30 0.17 0.16 -Miscellaneous Revenue (1.06)0%0%100%0%0%--(1.06)--Total Operating Expense 27.60$0.61$1.31$1.54$2.62$21.53$ DepreciationTransmission Mains 0.09$50%50%0%0%0%0.04$0.04$-$-$-$Distribution Mains 0.71 10%50%40%0%0%0.07 0.35 0.28 --Services/Meters/Regulators 0.44 0%0%0%100%0%---0.44 -General Plant 0.45 9%32%23%36%0%0.04 0.14 0.10 0.16 - Total Depreciation 1.68$0.16$0.54$0.39$0.60$-$ Net Plant InvestmentTransmission Mains 11.87$50%50%0%0%0%5.93$5.93$-$-$-$Distribution Mains 25.68 10%50%40%0%0%2.57 12.84 10.27 --Services/Meters/Regulators 9.78 0%0%0%100%0%---9.78 -General Plant 3.13 18%40%22%21%0%0.56 1.24 0.68 0.65 - Total Net Plant Investment 50.46$0%0%0%0%0%9.07$20.02$10.95$10.43$-$ ReturnTransmission Mains 0.34$50%50%0%0%0%0.17$0.17$-$-$-$Distribution Mains 0.73 10%50%40%0%0%0.07 0.36 0.29 --Services/Meters/Regulators 0.28 0%0%0%100%0%---0.28 -General Plant 0.09 18%40%22%21%0%0.02 0.04 0.02 0.02 - Total Return 1.43$0.26$0.57$0.31$0.30$-$ Total Cost of Service 30.72$1.02$2.42$2.24$3.51$21.53$ Natural Gas Rate Study [DRAFT]|19 4.3 CUSTOMER CLASSIFICATIONSThe Gas Utility presently classifies customers as residential, commercial and industrial, large commercial andindustrial, transportation and weighted average cost of gas (WACOG).With the exception of transportationand WACOG, all customer classes receive the gas purchased by City and distributed through City facilities on afirm basis. Transportation customers have their own contracts for purchased gas and are using the City’stransmission and distribution systems to transport their own purchased gas. Service to WACOG customerscan be temporarily interrupted to free up capacity to the firm customers on the gas system as needed.Table 4-3 indicates the number of accounts and annual usage of each customer class.Costs are allocated to customer classes in proportion to the class responsibility for the functional use of thegas system. Functional factors used in this study include commodity (cost per Ccf regardless of capacity),capacity (the cost to provide peak demand service), customer (the cost of meter reading billing and collection)and meters (the capital cost to provide meters of various sizes to meet capacity demands). Table 4-3:Customer Units of Service 4.4 ALLOCATION OF COST OF SERVICE Table 4-4 shows the development of commodity, capacity,customer and meter allocation factors. Theresponsibility for commodity (variable) costs is proportional to the amount of annual gas sales and isdistributed to customer classes on that basis. Capacity related costs are allocated to customer classes on thebasis of estimated peak day demand. Test year peak day demands are derived from estimated load factors for Customer Units of Service Sales (Mcf)Accounts Inside CityResidential 827,664 18,048Commercial & Industrial 883,223 3,077Large Commercial & Industrial 66,002 5 Total Inside City 1,776,889 21,130 Outside CityResidential 225,595 4,219Commercial & Industrial 154,674 241Large Commercial & Industrial 379,501 1 Total Outside City 759,771 4,461 Transportation 1,512,580 4 Weighted Average Cost of Gas (WACOG)Inside City WACOG 383,495 10Outside City WACOG 1,303,569 2 Total WACOG 1,687,064 12 Grand Total 5,736,303 25,607 20 |Clarksville Gas and Water [DRAFT] each classification. Customer costs are related to meter reading, billing, collection and accounting.Responsibility for customer costs is allocated to the customer classifications on the basis of annual bills for thetest year.Meter costs relate maintenance and capital charges associated with meters and services and areweighted to recognize cost differences due primarily to load size and type of service rendered. Table 4-5 indicates the allocation of costs to the various customer classes in proportion to each class’s unitsof service as well as a comparison to revenues currently being generated by each class. As an example,residential customers represent approximately 14 percent of commodity units and are allocated 14 percent ofcommodity costs.As Table 4-5 indicates, the City’s current rate structure results in some variances between the costs andrevenues generated by each customer class. The largest variance is between the costs generated by residentialcustomers and the revenues recovered from this class. The deficit in cost recovery from residential customersis made up by commercial and industrial customers. Note these variances represent the difference betweencurrent cost generation and the total revenue that would be generated by each customer class in FY 2017(including the underlying rate revenue increase). The proceeding section recommends adjustments to theCity’s existing rate structure to mitigate these cost of service variances. Natural Gas Rate Study [DRAFT]|21 Table 4-4:Customer Class Allocation Factors Allocation Factors Sales (Mcf)Commodity (%)Load Factor Capacity (Mcf/Day)Capacity (%)Accounts Allocator Customer (%)Weighted Accounts Meters (%)Inside CityResidential 827,664 14.4%17%13,339 29.6%18,048 70%1.00 18,048 54.5%Commercial & Industrial 883,223 15.4%24%10,082 22.4%3,077 12%3.00 9,230 27.9%Large Commercial & Industrial 66,002 1.2%47%385 0.9%5 0%15.00 75 0.2% Total Inside City 1,776,889 31.0%0%23,806 52.8%21,130 83%0%27,353 82.5% Outside CityResidential 225,595 3.9%17%3,636 8.1%4,219 16%1.00 4,219 12.7%Commercial & Industrial 154,674 2.7%20%2,119 4.7%241 1%3.00 724 2.2%Large Commercial & Industrial 379,501 6.6%60%1,733 3.8%1 0%50.00 50 0.2% Total Outside City 759,771 13.2%0%7,487 16.6%4,461 17%0%4,993 15.1% Transportation 1,512,580 26.4%50%8,288 18.4%4 0%50.00 200 0.6% Weighted Average Cost of Gas (WACOG)Inside City WACOG 383,495 6.7%78%1,347 3.0%10 0%50.00 492 1.5%Outside City WACOG 1,303,569 22.7%86%4,153 9.2%2 0%50.00 100 0.3%Total WACOG 1,687,064 29.4%0%5,500 12.2%12 0%0%592 1.8% Grand Total 5,736,303 100.0%0%45,081 100.0%25,607 100%0%33,138 100.0% 22 |Clarksville Gas and Water [DRAFT] Table 4-5:Customer Class Cost Allocations ($ Million) Customer Class Cost Allocation ($M)Commodity $Capacity $Customer $Meters $Cost of Service Current Revenue $Variance $Variance % Inside CityResidential 0.15$0.72$1.58$1.91$4.35$2.43$1.92$78.8%Commercial & Industrial 0.16 0.54 0.27 0.98 1.95 2.48 (0.54)-21.7%Large Commercial & Industrial 0.01 0.02 0.00 0.01 0.04 0.02 0.02 85.3% Total Inside City 0.32$1.28$1.85$2.90$6.34$4.94$1.40$28.3% Outside CityResidential 0.04$0.19$0.37$0.45$1.05$0.98$0.07$7.1%Commercial & Industrial 0.03 0.11 0.02 0.08 0.24 0.60 (0.36)-60.2%Large Commercial & Industrial 0.07 0.09 0.00 0.01 0.17 0.51 (0.34)-67.5%Total Outside City 0.14$0.40$0.39$0.53$1.46$2.09$(0.64)$-30.4% Transportation 0.27$0.44$0.00$0.02$0.73$0.70$0.03$4.4% Weighted Average Cost of Gas (WACOG)Inside City WACOG 0.07$0.07$0.00$0.05$0.19$0.18$0.01$5.1%Outside City WACOG 0.23 0.22 0.00 0.01 0.47 0.63 (0.16)-25.7% Total WACOG 0.30$0.29$0.00$0.06$0.66$0.81$(0.15)$-18.7% Grand Total 1.02$2.42$2.24$3.51$9.19$8.55$0.64$7.5% Natural Gas Rate Study [DRAFT]|23 5.RATE ADJUSTMENTSWe recommend the following rate adjustments:1.Increase the overall level of revenues to meet the Gas Utility revenue requirement.2.Unbundle the gas supply (and transportation) costs from base rates.3.Simplify rate structures where appropriate.4.Reflect class cost of service in the design of rates. 5.1 OVERALL INCREASEThe overall financial plan calls for increases in rate revenue the revenue generated by the City’s current ratestructure. At existing rates, these increases equate to 7.5 percent increase on January 1, 2017 and January 1,2018, followed by a 3 percent increase on January 1, 2019.In addition to these underlying rate increases, weare proposing rate structure adjustments, which will impact the level of additional revenue which is ultimatelygenerated in each year. These adjusted revenues are reflected in the financial plan discussed in Section 3. Thecauses of this difference are discussed in Section 5.4 below. 5.2 UNBUNDLED RATESThe City currently utilizes a single rate to recover both distribution system costs (margin) and purchased gascosts. Industry practices have tended towards unbundled rates, which transparently separate the cost of gaspurchasedand transported from the cost of operating and maintaining the distribution system. Currently, theCity adjusts the overall (bundled)rate monthly to account for the difference between base cost of gasembedded in the published rates and the actual cost of purchased gas (including transportation). Goingforward we recommend the City implement a rate structure that includes a separate rate component torecover the margin (a distribution charge), and another to recover the purchased gas cost. Given that the Citycurrently has a mechanism in place to adjust the base cost of gas monthly,transitioning to simply chargingcustomer directly for purchased gas would be relatively simple. It is essentially the same as assuming a basecost of gas of 0.The rates shown in this report are based on this unbundled structure and assume the Citywill recover the margin via a separate distribution charge and recover the cost of gas through a separate gascost rate. 5.3 SIMPLIFY RATE STRUCTURE 5.3.1 Replace Minimum Bill with Customer ChargeAll classes currently have some level of minimum usage included in their monthly fixed charge. Generally, aminimum charge is intended to reflect the fact that certain gas system costs do not vary with usage.Accordingly, a fixed customer charge aligns the revenues received from customers with the fixed costsincurred to serve them.The downside to the current minimum bill is a lack of transparency in the way the revenue is recovered. If aresidential customer uses less than the 3 Ccf minimum, for example, they may feel that they have beenovercharged. In fact,the cost to serve that customer is generally the same whether they exceed the minimumallotment or not.We recommend eliminating the minimum bill in all cases and replacing it with a fixed 24 |Clarksville Gas and Water [DRAFT] monthly customer charge (regardless of usage), with a separate volumetric charge being applied to every Ccfused.We also recommend increasing the proportion of revenue recovered through fixed customer charge for allclasses, in recognition of the high fixed cost of operating the gas system. This has the ancillary benefit ofreducing the City’s dependence on variable sources of revenue (i.e. the volumetric charges). 5.3.2 Remove Inside/Outside and Seasonal DistinctionsThere is no significant cost of service difference between inside and outside City customers.In addition,natural gas service frequently competes with alternate energy sources and having higher outside city ratesmay create a competitive disadvantage.Seasonal rates were likely intended to reflect the differences in gascost at different times of the year. Given the purchased gas adjustment and the proposal for unbundled rates(see above), this is no longer necessary.Therefore, we recommend that the City eliminate both theinside/outside and seasonal rate differentials. 5.3.3 Eliminate Block RatesSince we are recommending that the City implement a higher fixed customer charge, the existing structuresthat includes multiple block or tiers for each rate are no longer necessary. Further, there is no cost of servicedifference or cost of gas difference based on tiers. Therefore, we are recommending that the City eliminate allthe block structures and replace them with one volumetric distribution charge ($/Ccf) for each customer class. 5.4 ADJUST REVENUE RECOVERY TO CAPTURE COST OF SERVICECurrently a cost subsidy is being provided to inside city residential customer by large commercial andindustrial customers. The result is an imbalance between the way costs are incurred and the way revenuesare recovered.One approach would be to adjust all rates to cost of service in FY 2017, making across the boardadjustments thereafter. The disadvantage to this approach is that commercial and industrial rates would bedecreased in one year (i.e. FY 2017) only to be increased the next (FY 2018).Instead, (at the City’s direction) we adjusted commercial and industrial rates to capture the end of the 3-yearrate plan (i.e. FY 2019) in FY 2017 and holding them constant in FY 2018, and FY 2019. All other classes wouldreceive an adjustment based on cost of service in FY 2017, with across the board rate increases in FY 2018 andFY 2019.In either case, by the end of the 3-year plan, costs and revenues would be in much closer alignment.The advantage to the adjusted plan is more stability of commercial and industrial rates.This adjustment has important implications for the financial plan. By beginning the commercial and industrialrates two years early, the overall revenues recovered will be slightly higher in FY 2017 than if the FY 2017rates were used. However, the FY 2019 across the board rate adjustment was based on the City’s existing ratescommercial and industrial rates, which were much higher than what will ultimately be in place at that time.The result is that, in FY 2019 revenues will be slightly lower, under the proposed rates, than they would havebeen under the existing rates. These two largely offset each other, and it is anticipated that the result will belargely revenue neutral over the 3-year period. Natural Gas Rate Study [DRAFT]|25 Table 5-1 indicates the resultant revenues in the original (COS in FY 2017, across the board in FY 2018 andFY 2019) and adjusted (FY 2019 rates in FY 2017, flat in FY 2018 and FY 2019). Table 5-1: 3-Year Rate Plan Margin Revenues ($Million) 5.5 PROPOSED RATES AND IMPACTS Table 5-2 summarizes the rates under the proposed 3-year plan. Note that while all of the original customerclasses are shown,the structures reflect the simplifications discussed above.Figure 4-1 and 4-2 show billcomparison between the City and 4 other comparable utilities.The summer bill is at the higher end of the peergroup due to the increased fixed charge. However, the decreased volumetric charge means that the winter billhas increased only slightly and remains at the lower end of the peer group. The impact of increasing the fixedcharge is mitigated significantly by the decrease in the volume charge which benefits customers during thewinter months. Table 5-2:Proposed Rates 3 Year Rate Plan ($M)FY 2017 FY 2018 FY 2019 3 Yr.Original 8.96$10.13$11.16$30.25$Adjusted 9.52 10.13 10.50 30.15 Difference 0.55$0.00$(0.66)$(0.10)$ Proposed Rate Structure 1/1/2017 1/1/2018 1/1/2019 ResidentialMonthly Meter Charge 16.110$17.320$17.840$Usage Charge (per 100 cf)0.104$0.112$0.115$Commodity Charge (per 100 cf)Based on actual cost of gas Commercial & IndustrialMonthly Meter Charge 37.410$37.410$37.410$Usage Charge (per 100 cf)0.089$0.089$0.089$Commodity Charge (per 100 cf)Based on actual cost of gas Large Commercial & IndustrialMonthly Meter Charge 211.890$211.890$211.890$Usage Charge (per 100 cf)0.048$0.048$0.048$Commodity Charge (per 100 cf)Based on actual cost of gas TransportationMonthly Meter Charge 497.260$497.260$497.260$Usage Charge (per 100 cf)0.047$0.051$0.052$ WACOGMonthly Meter Charge 497.260$497.260$497.260$Usage Charge (per 100 cf)0.039$0.039$0.039$Commodity Charge (per 100 cf)Based on actual cost of gas 26 |Clarksville Gas and Water [DRAFT] Table 5-3:Annual Bill Impacts (2017) Figure 5-1:Summer Bill* Comparison (6 Ccf**) *Includes Gas Cost**Average July Usage Figure 5-2:Winter Bill* Comparison (102 Ccf**) *Includes Gas Cost**Average January Usage Annual Bill Impacts Annual Use (Ccf)Current Rates 1/1/2017 Δ $Inside CityResidential (Average)462 357$462$105$Commercial & Industrial (Average)2,858 2,397 2,069 (329)Large Commercial & Industrial (Average)132,004 66,790 71,869 5,079Outside CityResidential (Average)538 490$506$16$Commercial & Industrial (Average)6,304 5,899 4,039 (1,859)Large Commercial & Industrial (Average)3,795,018 2,296,985 1,971,147 (325,838)WACOG and TransportationTransportation 15,125,800 703,974$719,289$15,315$Inside City WACOG 390,690 203,430 205,895 2,465Outside City WACOG 6,517,845 3,365,784 3,313,331 (52,453) City of Clarksville TENNESSEE References: Fred Klein, CPA, CGA, Chief Financial Officer 2215 Madison Street, Clarksville, TN 37043 P: 931.542.9610 / E: fred.klein@cityofclarksville.com Dates of Service: 1/1/18 - 10/1/18 Project Team: Bart Kreps, Tom Sullivan, & Collin Drat Raftelis in conjunction with Navillus Utility Consulting, LLC (the project team) prepared financial planning, cost of service, and rate design analyses for the City of Clarksville’s (City) natural gas utility. A key driver of the study was the anticipated construction of the Texas Gas Pipeline interconnect. The project team evalu- ated gas revenues at existing rates and determined the adjustments required to ensure the City would continue to meet its debt cove- nants following the issuance of the debt for the project. Another critical aspect of the project involved forecasting demand for the City’s various customer classes. The project team evaluated recent years of historical natural gas demand as well as historical heating degree days to develop a normalized usage forecast to inform the financial plan and cost of service study. Raftelis has also provided similar services for the City’s water and wastewater utilities. City of Cookeville TENNESSEE References: Ronnie Kelly, Director, Department of Water Quality Control / 1800 S. Jefferson Avenue, Cookeville, TN 38506 P: 931.520.5259 / E: rjk@cookeville-tn.org Dates of Service: 6/1/18 - 6/1/19 Project Team: Bart Kreps, Tom Sullivan, & Collin Drat Raftelis conducted a water and wastewater rate and financial planning study for the City of Cookeville (City). The study was designed to address a number of financial and pricing objectives including, in particular, recommendations for cost-justified water and wastewater rates that fully support system operations and maintenance, asset repair and replacement, debt service, and debt service coverage requirements. Additional recommendations were On the following pages, we have provided detailed descriptions of several projects that we have worked on that are similar in scope to this project. We have included references for each of these clients and urge you to contact them to better understand our capabilities and the quality of service that we provide. also provided related to water and wastewater capacity charges that support growth-related projects to ensure that new customers are making an equitable contribution toward the capital investment in the capacity to accommodate growth. Capacity charges were cal- culated based on the system buy-in approach, which reflected the cost of capacity, expressed in gallons per day, of the City’s existing water treatment plant and transmission system and wastewater treatment plant and conveyance system. Raftelis also developed a rate and financial planning model to forecast annual revenue requirements and rates over a five-year planning period. Raftelis in conjunction with Navillus Utility Consulting evaluated the City’s natural gas rate structure. Specific emphasis was given to increasing the City’s level of fixed charges to mitigate the impact of reductions in per capita consumption. Richmond Department of Public Utilities VIRGINIA Reference: T. Wayne Lassiter, Utilities Comptroller 900 East Broad Street, Richmond, VA 23219 P: 804.646.5237 / E: wayne.lassiter@richmondgov.com Dates of Service: 1/1/08 - Present Project Team: Bart Kreps Since 2007, Raftelis has assisted the Richmond Department of Public Utilities (DPU) with various financial, rate, and manage- ment consulting services for water, wastewater, stormwater, natural gas, and electric street lighting utility services. Initially, Raftelis worked with DPU to develop a financial planning model that incorporates all utility systems: water, wastewater, nat- ural gas, street lighting and stormwater. DPU uses the model to set rates, determine optimal capital financing scenarios and report on utility system financial conditions. The financial plan includes a pro- jection of units of service (customer accounts and usage), operating expenses, and capital improvements. One key goal of the model is the assessment of utility asset condition and the development of a system recapitalization budget for DPU. Raftelis assisted DPU with an evaluation of capital financing alternatives, including revenue bonds, general obligation bonds, Virginia Resource Authority (VRA) loans, Build America Bonds (BAB) and grants to fund capital improvements. Raftelis recently completed a cost of service study for REFERENCES References 35 DPU’s water and wastewater utilities. The results of the study included several adjustments to the rate structures that balanced pricing goals of afforda- bility, revenue stability, and resource conservation. Raftelis is currently providing ongoing rate and financial consulting services to DPU. These services include various cost of service analyses and support for DPU’s effort to develop an integrated plan for its water, wastewater, and stormwater utilities. Raftelis is working with DPU to define and measure various metrics of rate affordability, which will be used to help frame discussions with regulators to determine sustainable levels of capital spending. Raftelis also provides debt issuance support services including preparation of financial feasibility reports. Raftelis annually prepares DPU’s five-year finan- cial model, which includes the implementation of a rate structure change from an equivalent resi- dential unit to per thousand square foot unit of charge. In addition to developing the prospective costs, plan for capital improvement financing, and five-year rate plan, we are providing supporting analysis associated with the proposed rate struc- ture change as well as advising the utility on its stormwater compliance, fee, and rate structure change outreach process. Since 2015, Raftelis has provided data manage- ment-related services, beginning with a needs assessment for key systems and data needs related to management, reporting, and business process efficiency. DPU identified that the development of a water loss program was a key need identified in the assessment, and Raftelis assisted DPU with the completion of its first water audit, aligning with the AWWA M36 Manual. Raftelis is also building an integrated software program supporting DPU’s Water Metro Care Affordability Program that pro- vides an automated link between intake occurring at the Department of Social Services and DPU’s customer information system. In addition to our water and wastewater consulting, Raftelis’ multi-year engagement with DPU includes stormwater services. We are currently preparing the Department’s five-year financial model, which includes the implementation of a stormwater rate structure change from an equivalent residential unit to per thousand square foot unit of charge. In addi- tion to developing the prospective costs, plan for capital improvement financing, and five-year rate plan, we are providing supporting analysis associ- ated with the proposed rate structure change as well as advising the utility on its stormwater compliance, fee, and rate structure change outreach process. Orangeburg Department of Public Utilities SOUTH CAROLINA References: Warren T. Harley / 1016 Russell Street, Orangeburg, SC 29116 P: 803.268.4000 / E: wharley@orbgdpu.com Dates of Service: 1982 - Present Project Team: Tom Sullivan & Bart Kreps Tom Sullivan has served as a project manager on numerous projects for the gas, electric, water, and wastewater divisions for the Orangeburg Department of Public Utilities (DPU). Mr. Sullivan recently provided assistance in connection with Carolina Gas Transmission’s (CGT) (formerly South Carolina Pipeline Cor- poration (SCPC)) open access filing first before the South Carolina Public Service Commission, then before the Federal Energy Regulatory Commission (FERC), and subsequently the negotiation of the first firm transportation service contract for a distribution utility on CGT’s system. Mr. Sullivan provided assistance to DPU in negotiating lower power supply costs, which led to the development of lower electric rates in anticipation of competition. Mr. Sullivan assisted DPU in the implementation of accounting and management information GIS systems for all four divisions to better manage costs and price services in a competitive environment. Mr. Sullivan recently completed a compensation survey of com- parable municipal utilities in the Southwest for DPU. The gas-related assistance has included gas supply and demand studies, development of purchased gas cost tracking models, feasibility studies, cost of service, rate design, and assistance with DPU’s intervention in South Carolina Pipeline rate filings. The electric-re- lated assistance has included electric supply and demand studies, assistance with power supply negotiations, purchased power cost analysis, cost of service and rate design, assistance in South Carolina Electric & Gas Co. rate filings, and assistance with regards to pole connection charges to Time-Warner. Water and wastewater assistance has included cost of service and rate design. In 2019, Mr. Sullivan collaborated with Raftelis to update the DPU’s water, wastewater, natural gas, and electric rate and cost of service models. City of Sunrise FLORIDA References: Wendy Dunbar, Finance Director / 10770 West Oakland Park Boulevard, Sunrise, FL 33351 / P: 954.746.3297 / E: wdunbar@sunrisefl.gov Dates of Service: 1/1/2005 - 1/1/2006 Project Team: Henry Thomas The City of Sunrise (City), located in Broward County, owns and operates a natural gas utility system serving over 10,000 customer accounts. PRMG, now a part of Raftelis, performed a natural gas utility rate study on behalf of the City. As part of the engagement, the project team developed a financial model encompassing 10 years, with five years of historical and five years of projections. The model included data concerning the number and consumption of natural gas by customer class and service type as well as calculated revenues by rate component (Base Demand and Use Charge), operating expenses, capital invest- ments, debt service, and other funding requirements. Recognizing that natural gas operations in the City are not monopolistic, the study also considered com- petitor rates for service. The result of the study identified the cost of service and a series of rate recommendations for consideration by the City Commission. CITY OF CLEARWATER36 Cost of Services The following table provides a breakdown of our proposed fee for this project including estimated expenses. This table includes the estimated level of effort required for completing each task described and the hourly billing rates for our project team members. Year 1 Year 3 Year 5 Rate and Financial Planning Study $ 58,500 48,000$ 50,000$ Optional Meetings (per meeting)$4,500 $4,700 $4,900 Staff List:Hourly Rate* Bart Kreps $295 Collin Draft $210 Tom Sullivan $295 Henry Thomas $295 Staff $125 *Hourly rate will be adjusted annually based on the Consumer Price Index for All Urban Consumers (CPI-U), U.S. City Average, Not Seasonally Adjusted as published by the U.S. Department of Labor. 37COST OF SERVICES This page intentionally left blank to facilitate two-sided printing EXCEPTIONS / ADDITIONAL MATERIAL / ADDENDA Gas System Utility Rate Study Services 23 RFP #58-19 Proposers shall indicate any and all exceptions taken to the provisions or specifications in this solicitation document. Exceptions that surface elsewhere and that do not also appear under this section shall be considered invalid and void and of no contractual significance. Exceptions (mark one): **Special Note – Any material exceptions taken to the City’s Terms and Conditions may render a Proposal non-responsive. No exceptions Exceptions taken (describe--attach additional pages if needed) Additional Materials submitted (mark one): No additional materials have been included with this proposal Additional Materials attached (describe--attach additional pages if needed) Acknowledgement of addenda issued for this solicitation: Prior to submitting a response to this solicitation, it is the vendor’s responsibility to confirm if any addenda have been issued. Addenda Number Initial to acknowledge receipt Vendor Name Date: X X 1 Raftelis Financial Consultants, Inc.10/16/19 39OTHER FORMS VENDOR INFORMATION Gas System Utility Rate Study Services 24 RFP #58-19 Company Legal/Corporate Name: Doing Business As (if different than above): Address: City: State: Zip: - Phone: Fax: E-Mail Address: Website: DUNS # Remit to Address (if different than above): Order from Address (if different from above): Address: Address: City: State: Zip: City: State: Zip: Contact for Questions about this proposal: Name: Fax: Phone: E-Mail Address: Day-to-Day Project Contact (if awarded): Name: Fax: Phone: E-Mail Address: Certified Small Business Certifying Agency: Certified Minority, Woman or Disadvantaged Business Enterprise Certifying Agency: Raftelis Financial Consultants, Inc. Bart Kreps, Vice President Bart Kreps, Vice President 341 N. Maitland Avenue, Suite 300 227 W. Trade Street, Suite 1400 227 W. Trade Street, Suite 1400 Charlotte NC 28202 Charlotte NC 28202 Maitland Avenue bkreps@raftelis.com bkreps@raftelis.com bkreps@raftelis.com 704.936.4438 704.936.4438 704.936.4438 828.484.2442 828.484.2442 828.484.2442 809874100 www.raftelis.com 32751Florida Raftelis CITY OF CLEARWATER40 32751 VENDOR CERTIFICATION OF PROPOSAL Gas System Utility Rate Study Services 25 RFP #58-19 By signing and submitting this Proposal, the Vendor certifies that: a) It is under no legal prohibition to contract with the City of Clearwater. b) It has read, understands, and is in compliance with the specifications, terms and conditions stated herein, as well as its attachments, and any referenced documents. c) It has no known, undisclosed conflicts of interest. d) The prices offered were independently developed without consultation or collusion with any of the other respondents or potential respondents or any other anti-competitive practices. e) No offer of gifts, payments or other consideration were made to any City employee, officer, elected official, or consultant who has or may have had a role in the procurement process for the services and or goods/materials covered by this contract. f) It understands the City of Clearwater may copy all parts of this response, including without limitation any documents and/or materials copyrighted by the respondent, for internal use in evaluating respondent’s offer, or in response to a public records request under Florida’s public records law (F.S. 119) or other applicable law, subpoena, or other judicial process. g) Respondent hereby warrants to the City that the respondent and each of its subcontractors (“Subcontractors”) will comply with, and are contractually obligated to comply with, all Federal Immigration laws and regulations that relate to their employees. h) Respondent certifies that they are not in violation of section 6(j) of the Federal Export Administration Act and not debarred by any Federal or public agency. i) It will provide the materials or services specified in compliance with all Federal, State, and Local Statutes and Rules if awarded by the City. j) It is current in all obligations due to the City. k) It will accept such terms and conditions in a resulting contract if awarded by the City. l) The signatory is an officer or duly authorized agent of the respondent with full power and authority to submit binding offers for the goods or services as specified herein. ACCEPTED AND AGREED TO: Company Name: Signature: Printed Name: Title: Date: Raftelis Financial Consultants, Inc. Bart Kreps Vice President 10/16/19 RAFTELIS 41 SCRUTINIZED COMPANIES FORMS Gas System Utility Rate Study Services 26 RFP #58-19 SCRUTINIZED COMPANIES AND BUSINESS OPERATIONS WITH CUBA AND SYRIA CERTIFICATION FORM IF YOUR BID/PROPOSAL IS $1,000,000 OR MORE, THIS FORM MUST BE COMPLETED AND SUBMITTED WITH THE BID/PROPOSAL. FAILURE TO SUBMIT THIS FORM AS REQUIRED MAY DEEM YOUR SUBMITTAL NONRESPONSIVE. The affiant, by virtue of the signature below, certifies that: 1. The vendor, company, individual, principal, subsidiary, affiliate, or owner is aware of the requirements of section 287.135, Florida Statutes, regarding companies on the Scrutinized Companies with Activities in Sudan List, the Scrutinized Companies with Activities in the Iran Petroleum Energy Sector List, or engaging in business operations in Cuba and Syria; and 2. The vendor, company, individual, principal, subsidiary, affiliate, or owner is eligible to participate in this solicitation and is not listed on either the Scrutinized Companies with Activities in Sudan List, the Scrutinized Companies with Activities in the Iran Petroleum Sector List, or engaged in business operations in Cuba and Syria; and 3. Business Operations means, for purposes specifically related to Cuba or Syria, engaging in commerce in any form in Cuba or Syria, including, but not limited to, acquiring, developing, maintaining, owning, selling, possessing, leasing or operating equipment, facilities, personnel, products, services, personal property, real property, military equipment, or any other apparatus of business or commerce; and 4. If awarded the Contract (or Agreement), the vendor, company, individual, principal, subsidiary, affiliate, or owner will immediately notify the City of Clearwater in writing, no later than five (5) calendar days after any of its principals are placed on the Scrutinized Companies with Activities in Sudan List, the Scrutinized Companies with Activities in the Iran Petroleum Sector List, or engaged in business operations in Cuba and Syria. __________________________________________ Authorized Signature __________________________________________ Printed Name __________________________________________ Title __________________________________________ Name of Entity/Corporation STATE OF _____________________ COUNTY OF ___________________ The foregoing instrument was acknowledged before me on this ______ day of _____________________, 20____, by _________________________________ (name of person whose signature is being notarized) as the ________________________ (title) of ________________________________________ (name of corporation/entity), personally known to me as described herein _____________________, or produced a _________________________ (type of identification) as identification, and who did/did not take an oath. __________________________________________ Notary Public __________________________________________ Printed Name My Commission Expires: __________________ NOTARY SEAL ABOVE Bart Kreps Bart Kreps Vice President Vice President Raftelis Financial Consultants, Inc. Raftelis Financial Consultants, Inc. CITY OF CLEARWATER42 SCRUTINIZED COMPANIES FORMS Gas System Utility Rate Study Services 27 RFP #58-19 SCRUTINIZED COMPANIES THAT BOYCOTT ISRAEL LIST CERTIFICATION FORM THIS FORM MUST BE COMPLETED AND SUBMITTED WITH THE BID/PROPOSAL. FAILURE TO SUBMIT THIS FORM AS REQUIRED MAY DEEM YOUR SUBMITTAL NONRESPONSIVE. The affiant, by virtue of the signature below, certifies that: 1. The vendor, company, individual, principal, subsidiary, affiliate, or owner is aware of the requirements of section 287.135, Florida Statutes, regarding companies on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel; and 2. The vendor, company, individual, principal, subsidiary, affiliate, or owner is eligible to participate in this solicitation and is not listed on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel; and 3. “Boycott Israel” or “boycott of Israel” means refusing to deal, terminating business activities, or taking other actions to limit commercial relations with Israel, or persons or entities doing business in Israel or in Israeli-controlled territories, in a discriminatory manner. A statement by a company that it is participating in a boycott of Israel, or that it has initiated a boycott in response to a request for a boycott of Israel or in compliance with, or in furtherance of, calls for a boycott of Israel, may be considered as evidence that a company is participating in a boycott of Israel; and 4. If awarded the Contract (or Agreement), the vendor, company, individual, principal, subsidiary, affiliate, or owner will immediately notify the City of Clearwater in writing, no later than five (5) calendar days after any of its principals are placed on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel. ______________________________________ Authorized Signature ______________________________________ Printed Name ______________________________________ Title ______________________________________ Name of Entity/Corporation STATE OF _____________________ COUNTY OF ___________________ The foregoing instrument was acknowledged before me on this ______ day of _____________________, 20____, by _________________________________ (name of person whose signature is being notarized) as the ________________________ (title) of ________________________________________ (name of corporation/entity), personally known to me as described herein _____________________, or produced a _________________________ (type of identification) as identification, and who did/did not take an oath. __________________________________________ Notary Public __________________________________________ Printed Name My Commission Expires: __________________ NOTARY SEAL ABOVE Bart Kreps Bart Kreps Vice President Vice President Raftelis Financial Consultants, Inc. Raftelis Financial Consultants, Inc. RAFTELIS 43 Form W-9 (Rev. December 2014) Department of the Treasury Internal Revenue Service Request for Taxpayer Identification Number and Certification Give Form to the requester. Do not send to the IRS.Print or type See Specific Instructions on page 2.1 Name (as shown on your income tax return). Name is required on this line; do not leave this line blank. 2 Business name/disregarded entity name, if different from above 3 Check appropriate box for federal tax classification; check only one of the following seven boxes: Individual/sole proprietor or single-member LLC C Corporation S Corporation Partnership Trust/estate Limited liability company. Enter the tax classification (C=C corporation, S=S corporation, P=partnership) ▶ Note. For a single-member LLC that is disregarded, do not check LLC; check the appropriate box in the line above for the tax classification of the single-member owner. Other (see instructions) ▶ 4 Exemptions (codes apply only to certain entities, not individuals; see instructions on page 3): Exempt payee code (if any) Exemption from FATCA reporting code (if any) (Applies to accounts maintained outside the U.S.) 5 Address (number, street, and apt. or suite no.) 6 City, state, and ZIP code Requester’s name and address (optional) 7 List account number(s) here (optional) Part I Taxpayer Identification Number (TIN) Enter your TIN in the appropriate box. The TIN provided must match the name given on line 1 to avoid backup withholding. For individuals, this is generally your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the Part I instructions on page 3. For other entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN on page 3. Note. If the account is in more than one name, see the instructions for line 1 and the chart on page 4 for guidelines on whose number to enter. Social security number –– or Employer identification number – Part II Certification Under penalties of perjury, I certify that: 1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and 2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and 3. I am a U.S. citizen or other U.S. person (defined below); and 4. The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct. Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions on page 3. Sign Here Signature of U.S. person ▶Date ▶ General Instructions Section references are to the Internal Revenue Code unless otherwise noted. Future developments. Information about developments affecting Form W-9 (such as legislation enacted after we release it) is at www.irs.gov/fw9. Purpose of Form An individual or entity (Form W-9 requester) who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN) which may be your social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN), to report on an information return the amount paid to you, or other amount reportable on an information return. Examples of information returns include, but are not limited to, the following: • Form 1099-INT (interest earned or paid) • Form 1099-DIV (dividends, including those from stocks or mutual funds) • Form 1099-MISC (various types of income, prizes, awards, or gross proceeds) • Form 1099-B (stock or mutual fund sales and certain other transactions by brokers) • Form 1099-S (proceeds from real estate transactions) • Form 1099-K (merchant card and third party network transactions) • Form 1098 (home mortgage interest), 1098-E (student loan interest), 1098-T (tuition) • Form 1099-C (canceled debt) • Form 1099-A (acquisition or abandonment of secured property) Use Form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN. If you do not return Form W-9 to the requester with a TIN, you might be subject to backup withholding. See What is backup withholding? on page 2. By signing the filled-out form, you: 1. Certify that the TIN you are giving is correct (or you are waiting for a number to be issued), 2. Certify that you are not subject to backup withholding, or 3. Claim exemption from backup withholding if you are a U.S. exempt payee. If applicable, you are also certifying that as a U.S. person, your allocable share of any partnership income from a U.S. trade or business is not subject to the withholding tax on foreign partners' share of effectively connected income, and 4. Certify that FATCA code(s) entered on this form (if any) indicating that you are exempt from the FATCA reporting, is correct. See What is FATCA reporting? on page 2 for further information. Cat. No. 10231X Form W-9 (Rev. 12-2014) Raftelis Financial Consultants,Inc. 227 W.Trade Street,Suite 1400 Charlotte,NC 28202 2 0 1 0 5 4 0 6 9 2019 Purchasing Office 100 S Myrtle Ave Clearwater FL 33756-5520 PO Box 4748, 33758-4748 727-562-4633 Tel v 11.2018 REQUEST FOR PROPOSALS #58-19 Utility Rate Study Services - Gas Utility System September 11, 2019 NOTICE IS HEREBY GIVEN that sealed proposals will be received by the City of Clearwater (City) until 10:00 AM, Local Time, October 17, 2019 to provide Utility Rate Study Services – Gas Utility System. Brief Description: The City of Clearwater seeks proposals from consultants with gas utility rate expertise. The consultant will be tasked with developing rate structures for the gas system, and is expected to attend meetings, prepare reports, and make recommendations for long term fiscal considerations. Proposals must be in accordance with the provisions, specifications and instructions set forth herein and will be received by Purchasing until the above noted time, when they will be publicly acknowledged and accepted. Proposal packets, any attachments and addenda are available for download at: https://www.myclearwater.com/bid Please read the entire solicitation package and submit the bid in accordance with the instructions. This document (less this invitation and the instructions) and any required response documents, attachments, and submissions will constitute the bid. General, Process or Technical Questions concerning this solicitation should be directed, IN WRITING, to the following Sr. Procurement Analyst: Lori Vogel, CPPB Sr. Procurement Analyst lori.vogel@myclearwater.com This Request for Proposals is issued by: Alyce Benge, CPPO, C.P.M. Purchasing Manager Alyce.Benge@myclearwater.com INSTRUCTIONS Gas System Utility Rate Study Services 2 RFP #58-19 i.1 VENDOR QUESTIONS: All questions regarding the contents of this solicitation, and solicitation process (including requests for ADA accommodations), shall be directed solely to the Purchasing Manager listed on Page 1. Questions should be submitted in writing via letter, fax or email. Questions received less than seven (7) calendar days prior to the due date and time may be answered at the discretion of the City. i.2 ADDENDA/CLARIFICATIONS: Any changes to the specifications will be in the form of an addendum. Addenda are posted on the City website and mailed to those who register on the City website when downloading solicitations no less than seven (7) days prior to the Due Date. Vendors are cautioned to check the Purchasing Website for addenda and clarifications prior to submitting their proposal. The City cannot be held responsible if a vendor fails to receive any addenda issued. The City shall not be responsible for any oral changes to these specifications made by any employees or officer of the City. Failure to acknowledge receipt of an addendum may result in disqualification of a proposal. i.3 VENDOR CONFERENCE / SITE VISIT: Yes No Mandatory Attendance: Yes No i.4 DUE DATE & TIME FOR SUBMISSION AND OPENING: Date: October 17, 2019 Time: 10:00 AM (Local Time) The City will open all proposals properly and timely submitted, and will record the names and other information specified by law and rule. All proposals become the property of the City and will not be returned except in the case of a late submission. Respondent names, as read at the bid opening, will be posted on the City website. Once a notice of intent to award is posted or 30 days from day of opening elapses, whichever occurs earlier, proposals are available for inspection by contacting Purchasing. i.5 PROPOSAL FIRM TIME: 120 Days from Opening Proposal shall remain firm and unaltered after opening for the number of days shown above. The City may accept the proposal, subject to successful contract negotiations, at any time during this time. i.6 PROPOSAL SECURITY: Yes $ 0.00 No If so designated above, a proposal security in the amount specified must be submitted with the proposal. The security may be submitted in any one of the following forms: an executed surety bond issued by a firm licensed and registered to transact such business with the State of Florida; cash; certified check, or cashier's check payable to the City of Clearwater (personal or company checks are not acceptable); certificate of deposit or any other form of deposit issued by a financial institution and acceptable to the City. Such proposal security shall be forfeited to the City of Clearwater should the proposer selected fail to execute a contract when requested. PERFORMANCE SECURITY: Yes $ 0.00 No If required herein, the Contractor, simultaneously with the execution of the Contract, will be required to furnish a performance security. The security may be submitted in one-year increments and in any one of the following forms: an executed surety bond issued by a firm licensed and registered to transact such business with the State of Florida; cash; certified check, cashier's check or money order payable to the City of Clearwater (personal and company checks are not acceptable); certificate of deposit or any other form of deposit issued by a financial institution and acceptable to the City. If the Contractor fails or refuses to fully comply with the terms and conditions of the contract, the City shall have the right to use all or such part of said security as may be necessary to reimburse the City for loss sustained by reason of such breach. The balance of said security, if any, will be returned to Contractor upon the expiration or termination of the contract. INSTRUCTIONS Gas System Utility Rate Study Services 3 RFP #58-19 i.7 SUBMIT PROPOSALS TO: Use label at the end of this solicitation package City of Clearwater Attn: Purchasing 100 S Myrtle Ave, 3rd Fl, Clearwater FL 33756-5520 or PO Box 4748, Clearwater FL 33758-4748 Proposals will be received at this address. Proposers may mail or hand-deliver proposals; e-mail or fax submissions will not be accepted. No responsibility will attach to the City of Clearwater, its employees or agents for premature opening of a proposal that is not properly addressed and identified. i.8 LATE PROPOSALS. The proposer assumes responsibility for having the proposal delivered on time at the place specified. All proposals received after the date and time specified shall not be considered and will be returned unopened to the proposer. The proposer assumes the risk of any delay in the mail or in handling of the mail by employees of the City of Clearwater, or any private courier, regardless whether sent by mail or by means of personal delivery. It shall not be sufficient to show that you mailed or commenced delivery before the due date and time. All times are Clearwater, Florida local times. The proposer agrees to accept the time stamp in the City Purchasing Office as the official time. i.9 LOBBYING. The integrity of the procurement process is critical. Communication regarding this solicitation for purpose of influencing the process or the award, between any person or affiliates seeking an award from this solicitation and the City, including but not limited to the City Council, employees, and consultants hired to assist in the solicitation, is strongly discouraged. This does not prohibit public comment at any City Council meeting, study session or Council committee meeting. This shall not apply to vendor-initiated communication with the contact(s) identified in the solicitation or City-initiated communications for the purposes of conducting the procurement including but not limited to pre-bid conferences, clarification of responses, presentations if provided in the solicitation, requests for Best and Final Proposals, contract negotiations, protest/appeal resolution, or surveying non-responsive vendors. i.10 COMMENCEMENT OF WORK. If proposer begins any billable work prior to the City’s final approval and execution of the contract, proposer does so at its own risk. i.11 RESPONSIBILITY TO READ AND UNDERSTAND. Failure to read, examine and understand the solicitation will not excuse any failure to comply with the requirements of the solicitation or any resulting contract, nor shall such failure be a basis for claiming additional compensation. If a vendor suspects an error, omission or discrepancy in this solicitation, the vendor must immediately and in any case not later than seven (7) business days in advance of the due date notify the contact on page one (1). The City is not responsible for and will not pay any costs associated with the preparation and submission of the proposal. Proposers are cautioned to verify their proposals before submission, as amendments to or withdrawal of proposals submitted after time specified for opening of proposals may not be considered. The City will not be responsible for any proposer errors or omissions. i.12 FORM AND CONTENT OF PROPOSALS. Unless otherwise instructed or allowed, proposals shall be submitted on the forms provided. An original and the designated number of copies of each proposal are required. Proposals, including modifications, must be submitted in ink, typed, or printed form and signed by an authorized representative. Please line through and initial rather than erase changes. If the proposal is not properly signed or if any changes are not initialed, it may be considered non-responsive. In the event of a disparity between the unit price and the extended price, the unit price shall prevail unless obviously in error, as determined by the City. The City may require that an electronic copy of the proposal be submitted. The proposal must provide all information requested and must address all points. The City does not encourage exceptions. The INSTRUCTIONS Gas System Utility Rate Study Services 4 RFP #58-19 City is not required to grant exceptions and depending on the exception, the City may reject the proposal. i.13 SPECIFICATIONS. Technical specifications define the minimum acceptable standard. When the specification calls for “Brand Name or Equal,” the brand name product is acceptable. Other products will be considered upon showing the other product meets stated specifications and is equivalent to the brand product in terms of quality, performance and desired characteristics. Minor differences that do not affect the suitability of the supply or service for the City’s needs may be accepted. Burden of proof that the product meets the minimum standards or is equal to the brand name product is on the proposer. The City reserves the right to reject proposals that the City deems unacceptable. i.14 MODIFICATION / WITHDRAWAL OF PROPOSAL. Written requests to modify or withdraw the proposal received by the City prior to the scheduled opening time will be accepted and will be corrected after opening. No oral requests will be allowed. Requests must be addressed and labeled in the same manner as the proposal and marked as a MODIFICATION or WITHDRAWAL of the proposal. Requests for withdrawal after the bid opening will only be granted upon proof of undue hardship and may result in the forfeiture of any proposal security. Any withdrawal after the bid opening shall be allowed solely at the City’s discretion. i.15 DEBARMENT DISCLOSURE. If the vendor submitting a proposal has been debarred, suspended, or otherwise lawfully precluded from participating in any public procurement activity, including being disapproved as a subcontractor with any federal, state, or local government, or if any such preclusion from participation from any public procurement activity is currently pending, the proposer shall include a letter with its proposal identifying the name and address of the governmental unit, the effective date of this suspension or debarment, the duration of the suspension or debarment, and the relevant circumstances relating to the suspension or debarment. If suspension or debarment is currently pending, a detailed description of all relevant circumstances including the details enumerated above must be provided. A proposal from a proposer who is currently debarred, suspended or otherwise lawfully prohibited from any public procurement activity may be rejected. i.16 RESERVATIONS. The City reserves the right to reject any or all proposals or any part thereof; to rebid the solicitation; to reject non-responsive or non-responsible proposals; to reject unbalanced proposals; to reject proposals where the terms, prices, and/or awards are conditioned upon another event; to reject individual proposals for failure to meet any requirement; to award by item, part or portion of an item, group of items, or total; to make multiple awards; to waive minor irregularities, defects, omissions, technicalities or form errors in any proposal. The City may seek clarification of the proposal from proposer at any time, and failure to respond is cause for rejection. Submission of a proposal confers on proposer no right to an award or to a subsequent contract. The City is responsible to make an award that is in the best interest of the City. All decisions on compliance, evaluation, terms and conditions shall be made solely at the City’s discretion and made to favor the City. No binding contract will exist between the proposer and the City until the City executes a written contract or purchase order. i.17 OFFICIAL SOLICITATION DOCUMENT. Changes to the solicitation document made by a proposer may not be acknowledged or accepted by the City. Award or execution of a contract does not constitute acceptance of a changed term, condition or specification unless specifically acknowledged and agreed to by the City. The copy maintained and published by the City shall be the official solicitation document. i.18 COPYING OF PROPOSALS. Proposer hereby grants the City permission to copy all parts of its proposal, including without limitation any documents and/or materials copyrighted by the proposer. The City’s right to copy shall be for internal use in evaluating the proposal. i.19 CONTRACTOR ETHICS. It is the intention of the City to promote courtesy, fairness, impartiality, integrity, service, professionalism, economy, and government by law in the Procurement process. The responsibility for implementing this policy rests with each individual who participates in the Procurement process, including Respondents and Contractors. INSTRUCTIONS Gas System Utility Rate Study Services 5 RFP #58-19 To achieve this purpose, it is essential that Respondents and Contractors doing business with the City also observe the ethical standards prescribed herein. It shall be a breach of ethical standards to: a. Exert any effort to influence any City employee or agent to breach the standards of ethical conduct. b. Intentionally invoice any amount greater than provided in Contract or to invoice for Materials or Services not provided. c. Intentionally offer or provide sub-standard Materials or Services or to intentionally not comply with any term, condition, specification or other requirement of a City Contract. i.20 GIFTS. The City will accept no gifts, gratuities or advertising products from proposers or prospective proposers and affiliates. The City may request product samples from vendors for product evaluation. i.21 PROTESTS AND APPEALS. If a Respondent believes there is a mistake, impropriety, or defect in the solicitation, believes the City improperly rejected its proposal, and/or believes the selected proposal is not in the City’s best interests, the Respondent may submit a written protest. All protests and appeals are governed by the City of Clearwater Purchasing Policy and Procedures Section 18 (“Purchasing Policy”). If there exists any discrepancy in this Section i.21 and the Purchasing Policy, the language of the Purchasing Policy controls. Protests based upon alleged mistake, impropriety, or defect in a solicitation that is apparent before the bid opening must be filed with the Purchasing Manager no later than five (5) business days before Bid Opening. Protests that only become apparent after the Bid Opening must be filed within ten (10) business days of the alleged violation of the applicable purchasing ordinance. The complete protest procedure can be obtained by contacting Purchasing. ADDRESS PROTESTS TO: Alyce Benge, CPPO, C.P.M. Purchasing Manager 100 So Myrtle Ave, 3rd Fl Clearwater FL 33756-5520 or PO Box 4748 Clearwater FL 33758-4748 INSTRUCTIONS – EVALUATION Gas System Utility Rate Study Services 6 RFP #58-19 i.22 EVALUATION PROCESS. Proposals will be reviewed by a screening committee comprised of City employees. The City staff may or may not initiate discussions with proposers for clarification purposes. Clarification is not an opportunity to change the proposal. Proposers shall not initiate discussions with any City employee or official. i.23 CRITERIA FOR EVALUATION AND AWARD. The City evaluates three (3) categories of information: responsiveness, responsibility, the technical proposal/price. All proposals must meet the following responsiveness and responsibility criteria. a) Responsiveness. The City will determine whether the proposal complies with the instructions for submitting proposals including completeness of proposal which encompasses the inclusion of all required attachments and submissions. The City must reject any proposals that are submitted late. Failure to meet other requirements may result in rejection. b) Responsibility. The City will determine whether the proposer is one with whom it can or should do business. Factors that the City may evaluate to determine "responsibility" include, but are not limited to: excessively high or low priced proposals, past performance, references (including those found outside the proposal), compliance with applicable laws, proposer's record of performance and integrity- e.g. has the proposer been delinquent or unfaithful to any contract with the City, whether the proposer is qualified legally to contract with the City, financial stability and the perceived ability to perform completely as specified. A proposer must at all times have financial resources sufficient, in the opinion of the City, to ensure performance of the contract and must provide proof upon request. City staff may also use Dun & Bradstreet and/or any generally available industry information. The City reserves the right to inspect and review proposer’s facilities, equipment and personnel and those of any identified subcontractors. The City will determine whether any failure to supply information, or the quality of the information, will result in rejection. c) Technical Proposal. The City will determine how well proposals meet its requirements in terms of the response to the specifications and how well the offer addresses the needs of the project. The City will rank offers using a point ranking system (unless otherwise specified) as an aid in conducting the evaluation. d) If less than three (3) responsive proposals are received, at the City’s sole discretion, the proposals may be evaluated using simple comparative analysis instead of any announced method of evaluation, subject to meeting administrative and responsibility requirements. For this RFP, the criteria that will be evaluated and their relative weights are: Evaluation Criteria Points Experience of Consultant in Gas Utility Rate Studies (Tab 2) 30 Qualifications of the Project Team (Tab 2) 30 Project Approach, Methodology and Schedule for Completion (Tab 3) 20 References: Five (5) Required (Tab 4) 10 Cost of Services (Tab 5) 10 i.24 SHORT-LISTING. The City at its sole discretion may create a short-list of the highest scored proposals based on evaluation against the evaluation criteria. Short-listed proposers may be invited to give presentations and/or interviews. Upon conclusion of any presentations/interviews, the City will finalize the ranking of shortlisted firms. i.25 PRESENTATIONS/INTERVIEWS. Presentations and/or interviews may be requested at the City’s discretion. The proposer must provide a formal presentation/interview on-site at a City location upon request. i.26 BEST & FINAL OFFERS. The City may request best & final offers if deemed necessary, and will determine the scope and subject of any best & final request. However, the proposer should not INSTRUCTIONS – EVALUATION Gas System Utility Rate Study Services 7 RFP #58-19 expect that the City will ask for best & finals and should submit their best offer based on the terms and conditions set forth in this solicitation. i.27 COST JUSTIFICATION. In the event only one response is received, the City may require that the proposer submit a cost proposal in sufficient detail for the City to perform a cost/price analysis to determine if the proposal price is fair and reasonable. i.28 CONTRACT NEGOTIATIONS AND ACCEPTANCE. Proposer must be prepared for the City to accept the proposal as submitted. If proposer fails to sign all documents necessary to successfully execute the final contract within a reasonable time as specified, or negotiations do not result in an acceptable agreement, the City may reject proposal or revoke the award, and may begin negotiations with another proposer. Final contract terms must be approved or signed by the appropriately authorized City official(s). No binding contract will exist between the proposer and the City until the City executes a written contract or purchase order. i.29 NOTICE OF INTENT TO AWARD. Notices of the City’s intent to award a Contract are posted to Purchasing’s website. It is the proposer’s responsibility to check the City of Clearwater’s website at https://www.myclearwater.com/bid to view relevant RFP information and notices. i.30 RFP TIMELINE. Dates are tentative and subject to change. Release RFP: September 11, 2019 Advertise Tampa Bay Times: September 12, 2019 Responses due: October 17, 2019 Review proposals: October 17-25, 2019 Presentations (if requested): Week of November 4, 2019 Award recommendation: November 12, 2019 Council authorization: December 5, 2019 Contract begins: December 2019 TERMS AND CONDITIONS Gas System Utility Rate Study Services 8 RFP #58-19 S.1 DEFINITIONS. Uses of the following terms are interchangeable as referenced: “vendor, contractor, supplier, proposer, company, parties, persons”, “purchase order, PO, contract, agreement”, “city, Clearwater, agency, requestor, parties”, “bid, proposal, response, quote”. S.2 INDEPENDENT CONTRACTOR. It is expressly understood that the relationship of Contractor to the City will be that of an independent contractor. Contractor and all persons employed by Contractor, either directly or indirectly, are Contractor’s employees, not City employees. Accordingly, Contractor and Contractor’s employees are not entitled to any benefits provided to City employees including, but not limited to, health benefits, enrollment in a retirement system, paid time off or other rights afforded City employees. Contractor employees will not be regarded as City employees or agents for any purpose, including the payment of unemployment or workers’ compensation. If any Contractor employees or subcontractors assert a claim for wages or other employment benefits against the City, Contractor will defend, indemnify and hold harmless the City from all such claims. S.3 SUBCONTRACTING. Contractor may not subcontract work under this Agreement without the express written permission of the City. If Contractor has received authorization to subcontract work, it is agreed that all subcontractors performing work under the Agreement must comply with its provisions. Further, all agreements between Contractor and its subcontractors must provide that the terms and conditions of this Agreement be incorporated therein. S.4 ASSIGNMENT. This Agreement may not be assigned either in whole or in part without first receiving the City’s written consent. Any attempted assignment, either in whole or in part, without such consent will be null and void and in such event the City will have the right at its option to terminate the Agreement. No granting of consent to any assignment will relieve Contractor from any of its obligations and liabilities under the Agreement. S.5 SUCCESSORS AND ASSIGNS, BINDING EFFECT. This Agreement will be binding upon and inure to the benefit of the parties and their respective permitted successors and assigns. S.6 NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the exclusive benefit of the parties. Nothing set forth in this Agreement is intended to create, or will create, any benefits, rights, or responsibilities in any third parties. S.7 NON- EXCLUSIVITY. The City, in its sole discretion, reserves the right to request the materials or services set forth herein from other sources when deemed necessary and appropriate. No exclusive rights are encompassed through this Agreement. S.8 AMENDMENTS. There will be no oral changes to this Agreement. This Agreement can only be modified in a writing signed by both parties. No charge for extra work or material will be allowed unless approved in writing, in advance, by the City and Contractor. S.9 TIME OF THE ESSENCE. Time is of the essence to the performance of the parties’ obligations under this Agreement. S.10 COMPLIANCE WITH APPLICABLE LAWS. a. General. Contractor must procure all permits and licenses, and pay all charges and fees necessary and incidental to the lawful conduct of business. Contractor must stay fully informed of existing and future federal, state, and local laws, ordinances, and regulations that in any manner affect the fulfillment of this Agreement and must comply with the same at its own expense. Contractor bears full responsibility for training, safety, and providing necessary equipment for all Contractor personnel to achieve throughout the term of the Agreement. Upon request, Contractor will demonstrate to the City's satisfaction any programs, procedures, and other activities used to ensure compliance. b. Drug-Free Workplace. Contractor is hereby advised that the City has adopted a policy establishing a drug-free workplace for itself and those doing business with the City to ensure the safety and health of all persons working on City contracts and projects. Contractor will require a drug-free workplace for all Contractor personnel working under this Agreement. Specifically, all Contractor personnel who are working under this Agreement must be notified TERMS AND CONDITIONS Gas System Utility Rate Study Services 9 RFP #58-19 in writing by Contractor that they are prohibited from the manufacture, distribution, dispensation, possession, or unlawful use of a controlled substance in the workplace. Contractor agrees to prohibit the use of intoxicating substances by all Contractor personnel, and will ensure that Contractor personnel do not use or possess illegal drugs while in the course of performing their duties. c. Federal and State Immigration Laws. Contractor agrees to comply with the Immigration Reform and Control Act of 1986 (IRCA) in performance under this Agreement and to permit the City and its agents to inspect applicable personnel records to verify such compliance as permitted by law. Contractor will ensure and keep appropriate records to demonstrate that all Contractor personnel have a legal right to live and work in the United States. (i) As applicable to Contractor, under this provision, Contractor hereby warrants to the City that Contractor and each of its subcontractors will comply with, and are contractually obligated to comply with, all federal immigration laws and regulations that relate to their employees (hereinafter “Contractor Immigration Warranty”). (ii) A breach of the Contractor Immigration Warranty will constitute as a material breach of this Agreement and will subject Contractor to penalties up to and including termination of this Agreement at the sole discretion of the City. (iii) The City retains the legal right to inspect the papers of all Contractor personnel who provide services under this Agreement to ensure that Contractor or its subcontractors are complying with the Contractor Immigration Warranty. Contractor agrees to assist the City in regard to any such inspections. (iv) The City may, at its sole discretion, conduct random verification of the employment records of Contractor and any subcontractor to ensure compliance with the Contractor Immigration Warranty. Contractor agrees to assist the City in regard to any random verification performed. (v) Neither Contractor nor any subcontractor will be deemed to have materially breached the Contractor Immigration Warranty if Contractor or subcontractor establishes that it has complied with the employment verification provisions prescribed by Sections 274A and 274B of the Federal Immigration and Nationality Act. d. Nondiscrimination. Contractor represents and warrants that it does not discriminate against any employee or applicant for employment or person to whom it provides services because of race, color, religion, sex, national origin, or disability, and represents and warrants that it complies with all applicable federal, state, and local laws and executive orders regarding employment. Contractor and Contractor’s personnel will comply with applicable provisions of Title VII of the U.S. Civil Rights Act of 1964, as amended, Section 504 of the Federal Rehabilitation Act, the Americans with Disabilities Act (42 U.S.C. § 12101 et seq.), and applicable rules in performance under this Agreement. S.11 SALES/USE TAX, OTHER TAXES. a. Contractor is responsible for the payment of all taxes including federal, state, and local taxes related to or arising out of Contractor’s services under this Agreement, including by way of illustration but not limitation, federal and state income tax, Social Security tax, unemployment insurance taxes, and any other taxes or business license fees as required. If any taxing authority should deem Contractor or Contractor employees an employee of the City, or should otherwise claim the City is liable for the payment of taxes that are Contractor’s responsibility under this Agreement, Contractor will indemnify the City for any tax liability, interest, and penalties imposed upon the City. b. The City is exempt from paying state and local sales/use taxes and certain federal excise taxes and will furnish an exemption certificate upon request. TERMS AND CONDITIONS Gas System Utility Rate Study Services 10 RFP #58-19 S.12 AMOUNTS DUE THE CITY. Contractor must be current and remain current in all obligations due to the City during the performance of services under the Agreement. Payments to Contractor may be offset by any delinquent amounts due the City or fees and charges owed to the City. S.13 OPENNESS OF PROCUREMENT PROCESS. Written competitive proposals, replies, oral presentations, meetings where vendors answer questions, other submissions, correspondence, and all records made thereof, as well as negotiations or meetings where negotiation strategies are discussed, conducted pursuant to this RFP, shall be handled in compliance with Chapters 119 and 286, Florida Statutes. Proposals or replies received by the City pursuant to this RFP are exempt from public disclosure until such time that the City provides notice of an intended decision or until 30 days after opening the proposals, whichever is earlier. If the City rejects all proposals or replies pursuant to this RFP and provides notice of its intent to reissue the RFP, then the rejected proposals or replies remain exempt from public disclosure until such time that the City provides notice of an intended decision concerning the reissued RFP or until the City withdraws the reissued RFP. A proposal or reply shall not be exempt from public disclosure longer than 12 months after the initial City notice rejecting all proposals or replies. Oral presentations, meetings where vendors answer questions, or meetings convened by City staff to discuss negotiation strategies, if any, shall be closed to the public (and other proposers) in compliance with Chapter 286 Florida Statutes. A complete recording shall be made of such closed meeting. The recording of, and any records presented at, the exempt meeting shall be available to the public when the City provides notice of an intended decision or until 30 days after opening proposals or final replies, whichever occurs first. If the City rejects all proposals or replies pursuant to this RFP and provides notice of its intent to reissue the RFP, then the recording and any records presented at the exempt meeting remain exempt from public disclosure until such time that the City provides notice of an intended decision concerning the reissued RFP or until the City withdraws the reissued RFP. A recording and any records presented at an exempt meeting shall not be exempt from public disclosure longer than 12 months after the initial City notice rejecting all proposals or replies. In addition to all other contract requirements as provided by law, the contractor executing this agreement agrees to comply with public records law. IF THE CONTRACTOR HAS QUESTIONS REGARDING THE APPLICATION OF CHAPTER 119, FLORIDA STATUTES, TO THE CONTRACTOR’S DUTY TO PROVIDE PUBLIC RECORDS RELATING TO THIS CONTRACT, CONTACT THE CUSTODIAN OF PUBLIC RECORDS, Rosemarie Call, phone: 727-562-4092 or Rosemarie.Call@myclearwater.com, 112 S. Osceola Ave., Clearwater, FL 33756. The contractor’s agreement to comply with public records law applies specifically to: a) Keep and maintain public records required by the City of Clearwater (hereinafter “public agency”) to perform the service being provided by the contractor hereunder. b) Upon request from the public agency’s custodian of public records, provide the public agency with a copy of the requested records or allow the records to be inspected or copied within a reasonable time at a cost that does not exceed the cost provided for in Chapter 119, Florida Statutes, as may be amended from time to time, or as otherwise provided by law. c) Ensure that the public records that are exempt or confidential and exempt from public records disclosure requirements are not disclosed except as authorized by law for the duration of the contract term and following completion of the contract if the contractor does not transfer the records to the public agency. TERMS AND CONDITIONS Gas System Utility Rate Study Services 11 RFP #58-19 d) Upon completion of the contract, transfer, at no cost, to the public agency all public records in possession of the contractor or keep and maintain public records required by the public agency to perform the service. If the contractor transfers all public records to the public agency upon completion of the contract, the contractor shall destroy any duplicate public records that are exempt or confidential and exempt from public records disclosure requirements. If the contractor keeps and maintains public records upon completion of the contract, the contractor shall meet all applicable requirements for retaining public records. All records stored electronically must be provided to the public agency, upon request from the public agency’s custodian of public records, in a format that is compatible with the information technology systems of the public agency. e) A request to inspect or copy public records relating to a public agency’s contract for services must be made directly to the public agency. If the public agency does not possess the requested records, the public agency shall immediately notify the contractor of the request and the contractor must provide the records to the public agency or allow the records to be inspected or copied within a reasonable time. f) The contractor hereby acknowledges and agrees that if the contractor does not comply with the public agency’s request for records, the public agency shall enforce the contract provisions in accordance with the contract. g) A contractor who fails to provide the public records to the public agency within a reasonable time may be subject to penalties under Section 119.10, Florida Statutes. h) If a civil action is filed against a contractor to compel production of public records relating to a public agency’s contract for services, the court shall assess and award against the contractor the reasonable costs of enforcement, including reasonable attorney fees, if: 1. The court determines that the contractor unlawfully refused to comply with the public records request within a reasonable time; and 2. At least eight (8) business days before filing the action, the plaintiff provided written notice of the public records request, including a statement that the contractor has not complied with the request, to the public agency and to the contractor. i) A notice complies with subparagraph (h)2. if it is sent to the public agency’s custodian of public records and to the contractor at the contractor’s address listed on its contract with the public agency or to the contractor’s registered agent. Such notices must be sent by common carrier delivery service or by registered, Global Express Guaranteed, or certified mail, with postage or shipping paid by the sender and with evidence of delivery, which may be in an electronic format. A contractor who complies with a public records request within 8 business days after the notice is sent is not liable for the reasonable costs of enforcement. S.14 AUDITS AND RECORDS. Contractor must preserve the records related to this Agreement for five (5) years after completion of the Agreement. The City or its authorized agent reserves the right to inspect any records related to the performance of work specified herein. In addition, the City may inspect any and all payroll, billing or other relevant records kept by Contractor in relation to the Agreement. Contractor will permit such inspections and audits during normal business hours and upon reasonable notice by the City. The audit of records may occur at Contractor’s place of business or at City offices, as determined by the City. S.15 BACKGROUND CHECK. The City may conduct criminal, driver history, and all other requested background checks of Contractor personnel who would perform services under the Agreement or who will have access to the City’s information, data, or facilities in accordance with the City’s current TERMS AND CONDITIONS Gas System Utility Rate Study Services 12 RFP #58-19 background check policies. Any officer, employee, or agent that fails the background check must be replaced immediately for any reasonable cause not prohibited by law. S.16 SECURITY CLEARANCE AND REMOVAL OF CONTRACTOR PERSONNEL. The City will have final authority, based on security reasons: (i) to determine when security clearance of Contractor personnel is required; (ii) to determine the nature of the security clearance, up to and including fingerprinting Contractor personnel; and (iii) to determine whether or not any individual or entity may provide services under this Agreement. If the City objects to any Contractor personnel for any reasonable cause not prohibited by law, then Contractor will, upon notice from the City, remove any such individual from performance of services under this Agreement. S.17 DEFAULT. a. A party will be in default if that party: (i) Is or becomes insolvent or is a party to any voluntary bankruptcy or receivership proceeding, makes an assignment for a creditor, or there is any similar action that affects Contractor’s capability to perform under the Agreement; (ii) Is the subject of a petition for involuntary bankruptcy not removed within sixty (60) calendar days; (iii) Conducts business in an unethical manner or in an illegal manner; or (iv) Fails to carry out any term, promise, or condition of the Agreement. b. Contractor will be in default of this Agreement if Contractor is debarred from participating in City procurements and solicitations in accordance with Section 27 of the City’s Purchasing and Procedures Manual. c. Notice and Opportunity to Cure. In the event a party is in default then the other party may, at its option and at any time, provide written notice to the defaulting party of the default. The defaulting party will have thirty (30) days from receipt of the notice to cure the default; the thirty (30) day cure period may be extended by mutual agreement of the parties, but no cure period may exceed ninety (90) days. A default notice will be deemed to be sufficient if it is reasonably calculated to provide notice of the nature and extent of such default. Failure of the non-defaulting party to provide notice of the default does not waive any rights under the Agreement. d. Anticipatory Repudiation. Whenever the City in good faith has reason to question Contractor’s intent or ability to perform, the City may demand that Contractor give a written assurance of its intent and ability to perform. In the event that the demand is made and no written assurance is given within five (5) calendar days, the City may treat this failure as an anticipatory repudiation of the Agreement. S.18 REMEDIES. The remedies set forth in this Agreement are not exclusive. Election of one remedy will not preclude the use of other remedies. In the event of default: a. The non-defaulting party may terminate the Agreement, and the termination will be effective immediately or at such other date as specified by the terminating party. b. The City may purchase the services required under the Agreement from the open market, complete required work itself, or have it completed at the expense of Contractor. If the cost of obtaining substitute services exceeds the contract price, the City may recover the excess cost by: (i) requiring immediate reimbursement to the City; (ii) deduction from an unpaid balance due to Contractor; (iii) collection against the proposal and/or performance security, if any; (iv) collection against liquidated damages (if applicable); or (v) a combination of the aforementioned remedies or other remedies as provided by law. Costs includes any and all, fees, and expenses incurred in obtaining substitute services and expended in obtaining reimbursement, including, but not limited to, administrative expenses, attorneys’ fees, and costs. TERMS AND CONDITIONS Gas System Utility Rate Study Services 13 RFP #58-19 c. The non-defaulting party will have all other rights granted under this Agreement and all rights at law or in equity that may be available to it. d. Neither party will be liable for incidental, special, or consequential damages. S.19 CONTINUATION DURING DISPUTES. Contractor agrees that during any dispute between the parties, Contractor will continue to perform its obligations until the dispute is settled, instructed to cease performance by the City, enjoined or prohibited by judicial action, or otherwise required or obligated to cease performance by other provisions in this Agreement. S.20 TERMINATION FOR CONVENIENCE. The City reserves the right to terminate this Agreement in part or in whole upon thirty (30) calendar days’ written notice. S.21 CONFLICT OF INTEREST F.S. Section 112. Pursuant to F.S. Section 112, the City may cancel this Agreement after its execution, without penalty or further obligation, if any person significantly involved in initiating, securing, drafting, or creating the Agreement for the City becomes an employee or agent of Contractor. S.22 TERMINATION FOR NON-APPROPRIATION AND MODIFICATION FOR BUDGETARY CONSTRAINT. The City is a governmental agency which relies upon the appropriation of funds by its governing body to satisfy its obligations. If the City reasonably determines that it does not have funds to meet its obligations under this Agreement, the City will have the right to terminate the Agreement without penalty on the last day of the fiscal period for which funds were legally available. In the event of such termination, the City agrees to provide written notice of its intent to terminate thirty (30) calendar days prior to the stated termination date. S.23 PAYMENT TO CONTRACTOR UPON TERMINATION. Upon termination of this Agreement, Contractor will be entitled only to payment for those services performed up to the date of termination, and any authorized expenses already incurred up to such date of termination. The City will make final payment within thirty (30) calendar days after the City has both completed its appraisal of the materials and services provided and received Contractor’s properly prepared final invoice. S.24 NON-WAIVER OF RIGHTS. There will be no waiver of any provision of this agreement unless approved in writing and signed by the waiving party. Failure or delay to exercise any rights or remedies provided herein or by law or in equity, or the acceptance of, or payment for, any services hereunder, will not release the other party of any of the warranties or other obligations of the Agreement and will not be deemed a waiver of any such rights or remedies. S.25 INDEMNIFICATION/LIABILITY. a. To the fullest extent permitted by law, Contractor agrees to defend, indemnify, and hold the City, its officers, agents, and employees, harmless from and against any and all liabilities, demands, claims, suits, losses, damages, causes of action, fines or judgments, including costs, attorneys’, witnesses’, and expert witnesses’ fees, and expenses incident thereto, relating to, arising out of, or resulting from: (i) the services provided by Contractor personnel under this Agreement; (ii) any negligent acts, errors, mistakes or omissions by Contractor or Contractor personnel; and (iii) Contractor or Contractor personnel’s failure to comply with or fulfill the obligations established by this Agreement. b. Contractor will update the City during the course of the litigation to timely notify the City of any issues that may involve the independent negligence of the City that is not covered by this indemnification. c. The City assumes no liability for actions of Contractor and will not indemnify or hold Contractor or any third party harmless for claims based on this Agreement or use of Contractor-provided supplies or services. S.26 WARRANTY. Contractor warrants that the services and materials will conform to the requirements of the Agreement. Additionally, Contractor warrants that all services will be performed in a good, workman-like and professional manner. The City’s acceptance of service or materials provided by Contractor will not relieve Contractor from its obligations under this warranty. If any materials or TERMS AND CONDITIONS Gas System Utility Rate Study Services 14 RFP #58-19 services are of a substandard or unsatisfactory manner as determined by the City, Contractor, at no additional charge to the City, will provide materials or redo such services until in accordance with this Agreement and to the City’s reasonable satisfaction. Unless otherwise agreed, Contractor warrants that materials will be new, unused, of most current manufacture and not discontinued, will be free of defects in materials and workmanship, will be provided in accordance with manufacturer's standard warranty for at least one (1) year unless otherwise specified, and will perform in accordance with manufacturer's published specifications. S.27 THE CITY’S RIGHT TO RECOVER AGAINST THIRD PARTIES. Contractor will do nothing to prejudice the City’s right to recover against third parties for any loss, destruction, or damage to City property, and will at the City’s request and expense, furnish to the City reasonable assistance and cooperation, including assistance in the prosecution or defense of suit and the execution of instruments of assignment in favor of the City in obtaining recovery. S.28 NO GUARANTEE OF WORK. Contractor acknowledges and agrees that it is not entitled to deliver any specific amount of materials or services or any materials or services at all under this Agreement and acknowledges and agrees that the materials or services will be requested by the City on an as needed basis at the sole discretion of the City. Any document referencing quantities or performance frequencies represent the City's best estimate of current requirements, but will not bind the City to purchase, accept, or pay for materials or services which exceed its actual needs. S.29 OWNERSHIP. All deliverables, services, and information provided by Contractor or the City pursuant to this Agreement (whether electronically or manually generated) including without limitation, reports, test plans, and survey results, graphics, and technical tables, originally prepared in the performance of this Agreement, are the property of the City and will not be used or released by Contractor or any other person except with prior written permission by the City. S.30 USE OF NAME. Contractor will not use the name of the City of Clearwater in any advertising or publicity without obtaining the prior written consent of the City. S.31 PROHIBITED ACTS. Pursuant to Florida Constitution Article II Section 8, a current or former public officer or employee within the last two (2) years shall not represent another organization before the City on any matter for which the officer or employee was directly concerned and personally participated in during their service or employment or over which they had a substantial or material administrative discretion. S.32 FOB DESTINATION FREIGHT PREPAID AND ALLOWED. All deliveries will be FOB destination freight prepaid and allowed unless otherwise agreed. S.33 RISK OF LOSS. Contractor agrees to bear all risks of loss, injury, or destruction of goods or equipment incidental to providing these services and such loss, injury, or destruction will not release Contractor from any obligation hereunder. S.34 SAFEGUARDING CITY PROPERTY. Contractor will be responsible for any damage to City real property or damage or loss of City personal property when such property is the responsibility of or in the custody of Contractor or its employees. S.35 WARRANTY OF RIGHTS. Contractor warrants it has title to, or the right to allow the City to use, the materials and services being provided and that the City may use same without suit, trouble or hindrance from Contractor or third parties. S.36 PROPRIETARY RIGHTS INDEMNIFICATION. Without limiting the foregoing, Contractor will without limitation, at its expense defend the City against all claims asserted by any person that anything provided by Contractor infringes a patent, copyright, trade secret or other intellectual property right and must, without limitation, pay the costs, damages and attorneys' fees awarded against the City in any such action, or pay any settlement of such action or claim. Each party agrees to notify the other promptly of any matters to which this provision may apply and to cooperate with each other in connection with such defense or settlement. If a preliminary or final judgment is obtained against the City’s use or operation of the items provided by Contractor hereunder or any part thereof by reason of any alleged infringement, Contractor will, at its expense and without TERMS AND CONDITIONS Gas System Utility Rate Study Services 15 RFP #58-19 limitation, either: (a) modify the item so that it becomes non-infringing; (b) procure for the City the right to continue to use the item; (c) substitute for the infringing item other item(s) having at least equivalent capability; or (d) refund to the City an amount equal to the price paid, less reasonable usage, from the time of installation acceptance through cessation of use, which amount will be calculated on a useful life not less than five (5) years, plus any additional costs the City may incur to acquire substitute supplies or services. S.37 CONTRACT ADMINISTRATION. The contract will be administered by the Purchasing Department and/or an authorized representative from the using department. All questions regarding the contract will be referred to the Purchasing Department for resolution. Supplements may be written to the contract for the addition or deletion of services. S.38 FORCE MAJEURE. Failure by either party to perform its duties and obligations will be excused by unforeseeable circumstances beyond its reasonable control, including acts of nature, acts of the public enemy, riots, fire, explosion, legislation, and governmental regulation. The party whose performance is so affected will within five (5) calendar days of the unforeseeable circumstance notify the other party of all pertinent facts and identify the force majeure event. The party whose performance is so affected must also take all reasonable steps, promptly and diligently, to prevent such causes if it is feasible to do so, or to minimize or eliminate the effect thereof. The delivery or performance date will be extended for a period equal to the time lost by reason of delay, plus such additional time as may be reasonably necessary to overcome the effect of the delay, provided however, under no circumstances will delays caused by a force majeure extend beyond one hundred-twenty (120) calendar days from the scheduled delivery or completion date of a task unless agreed upon by the parties. S.39 COOPERATIVE USE OF CONTRACT. The City has entered into various cooperative purchasing agreements with other Florida government agencies, including the Tampa Bay Area Purchasing Cooperative. Under a Cooperative Purchasing Agreement, any contract may be extended for use by other municipalities, school districts and government agencies with the approval of Contractor. Any such usage by other entities must be in accordance with the statutes, codes, ordinances, charter and/or procurement rules and regulations of the respective government agency. Orders placed by other agencies and payment thereof will be the sole responsibility of that agency. The City is not responsible for any disputes arising out of transactions made by others. S.40 FUEL CHARGES AND PRICE INCREASES. No fuel surcharges will be accepted. No price increases will be accepted without proper request by Contractor and response by the City’s Purchasing Division. S.41 NOTICES. All notices to be given pursuant to this Agreement must be delivered to the parties at their respective addresses. Notices may be (i) personally delivered; (ii) sent via certified or registered mail, postage prepaid; (iii) sent via overnight courier; or (iv) sent via facsimile. If provided by personal delivery, receipt will be deemed effective upon delivery. If sent via certified or registered mail, receipt will be deemed effective three (3) calendar days after being deposited in the United States mail. If sent via overnight courier or facsimile, receipt will be deemed effective two (2) calendar days after the sending thereof. S.42 GOVERNING LAW, VENUE. This Agreement is governed by the laws of the State of Florida. The exclusive venue selected for any proceeding or suit in law or equity arising from or incident to this Agreement will be Pinellas County, Florida. S.43 INTEGRATION CLAUSE. This Agreement, including all attachments and exhibits hereto, supersede all prior oral or written agreements, if any, between the parties and constitutes the entire agreement between the parties with respect to the work to be performed. S.44 PROVISIONS REQUIRED BY LAW. Any provision required by law to be in this Agreement is a part of this Agreement as if fully stated in it. S.45 SEVERABILITY. If any provision of this Agreement is declared void or unenforceable, such provision will be severed from this Agreement, which will otherwise remain in full force and effect. The parties will negotiate diligently in good faith for such amendment(s) of this Agreement as may TERMS AND CONDITIONS Gas System Utility Rate Study Services 16 RFP #58-19 be necessary to achieve the original intent of this Agreement, notwithstanding such invalidity or unenforceability. S.46 SURVIVING PROVISIONS. Notwithstanding any completion, termination, or other expiration of this Agreement, all provisions which, by the terms of reasonable interpretation thereof, set forth rights and obligations that extend beyond completion, termination, or other expiration of this Agreement, will survive and remain in full force and effect. Except as specifically provided in this Agreement, completion, termination, or other expiration of this Agreement will not release any party from any liability or obligation arising prior to the date of termination. DETAILED SPECIFICATIONS Gas System Utility Rate Study Services 17 RFP #58-19 1. INTRODUCTION. The City of Clearwater (City) is located on the West Coast of Florida in the Tampa Bay region. It is the third largest city in the region with an estimated population of 110,000 residents. The City of Clearwater is also a major tourist destination – Clearwater Beach has been rated #1 U.S. Beach by TripAdvisor, “Florida’s Best Beach Town 2013” by USA Today, and was on the “Top Ten List of Best Beaches from Maine to Hawaii”. The City of Clearwater is home to the Philadelphia Phillies Spring Training and Clearwater Threshers Minor League Baseball, as well as hosting several sports tournaments through the year that attract visitors from across the country. Clearwater is home for Winter the Dolphin and the Clearwater Marine Aquarium. Winter’s story made it all the way to Hollywood in the motion pictures “Dolphin Tale” and “Dolphin Tale 2”, both filmed here in Clearwater. 2. PROJECT GOAL. It is the City of Clearwater’s intent to employ a rate study consultant with gas utility expertise to develop gas utility rate structures, sufficient to maintain the fiscal viability of the utility for the long term. 3. BACKGROUND. The Clearwater Gas System (CGS) is owned and operated as an enterprise utility by the City of Clearwater. CGS operates nearly 1,000 miles of underground gas main and handles the supply and distribution of both natural and propane (LP) gas throughout central and northern Pinellas County and western and central Pasco County. As a “full service” gas utility, CGS provides gas appliance sales and service, installation of inside customer gas piping, domestic and commercial gas equipment service, construction and maintenance of underground gas mains and service lines, and 24-hour response to any gas emergency call within the service area. The Clearwater Gas System is regulated for safety by the Florida Public Service Commission and the Federal Department of Transportation. CGS has been serving customers in the Clearwater area for over 96 years (since 1923), when operations began with a manufactured gas plant operation from coal and coke. In 1959, when natural gas transmission lines were finally extended to peninsula Florida, CGS discontinued the manufacturing of gas and began receiving piped natural gas from Florida Gas Transmission. Clearwater Gas System serves over 26,000 customers in a 330 square mile service territory, which extends some 43 miles and includes 20 municipalities as well as the unincorporated areas of north and central Pinellas County and western and central Pasco County. The Pinellas County service territory is 158 square miles and extends generally from Ulmerton and Walsingham Roads on the South to the Pasco County line on the North and from the Gulf of Mexico on the West to the Hillsborough County line on the East. This includes all of the Pinellas beach communities south to Madeira Beach. The Pasco County service territory is 172 square miles and extends from the Gulf of Mexico on the West inland about 20 miles to Ehren Cutoff, which is East of State Road 41 and Land O’ Lakes and from the Pinellas and Hillsborough County lines on the South to generally State Road 52 on the North. Clearwater Gas System prides itself in being a competitive and public service-minded utility, making economical and environmentally-friendly gas, which is made in America, available in our community for all of the homes and businesses within the service area, with special focus on the residential customers who make up nearly 85% of our customer base. 4. SCOPE OF SERVICES. Develop rate structures for the gas utility system that are sufficient to meet current and future revenue requirements, including projected operating costs, capital costs, debt service costs and coverages, and working capital reserve requirements. The consultant shall prepare an estimate of future revenues and revenue requirements for ten (10) fiscal years from the base year of each study, with an emphasis on the first five (5) years for rate setting purposes. The consultant will be expected to provide draft and final reports and attend meetings as specified for the level of rate study to be performed, see Exhibit A – Rate Study Milestones. City staff will provide base line information, typically in February depending on the status of the City’s financial statements audit. DETAILED SPECIFICATIONS Gas System Utility Rate Study Services 18 RFP #58-19 The Consultant shall propose reasonable schedules for commencement and completion of biennial rate studies. 5. MINIMUM QUALIFICATIONS. Proposers shall have demonstrated experience conducting studies for comparable utility systems, preferably for gas utilities in the state of Florida. A minimum of five (5) references, prioritized by 1) public sector, 2) gas utility systems, and 3) within the state of Florida, are required. 6. INSURANCE REQUIREMENTS. The Vendor shall, at its own cost and expense, acquire and maintain (and cause any subcontractors, representatives or agents to acquire and maintain) during the term with the City, sufficient insurance to adequately protect the respective interest of the parties. Coverage shall be obtained with a carrier having an AM Best Rating of A-VII or better. In addition, the City has the right to review the Contractor’s deductible or self-insured retention and to require that it be reduced or eliminated. Specifically the Vendor must carry the following minimum types and amounts of insurance on an occurrence basis or in the case of coverage that cannot be obtained on an occurrence basis, then coverage can be obtained on a claims-made basis with a minimum three (3) year tail following the termination or expiration of this Agreement: a. Commercial General Liability Insurance coverage, including but not limited to, premises operations, products/completed operations, products liability, contractual liability, advertising injury, personal injury, death, and property damage in the minimum amount of $1,000,000 (one million dollars) per occurrence and $2,000,000 (two million dollars) general aggregate. b. Commercial Automobile Liability Insurance coverage for any owned, non-owned, hired or borrowed automobile is required in the minimum amount of $1,000,000 (one million dollars) combined single limit. c. Professional Liability/Malpractice/Errors or Omissions Insurance coverage appropriate for the type of business engaged in by the Respondent with minimum limits of $2,000,000 (two million dollars) per occurrence. If a claims made form of coverage is provided, the retroactive date of coverage shall be no later than the inception date of claims made coverage, unless the prior policy was extended indefinitely to cover prior acts. Coverage shall be extended beyond the policy year either by a supplemental extended reporting period (SERP) of as great a duration as available, and with no less coverage and with reinstated aggregate limits, or by requiring that any new policy provide a retroactive date no later than the inception date of claims made coverage. d. Unless waived by the State of Florida and proof of waiver is provided to the City, statutory Workers’ Compensation Insurance coverage in accordance with the laws of the State of Florida, and Employer’s Liability Insurance in the minimum amount of $500,000 (five hundred thousand dollars) each employee each accident, $500,000 (five hundred thousand dollars) each employee by disease, and $500,000 (five hundred thousand dollars) disease policy limit. Coverage should include Voluntary Compensation, Jones Act, and U.S. Longshoremen’s and Harbor Worker’s Act coverage where applicable. Coverage must be applicable to employees, contractors, subcontractors, and volunteers, if any. The above insurance limits may be achieved by a combination of primary and umbrella/excess liability policies. DETAILED SPECIFICATIONS Gas System Utility Rate Study Services 19 RFP #58-19 Other Insurance Provisions. a. Prior to the execution of this Agreement, and then annually upon the anniversary date(s) of the insurance policy’s renewal date(s) for as long as this Agreement remains in effect, the Vendor will furnish the City with a Certificate of Insurance(s) (using appropriate ACORD certificate, SIGNED by the Issuer, and with applicable endorsements) evidencing all of the coverage set forth above and naming the City as an “Additional Insured” on the Commercial General Liability Insurance and the Commercial Automobile Liability Insurance. In addition when requested in writing from the City, Vendor will provide the City with certified copies of all applicable policies. The address where such certificates and certified policies shall be sent or delivered is as follows: City of Clearwater Attn: Purchasing Department, RFP #58-19 P.O. Box 4748 Clearwater, FL 33758-4748 b. Vendor shall provide thirty (30) days written notice of any cancellation, non-renewal, termination, material change or reduction in coverage. c. Vendor’s insurance as outlined above shall be primary and non-contributory coverage for Vendor’s negligence. d. Vendor reserves the right to appoint legal counsel to provide for the Vendor’s defense, for any and all claims that may arise related to Agreement, work performed under this Agreement, or to Vendor’s design, equipment, or service. Vendor agrees that the City shall not be liable to reimburse Vendor for any legal fees or costs as a result of Vendor providing its defense as contemplated herein. The stipulated limits of coverage above shall not be construed as a limitation of any potential liability to the City, and City’s failure to request evidence of this insurance shall not be construed as a waiver of Vendor’s (or any contractors’, subcontractors’, representatives’ or agents’) obligation to provide the insurance coverage specified. MILESTONES Gas System Utility Rate Study Services 20 RFP #58-19 1. ANTICIPATED BEGINNING AND END DATE OF INITIAL TERM. December 1, 2019 through November 30, 2024. If the commencement of performance is delayed because the City does not execute the contract on the start date, the City may adjust the start date, end date and milestones to reflect the delayed execution. 2. EXTENSION. The City reserves the right to extend the term of this contract, provided however, that the City shall give written notice of its intentions to extend this contract no later than thirty (30) days prior to the expiration date of the contract. 3. RENEWAL. At the end of the initial term of this contract, the City may initiate renewal(s) as provided herein. The decision to renew a contract rests solely with the City. The City will give written notice of its intention to renew the contract no later than thirty (30) days prior to the expiration. • One (1), five (5) year renewal is possible at the City’s option. 4. PRICES. All pricing shall be firm for the initial term of five (5) years except where otherwise provided by the specifications, and include all transportation, insurance and warranty costs. The City shall not be invoiced at prices higher than those stated in any contract resulting from this proposal. a. The Contractor certifies that the prices offered are no higher than the lowest price the Contractor charges other buyers for similar quantities under similar conditions. The Contractor further agrees that any reductions in the price of the goods or services covered by this proposal and occurring after award will apply to the undelivered balance. The Contractor shall promptly notify the City of such price reductions. b. During the sixty (60) day period prior to the renewal anniversary of the contract effective date, the Contractor may submit a written request that the City increase the prices in an amount for no more than the twelve month change in the Consumer Price Index for All Urban Consumers (CPI-U), US City Average, All Items, Not Seasonally Adjusted as published by the U.S. Department of Labor, Bureau of Labor Statistics (http://www.bls.gov/cpi/home.htm). The City shall review the request for adjustment and respond in writing; such response and approval shall not be unreasonably withheld. c. At the end of the initial term, pricing may be adjusted for amounts other than inflation based on mutual agreement of the parties after review of appropriate documentation. Renewal prices shall be firm for the five (5) year renewal term. d. No fuel surcharges will be accepted. RESPONSE ELEMENTS Gas System Utility Rate Study Services 21 RFP #58-19 1. PROPOSAL SUBMISSION - Submit one (1) signed original proposal, five (5) copies of the proposal, and one (1) electronic format copy on a disk or thumb drive, in a sealed container. 2. PROPOSAL FORMAT (the following should be included and referenced with index tabs) Table of Contents: Identify contents by tab and page number TAB 1 - Letter of Transmittal. A brief letter of transmittal should be submitted that includes the following information: 1. The proposer’s understanding of the work to be performed. 2. A positive commitment to perform the service within the time period specified. 3. The names of key persons, representatives, project managers who will be the main contacts for the City regarding this project. TAB 2 – Experience and Qualifications. The following information should be included: 1. A statement of experience, expertise, and abilities in providing the services for similar public sector gas utilities. a. A description of what qualifies your company, financial and otherwise, to provide the City with these services for the required period of time, provide appropriate staffing, provide necessary resources for the engagement. Identify the location of the firm’s office that would service the City of Clearwater. b. An assessment of the proposer’s abilities to meet and satisfy the needs of the City, taking into consideration the requested services, additional services and/or expertise offered that exceed the requirements, or the vendor’s inability to meet some of the requirements of the specifications. 2. A statement of qualifications, identifying senior and technical staff to be assigned to the City’s project. Staff named in the proposal may not be substituted without permission of the City. a. Resumes, including relevant experience should be included. b. It is expected that the firm submitting a proposal will perform work with their personnel. If subcontractors will be used, all requested information must be provided for the subcontractor’s firm and personnel as well. TAB 3 – Project Approach, Methodology, and Schedule for Completion. Clearly define the program offered and your method of approach to include, but not limited to the following elements: 1. Project Approach – Provide a detailed discussion of the consultant’s understanding of the City’s needs, scope of work, proposed project approach, and project management techniques to ensure the project meets stated objectives, stays within budget, and is completed on schedule. Outline key steps and actions that will be taken to effectively complete the scope of work. 2. Rate Development Methodology – Describe the basic methodology, software, decision- making processes, scenario testing, sensitivity analyses, and other features of the computerized rate design tools. Confirm the ability of the model to immediately accommodate new data, differing scenarios, new assumptions, updated forecasts, and other new variables. Discuss experience with conservation impacts and equity issues among various forms of property ownership. 3. Project Innovation – Provide examples of recent innovative and creative approaches to gas utility rate development including date, client, and description of work. 4. Project Schedule - Provide a project completion schedule incorporating the required reports and meetings per Exhibit A - Rate Study Milestones. Include all information the proposer expects the Gas utility to provide in the project completion schedule. 5. Work Product – Provide a recent sample report completed for one (1) of the References provided in the proposal. RESPONSE ELEMENTS Gas System Utility Rate Study Services 22 RFP #58-19 TAB 4 – References. Provide a minimum of five (5) references for whom you have provided similar services, prioritized by 1) public sector, 2) gas utility systems, and 3) within the state of Florida, are required. For each reference include the name of entity, contact person’s name, phone number, e-mail address, mailing address, type of services provided, and dates these services were provided. Identify any proposed project team members that worked on the engagements as either project director or manager. TAB 5 – Cost of Services. The cost portion of the proposal should include the following elements: 1. Provide separate not-to-exceed costs for each of the three (3) biennial studies during the contract period. The not-to-exceed cost for each study should include all travel, food, and lodging costs, and other out-of-pocket costs, as these will not be reimbursed separately. 2. Provide hourly rates for related consulting by Project Team members outside the scope of the biennial rate studies. Indicate applicable cost inflation factors to be applied to hourly rates annually. TAB 6 – Other Forms. The following forms should be completed and signed: 1. Exceptions/Additional Materials/Addenda form 2. Vendor Information form 3. Vendor Certification of Proposal form 4. Scrutinized Companies Form(s) 5. Include a current W-9 form (http://www.irs.gov/pub/irs-pdf/fw9.pdf) EXCEPTIONS / ADDITIONAL MATERIAL / ADDENDA Gas System Utility Rate Study Services 23 RFP #58-19 Proposers shall indicate any and all exceptions taken to the provisions or specifications in this solicitation document. Exceptions that surface elsewhere and that do not also appear under this section shall be considered invalid and void and of no contractual significance. Exceptions (mark one): **Special Note – Any material exceptions taken to the City’s Terms and Conditions may render a Proposal non-responsive. No exceptions Exceptions taken (describe--attach additional pages if needed) Additional Materials submitted (mark one): No additional materials have been included with this proposal Additional Materials attached (describe--attach additional pages if needed) Acknowledgement of addenda issued for this solicitation: Prior to submitting a response to this solicitation, it is the vendor’s responsibility to confirm if any addenda have been issued. Addenda Number Initial to acknowledge receipt Vendor Name Date: VENDOR INFORMATION Gas System Utility Rate Study Services 24 RFP #58-19 Company Legal/Corporate Name: Doing Business As (if different than above): Address: City: State: Zip: - Phone: Fax: E-Mail Address: Website: DUNS # Remit to Address (if different than above): Order from Address (if different from above): Address: Address: City: State: Zip: City: State: Zip: Contact for Questions about this proposal: Name: Fax: Phone: E-Mail Address: Day-to-Day Project Contact (if awarded): Name: Fax: Phone: E-Mail Address: Certified Small Business Certifying Agency: Certified Minority, Woman or Disadvantaged Business Enterprise Certifying Agency: VENDOR CERTIFICATION OF PROPOSAL Gas System Utility Rate Study Services 25 RFP #58-19 By signing and submitting this Proposal, the Vendor certifies that: a) It is under no legal prohibition to contract with the City of Clearwater. b) It has read, understands, and is in compliance with the specifications, terms and conditions stated herein, as well as its attachments, and any referenced documents. c) It has no known, undisclosed conflicts of interest. d) The prices offered were independently developed without consultation or collusion with any of the other respondents or potential respondents or any other anti-competitive practices. e) No offer of gifts, payments or other consideration were made to any City employee, officer, elected official, or consultant who has or may have had a role in the procurement process for the services and or goods/materials covered by this contract. f) It understands the City of Clearwater may copy all parts of this response, including without limitation any documents and/or materials copyrighted by the respondent, for internal use in evaluating respondent’s offer, or in response to a public records request under Florida’s public records law (F.S. 119) or other applicable law, subpoena, or other judicial process. g) Respondent hereby warrants to the City that the respondent and each of its subcontractors (“Subcontractors”) will comply with, and are contractually obligated to comply with, all Federal Immigration laws and regulations that relate to their employees. h) Respondent certifies that they are not in violation of section 6(j) of the Federal Export Administration Act and not debarred by any Federal or public agency. i) It will provide the materials or services specified in compliance with all Federal, State, and Local Statutes and Rules if awarded by the City. j) It is current in all obligations due to the City. k) It will accept such terms and conditions in a resulting contract if awarded by the City. l) The signatory is an officer or duly authorized agent of the respondent with full power and authority to submit binding offers for the goods or services as specified herein. ACCEPTED AND AGREED TO: Company Name: Signature: Printed Name: Title: Date: SCRUTINIZED COMPANIES FORMS Gas System Utility Rate Study Services 26 RFP #58-19 SCRUTINIZED COMPANIES AND BUSINESS OPERATIONS WITH CUBA AND SYRIA CERTIFICATION FORM IF YOUR BID/PROPOSAL IS $1,000,000 OR MORE, THIS FORM MUST BE COMPLETED AND SUBMITTED WITH THE BID/PROPOSAL. FAILURE TO SUBMIT THIS FORM AS REQUIRED MAY DEEM YOUR SUBMITTAL NONRESPONSIVE. The affiant, by virtue of the signature below, certifies that: 1. The vendor, company, individual, principal, subsidiary, affiliate, or owner is aware of the requirements of section 287.135, Florida Statutes, regarding companies on the Scrutinized Companies with Activities in Sudan List, the Scrutinized Companies with Activities in the Iran Petroleum Energy Sector List, or engaging in business operations in Cuba and Syria; and 2. The vendor, company, individual, principal, subsidiary, affiliate, or owner is eligible to participate in this solicitation and is not listed on either the Scrutinized Companies with Activities in Sudan List, the Scrutinized Companies with Activities in the Iran Petroleum Sector List, or engaged in business operations in Cuba and Syria; and 3. Business Operations means, for purposes specifically related to Cuba or Syria, engaging in commerce in any form in Cuba or Syria, including, but not limited to, acquiring, developing, maintaining, owning, selling, possessing, leasing or operating equipment, facilities, personnel, products, services, personal property, real property, military equipment, or any other apparatus of business or commerce; and 4. If awarded the Contract (or Agreement), the vendor, company, individual, principal, subsidiary, affiliate, or owner will immediately notify the City of Clearwater in writing, no later than five (5) calendar days after any of its principals are placed on the Scrutinized Companies with Activities in Sudan List, the Scrutinized Companies with Activities in the Iran Petroleum Sector List, or engaged in business operations in Cuba and Syria. __________________________________________ Authorized Signature __________________________________________ Printed Name __________________________________________ Title __________________________________________ Name of Entity/Corporation STATE OF _____________________ COUNTY OF ___________________ The foregoing instrument was acknowledged before me on this ______ day of _____________________, 20____, by _________________________________ (name of person whose signature is being notarized) as the ________________________ (title) of ________________________________________ (name of corporation/entity), personally known to me as described herein _____________________, or produced a _________________________ (type of identification) as identification, and who did/did not take an oath. __________________________________________ Notary Public __________________________________________ Printed Name My Commission Expires: __________________ NOTARY SEAL ABOVE SCRUTINIZED COMPANIES FORMS Gas System Utility Rate Study Services 27 RFP #58-19 SCRUTINIZED COMPANIES THAT BOYCOTT ISRAEL LIST CERTIFICATION FORM THIS FORM MUST BE COMPLETED AND SUBMITTED WITH THE BID/PROPOSAL. FAILURE TO SUBMIT THIS FORM AS REQUIRED MAY DEEM YOUR SUBMITTAL NONRESPONSIVE. The affiant, by virtue of the signature below, certifies that: 1. The vendor, company, individual, principal, subsidiary, affiliate, or owner is aware of the requirements of section 287.135, Florida Statutes, regarding companies on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel; and 2. The vendor, company, individual, principal, subsidiary, affiliate, or owner is eligible to participate in this solicitation and is not listed on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel; and 3. “Boycott Israel” or “boycott of Israel” means refusing to deal, terminating business activities, or taking other actions to limit commercial relations with Israel, or persons or entities doing business in Israel or in Israeli-controlled territories, in a discriminatory manner. A statement by a company that it is participating in a boycott of Israel, or that it has initiated a boycott in response to a request for a boycott of Israel or in compliance with, or in furtherance of, calls for a boycott of Israel, may be considered as evidence that a company is participating in a boycott of Israel; and 4. If awarded the Contract (or Agreement), the vendor, company, individual, principal, subsidiary, affiliate, or owner will immediately notify the City of Clearwater in writing, no later than five (5) calendar days after any of its principals are placed on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel. ______________________________________ Authorized Signature ______________________________________ Printed Name ______________________________________ Title ______________________________________ Name of Entity/Corporation STATE OF _____________________ COUNTY OF ___________________ The foregoing instrument was acknowledged before me on this ______ day of _____________________, 20____, by _________________________________ (name of person whose signature is being notarized) as the ________________________ (title) of ________________________________________ (name of corporation/entity), personally known to me as described herein _____________________, or produced a _________________________ (type of identification) as identification, and who did/did not take an oath. __________________________________________ Notary Public __________________________________________ Printed Name My Commission Expires: __________________ NOTARY SEAL ABOVE MAILING LABEL CUT ALONG THE LINE AND AFFIX TO THE FRONT OF YOUR BID CONTAINER Gas System Utility Rate Study Services 28 RFP #58-19 --------------------------------------------------------------------------------- For US Mail ------------------------------------------------------------------------------ SEALED PROPOSAL Submitted by: Company Name: Address: City, State, Zip: RFP #58-19, Utility Rate Study Services – Gas Utility System Due Date: October 17, 2019, at 10:00 A.M. City of Clearwater Attn: Purchasing PO Box 4748 Clearwater FL 33758-4748 --------------------------------------------------------------------------------- For US Mail ------------------------------------------------------------------------------ ---------------------------------------------- For Hand Deliveries, FEDEX, UPS or Other Courier Services ------------------------------------------------ SEALED PROPOSAL Submitted by: Company Name: Address: City, State, Zip: RFP #58-19, Utility Rate Study Services – Gas Utility System Due Date: October 17, 2019, at 10:00 A.M. City of Clearwater Attn: Purchasing 100 S Myrtle Ave 3rd Fl Clearwater FL 33756-5520 ---------------------------------------------- For Hand Deliveries, FEDEX, UPS or Other Courier Services ------------------------------------------------ EXHIBIT A RFP #58-19 Utility Rate Study Services - Gas Utility System RATE STUDY MILESTONES 1. City staff provides baseline information, budget data and assumptions. 2. Consultant provides electronic copies of draft schedules and results one to two weeks prior to interactive meeting with City staff. 3. Interactive meeting with consultant at City offices. 4. Consultant updates draft schedules and results for options selected at interactive meeting. 5. Optional - consultant provides electronic copies of updated draft schedules and results at least one week prior to optional second interactive meeting with City staff. 6. Optional – second interactive meeting with City staff at City offices. 7. Consultant provides electronic copies of updated draft schedules and results at least one week prior to interactive meeting with City staff, City Manager and/or Assistant City Manager(s). 8. Interactive meeting at City offices with staff, City Manager and/or Assistant City Manager(s). 9. Consultant incorporates changes and prepares draft final report including schedules, results and optional scenarios (if any). 10. Consultant provides electronic copy of draft final report including schedules, results and optional scenarios for staff review. 11. After incorporating any further changes, Consultant provides draft of final report including schedules, results and optional scenarios for meetings with individual council members. 12. Consultant attends interactive meetings with individual council members (five members - usually over a two-day period). 13. Consultant incorporates any changes recommended by council members. 14. Consultant provides final draft report including schedules, results and optional scenarios (if any). 15. Consultant attends City Council work session (usually on Monday mornings). 16. Consultant attends City Council meeting (usually on Thursday evenings). 17. Consultant provides final rate study report (printed copies including one unbound and electronic). Page 1 of 1 Addendum #1 RFP #58-19, Utility Rate Study Services – Gas Utility System September 20, 2019 NOTICE IS HEREBY GIVEN that the following addendum serves to provide clarification and to answer the questions received on RFP #58-19, Utility Rate Study Services – Gas Utility System. Question 1: Can you tell us when the last gas rate study was conducted and who or what firm did the work? Further, if a copy of the study is available we would like to review it. Answer to Question 1: The last rate study was performed by Black and Veatch. A copy of the rate study reports can be found on the City’s FPT site; note that access issues are typically due to the user’s system firewall/security settings: ftp://ftpserver.myclearwater.com Logon user name – vendor Logon password – clearwater (note the lower case “c”) Directory: Purchasing Folder: RFP 58-19 UTILITY RATE STUDY SERVICES – GAS UTILITY SYSTEM End of Questions and Answers End of Addenda Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7221 Agenda Date: 12/19/2019 Status: Consent AgendaVersion: 1 File Type: Action ItemIn Control: Finance Agenda Number: 7.2 SUBJECT/RECOMMENDATION: Approve settlement of automobile bodily injury liability claim 18-00162 for payment of $95,000, inclusive of attorney fees and costs, for Zoe Applegate, with a general release of all claims and authorize the appropriate officials to execute same. (consent) SUMMARY: On May 29, 2018, a city police vehicle was traveling west on Rosery Road, with lights and siren off, in a high-speed pursuit of a stolen car with two other Clearwater Police Department vehicles. It entered the intersection with Clearwater-Largo Rd. Ms. Applegate and her passenger were on Clearwater-Largo Rd., traveling south. The police vehicle had cleared the intersection except for the curb lane Ms. Applegate’s vehicle was traveling in. Her front driver’s side struck the front corner passenger side of the police vehicle. As a result of the collision Ms . Applegate was injured and incurred significant medical expenses and will likely incur additional expenses in the future. Ms. Applegate retained legal representation. The City and her counsel agreed to a pre -suit mediation to resolve this claim. On November 1, 2019, the claim was settled for $95,000, pending approval by City Council. APPROPRIATION CODE AND AMOUNT: 5907590-545900 $95,000.00 Page 1 City of Clearwater Printed on 12/19/2019 Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7243 Agenda Date: 12/19/2019 Status: Consent AgendaVersion: 1 File Type: Action ItemIn Control: Finance Agenda Number: 7.3 SUBJECT/RECOMMENDATION: Authorize a sole source award for a renewal subscription to the ISO ClaimSearch for Non-Insurers Database, effective January 1, 2020 through December 31, 2020, for a not-to-exceed total of $15,000 for the annual membership fee and as-needed claim search fees, pursuant to Clearwater Code of Ordinances Section 2.564(1)(b) and authorize the appropriate officials to execute same. (consent) SUMMARY: The Risk Management Division of the Finance Department would like to renew its current agreement approved by City Council in 2017 and continue its participation as a member of the ISO ClaimSearch database for Casualty and Claims Inquiry, which allows Risk Management Specialists to determine if claimants who have filed claims against the City of Clearwater for bodily injury or workers compensation claims have had previous and /or current accidents nationwide. This database is shared by most insurance companies, third party administrators and municipalities in the industry who administer claims and is considered part of best practices in claims management and severity control. It is a single source provider of this service. Its reputation and quality of product are well known in the industry. This web-based search and report tool is particularly effective in identifying “professional claimants.” There is an increase from $7.90 to $8.50 for single field searches and $13.10 to $13.90 for name/address searches, along with an annual membership fee of $1,100. Claims reports received will be accessed through a web portal. Staff is requesting approval of a not-to-exceed amount of $15,000 to cover our searches for the year, and the Annual Membership Fee of up to $1,100. The agreement does include an auto-renewal provision with a 90-day cancellation clause. APPROPRIATION CODE AND AMOUNT: Account # 5909830-557100 $ 1,100 Account# 5909830-530300 $13,900 Page 1 City of Clearwater Printed on 12/19/2019 Product Supplement – ISO ClaimSearch® For Non-Insurers (Universal Format Web Reporters) Ed: 01/2019 Page 1 of 10 This is a Product Supplement to the ISO Master Agreement, 03-14 edition, dated September 21, 2017 by and between City Of Clearwater (“Licensee") and Insurance Services Office, Inc., on behalf of itself, its subsidiaries and affiliates, (all of which are collectively referred to herein as "ISO”). 1.DESCRIPTION: This Product consists of the electronic provision to Licensee of loss claims history information from various ISO ClaimSearch® databases concerninginsurance claims and the property subject to the claim (“Databases” or “ISO ClaimSearch”). This Product also provides access to various servicesconcerning the insurance claim and provides the Licensee access to ClaimSearch Information. For purposes of this Product Supplement,“ClaimSearch Information” shall mean any and all information received through, obtained from or derived from ISO ClaimSearch, including, but notnecessarily limited to, loss history information concerning insurance claims contained in ISO ClaimSearch, claims reports and digital media (providedLicensee provides digital media to ISO). 2.AUTHORIZATION FOR LICENSEE INFORMATION: Licensee hereby authorizes the use of all Licensee Information (defined below) reported or provided to ISO ClaimSearch under this ProductSupplement and authorizes and consents to ISO’s use of and sharing of Licensee Information for the purposes permitted under this ProductSupplement. “Licensee Information” shall mean any and all information reported to or provided to ISO ClaimSearch by Licensee or on behalf ofLicensee under this Product Supplement, including, but not limited to, claims information and digital media. 3.SCOPE OF USE: a)Licensee warrants that it andits Authorized Users of the Databases shall use the Databases exclusively for purposes of insurance claimsprocessing, investigation, fraud detection and prevention. “Authorized Users” of Licensee shall mean certain designated employees, officers and directors of Licensee (as further described in Section 3(b) below), in each case who are performing or providing services to theLicensee, and who have been pre-approved in writing by ISO. b)Only employees, officers and directors designated by Licensee and who are involved in the processing, investigation and payment of claims shall access ISO ClaimSearch and receive or use ClaimSearch Information. Licensee will notify ISO immediately of any change in suchdesignations. Licensee shall be responsible for ensuring that only Authorized Users access ISO ClaimSearch and receive and useClaimSearch Information, and that those Authorized Users use the information only for processing active claims. No information receivedthrough ISO ClaimSearch (including any extracts, summaries and derivatives thereof) shall be provided, in whole or in part, to anyemployees not authorized to access the information or to any third party, other than the insurance company which has provided the initialclaim information to ISO. c)Licensee may deliver this Product to Authorized Users via local or wide area networks or intranets or extranets or similar electronic means, pursuant to all other terms, conditions and limitations of this Product Supplement. ISO may periodically audit Licensee’s books and records as required to verify compliance with the ISO ClaimSearch Privacy and Security Policies. Licensee agrees to comply with the audit process contained in the ISO ClaimSearch Privacy and Security Policies including all updates to that policy during the term of this ProductSupplement. Neither Licensee, its employees, any user of the Product or any information from ISO ClaimSearch, nor anyone acting by orthrough Licensee shall sell, transfer, distribute, publish, disclose, display or otherwise make the Product, or any of the information (includingany extracts, summaries and derivatives thereof) therein, available, in whole or in part, to any other third party. 4.REPORTING OBLIGATIONS (Database segments only):a)Using forms and methods prescribed by ISO, Licensee agrees to provide the Licensee Information described for the Databases selected(as checked or referenced below).. Licensee shall submit all Licensee Information in accordance with the timeframes required by ISO. b)Licensee shall retain adequate documentation of all Licensee Information submitted to ISO. In the event that ISO determines for anyreason to audit, investigate or reinvestigate any Licensee Information, Licensee shall comply with any written auditing procedures providedto Licensee by ISO and shall cooperate fully in assessing the accuracy and completeness of such information. Full cooperation shallinclude, but not be limited to, an undertaking by Licensee to verify the accuracy of Licensee Information. c)Licensee represents and warrants that all Licensee Information submitted to ISO pursuant to this Product Supplement shall be true andaccurate to the best of its knowledge, information and belief and that reasonable commercial attempts have been made to ensure dataquality. Licensee shall require its appropriate personnel to certify that any Licensee Information provided by them is true and accurate tothe best of their knowledge, information and belief. Licensee agrees to conduct periodic audits of its claims input procedures to assuremaximum accuracy of Licensee Information. d)Licensee is required to provide Licensee Information containing claims data for the Databases selected (as checked or referenced below).Licensee shall submit Licensee Information to ISO for all claims reported during the term of this Product Supplement on a transaction basis in mutually agreed-upon formats. In addition, if Licensee is an insurer, an initial report may be submitted to ISO, which includes a three tofive year master loss history file, the specific format of which will be agreed to by ISO and Licensee. e)Throughout the term of this Product Supplement, Licensee represents and warrants that (i) Licensee has the right to collect and provideISO with the Licensee Information for the purposes set forth herein, (ii) that Licensee has the authority and or license to provide the LicenseeInformation to ISO and that the provision of the Licensee Information to ISO for the use referenced herein does not violate any law, contractor rights or interests of any third party and does not infringe on any intellectual property rights or proprietary rights of any third party,including but not limited to patent, copyright, trademark or trade secret; (iii) it has legally obtained the Licensee Information; and (iv) allLicensee Information submitted to ISO pursuant to this Agreement shall be true and accurate to the best of its knowledge, information andbelief. f)Additional Terms and Conditions Applicable to Digital Media Reporting and Access: 1.) Licensee may report or provide to ISO digital media in connection with an existing claim, including but not limited to: automobile physical damage photos, property damage photos and other Licensee authorized photos, in an agreed upon format, for ISO’s use as provided in this Product Supplement. All digital media provided to ISO shall be considered “Licensee Information” and DocuSign Envelope ID: 916E0558-06C3-4E44-9536-A58240888035 Product Supplement – ISO ClaimSearch® For Non-Insurers (Universal Format Web Reporters) Ed: 01/2019 Page 2 of 10 may be used by ISO as provided in this Product Supplement. To the extent Licensee, its Authorized Users, or any one on Licensee’s behalf, separately reports or has previously reported or provided the aforementioned digital media, Licensee consents to and authorizes ISO to access, retrieve and use such digital media for the purposes of this Product Supplement. To the extent any third party has Licensee’s digital media in its possession or control, Licensee consents to and authorizes such third party to disclose, provide, transfer or deliver to ISO such digital media and consents to and authorizes ISO to access, receive, retrieve and use such digital media from such third party sources for the purposes of this Product Supplement. For purposes of this Supplement, any separately or previously reported Licensee digital media and any digital media obtained from third party sources shall be deemed Licensee Information. 2.) Licensee shall ensure it, its Authorized Users, and any one acting by or through Licensee shall (i) capture and upload, or otherwise provide, digital media to ISO ClaimSearch only in connection with an existing claim; (ii) not upload or otherwise provide digital media which display personally identifiable information (PII) or personal health information (PHI); and (iii) not upload or otherwise provide digital media which may be considered vulgar or offensive or in violation of any law or regulation. Licensee shall report digital media uploaded or provided to ISO ClaimSearch in violation of any of the above to ClaimSearchCompliance@iso.com. 3.) Provided Licensee is in compliance with this Product Supplement and Licensee is actively contributing digital media to ISO ClaimSearch under this Product Supplement, Licensee shall be permitted to view digital media contributed by other ClaimSearch subscribers. Licensee acknowledges and agrees if it ceases to or fails to provide digital media to ISO ClaimSearch, all rights to view or access digital media contributed by other ClaimSearch subscribers shall immediately terminate. Licensee shall be responsible for ensuring that only Authorized Users access, receive and use digital media obtained from the Databases and that such Authorized Users receive and use such ClaimSearch Information only for processing active claims. 5. ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO THESE PRODUCTS: a) Neither Licensee nor its employees or Authorized Users, nor anyone acting by or through Licensee, shall use the Databases for purposes of insurance underwriting (including ratemaking, risk classification, actuarial calculations, and identification of prospective Licensees or reclassification of Licensees), policy cancellation or renewal, establishing or stabilizing claims payment levels, granting of credit or other similar purpose. Licensee’s and its Authorized User’s use shall comply in all respects with the ISO ClaimSearch Privacy and Security Policy, including all updates to that policy made during the term of this Product Supplement that are provided to Licensee and Licensee shall be responsible for ensuring its employees and Authorized Users’ use complies in all respects with such Policy. b) Licensee acknowledges and agrees neither Licensee, its employees, any Authorized User or other user of the products, nor anyone or anything acting by or through Licensee shall use ClaimSearch Information to: 1) create a database; 2) create any derivative work product in a manner that does not directly and solely support the evaluation or investigation of an active claim; 3) create a database or product that competes with or can be used as an alternative to the Databases; or 4) populate, enhance or improve any Licensee database, software or system; 5) use any third party to create a database or create derivative work product in a manner that is prohibited in sections 1, 2, and 3 herein. c) Neither Licensee, its employees, nor its Authorized Users, nor any third party, nor anyone or anything acting by or through Licensee, shall warehouse ClaimSearch Information in whole or part, received from ISO. “Warehouse” shall mean the electronic accumulation and storage of any amounts of ClaimSearch Information for general decision support or business intelligence purposes or any other purposes other than processing an individual and active claim subject to the terms in this Product Supplement. Except as permitted hereunder, neither Licensee nor its employees or any Authorized User nor any third party, nor anyone or anything acting by or through Licensee,, shall (i) disassemble, decompile, manipulate, aggregate or reverse engineer the product or the other information obtained from the product and shall not permit any third party to disassemble, decompile, manipulate, aggregate, or reverse engineer the product or (ii) sell, license, publish, publish, display, copy, distribute, or otherwise make available the information obtained from this product in any form or by any means. Licensee hereby requests the Product described herein and represents that this request is made by its authorized representative. Licensee warrants that it is in compliance with all terms of the Master Agreement between the parties. Licensee certifies and warrants that it will comply with all federal, state, and local laws, statutes, regulations and rules applicable to it and its obligations under this Product Supplement. At Licensee’s expense, Licensee shall provide all necessary Licensee equipment and appropriate interfacing devices and communication lines with the connectivity arrangement(s) selected and to pay for all costs to connect to an ISO-provided connect point or designated node, if necessary. d) This Product and the ClaimSearch Information licensed hereunder are copyrighted by ISO and other third-party providers as specified herein. ISO shall not be responsible for any claim that may arise out of the third-party providers' information included in this Product. Licensee agrees that if ISO is no longer authorized by a third party provider (s) to deliver the Product or the information contained therein, or if directed by a third party provider, ISO may immediately, without prior notification, terminate Licensee’s access to this Product or the information contained in the Product. e) ISO agrees, represents and warrants that it will use the Licensee Information supplied by Licensee hereunder strictly in accordance with the terms and provisions of this Product Supplement as expressly and specifically set forth herein. During the term of this Product Supplement, Licensee grants to ISO a non-exclusive license to: (1) incorporate the Licensee Information into the Databases; (2) to disseminate Licensee Information to other ISO licensees; (3) use the Licensee Information for new and enhanced features and improvements to the Product; (4) use Licensee Information for new and enhanced products, features, improvements and enhanced solution offerings; (5) use the Licensee Information for internal research and development purposes in support of the insurance process; and (6) use Licensee Information with ISO’s authorized third parties that have been vetted by ISO and are under written obligations of confidentiality, solely to support ISO for the purposes stated herein. f) ISO grants to Licensee a limited revocable license to use and access the Product, Databases and ClaimSearch Information solely within the states, jurisdictions or territories of the United States, District of Columbia, Guam, Puerto Rico, and the US Virgin Islands. Licensee shall not use or access the Product, and ClaimSearch Information from outside of the states, jurisdictions or territories of the United States, District of Columbia, Guam, Puerto Rico, or the US Virgin Islands, without ISO’s express prior written approval. DocuSign Envelope ID: 916E0558-06C3-4E44-9536-A58240888035 Product Supplement – ISO ClaimSearch® For Non-Insurers (Universal Format Web Reporters) Ed: 01/2019 Page 3 of 10 g) Licensee warrants that it will comply with the ISO ClaimSearch Privacy and Security Policy (including updates) provided to Licensee. h) The parties acknowledge and agree that ISO may utilize a third party cloud service provider (“Cloud Services”) for the storage, access, transfer, processing of Licensee Information and all information related to the products and services provided under this Product Supplement. ISO shall use at a minimum, commercially reasonable industry standards available in connection with the performance of its obligations under this Product Supplement. ISO shall employ commercially reasonable standard security practices for the storage of any Licensee Information and provide and implement at a minimum, industry standard security procedures for the transfer, transmission, storage, or accessing of Licensee Information provided to ISO under this Product Supplement. i) Licensee acknowledges and agrees that neither Licensee, nor any of its Authorized Users, employees, analysts, agents, consultants or representative may utilize Robotic Process Automation (“RPA”), Artificial Intelligence (“AI”) or any other similar automation tools, software, technology or processes (hereinafter collectively referred to as “Automation Processes”) to access, interface with, or use the Product, Databases, or any ClaimSearch Information, without ISO’s express prior written consent. ISO reserves the right to revoke the authorization to utilize any Automation Processes. Licensee shall be fully responsible for acts, services and functions performed by such Automation Tools to the same extent as if such acts, services and functions were performed by Licensee employees, and for purposes of this Product Supplement such acts, services and functions will be deemed work performed by Licensee. Licensee will remain fully liable for any and all use of such Automation Processes and shall indemnify and hold ISO harmless from and against any and all claims, suits, actions, proceedings (formal and informal), investigations, judgments, deficiencies, damages, settlements, and liabilities, arising out of, based upon or in connection with any use of the Automation Processes. j) To the extent ISO agrees to permit Licensee to utilize Automation Tools, Licensee shall: (i) employ industry best practice encryption techniques for information stored on, accessed on or transmitted to or from the Automation Tool (at a minimum Licensee’s encryption processes for “data at rest” and “data in transit” shall comply with the NIST Special Publication 800-111 standards); (ii) provide for and implement at a minimum, industry standard, security procedures, which will be subject to ISO’s audit and review, for all facilities (including equipment, software and network) used to transfer, transmit or access the Product, Databases or ClaimSearch Information; (iii) ensure Automation Tools operate strictly in accordance with the terms and conditions set forth in this Product Supplement, including but not limited to ensuring each and every Automation Tool is assigned a unique ID only to be used or known by that automation tool; and (iv) upon the earlier to occur, expiration or termination of this Product Supplement or ISO revoking its consent to use of the Automation Tools, immediately terminate the ability of the Automation Tools to access the Product, Databases and ClaimSearch Information. ISO’s revocation of its consent to use the Automation Tools is effective immediately upon delivery of notice to Licensee. If Licensee believes a security breach occurs or if Licensee suspects that a security breach may have occurred Licensee shall immediately notify ISO. k) The parties herein agree that any breach of sections 3 (Scope of Use), 4 (Reporting Obligations) or 5 (Additional Terms and Conditions) shall constitute a material breach of this Product Supplement. In the event of a breach, ISO may, in its sole discretion immediately suspend Licensee and its Authorized Users’ access to the Product or any ClaimSearch Information upon notice. Licensee shall have (30) days from date of the notice to cure the breach prior to termination. The parties will work together in good faith to give Licensee an opportunity to cure the breach. If ISO is not satisfied with the cure within thirty (30) days from the date of the initial notice of breach, ISO may terminate this Product Supplement upon delivery of written notice without any further obligation to Licensee. l) ISO may issue one or more joint press releases upon the execution of this Product Supplement. Any such press releases shall be subject to the agreement of the parties as to timing, forum, audience and content. Notwithstanding the above, ISO may use Licensee’s name and logo solely to indicate that Licensee is a participant and subscriber of the Product without prior written approval of each use. 6. DELIVERY: The company claim system and ISO’s Internet electronic delivery platform. System authentication is required for Internet access. Each Authorized User must have an assigned unique ID only to be used by that Authorized User. Sharing of IDs and/or passwords is strictly prohibited. 7. DATABASE SERVICES: CHECK ALL THAT APPLY: A. AUTOMOBILE CLAIMS INFORMATION This database includes access to Insurer automobile claims database files, including auto physical damage, auto property damage liability, vehicle theft (including insurance company recoveries), vehicle salvage, VINassist™, and vehicle claims system (VCS) records. This database also provides access to ClaimDirectorSM which delivers a claim score and information regarding the basis of the score to facilitate the identification of meritorious and questionable claims. Fee: <INSERT> in addition to license fees for access to the other databases checked or referenced herein. If Licensee is an insurance company, the fee will be based on Licensee’s direct written premium for the second preceding year for the applicable line (s) of business. If Licensee is not an insurance company, Licensee shall be invoiced monthly for each transaction recorded for the applicable line of business during the preceding month. The invoice will be based on the prices in effect for each search type at the effective date of this Product Supplement and the commencement date of each renewal period thereafter. Product Supplement Term: <INSERT>; Term automatically renews for one-year periods unless terminated pursuant to the Master Agreement. NOTE: Access to Law Enforcement and Manufacturers Data (“LEMD”) must be authorized by the National Insurance Crime Bureau (“NICB”) and may be arranged through the NICB for a fee. If Licensee is so authorized, ISO will include access to the vehicle-related, third-party data in this segment. The LEMD data includes: NCIC vehicle recoveries, law enforcement DocuSign Envelope ID: 916E0558-06C3-4E44-9536-A58240888035 Product Supplement – ISO ClaimSearch® For Non-Insurers (Universal Format Web Reporters) Ed: 01/2019 Page 4 of 10 (vehicle thefts - theft indicator only) data: vehicle impounds; vehicle exports; and vehicle manufacturers (shipping and assembly, paperless MCO) files. B. CASUALTY CLAIMS INFORMATION This database includes access to claims records reported to ISO under all casualty lines: workers’ compensation, general liability, auto bodily injury liability, medical payments, homeowners and farmowners liability, E&O and D&O, and disability. This database also provides access to ClaimDirectorSM scores for workers’ compensation, and personal and commercial auto liability claims. ClaimDirector delivers a claim score and information regarding the basis of the score to facilitate the identification of meritorious and questionable claims. Fee: $1,100 annually plus usage in addition to license fees for access to the other databases checked or referenced herein. If Licensee is an insurance company, the fee will be based on Licensee’s direct written premium for the second preceding year for the applicable line (s) of business. If Licensee is not an insurance company, Licensee shall be invoiced monthly for each transaction recorded for the applicable line of business during the preceding month. The invoice will be based on the prices in effect for each search type at the effective date of this Product Supplement and the commencement date of each renewal period thereafter. Product Supplement Term: January 1, 2020 – December 31, 2020; Term automatically renews for one-year periods unless terminated pursuant to the Master Agreement. C. PROPERTY CLAIMS INFORMATION This database includes access to first party property loss claims records reported to ISO. Property claims resulting from all perils are included in this database. This database also provides access to ClaimDirectorSM scores for homeowner claims. ClaimDirector delivers a claim score and information regarding the basis of the score to facilitate the identification of meritorious and questionable claims. Fee: <INSERT> in addition to license fees for access to the other databases checked or referenced herein. If Licensee is an insurance company, the fee will be based on Licensee’s direct written premium for the second preceding for the applicable line (s) of business. If Licensee is not an insurance company, Licensee shall be invoiced monthly for each transaction recorded for the applicable line of business during the preceding month. The invoice will be based on the prices in effect for each search type at the effective date of this Product Supplement and the commencement date of each renewal period thereafter. Product Supplement Contract Term: <INSERT>; Term automatically renews for one-year periods unless terminated pursuant to the Master Agreement. D. MARINE CLAIMS INFORMATION This service includes access to claim records, reported to ISO’s Marine Claims Information database under all Marine claims casualty losses, including claims under Longshore and Harbor workers, and Jones Act, Protection and Indemnity and other bodily injury and property damage liability claims as submitted by employees and third party claimants. Marine casualty claims as above will be included in the Casualty service within ISO ClaimSearch. Searches and matches will include those claims included in the Casualty service in addition to the Marine casualty claims submitted by participating organizations. Fee: <INSERT> in addition to license fee for access to the other Databases. If Licensee is an insurance company, the fee will be based on licensee’s direct written premium for the second preceding year for the applicable line(s) of business. If Licensee is not an insurance company, Licensee shall be invoiced either monthly or quarterly for each transaction for the applicable service, after payment of an annual fee, in excess of the base number of Information included as a part of the annual consideration. Licensee also may participate in an annual participation fee that will include all transactions with no additional fee. The invoices will be based on the prices in effect for each submission at the effective date of this product supplement and the commencement date of each renewal period thereafter. Product Supplement Term: <INSERT>; Term automatically renews for one-year periods unless terminated pursuant to the Master. E. CLAIMS INQUIRY AND INVESTIGATIONS QUERY (FOR NON-INSURERS ONLY) This product consists of electronic inquiry access to the loss history information for the investigation of insurance claims. A password and system authentication is required for access. Licensee warrants that it, its employees and Authorized Users of the Databases shall use Claims Inquiry exclusively for purposes of investigation of claims. Use of this Product is limited to personnel of Licensee whose primary responsibility is the investigation and disposition of potentially fraudulent claims. Each user must be specifically designated to use Claims Inquiry by an authorized representative of Licensee. The following limitations apply to the use of Claims Inquiry: DocuSign Envelope ID: 916E0558-06C3-4E44-9536-A58240888035 Product Supplement – ISO ClaimSearch® For Non-Insurers (Universal Format Web Reporters) Ed: 01/2019 Page 5 of 10 1) Searches may only be conducted in connection with the investigation of an existing claim and where an initial claim report has been filed in the Databases. Additionally, for searches involving doctors, attorneys or other parties to the loss, Licensee must have a reasonable basis to believe that such search may provide relevant information in connection with a claim under investigation. 2) Information obtained from the Databases on an individual may only be used in connection with the investigation of suspicious or fraudulent claims and such information may only be disclosed to (a) persons who are involved in the investigation or resolution of the claim, or (b) law enforcement officials, in the event that the matter has been turned over to the law enforcement authorities. 3) No search of the Databases may be conducted on behalf or, or at the request of, any government official other than those specifically involved in a joint investigation. 4) The purpose of this Product and its Databases is to provide information that will be used to evaluate active claims and to detect and deter insurance fraud. Searches for any other purpose are strictly prohibited. 5) Contract SIU organizations and C/O offices and any other persons other than the Licensee’s Authorized Users, the names which have been been provided to and approved by ISO in writing, may not conduct searches on behalf of Licensee without prior ISO written approval. Licensee will notify ISO immediately of any change in its personnel authorized to use this Product. This Product and the information licensed hereunder are copyrighted by ISO and other third-party providers as specified in the Product. ISO shall not be responsible for any claim that may arise out of the third-party providers' information included in this Product. Product Supplement Term: January 1, 2020 – December 31, 2020; Term automatically renews for one-year periods unless terminated pursuant to the Master Agreement. Fee: Transactional. Licensee shall be invoiced quarterly for each transaction recorded for the applicable search type during the preceding quarter. The invoice will be based on the prices in effect for each search type at the effective date of this Product Supplement and the commencement date of each renewal period thereafter. G. PUBLIC RECORDS INFORMATION This database service includes access to public record information from third-party providers. Public record information includes but is not limited to names, addresses, telephone numbers, driver information, bankruptcy information and civil judgments. For this database only, Licensee’s reporting obligations are waived. Licensee warrants that it is licensed to access an ISO ClaimSearch database identified in A, B or C above. Licensee agrees that if its right to access the ISO Databases terminates that Licensee’s right to access this public records information database shall also terminate. 1) Licensee hereby acknowledges that third-party providers are third-party beneficiaries to this Product Supplement. With respect to the information supplied by third-party providers that require separate contracts Licensee hereby warrants that it has executed the contracts and is in compliance with their terms and conditions. Licensee warrants and represents that in accessing and using the public record data it is acting solely as a claims, subrogation or special investigation department and function of (i) the property-casualty insurance industry or (ii) the property-casualty loss management department of a third-party administrator or self-insured entity. 2) Licensee accepts all information "AS IS." Licensee acknowledges and agrees that the data is obtained from third-party sources, which may or may not be completely thorough and accurate, and that Licensee shall not rely on the third-party data provider or ISO for the accuracy or completeness of information supplied. 3) Licensee warrants to the data providers and ISO that Licensee proceeds at its own risk in choosing to rely upon public records information in whole or in part. Licensee agrees that the data providers assume no responsibility for the accuracy of the information, errors that occur in the conversion of data or for Licensee's use of the information. Neither the third-party data providers, nor any third-party data provider to them (for purposes of indemnification, warranties and limitations on liability the third-party data providers and their data providers are hereby collectively referred to as third-party data providers), shall be liable to Licensee for any loss or injury arising out of or caused in whole or in part by third-party data providers’ acts or omissions, whether negligent or otherwise, in procuring, compiling, collecting, interpreting, reporting, communicating, or delivering the services. If, notwithstanding the foregoing, liability can be imposed on a provider, then Licensee agrees, that the aggregate liability for any and all losses or injuries arising out of any act or omission of a third-party data provider in connection with anything to be done or furnished under this agreement, regardless of the cause of the loss or injury shall never exceed $100.00, and Licensee agrees that it will not seek punitive damages in any suit against a third-party data provider. The third-party data providers do not make and hereby disclaim any warranty, express or implied with respect to the services provided hereunder. The third-party data providers do not guarantee or warrant the correctness, completeness, merchantability, or fitness for a particular purpose of their services or the components thereof or information provided hereunder. In no event shall a third-party data provider be liable for any direct, incidental or consequential damages, however arising, incurred by Licensee’s receipt or use of information delivered hereunder, or the unavailability thereof. 4) Licensee agrees that Licensee shall not reproduce, retransmit, republish, or otherwise transfer for any commercial purpose any information that Licensee receives from the services, other than as permitted under this Supplement. Licensee acknowledges that the third-party data providers shall retain all right, title, and interest in and to the data and information provided by the services under applicable contractual, copyright, and related laws, and Licensee shall use DocuSign Envelope ID: 916E0558-06C3-4E44-9536-A58240888035 Product Supplement – ISO ClaimSearch® For Non-Insurers (Universal Format Web Reporters) Ed: 01/2019 Page 6 of 10 such materials consistent with the third-party data providers’ interests and notify them of any threatened or actual infringement of their rights. 5) Licensee warrants that it, its employees and Authorized Users of the Databases shall use its public records services consistent with the privacy obligations and any other terms and provisions of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et seq.) (“GLB”) or any similar state or local statute, rules and regulations, the Federal Drivers Privacy Protection Act (18 U.S.C. Section 2721 et seq.) (“DPPA”) and similar state and local statutes, rules and regulations, and such legislation and rules and regulations as may be enacted or adopted after the date of this Product Supplement, by any federal, state or local government body. In addition, Licensee shall not use any information received from the public records services for consumer credit purposes, consumer insurance underwriting, employment purposes, or for any other purpose covered by the federal Fair Credit Reporting Act (15 U.S.C. § 1681 et seq.) or similar state or local statute, rule, or regulation. Licensee shall abide by such legislation and rules and regulations as may be enacted or adopted after the date hereof. 6) Licensee hereby agrees that upon reasonable notice and at a mutually agreeable time, ISO may periodically audit Licensee’s books and records relevant to the use of this public records service in order to ensure compliance with the GLB and all other applicable laws. The third-party data providers shall also investigate all legitimate Information of abuse or misuse of their services. Violations discovered in any review will be subject to immediate action including, but not limited to, termination of Licensee’s right to use the public records services, legal action, and/or referral to federal or state regulatory agencies. Fee: <INSERT> In addition to license fees for access to the other databases checked or referenced herein, for this database service, Licensee shall be invoiced monthly for each transaction recorded during the preceding month, in addition to any applicable service charges. The invoice will be based on the prices in effect for each search and report type at the time of billing and as may be modified from time to time upon ninety (90) day notice to Licensee. Product Supplement Term: <INSERT>; Term automatically renews for one-year periods unless terminated pursuant to the Master Agreement H. POLICE INFORMATION This service includes access to nationwide police Information including police, fire, coroners’, and department of motor vehicles (DMV) Information from tens of thousands of agencies across the United States. 1) Licensee hereby requests the Product(s) described herein and represents that this request is made by its authorized representative. Licensee warrants that it is in compliance with all terms of the Master Agreement between the parties. At Licensee’s expense, Licensee shall provide all Licensee equipment and appropriate interfacing devices; for any lines, modems and terminals compatible with the connectivity arrangement(s) selected and to pay for all costs to connect to an ISO-provided connect point or designated node, if necessary. 2) ISO hereby grants consent to Licensee to deliver this Product to Licensee's employees and Authorized Users via local or wide area networks, intranets, extranets or the internet or similar electronic means pursuant to all other terms, conditions and limitations of the Master Agreement. Upon reasonable notice and at a mutually agreeable time, ISO may periodically audit Licensee’s books and records relevant to the use of this Product to verify the number of Authorized Users that have access to the Product via any means. Neither Licensee, its employees, any other authorized user of the Product, nor anyone acting by or through Licensee shall sell, transfer, distribute, publish, disclose, display or otherwise make the Products available, in whole or in part, or any of the information therein, to any other person or entity, without the express written consent of ISO. 3) Licensee warrants that it, its employees and Authorized Users of the Information shall use the Information exclusively for purposes of insurance claims processing and investigation and fraud detection, prevention and investigation. Neither Licensee nor its employees or Authorized Users shall use the Information for purposes of insurance underwriting (including ratemaking, risk classification, actuarial calculations, and identification of prospective Licensees or reclassification of Licensees), policy cancellation or renewal, establishing or stabilizing claims payment levels, granting of credit or other similar purpose. Fee: <INSERT> (plus applicable taxes) Product Supplement Term: <INSERT> Term automatically renews for one-year periods unless terminated pursuant to the Master Agreement. I. DATA APPEND SERVICES Social Security Number Append Service (APPEND-DS) This service will append to claims Information missing or omitted data, specifically; social security numbers consistent with the manner of claims delivery to ISO ClaimSearch. 1) Licensee hereby requests the Product(s) described herein and represents that this request is made by its authorized representative. Licensee warrants that it is in compliance with all terms of the Master Agreement between the parties. At Licensee’s expense, Licensee shall provide all Licensee equipment and appropriate interfacing devices; for any DocuSign Envelope ID: 916E0558-06C3-4E44-9536-A58240888035 Product Supplement – ISO ClaimSearch® For Non-Insurers (Universal Format Web Reporters) Ed: 01/2019 Page 7 of 10 lines, modems and terminals compatible with the connectivity arrangement(s) selected and to pay for all costs to connect to an ISO-provided connect point or designated node, if necessary. 2) Licensee warrants that it is licensed to access an ISO ClaimSearch database. Licensee agrees that if its right to access the Databases terminates that Licensee’s right to access this Append DS product shall also terminate. 3) Licensee accepts all information "AS IS." Licensee acknowledges and agrees that the data is obtained from third-party sources, which may or may not be completely thorough and accurate, and that Licensee shall not rely on the third-party data provider or ISO for the accuracy or completeness of information supplied. 4) Licensee warrants to the data providers and ISO that Licensee proceeds at its own risk in choosing to rely upon public records information in whole or in part. Licensee agrees that the data providers assume no responsibility for the accuracy of the information, errors that occur in the conversion of data or for Licensee's use of the information. Neither the third-party data providers, nor any third-party data provider to them (for purposes of indemnification, warranties and limitations on liability the third-party data providers and their data providers are hereby collectively referred to as third-party data providers), shall be liable to Licensee for any loss or injury arising out of or caused in whole or in part by third-party data providers’ acts or omissions, whether negligent or otherwise, in procuring, compiling, collecting, interpreting, reporting, communicating, or delivering the services. If, notwithstanding the foregoing, liability can be imposed on a provider, then Licensee agrees, that the aggregate liability for any and all losses or injuries arising out of any act or omission of a third-party data provider in connection with anything to be done or furnished under this agreement, regardless of the cause of the loss or injury shall never exceed $100.00 and Licensee agrees that it will not seek punitive damages in any suit against a third-party data provider. The third-party data providers do not make and hereby disclaim any warranty, express or implied with respect to the services provided hereunder. The third-party data providers do not guarantee or warrant the correctness, completeness, merchantability, or fitness for a particular purpose of their services or the components thereof or information provided hereunder. In no event shall a third-party data provider be liable for any direct, incidental or consequential damages, however arising, incurred by Licensee’s receipt or use of information delivered hereunder, or the unavailability thereof. 5) Licensee agrees that Licensee shall not reproduce, retransmit, republish, or otherwise transfer for any commercial purpose any information that Licensee receives from the services, other than as permitted under this Supplement. Licensee acknowledges that the third-party data providers shall retain all right, title, and interest in and to the data and information provided by the services under applicable contractual, copyright, and related laws, and Licensee shall use such materials consistent with the third-party data providers’ interests and notify them of any threatened or actual infringement of their rights. 6) Licensee warrants that it, its employees and Authorized Users of the Databases shall use its public records services consistent with the privacy obligations and any other terms and provisions of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et seq.) (“GLB”) or any similar state or local statute, rules and regulations, the Federal Drivers Privacy Protection Act (18 U.S.C. Section 2721 et seq.) (“DPPA”) and similar state and local statutes, rules and regulations, and such legislation and rules and regulations as may be enacted or adopted after the date of this Product Supplement, by any federal, state or local government body. In addition, Licensee shall not use any information received from the public records services for consumer credit purposes, consumer insurance underwriting, employment purposes, or for any other purpose covered by the federal Fair Credit Reporting Act (15 U.S.C. § 1681 et seq.) or similar state or local statute, rule, or regulation. Licensee shall abide by such legislation and rules and regulations as may be enacted or adopted after the date hereof. 7) Licensee hereby agrees that upon reasonable notice and at a mutually agreeable time, ISO may periodically audit Licensee’s books and records relevant to the use of this public records service in order to ensure compliance with the GLB and all other applicable laws. The third-party data providers shall also investigate all legitimate Information of abuse or misuse of their services. Violations discovered in any review will be subject to immediate action including, but not limited to, termination of Licensee’s right to use the public records services, legal action, and/or referral to federal or state regulatory agencies. Fee: See Attached Fee Schedule (plus applicable taxes) Licensee shall be invoiced monthly for each transaction recorded for the applicable line of business during the preceding month. The invoice will be based on the prices in effect for each search type at the time of billing and as may be modified from time to time upon ninety (90) day notice to Licensee. Product Supplement Term: <INSERT> Term automatically renews for one-year periods unless terminated pursuant to the Master Agreement. J. MOTOR VEHICLE INFORMATION (MVRs) Description: This service will provide access to the driving records (MVRs) of individuals licensed to operate motor vehicles in the Jurisdictions of the United States. Delivery: Electronic submission. A password is required. Each sign-on and password may be used only by one authorized individual; Scope of Use: DocuSign Envelope ID: 916E0558-06C3-4E44-9536-A58240888035 Product Supplement – ISO ClaimSearch® For Non-Insurers (Universal Format Web Reporters) Ed: 01/2019 Page 8 of 10 1) Licensee warrants that it, its employees and Authorized Users shall use the information exclusively for purposes of insurance claims processing and investigation and fraud detection, prevention and investigation. Neither Licensee nor its employees or Authorized Users shall use the information for purposes of insurance underwriting (including ratemaking, risk classification, actuarial calculations, and identification of prospective Licensees or reclassification of Licensees), policy cancellation or renewal, establishing or stabilizing claims payment levels, granting of credit or for employment purposes, tenant screening purposes or for any other purpose(s) governed by the Federal Fair Credit Reporting Act (15 U.S.C. § 1681 et seq.) and all amendments thereto Additional Terms and Conditions Applicable to this Product: 2) Licensee hereby requests the Product(s) described herein and represents that this request is made by its authorized representative. Licensee warrants that it is in compliance with all terms of the Master Agreement between the parties. At Licensee’s expense, Licensee shall provide all Licensee equipment and appropriate interfacing devices; for any lines, modems and terminals compatible with the connectivity arrangement(s) selected and to pay for all costs to connect to an ISO-provided connect point or designated node, if necessary. 3) Licensee hereby acknowledges that third-party providers are third-party beneficiaries to this Product Supplement. Licensee hereby warrants that it has executed the Insurance Claims Subscription Agreement with Insurance Information Exchange, a unit of ISO Claims Services, Inc. a wholly owned subsidiary of ISO (“iiX”) and is in compliance with its terms and conditions. 4) Licensee agrees that Licensee shall not reproduce, retransmit, republish, or otherwise transfer for any commercial purpose any information that Licensee receives from the information, other than as permitted under this Supplement. Licensee acknowledges that the third-party data providers shall retain all right, title, and interest in and to the data and information provided by the services under applicable contractual, copyright, and related laws, and Licensee shall use such materials consistent with the third-party data providers’ interests and notify them of any threatened or actual infringement of their rights. 5) Licensee shall not use or retain copies of the Product to build or to develop any electronically searchable information database in competition with ISO. 6) Licensee hereby agrees that upon reasonable notice and at a mutually agreeable time, ISO may periodically audit Licensee’s books and records relevant to the use of the information in order to ensure compliance with the terms of this Product Supplement and all applicable laws. The third-party data providers may investigate all legitimate Information of abuse or misuse of their services. Violations discovered in any review will be subject to immediate action including, but not limited to, termination of Licensee’s right to access or use the information, legal action, and/or referral to federal or state regulatory agencies. Fee: <INSERT> Product Supplement Term: <INSERT> Term automatically renews for one-year periods unless terminated pursuant to the Master Agreement. In addition to any the terms of the Master Agreement with respect to termination, this Product Supplement may be terminated if access to MVRs is terminated or the Insurance Claims Subscription Agreement is terminated. K. OFAC COMPLIANCE VERIFIER SERVICES This service matches claim submissions by Licensee against data provided by various third parties which contains the names of specially designated persons or entities to which special monetary conditions and restrictions may apply. Additional Terms and Conditions Applicable to this Product: 1) Licensee hereby requests the Product(s) described herein and represents that this request is made by its authorized representative. Licensee warrants that it is in compliance with all terms of the Master Agreement between the parties. At Licensee’s expense, Licensee shall provide all Licensee equipment and appropriate interfacing devices for any lines, modems and terminals compatible with the connectivity arrangement(s) selected and to pay for all costs to connect to an ISO-provided connect point or designated node, if necessary. 2) Licensee hereby acknowledges that the data is provided by various third party providers and that these third-party providers are third-party beneficiaries to this Product Supplement 3) Licensee warrants to the data providers and ISO that Licensee proceeds at its own risk in choosing to rely upon the data provided by ISO in whole or in part. Licensee accepts all information "AS IS." Licensee acknowledges and agrees that the data is obtained from third-party sources, which may or may not be completely thorough and accurate, and that Licensee shall not rely on the third-party data provider or ISO for the accuracy or completeness of information supplied. Licensee agrees that the data providers assume no responsibility for the accuracy of the information, errors that occur in the conversion of data or for Licensee's use of the information. Neither the third-party data providers, nor any person providing data to said third-party data provider to (for purposes of indemnification, warranties and limitations on liability the third-party data providers and their data providers are hereby collectively referred to as “data providers”), nor ISO shall be liable to Licensee for any loss or injury arising out of or caused in whole or in part by any third-party data providers’ acts or omissions, whether negligent or otherwise, in procuring, compiling, collecting, interpreting, reporting, communicating, or delivering the services. If, notwithstanding the foregoing, liability can be imposed on a provider of data, then Licensee agrees that the aggregate liability for any and all losses or injuries arising out of any DocuSign Envelope ID: 916E0558-06C3-4E44-9536-A58240888035 Product Supplement – ISO ClaimSearch® For Non-Insurers (Universal Format Web Reporters) Ed: 01/2019 Page 9 of 10 act or omission of a data provider or ISO in connection with any service or deliverable furnished under this Product Supplement, regardless of the cause of the loss or injury shall never exceed $100.00, and Licensee agrees that it will not seek punitive damages in any suit against either a data provider or ISO. All data providers hereby disclaim any warranty, express or implied with respect to the services provided hereunder. Neither ISO nor the data providers guarantee or warrant the correctness, completeness, merchantability, or fitness for a particular purpose of their services or the components thereof or information provided hereunder. In no event shall either ISO or a data provider be liable for any direct, incidental or consequential damages, however arising, incurred as a result of by Licensee’s receipt or use of information delivered hereunder, or the unavailability thereof. 4) Licensee agrees that Licensee shall not reproduce, retransmit, republish, or otherwise transfer for any commercial purpose any information that Licensee receives from the services, other than as permitted under this Product Supplement Service: Standard Premium Historical Sweep Enterprise Includes Affiliates? Yes No Fee: <INSERT> (plus applicable taxes) Product Supplement Term: <INSERT> Term automatically renews for one-year periods unless terminated pursuant to the Master Agreement. Except as provided herein or modified hereby, all terms, covenants and conditions of the Master Agreement remain unchanged. To the extent any provision in this Product Supplement conflicts with any similar provision in the Master Agreement, the terms set forth on this Product Supplement shall control. This ClaimSearch Product Supplement supersedes and replaces any prior executed ClaimSearch Product Supplement. This Product Supplement may be executed in separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts shall together constitute the same agreement. This Product Supplement is not valid against ISO unless and until executed by the appropriate ISO officer or authorized representative at the appropriate ISO home office. In witness whereof, the parties hereto have caused this Product Supplement to be executed by their duly authorized representatives. Licensee: City Of Clearwater ISO: INSURANCE SERVICES OFFICE, INC. On behalf of itself, its subsidiaries and affiliates. Signature: _________________________________ Signature: _________________________________ Print Name: _________________________________ Print Name: _________________________________ Title: _________________________________ Title: _________________________________ Date: _________________________________ Date: _________________________________ Revised ISO ClaimSearch Product Supplement (Non-Insurers).doc Ed: 1/2019 Revised DocuSign Envelope ID: 916E0558-06C3-4E44-9536-A58240888035 Vice President & General Manager Carlos Martins 11/25/2019 Product Supplement – ISO ClaimSearch® For Non-Insurers (Universal Format Web Reporters) Ed: 01/2019 Page 10 of 10 ISO ClaimSearch Product Supplement (Non-Insurer) Countersigned: CITY OF CLEARWATER, FLORIDA By: George N. Cretekos William B. Horne II Mayor City Manager Approved as to form: Attest: Dick Hull, Esq. Rosemarie Call Assistant City Attorney City Clerk DocuSign Envelope ID: 916E0558-06C3-4E44-9536-A58240888035 Date: December 6, 2019 Name: Rick Osorio, City of Clearwater Title: Risk Manager Address: 100 S. Myrtle Avenue Clearwater, Fl 33756 Dear City of Clearwater, ISO Claims Solutions provides a wide variety of integrated tools to help you at every step of the claims process. ISO’s claims-management, analysis, investigation, and support services can help you improve and streamline your workflow and increase service, productivity, and profitability. At the core of ISO Claims Solutions is ISO ClaimSearch® — a comprehensive system that claims and investigations professionals use to find vital data on property, casualty, and automobile claims, including physical damage, theft, and salvage information. ISO ClaimSearch® is the industry’s all-claims database and front line of defense against claims fraud. ISO ClaimSearch® is a contributory database that features a secure Internet platform and a stringent privacy and security policy. The system supplies the data you need to improve claims processing and avoid paying questionable or fraudulent claims. ISO ClaimSearch® helps you research prior loss histories, identify claims patterns, and detect fraud. ISO is a sole source provider of ISO ClaimSearch products and services to the City, as ISO is the only company that can provide ISO ClaimSearch® products and services to the City. ISO ClaimSearch serves thousands of insurers, representing more than 93 percent of the property/casualty industry by premium volume. Our system also serves state workers compensation insurance funds, self-insureds, third-party administrators (TPAs), fraud bureaus, and law enforcement entities. If you have questions about our service or need further assistance, please feel free to contact the ISO ClaimSearch Customer Support office at 1-800-888-4476 or e-mail us at njsupport@iso.com. Sincerely, Carlos Martins Vice President and General Manager 545 Washington Boulevard, 22 Jersey City, NJ 07310-1686 Phone: (800) 888 4476 Fax: (201) 469 4139 Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7174 Agenda Date: 12/19/2019 Status: Consent AgendaVersion: 1 File Type: Action ItemIn Control: Gas System Agenda Number: 7.4 SUBJECT/RECOMMENDATION: Approve a Facility Encroachment Agreement with CSX Transportation, Inc. for the installation of an underground natural gas main in the CSX right-of-way and authorize the appropriate officials to execute same. (consent) SUMMARY: Florida Department of Transportation (FDOT) is widening State Road 52, located in Pasco County. To avoid conflict with FDOT, Clearwater Gas System (CGS) is relocating an existing six-inch main to a new location. The proposed relocation of the pipe requires a new crossing under the existing CSX right-of-way, along State Road 52, located west of US Hwy 41 and east of the Suncoast Parkway. CSX requires an Agreement to cover the costs of encroaching, construction risk and to provide the terms and conditions associated with placing a pipeline underneath their railway system. This Agreement also contains a Contractor Acceptance Rider that requires any contractor performing work within the CSX right-of-way, as part of this agreement, to provide $1,000,000 Workers Compensation & Employers Liability insurance; $5,000,000 Commercial General Liability coverage; Business automobile liability insurance of $1,000,000; and Railroad Protective Liability Insurance coverage of $5,000,000. APPROPRIATION CODE AND AMOUNT: Funds are budgeted and available in capital improvement project 3237323-96378. Page 1 City of Clearwater Printed on 12/19/2019 AGREEMENT NO. CSX897485 Ø Page 1 of 14 ø FACILITY ENCROACHMENT AGREEMENT THIS AGREEMENT, made and effective as of _____________ ____, 2019, by and between CSX TRANSPORTATION, INC., a Virginia corporation, whose mailing address is 500 Water Street, Jacksonville, Florida 32202, hereinafter called "Licensor," and CITY OF CLEARWATER (d/b/a CLEARWATER GAS SYSTEM), a municipal corporation, political subdivision or state agency, under the laws of the State of Florida, whose mailing address is 100 S Myrtle Avenue, Room 220, Clearwater, Florida 33756, hereinafter called "Licensee," WITNESSETH: WHEREAS, Licensee desires to construct (unless previously constructed and designated as existing herein), use and maintain the below described facility(ies), hereinafter called "Facilities," over, under or across property owned or controlled by Licensor, at the below described location(s): 1. One (1) six inch (6'') diameter sub-grade pipeline crossing, solely for the conveyance of natural gas, located at or near Land O' Lakes, Pasco County, Florida, Jacksonville Division, Brooksville Subdivision, Milepost SR-816.76, Latitude N28:19:27., Longitude W82:31:04.; hereinafter, called the ''Encroachment,'' as shown on print(s) labeled Exhibit "A," attached hereto and made a part hereof; NOW, THEREFORE, in consideration of the mutual covenants, conditions, terms and agreements herein contained, the parties hereto agree and covenant as follows: 1. LICENSE: 1.1 Subject to Article 17, Licensor, insofar as it has the legal right, power and authority to do so, and its present title permits, and subject to: (A) Licensor's present and future right to occupy, possess and use its property within the area of the Encroachment for any and all purposes; (B) All encumbrances, conditions, covenants, easements, and limitations applicable to Licensor's title to or rights in the subject property; and (C) Compliance by Licensee with the terms and conditions herein contained; does hereby license and permit Licensee to construct, maintain, repair, renew, operate, use, alter or change the Facilities at the Encroachment above for the term herein stated, and to remove same upon termination. 1.2 The term Facilities, as used herein, shall include only those structures and ancillary facilities devoted exclusively to the transmission usage above within the Encroachment, and as shown on attached Exhibit A. AGREEMENT NO. CSX897485 Ø Page 2 of 14 ø 1.3 No additional structures or other facilities shall be placed, allowed, or maintained by Licensee in, upon or on the Encroachment except upon prior separate written consent of Licensor. 2. ENCROACHMENT FEE; TERM: 2.1 Licensee shall pay Licensor a one-time nonrefundable Encroachment Fee of FIVE HUNDRED AND 00/100 U.S. DOLLARS ($500.00) upon execution of this Agreement. Licensee agrees that the Encroachment Fee applies only to the original Licensee under this Agreement. In the event of a successor (by merger, consolidation, reorganization and/or assignment) or if the original Licensee changes its name, then Licensee shall be subject to payment of Licensor's current administrative and document preparation fees for the cost incurred by Licensor in preparing and maintaining this Agreement on a current basis. 2.2 However, Licensee assumes sole responsibility for, and shall pay directly (or reimburse Licensor), any additional annual taxes and/or periodic assessments levied against Licensor or Licensor's property solely on account of said Facilities or Encroachment. 2.3 This Agreement shall terminate as herein provided, but shall also terminate upon: (a) Licensee's cessation of use of the Facilities or Encroachment for the purpose(s) above; (b) removal of the Facilities; (c) subsequent mutual consent; and/or (d) failure of Licensee to complete installation within five (5) years from the effective date of this Agreement. 2.4 In further consideration for the license or right hereby granted, Licensee hereby agrees that Licensor shall not be charged or assessed, directly or indirectly, with any part of the cost of the installation of said Facilities and appurtenances, and/or maintenance thereof, or for any public works project of which said Facilities is a part. 3. CONSTRUCTION, MAINTENANCE AND REPAIRS: 3.1 Licensee shall construct, maintain, relocate, repair, renew, alter, and/or remove the Facilities, in a prudent, workmanlike manner, using quality materials and complying with any applicable standard(s) or regulation(s) of Licensor (CSXT Specifications), or Licensee's particular industry, National Electrical Safety Code, or any governmental or regulatory body having jurisdiction over the Encroachment. 3.2 Location and construction of Facilities shall be made strictly in accordance with design(s) and specifications furnished to and approved by Licensor and of material(s) and size(s) appropriate for the purpose(s) above recited. 3.3 All of Licensee's work, and exercise of rights hereunder, shall be undertaken at time(s) satisfactory to Licensor, and so as to eliminate or minimize any impact on or interference with the safe use and operation of Licensor's property and appurtenances thereto. 3.4 In the installation, maintenance, repair and/or removal of said Facilities, Licensee shall not use explosives of any type or perform or cause any blasting without the AGREEMENT NO. CSX897485 Ø Page 3 of 14 ø separate express written consent of Licensor. As a condition to such consent, a representative will be assigned by Licensor to monitor blasting, and Licensee shall reimburse Licensor for the entire cost and/or expense of furnishing said monitor. 3.5 Any repairs or maintenance to the Facilities, whether resulting from acts of Licensee, or natural or weather events, which are necessary to protect or facilitate Licensor's use of its property, shall be made by Licensee promptly, but in no event later than thirty (30) days after Licensee has notice as to the need for such repairs or maintenance. 3.6 Licensor, in order to protect or safeguard its property, rail operations, equipment and/or employees from damage or injury, may request immediate repair or renewal of the Facilities, and if the same is not performed, may make or contract to make such repairs or renewals, at the sole risk, cost and expense of Licensee. 3.7 Neither the failure of Licensor to object to any work done, material used, or method of construction or maintenance of said Encroachment, nor any approval given or supervision exercised by Licensor, shall be construed as an admission of liability or responsibility by Licensor, or as a waiver by Licensor of any of the obligations, liability and/or responsibility of Licensee under this Agreement. 3.8 All work on the Encroachment shall be conducted in accordance with Licensor's safety rules and regulations. 3.9 Licensee hereby agrees to reimburse Licensor any loss, cost or expense (including losses resulting from train delays and/or inability to meet train schedules) arising from any failure of Licensee to make repairs or conduct maintenance as required by Section 3.5 above or from improper or incomplete repairs or maintenance to the Facilities or Encroachment. 3.10 In the event it becomes necessary for the Licensee to deviate from the approved Exhibit, Licensee shall seek prior approval from Licensor, or when applicable, an official field representative of Licensor permitted to approve changes, authorizing the necessary field changes and Licensee shall provide Licensor with complete As-Built Drawings of the completed work. As-Built Drawings shall be submitted to Licensor in either electronic or hard copy form upon the substantial completion of the project and upon Licensor’s request. 3.11 In the event of large scale maintenance/construction work to railroad bridges Licensee is required to protect power lines with insulated covers or comparable safety devices at their costs during construction/maintenance for safety of railroad employees. 4. PERMITS, LICENSES: 4.1 Before any work hereunder is performed, or before use of the Encroachment for the contracted purpose, Licensee, at its sole cost and expense, shall obtain all necessary permit(s) (including but not limited to zoning, building, construction, health, safety or environmental matters), letter(s) or certificate(s) of approval. Licensee expressly agrees and warrants that it shall conform and limit its activities to the terms of such permit(s), approval(s) AGREEMENT NO. CSX897485 Ø Page 4 of 14 ø and authorization(s), and shall comply with all applicable ordinances, rules, regulations, requirements and laws of any governmental authority (State, Federal or Local) having jurisdiction over Licensee's activities, including the location, contact, excavation and protection regulations of the Occupational Safety and Health Act (OSHA) (29 CFR 1926.651(b)), et al., and State "One Call" - "Call Before You Dig" requirements. 4.2 Licensee assumes sole responsibility for failure to obtain such permit(s) or approval(s), for any violations thereof, or for costs or expenses of compliance or remedy. 5. MARKING AND SUPPORT: 5.1 With respect to any subsurface installation or maintenance upon Licensor's property, Licensee, at its sole cost and expense, shall: (A) support track(s) and roadbed in a manner satisfactory to Licensor; (B) backfill with satisfactory material and thoroughly tamp all trenches to prevent settling of surface of land and roadbed of Licensor; and (C) either remove any surplus earth or material from Licensor's property or cause said surplus earth or material to be placed and distributed at location(s) and in such manner Licensor may approve. 5.2 After construction or maintenance of the Facilities, Licensee shall: (A) Restore any track(s), roadbed and other disturbed property; and (B) Erect, maintain and periodically verify the accuracy of aboveground markers, in a form approved by Licensor, indicating the location, depth and ownership of any underground Facilities or related facilities. 5.3 Licensee shall be solely responsible for any subsidence or failure of lateral or subjacent support in the Encroachment area for a period of three (3) years after completion of installation. 6. TRACK CHANGES: 6.1 In the event that rail operations and/or track maintenance result in changes in grade or alignment of, additions to, or relocation of track(s) or other facilities, or in the event future use of Licensor's rail corridor or property necessitate any change of location, height or depth in the Facilities or Encroachment, Licensee, at its sole cost and expense and within thirty (30) days after notice in writing from Licensor, shall make changes in the Facilities or Encroachment to accommodate such track(s) or operations. 6.2 If Licensee fails to do so, Licensor may make or contract to make such changes at Licensee's cost. AGREEMENT NO. CSX897485 Ø Page 5 of 14 ø 7. FACILITY CHANGES: 7.1 Licensee shall periodically monitor and verify the depth or height of the Facilities or Encroachment in relation to the existing tracks and facilities, and shall relocate the Facilities or change the Encroachment, at Licensee's expense, should such relocation or change be necessary to comply with the minimum clearance requirements of Licensor. 7.2 If Licensee undertakes to revise, renew, relocate or change in any manner whatsoever all or any part of the Facilities (including any change in voltage or gauge of wire or any change in circumference, diameter or radius of pipe or change in materials transmitted in and through said pipe), or is required by any public agency or court order to do so, plans therefor shall be submitted to Licensor for approval before such change. After approval, the terms and conditions of this Agreement shall apply thereto. 8. INTERFERENCE WITH RAIL FACILITIES: 8.1 Although the Facilities/Encroachment herein permitted may not presently interfere with Licensor's railroad or facilities, in the event that the operation, existence or maintenance of said Facilities, in the sole judgment of Licensor, causes: (a) interference (including, but not limited to, physical or interference from an electromagnetic induction, or interference from stray or other currents) with Licensor's power lines, communication, signal or other wires, train control system, or electrical or electronic apparatus; or (b) interference in any manner, with the operation, maintenance or use of the rail corridor, track(s), structures, pole line(s), devices, other property, or any appurtenances thereto; then and in either event, Licensee, upon receipt of written notice from Licensor of any such interference, and at Licensee's sole risk, cost and expense, shall promptly make such changes in its Facilities or installation, as may be required in the reasonable judgment of the Licensor to eliminate all such interference. Upon Licensee's failure to remedy or change, Licensor may do so or contract to do so at Licensee's sole cost. 8.2 Without assuming any duty hereunder to inspect the Facilities, Licensor hereby reserves the right to inspect same and to require Licensee to undertake repairs, maintenance or adjustments to the Facilities, which Licensee hereby agrees to make promptly, at Licensee's sole cost and expense. 9. RISK, LIABILITY, INDEMNITY: With respect to the relative risk and liabilities of the parties, it is hereby agreed that: 9.1 To the fullest extent permitted by State law (constitutional or statutory, as amended), Licensee hereby agrees to, defend, indemnify, and hold Licensor harmless from and against any and all liability, loss, claim, suit, damage, charge or expense which Licensor may suffer, sustain, incur or in any way be subjected to, on account of death of or injury to any person whomsoever (including officers, agents, employees or invitees of Licensor), and for damage to or loss of or destruction of any property whatsoever, arising out of, resulting from, or in any way AGREEMENT NO. CSX897485 Ø Page 6 of 14 ø connected with the construction, repair, maintenance, replacement, presence, existence, operations, use or removal of the Facilities or any structure in connection therewith, or restoration of premises of Licensor to good order or condition after removal, EXCEPT when proven to have been caused solely by the willful misconduct or gross negligence of Licensor. HOWEVER, to the fullest extent permitted by State law, during any period of actual construction, repair, maintenance, replacement or removal of the Facilities, wherein agents, equipment or personnel of Licensee are on the railroad rail corridor, Licensee's liability hereunder shall be absolute, irrespective of any joint, sole or contributory fault or negligence of Licensor. 9.2 Use of Licensor's rail corridor involves certain risks of loss or damage as a result of the rail operations. Notwithstanding Section 9.1, Licensee expressly assumes all risk of loss and damage to Licensee's Property or the Facilities in, on, over or under the Encroachment, including loss of or any interference with use or service thereof, regardless of cause, including electrical field creation, fire or derailment resulting from rail operations. For this Section, the term "Licensee's Property" shall include property of third parties situated or placed upon Licensor's rail corridor by Licensee or by such third parties at request of or for benefit of Licensee. 9.3 To the fullest extent permitted by State law, as above, Licensee assumes all responsibility for, and agrees to defend, indemnify and hold Licensor harmless from: (a) all claims, costs and expenses, including reasonable attorneys' fees, as a consequence of any sudden or nonsudden pollution of air, water, land and/or ground water on or off the Encroachment area, arising from or in connection with the use of this Encroachment or resulting from leaking, bursting, spilling, or any escape of the material transmitted in or through the Facilities; (b) any claim or liability arising under federal or state law dealing with either such sudden or nonsudden pollution of air, water, land and/or ground water arising therefrom or the remedy thereof; and (c) any subsidence or failure of lateral or subjacent support of the tracks arising from such Facilities leakage. 9.4 Notwithstanding Section 9.1, Licensee also expressly assumes all risk of loss which in any way may result from Licensee's failure to maintain either required clearances for any overhead Facilities or the required depth and encasement for any underground Facilities, whether or not such loss(es) result(s) in whole or part from Licensor's contributory negligence or joint fault. 9.5 Obligations of Licensee hereunder to release, indemnify and hold Licensor harmless shall also extend to companies and other legal entities that control, are controlled by, subsidiaries of, or are affiliated with Licensor, as well as any railroad that operates over the rail corridor on which the Encroachment is located, and the officers, employees and agents of each. 9.6 If a claim is made or action is brought against Licensor, and/or its operating lessee, for which Licensee may be responsible hereunder, in whole or in part, Licensee shall be notified to assume the handling or defense of such claim or action; but Licensor may participate in such handling or defense. AGREEMENT NO. CSX897485 Ø Page 7 of 14 ø 9.7 Notwithstanding anything contained herein to the contrary, Section 9 shall not be construed as a waiver of any immunity to which Licensee is entitled or the extent of any limitation of liability pursuant to Florida Statute 768.28. Furthermore, this section is not intended to nor shall it be interpreted as limiting or in any way affecting any defense Licensee may have under Florida Statute 768.28. 10. INSURANCE: 10.1 Prior to commencement of surveys, installation or occupation of premises pursuant to this Agreement, Licensee shall procure and shall maintain during the continuance of this Agreement, at its sole cost and expense, a policy of (i) Statutory Worker's Compensation and Employers Liability Insurance with available limits of not less than ONE MILLION AND 00/100 U.S. DOLLARS ($1,000,000.00). (ii) Commercial General Liability coverage (inclusive of contractual liability) with available limits of not less than FIVE MILLION AND 00/100 U.S. DOLLARS ($5,000,000.00)in combined single limits for bodily injury and property damage and covering the contractual liabilities assumed under this Agreement and naming Licensor, and/or its designee, as additional insured. The evidence of insurance coverage shall be endorsed to provide for thirty (30) days' notice to Licensor, or its designee, prior to cancellation or modification of any policy. Mail CGL certificate, along with agreement, to CSX Transportation, Inc., Speed Code J180, 500 Water Street, Jacksonville, FL 32202. On each successive year, send certificate to RenewalCOI@csx.com. (iii) Business automobile liability insurance with available limits of not less than ONE MILLION AND 00/100 U.S. DOLLARS ($1,000,000.00) combined single limit for bodily injury and/or property damage per occurrence naming Licensor, and/or its designee, as additional insured. (iv) The insurance policies must contain a waiver of subrogation against CSXT and its Affiliates, except where prohibited by law. All insurance companies must be A. M. Best rated A- and Class VII or better. (v) Such other insurance as Licensor may reasonably require. (vi) Licensee shall require its contractors to meet minimum insurance requirements above when performing work in relation to this agreement. Licensee will procure and review contractor’s insurance certificates to confirm requirements are met. Licensor may request a copy of the insurance certificate. 10.2 If Licensee's existing CGL policy(ies) do(es) not automatically cover Licensee's contractual liability during periods of survey, installation, maintenance and continued occupation, a specific endorsement adding such coverage shall be purchased by Licensee. If said AGREEMENT NO. CSX897485 Ø Page 8 of 14 ø CGL policy is written on a "claims made" basis instead of a "per occurrence" basis, Licensee shall arrange for adequate time for reporting losses. Failure to do so shall be at Licensee's sole risk. 10.3 Licensor, or its designee, may at any time request evidence of insurance purchased by Licensee to comply with this Agreement. Failure of Licensee to comply with Licensor's request shall be considered a default by Licensee. 10.4 To the extent permitted by law and without waiver of the sovereign immunity of Licensee, securing such insurance shall not limit Licensee's liability under this Agreement, but shall be security therefor. 10.5 (A) In the event Licensee finds it necessary to perform construction or demolition operations within fifty feet (50') of any operated railroad track(s) or affecting any railroad bridge, trestle, tunnel, track(s), roadbed, overpass or underpass, Licensee shall: (a) notify Licensor; and (b) require its contractor(s) performing such operations to procure and maintain during the period of construction or demolition operations, at no cost to Licensor, i) Railroad Protective Liability (RPL) Insurance, naming Licensor, and/or its designee, as Named Insured, written on the current ISO/RIMA Form (ISO Form No. CG 00 35 04 13) with limits of FIVE MILLION AND 00/100 U.S. DOLLARS ($5,000,000.00) per occurrence for bodily injury and property damage, with at least TEN MILLION AND 00/100 U.S. DOLLARS ($10,000,000.00) aggregate limit per annual policy period. The original of such RPL policy shall be sent to and approved by Licensor prior to commencement of such construction or demolition. Licensor reserves the right to demand higher limits. OR ii) The CGL policy shall include endorsement ISO CG 24 17 and the Auto Liability Policy shall include endorsement ISO CA 20 70 evidencing that coverage is provided for work within 50 feet of a railroad. If such endorsements are not included, RPL insurance must be provided. (B) At Licensor's option, in lieu of purchasing RPL insurance or the 50 foot endorsements from an insurance company (but not CGL insurance), Licensee may pay Licensor, at Licensor's current rate at time of request, the cost of adding this Encroachment, or additional construction and/or demolition activities, to Licensor's Railroad Protective Liability (RPL) Policy for the period of actual construction. This coverage is offered at Licensor's discretion and may not be available under all circumstances. 10.6 Notwithstanding the provisions of Sections 10.1 and 10.2, Licensee, pursuant to State Statute(s), may self-insure or self-assume, in any amount(s), any contracted liability arising under this Agreement, under a funded program of self-insurance, which fund will respond to liability of Licensee imposed by and in accordance with the procedures established by law. AGREEMENT NO. CSX897485 Ø Page 9 of 14 ø 11. GRADE CROSSINGS; PROTECTION SERVICES: 11.1 Nothing herein contained shall be construed to permit Licensee or Licensee's contractor to move any vehicles or equipment over the track(s), except at public road crossing(s), without separate prior written approval of Licensor. 11.2 If Licensor deems it advisable, during any construction, maintenance, repair, renewal, alteration, change or removal of said Facilities, to place watchmen, flagmen, or field construction managers for protection of operations of Licensor or others on Licensor's rail corridor at the Encroachment, and to keep persons, equipment or materials away from the track(s), Licensor shall have the right to do so at the expense of Licensee, but Licensor shall not be liable for failure to do so. 12. LICENSOR'S COSTS: 12.1 Any additional or alternative costs or expenses incurred by Licensor to accommodate Licensee's continued use of Licensor's property as a result of track changes or wire changes shall also be paid by Licensee. 12.2 Licensor's expense for wages ("force account" charges) and materials for any work performed at the expense of Licensee pursuant hereto shall be paid by Licensee within thirty (30) days after receipt of Licensor's bill therefor. Licensor may, at its discretion, request an advance deposit for estimated Licensor costs and expenses. 12.3 Such expense shall include, but not be limited to, cost of railroad labor and supervision under "force account" rules, plus current applicable overhead percentages, the actual cost of materials, and insurance, freight and handling charges on all material used. Equipment rentals shall be in accordance with Licensor's applicable fixed rate. Licensor may, at its discretion, require advance deposits for estimated costs of such expenses and costs. 13. DEFAULT, BREACH, WAIVER: 13.1 The proper and complete performance of each covenant of this Agreement shall be deemed of the essence thereof, and in the event Licensee fails or refuses to fully and completely perform any of said covenants or remedy any breach within thirty (30) days after receiving written notice from Licensor to do so (or within forty-eight (48) hours in the event of notice of a railroad emergency), Licensor shall have the option of immediately revoking this Agreement and the privileges and powers hereby conferred, regardless of encroachment fee(s) having been paid in advance for any annual or other period. Upon such revocation, Licensee shall make removal in accordance with Article 14. 13.2 No waiver by Licensor of its rights as to any breach of covenant or condition herein contained shall be construed as a permanent waiver of such covenant or condition, or any subsequent breach thereof, unless such covenant or condition is permanently waived in writing by Licensor. AGREEMENT NO. CSX897485 Ø Page 10 of 14 ø 13.3 Neither the failure of Licensor to object to any work done, material used, or method of construction or maintenance of said Encroachment, nor any approval given or supervision exercised by Licensor, shall be construed as an admission of liability or responsibility by Licensor, or as a waiver by Licensor of any of the obligations, liability and/or responsibility of Licensee under this Agreement. 14. TERMINATION, REMOVAL: 14.1 All rights which Licensee may have hereunder shall cease upon the date of (a) termination, (b) revocation, or (c) subsequent agreement, or (d) Licensee's removal of the Facility from the Encroachment. However, neither termination nor revocation of this Agreement shall affect any claims and liabilities which have arisen or accrued hereunder, and which at the time of termination or revocation have not been satisfied; neither party, however, waiving any third party defenses or actions. 14.2 Within thirty (30) days after revocation or termination, Licensee, at its sole risk and expense, shall (a) remove the Facilities from the rail corridor of Licensor, unless the parties hereto agree otherwise, (b) restore the rail corridor of Licensor in a manner satisfactory to Licensor, and (c) reimburse Licensor any loss, cost or expense of Licensor resulting from such removal. 15. NOTICE: 15.1 Licensee shall give Licensor at least thirty (30) days written notice before doing any work on Licensor's rail corridor, except that in cases of emergency shorter notice may be given. Licensee shall provide proper notification as follows: a. For non-emergencies, Licensee shall submit online via the CSX Property Portal from Licensor's web site, via web link: https://propertyportal.csx.com/pub_ps_res/ps_res/jsf/public/index.faces b. For emergencies, Licensee shall complete all of the steps outlined in Section 15.1 a. above, and shall also include detailed information of the emergency. Licensee shall also call and report details of the emergency to Licensor's Rail Operations Emergency Telephone Number: 1-800-232-0144. In the event Licensor needs to contact Licensee concerning an emergency involving Licensee's Facility(ies), the emergency phone number for Licensee is: 727-638-0775. 15.2 All other notices and communications concerning this Agreement shall be addressed to Licensee at the address above, and to Licensor at the address shown on Page 1, c/o CSXT Contract Management, J180; or at such other address as either party may designate in writing to the other. 15.3 Unless otherwise expressly stated herein, all such notices shall be in writing and sent via Certified or Registered Mail, Return Receipt Requested, or by courier, and shall be considered delivered upon: (a) actual receipt, or (b) date of refusal of such delivery. AGREEMENT NO. CSX897485 Ø Page 11 of 14 ø 16. ASSIGNMENT: 16.1 The rights herein conferred are the privileges of Licensee only, and Licensee shall obtain Licensor's prior written consent to any assignment of Licensee's interest herein; said consent shall not be unreasonably withheld. 16.2 Subject to Sections 2 and 16.1, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors or assigns. 16.3 Licensee shall give Licensor written notice of any legal succession (by merger, consolidation, reorganization, etc.) or other change of legal existence or status of Licensee, with a copy of all documents attesting to such change or legal succession, within thirty (30) days thereof. 16.4 Licensor expressly reserves the right to assign this Agreement, in whole or in part, to any grantee, lessee, or vendee of Licensor's underlying property interests in the Encroachment, upon written notice thereof to Licensee. 16.5 In the event of any unauthorized sale, transfer, assignment, sublicense or encumbrance of this Agreement, or any of the rights and privileges hereunder, Licensor, at its option, may revoke this Agreement by giving Licensee or any such assignee written notice of such revocation; and Licensee shall reimburse Licensor for any loss, cost or expense Licensor may incur as a result of Licensee's failure to obtain said consent. 17. TITLE: 17.1 Licensee understands that Licensor occupies, uses and possesses lands, rights-of-way and rail corridors under all forms and qualities of ownership rights or facts, from full fee simple absolute to bare occupation. Accordingly, nothing in this Agreement shall act as or be deemed to act as any warranty, guaranty or representation of the quality of Licensor's title for any particular Encroachment or segment of Rail Corridor occupied, used or enjoyed in any manner by Licensee under any rights created in this Agreement. It is expressly understood that Licensor does not warrant title to any Rail Corridor and Licensee will accept the grants and privileges contained herein, subject to all lawful outstanding existing liens, mortgages and superior rights in and to the Rail Corridor, and all leases, licenses and easements or other interests previously granted to others therein. 17.2 The term "license," as used herein, shall mean with regard to any portion of the Rail Corridor which is owned by Licensor in fee simple absolute, or where the applicable law of the State where the Encroachment is located otherwise permits Licensor to make such grants to Licensee, a "permission to use" the Rail Corridor, with dominion and control over such portion of the Rail Corridor remaining with Licensor, and no interest in or exclusive right to possess being otherwise granted to Licensee. With regard to any other portion of Rail Corridor occupied, used or controlled by Licensor under any other facts or rights, Licensor merely waives its exclusive right to occupy the Rail Corridor and grants no other rights whatsoever under this AGREEMENT NO. CSX897485 Ø Page 12 of 14 ø Agreement, such waiver continuing only so long as Licensor continues its own occupation, use or control. Licensor does not warrant or guarantee that the license granted hereunder provides Licensee with all of the rights necessary to occupy any portion of the Rail Corridor. Licensee further acknowledges that it does not have the right to occupy any portion of the Rail Corridor held by Licensor in less than fee simple absolute without also receiving the consent of the owner(s) of the fee simple absolute estate. Further, Licensee shall not obtain, exercise or claim any interest in the Rail Corridor that would impair Licensor's existing rights therein. 17.3 Licensee agrees it shall not have nor shall it make, and hereby completely and absolutely waives its right to, any claim against Licensor for damages on account of any deficiencies in title to the Rail Corridor in the event of failure or insufficiency of Licensor's title to any portion thereof arising from Licensee's use or occupancy thereof. 17.4 Licensee agrees to fully and completely indemnify and defend all claims or litigation for slander of title, overburden of easement, or similar claims arising out of or based upon the Facilities placement, or the presence of the Facilities in, on or along any Encroachment(s), including claims for punitive or special damages. 17.5 Licensee shall not at any time own or claim any right, title or interest in or to Licensor's property occupied by the Encroachments, nor shall the exercise of this Agreement for any length of time give rise to any right, title or interest in Licensee to said property other than the license herein created. 17.6 Nothing in this Agreement shall be deemed to give, and Licensor hereby expressly waives, any claim of ownership in and to any part of the Facilities. 17.7 Licensee shall not create or permit any mortgage, pledge, security, interest, lien or encumbrances, including without limitation, tax liens and liens or encumbrances with respect to work performed or equipment furnished in connection with the construction, installation, repair, maintenance or operation of the Facilities in or on any portion of the Encroachment (collectively, "Liens or Encumbrances"), to be established or remain against the Encroachment or any portion thereof or any other Licensor property. 17.8 In the event that any property of Licensor becomes subject to such Liens or Encumbrances, Licensee agrees to pay, discharge or remove the same promptly upon Licensee's receipt of notice that such Liens or Encumbrances have been filed or docketed against the Encroachment or any other property of Licensor; however, Licensee reserves the right to challenge, at its sole expense, the validity and/or enforceability of any such Liens or Encumbrances. 18. GENERAL PROVISIONS: 18.1 This Agreement, and the attached specifications, contains the entire understanding between the parties hereto. AGREEMENT NO. CSX897485 Ø Page 13 of 14 ø 18.2 Neither this Agreement, any provision hereof, nor any agreement or provision included herein by reference, shall operate or be construed as being for the benefit of any third person. 18.3 Except as otherwise provided herein, or in any Rider attached hereto, neither the form of this Agreement, nor any language herein, shall be interpreted or construed in favor of or against either party hereto as the sole drafter thereof. 18.4 This Agreement is executed under current interpretation of applicable Federal, State, County, Municipal or other local statute, ordinance or law(s). However, each separate division (paragraph, clause, item, term, condition, covenant or agreement) herein shall have independent and severable status for the determination of legality, so that if any separate division is determined to be void or unenforceable for any reason, such determination shall have no effect upon the validity or enforceability of each other separate division, or any combination thereof. 18.5 This Agreement shall be construed and governed by the laws of the state in which the Facilities and Encroachment are located. 18.6 If any amount due pursuant to the terms of this Agreement is not paid by the due date, it will be subject to Licensor's standard late charge and will also accrue interest at eighteen percent (18%) per annum, unless limited by local law, and then at the highest rate so permitted. 18.7 Licensee agrees to reimburse Licensor for all reasonable costs (including attorney's fees) incurred by Licensor for collecting any amount due under the Agreement. 18.8 The provisions of this License are considered confidential and may not be disclosed to a third party without the consent of the other party(s), except: (a) as required by statute, regulation or court order, (b) to a parent, affiliate or subsidiary company, (c) to an auditing firm or legal counsel that are agreeable to the confidentiality provisions, or (d) to Lessees of Licensor's land and/or track who are affected by the terms and conditions of this Agreement and will maintain the confidentiality of this Agreement. 18.9 Within thirty (30) days of an overpayment in a cumulative total amount of One Hundred Dollars ($100.00) or more by Licensee to Licensor, Licensee shall notify Licensor in writing with documentation evidencing such overpayment. Licensor shall refund the actual amount of Licensee’s overpayment within one hundred twenty (120) days of Licensor’s verification of such overpayment. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] AGREEMENT NO. CSX897485 Ø Page 14 of 14 ø IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate (each of which shall constitute an original) as of the effective date of this Agreement. Witness for Licensor: CSX TRANSPORTATION, INC. By:_ Print/Type Name: Print/Type Title: Countersigned: CITY OF CLEARWATER, FLORIDA ___________________________ By: __________________________ George N. Cretekos William B. Horne II Mayor City Manager Approved as to form: Attest: ___________________________ ________________________________ Laura Mahony Rosemarie Call Assistant City Attorney City Clerk STATE OF FLORIDA COUNTY OF _____________________ The foregoing instrument was acknowledged before me this _____ day of ___________________ 20___, By _________________________. That he / she is personally known to me or has produced _______________________ as identification and has / has not taken an oath. By: ___________________________ Notary Public My Commission Expires: ___________________ Print Name: ________________________________ Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7197 Agenda Date: 12/19/2019 Status: Consent AgendaVersion: 1 File Type: Action ItemIn Control: Parks & Recreation Agenda Number: 7.5 SUBJECT/RECOMMENDATION: Authorize a purchase order to Angelo’s Recycled Materials of St. Petersburg, FL, for debris disposal (yard trash, Class III, and construction and demolition debris), in the not-to-exceed amount of $275,000 for the period of December 1, 2019 through September 30, 2021, with one additional two-year renewal term at an annual not-to-exceed amount of $150,000 at the City’s discretion, pursuant to Clearwater Code of Ordinances Section 2.564(1)(d) Cooperative Contracts and authorize the appropriate officials to execute same. (consent) SUMMARY: The Parks and Recreation Department collects brush, yard waste, and construction and demolition debris from parks, city-owned properties, and projects. The trash and debris are transported by Parks and Recreation vehicles to the contractor’s State-permitted disposal facilities. During May and June 2018, the City of Largo, FL advertised request for Bid 18-B-641, Yard Trash, Class III and Construction Demolition Debris Disposal. The City of Clearwater and the City of Dunedin were cooperative bidders in this solicitation. Angelo’s Recycled Materials was the lowest bidder for the items to be disposed and was awarded the contract. APPROPRIATION CODE AND AMOUNT: Funds are available as part of the FY 2019/20 Operating Budget in various Parks and Recreation Department Funds; however, the primary funds are 0101874 and 0101877. USE OF RESERVE FUNDS: N/A Page 1 City of Clearwater Printed on 12/19/2019 CITY COMMISSION LARGO, FLORIDA INVITATION FOR BID Bid #: 18-B-641 Date: May 7, 2018 Competitive sealed bids will be accepted by the City of Largo Office of Management and Budget, Largo City Hall, located at 201 Highland Avenue, Largo, FL 33770, until 3:00 p.m., local time June 4, 2018 at which time all bids received shall be publicly opened and read aloud in the Office of Management Budget, Largo City Hall, for YARD TRASH, CLASS III & CONSTRUCTION DEMOLITION DEBRIS DISPOSAL Bids must conform to the Specifications and Instructions to Bidders. Any deviation from the specifications must be shown. The City reserves the right to reject any or all bids received, to waive any irregularities or informalities. If you are interested in bidding, please complete the Invitation for Bid Form(s) and return to this office by the date indicated. Non-conformance with these instructions is grounds for rejection of bid. Late Bids will be rejected. Questions of a technical nature should be directed to Michael Gordon, Solid Waste Manager at 727-587-6760. Questions concerning this Bid should be directed to Joan Wheaton, Procurement Analyst, Office of Management and Budget at (727) 587-6727. BY ORDER OF THE CITY COMMISSION LARGO, FLORIDA Joan Wheaton, Procurement Analyst Please indicate BID number Office of Management and Budget on your response envelope. BID and ADDENDUM DOCUMENTS CAN BE DOWNLOADED FROM THE CITY WEBSITE www.largo.com - click the Business Tab - click on Bid/Rfp listings - click view list of current bids/rfps. I N D E X INSTRUCTIONS TO BIDDERS 1. .................................................................................................................................................. Scope 1 2. .................................................................................................................................................. Definitions 1 3. .................................................................................................................................................. Preparation of Bids ........................................................................................................................................... 1 4. .................................................................................................................................................. Submission and Receipt of Bids ........................................................................................................................... 2 5. .................................................................................................................................................. Acceptance of Offer ........................................................................................................................................... 2 6. .................................................................................................................................................. Clarification and Addenda .................................................................................................................................... 2 7. .................................................................................................................................................. Firm Prices ................................................................................................................................................... 3 8. .................................................................................................................................................. Fiscal Non- Funding Clause .......................................................................................................................... 3 9. .................................................................................................................................................. Estimated Quantities ................................................................................................................................... 3 10. ................................................................................................................................................ F.O.B. Largo, Florida ........................................................................................................................................ 3 11. ................................................................................................................................................ Discounts 3 12. ................................................................................................................................................ Award 3 13. ................................................................................................................................................ Brand Names ................................................................................................................................................... 4 14. ................................................................................................................................................ Variations of Specifications ............................................................................................................................. 4 15. ................................................................................................................................................ Material Quality ........................................................................................................................................ 4 16. ................................................................................................................................................ Acceptance of Material ...................................................................................................................................... 5 17. ................................................................................................................................................ Timely Delivery ...................................................................................................................................... 5 18. ................................................................................................................................................ Price Changes Re: Contracts ............................................................................................................................. 5 19. ................................................................................................................................................ City Indemnification Re: Patent & Copyright.................................................................................... 5 20. ................................................................................................................................................ Conflict of Interest ....................................................................................................................................... 5 21. ................................................................................................................................................ Public Entity Crime ........................................................................................................................................ 5 22. ................................................................................................................................................ Options 6 23. ................................................................................................................................................ Subcontractin g ................................................................................................................................................. 6 24. ................................................................................................................................................ Taxes 6 25. ................................................................................................................................................ Failure to Bid ................................................................................................................................................... 6 26. ................................................................................................................................................ Additional Information Required ................................................................................................................. 6 27. ................................................................................................................................................ Manufacturer's Certification ................................................................................................................................ 6 28. ................................................................................................................................................ Default of Contract ..................................................................................................................................... 7 29. ................................................................................................................................................ Modification for Changes ............................................................................................................................... 7 30. ................................................................................................................................................ Order or Precedence ................................................................................................................................ 7 31. ................................................................................................................................................ Examination of Records...................................................................................................................................... 7 32. ................................................................................................................................................ Occupational Health and Safety ...................................................................................................................... 7 33. ................................................................................................................................................ Safety Clause ................................................................................................................................................... 8 34. ................................................................................................................................................ Hold Harmless ................................................................................................................................................... 8 35. ................................................................................................................................................ Qualifications of Bidders ................................................................................................................................... 8 36. ................................................................................................................................................ Disqualificatio n of Bidders ................................................................................................................................ 8 37. ................................................................................................................................................ Licenses and Permits ....................................................................................................................................... 8 38. ................................................................................................................................................ Vendor Site Inspection and Evaluation.......................................................................................................... 9 39. ................................................................................................................................................ Provisions for Other Agencies .......................................................................................................................... 9 40. ................................................................................................................................................ Applicable Law and Venue .......................................................................................................................... 9 41. ................................................................................................................................................ Request for Information ................................................................................................................................. 9 SPECIAL CONDITIONS .......................................................................................................... 10 SPECIFICATIONS ................................................................................................................... 12 Bid Forms .................................................................................................................................... Reference Information ................................................................................................................. Statement of No Bid ..................................................................................................................... Insurance Requirements.............................................................................................................. CITY OF LARGO, FLORIDA INSTRUCTIONS TO BIDDERS 1. Scope The instructions to bidders and general conditions described herein apply to transactions on material, supplies or services with an estimated aggregate cost of $25,000 or more. 2. Definitions (as used herein) a. The term "Invitation For Bid" means a solicitation of formal sealed bids. The acronym "IFB" means Invitation For Bid. b. The term "bid" means the offer as a price by the bidder. c. The term "bidder" means the offerer. d. The term "Change Order" means a written order signed by the Assistant City Manager or authorized representative directing the vendor to make changes to a contract or purchase order resulting from the IFB. e. The term "City" means the City of Largo, Florida. f. The term "City Commission" means the governing body of the City of Largo. 3. Preparation of Bids a. Bidders are expected to examine the specifications, drawings, and all special and general conditions. No plea of ignorance by the bidder of conditions that exist or that may hereafter exist as a result of failure or omission on the part of the bidder to make the necessary examinations and investigations, or failure to fulfill in every detail the requirements of the contract document, will be accepted as a basis for varying the requirements of the City or the compensation to the vendor. b. The apparent silence of any supplemental specifications as to any details or the omission from it of a detailed description concerning any point will be regarded as meaning that only the best commercial practices are to prevail and that only materials of first quality and correct type, size and design are to be used. All workmanship is to be first quality. All interpretations of the specifications shall be made upon the basis of this statement. c. Bids shall be submitted on the Bid Form furnished with the specifications, other forms may be rejected. Unless otherwise stated within the specifications, responses to the IFB should be submitted in DUPLICATE for bid evaluation purposes. d. Each bidder shall furnish the information required by the IFB. The bidder shall sign the IFB and print or type his name, address, and telephone number on the face page and on each continuation sheet thereof on which he makes an entry. e. Unit price for each unit offered shall be shown, and such price shall include packing and shipping unless otherwise specified. A total shall be entered in the "Total" column for each item offered. In case of discrepancy between the unit price and extended price, the unit price will be presumed correct. f. The bidders must state a definite time for delivery of supplies or performance of services. g. Additional or alternate bids, unless specifically requested, will not be accepted. Vendors are urged to inspect their product lines and select one item that will meet or exceed the specifications as given and submit only one bid. h. The bidder should retain a copy of all bid documents for future reference. i. All bids must be signed with the firm name and by an officer or employee having authority to bind the company or firm by his/her signature. 4. Submission and Receipt of Bids a. Bids must be received at or before the specified time of opening as designated in the IFB. Bidders are welcome to attend bid opening; however, no award of bid will be made at this time. A bid tabulation will be furnished, upon request. b. Bids shall be submitted in a sealed envelope. The envelope shall show the hour and date specified for receipt of bids, the bid number, and the name and address of the bidder. c. The City of Largo is not responsible for the U.S. Mail or private couriers in regards to mail being delivered by the specified time so that a bid can be considered. Late bids will be rejected. d. Telegraph bids will not be considered; however, bids may be modified by telegraphic notice, provided such notices are received prior to the hour and date specified on the bid. Bids submitted by telephone or FAX will not be accepted. e. Samples of items, when required, must be submitted within the time specified at no expense to the City. If not destroyed by testing, vendor(s) will be notified to remove samples, at their expense, within thirty (30) days after notification. Failure to remove the samples will result in the samples becoming the property of the City. f. Failure to follow these procedures is cause for rejection of bid. g. Bids having any erasures or corrections must be initialed by the bidder in ink. Bids shall be signed in ink. All bid amounts shall be typewritten or filled in with ink. h. The City reserves the right to reject any or all bids received, to waive any irregularities in the bids received, or to accept the bid which best serves the interest of the City of Largo. I. Overnight and express mail should not be addressed to the PO Box. 5. Acceptance of Offer The signed bid shall be considered an offer on the part of the bidder; such offer shall be deemed accepted upon issuance by the City of a Purchase Order, Blanket Purchase Order, or other contractual document. 6. Clarification and Addenda Any inquiries, suggestions, or requests concerning interpretation, clarification, or additional information pertaining to the Bid shall be made through the City of Largo Office of Management and Budget. The City shall not be responsible for oral interpretations given by any City employee, representative, or others. The issuance of a written addendum is the only official method whereby interpretation, clarification, and additional information can be given. If any addenda are issued to this Bid, the City will attempt to notify all prospective Bidders who have secured same; however, it shall be the responsibility of each Bidder, prior to submitting the Bid, to check the City web site or contact the City of Largo Office of Management and Budget at (727) 587-6727, to determine if addenda were issued and to make such addenda a part of the Invitation to Bid. 7. Firm Prices The bidder warrants that prices, terms and conditions quoted in his bid will be firm for acceptance for a period of not less than ninety (90) days from the bid opening date unless otherwise specified in the IFB. Such prices will remain firm for the period of performance of resulting purchase orders or contracts which are to be performed over a period of time. 8. Fiscal Non-Funding Clause In the event sufficient budgeted funds are not available for a new fiscal period, the City shall notify the vendor of such occurrence and contract shall terminate on the last day of the current fiscal period without penalty or expense to the City. 9. Estimated Quantities Whenever a bid requests prices to be firm for the period of performance, the quantities or usages shown are estimated only with no guarantee made by the City that these quantities shall be purchased. The quantities shown are for the bidders' information only, and the City shall be bound only for actual quantities ordered. 10. F.O.B. Largo, Florida Unless otherwise specified in the IFB, all prices quoted by the bidder must be F.O.B. Largo, Florida with all delivery costs and charges included in the bid price. Failure to do so may cause rejection of bid. 11. Discounts Cash discounts of two percent (2%) will be considered in determining the award. Unless otherwise specified, discounts offering 10 days or more will be taken by the City's Finance Department, with payment being made on the nearest 10th or 25th of the month subsequent to receipt, inspection and acceptance of articles, and receipt of correct invoice(s). 12. Award The contract or purchase order shall be awarded by appropriate written notice to the qualified, responsible and responsive bidder whose bid best meets the requirements and criteria set forth in the IFB and as follows: a. The ability, capacity and skill of bidder to perform the contract or provide the service required; b. Whether the bidder can perform the contract or provide the service promptly, or within the time specified, without delay or interference; c. The character, integrity, reputation, judgment, experience and efficiency of the bidder; d. The quality of performance of previous contracts or services; e. The previous and existing compliance by the bidder with laws and ordinances relating to the contract or services; f. The sufficiency of the financial resources and ability of the bidder to perform the contract or provide the service; g. The quality, availability and adaptability of the supplies or contractual services to the particular use required; h. The ability of the bidder to provide future maintenance and service; i. The number and scope of conditions attached to the bid. j. The City reserves the right to accept or reject any or all bids or part of bids, to waive irregularities and technicalities, and to request re-bids on the material described in the IFB. k. The City also reserves the right to award the contract on such material as the City deems will best serve its interests. l. The City reserves the right to award the contract on a split-order basis, lump-sum or individual-item basis, or such combination as shall best serve the interest of the City unless otherwise specified. m. The City reserves the right to terminate the contract with thirty (30) days written notice of intent. 13. Brand Names If and wherever in the specifications of brand names, make, name of any manufacturer, trade name, or vendor catalog number is specified, it is for the purpose of establishing a grade or quality of material only. When the City does not wish to rule out other competitors' brands or makes, the phrase OR EQUAL is added. However, if a product other than the specified is bid, it is the bidder's responsibility to identify such product in his bid and he must prove to the City that said product is equal to or better than the product specified. Unless otherwise specified, evidence in the form of samples may be requested if the brand being bid is other than specified by the City. Such samples are to be furnished after the date of bid opening only upon request of the City. If samples should be requested, such samples must be received by the City no later than four days after formal request is made. 14. Variations of Specifications For purposes of bid evaluation, the bidder must indicate any variances from our specifications and/or conditions, no matter how slight. Any deviation from specifications must be explained in complete detail, including any drawings, engineering explanations and effect upon the costs. If variations are not stated in the bid, it will be assumed that the product or service fully complies with the City's specifications. 15. Material Quality All materials used in the manufacture or construction of supplies, materials or equipment purchased and delivered against this contract will be of first quality and not damaged and/or factory seconds. Any materials damaged or not in first quality condition upon receipt will be exchanged within twenty-four (24) hours at no charge to the City. 16. Acceptance of Material The material delivered under this bid shall remain the property of the seller until a physical inspection and actual usage of this material and/or service is made, and thereafter is accepted to the satisfaction of the City. It must comply with the terms herein, and be fully in accord with specification and of the highest quality. In the event the material and/or services supplied to the City is found to be defective or does not conform to specification, the City reserves the right to cancel the order upon written notice to the bidder and return product to bidder at the bidder's expense. The City reserves the right to request that the bidder(s) provide a demonstration unit and/or presentation prior to award. 17. Timely Delivery Time will be of the essence for any orders placed as a result of this bid. The City reserves the right to cancel such orders, or any part thereof, without obligation, if delivery is not made within the time(s) specified on the bid form. 18. Price Changes Re Contracts If this IFB is for an estimated quantity of supplies, etc., versus purchase of a specific quantity of articles or service, consideration in awarding bid for yearly contracts will be given: First to bidder offering firm prices for full contract period; and, Second to bidder offering firm prices subject to market price reduction. 19. City Indemnification RE: Patent & Copyright The Vendor, in accepting this order, agrees to indemnify the City and hold it harmless from and against all claims, liability, loss, damage or expense, including counsel fees, arising from or by reason of any actual or claimed trademark, patent or copyright infringement or litigation based thereon, with respect to the goods or any part thereof covered by this order, and such obligation shall survive acceptance of the goods and payment therefor by the City. 20. Conflict of Interest The bidder certifies that, to the best of his knowledge or belief, no elected/appointed official or employee of the City of Largo, a spouse thereof or other person residing in the same household, is financially interested, directly or indirectly, in providing the goods or services specified in this bid. Financial interest includes ownership of more than five percent of the total assets or capital stock or being an officer, director, manager, partner, proprietor, or agent of the business submitting the bid or of any subcontractor or supplier thereof providing goods or services in excess of ten percent of the total bid amount. Additionally, the bidder, on company letterhead, must divulge at the time of bid submittal, any relative, other than those already specified, of an elected /appointed official or employee of the City of Largo who has a financial interest, as defined herein, in providing the goods or services specified in the bid. The City, at its sole discretion, will determine whether a conflict exists and whether to accept or reject the bid. 21. Public Entity Crime A person or affiliate who has been placed on the convicted vendor list following a conviction for public entity crime may not submit a bid on a contract to provide any goods or services to a public entity, may not submit a bid on a contract with a public entity for the construction or repair of a public building or public work, may not submit bids on leases of real property to a public entity, may not be awarded or perform work as a contractor, supplier, subcontractor, or consultant under a contract with any public entity, and may not transact business with any public entity in excess of the threshold amount provided in Section 287.017, for CATEGORY TWO for a period of 36 months from the date of being placed on the convicted vendor list. 22. Options When the City requests bids with options regarding the extent of services to be provided, the City requests that all bidders provide a cost breakdown for each option proposed. Although all options may be purchased, some may not. The City reserves the right to decide, at its discretion, which options shall be purchased. Award will be made group by group or in the aggregate, whichever is in the best interest of the City of Largo. During the evaluation, vendors may be required to furnish price sheets their quotes are based on. The City also reserves the right to engage more than one firm, if it is believed that different firms might best serve the City's interests in performing different segments of a particular job. 23. Subcontracting Where proposers do not have the "in-house" capability to perform work desired, or to provide a product as specified, in the Bid, subcontracting may be permitted with prior knowledge and approval of the City. The City must be assured and agree that any proposed subcontractor(s) can perform the work or provide the product at the desired quality and in a timely manner. Therefore, the name of any intended subcontractor(s) should be identified in the bid. 24. Taxes The City of Largo is exempt from local, state, federal or transportation taxes, except excise tax on lubricants and batteries in accordance with Chapter 88-393, Laws of Florida, effective October 1, 1988. Exemption certificates will be provided upon request. 25. Failure to Bid If any vendor does not wish to bid, the Statement of No Bid must be returned. Otherwise, the vendor's name will be removed from the City's mailing list after three "No Bids". 26. Additional Information The apparent low bidder may be required to submit to the City within twenty-four (24) hours of bid opening the following documents: Most recent financial statements of the company; A list of equipment owned; A list of references which may be immediately contacted. 27. Manufacturer's Certification The City reserves the right to request from bidders a separate manufacturer certification of all statements made in the bid. Failure to provide such certification may result in rejection of bid or default termination of contract for which the bidder must bear full liability. 28. Default of Contract In case of default by the bidder or contractor, the City may procure the items or services from other sources and hold the bidder or contractor responsible for any excess costs occasioned or incurred thereby. 29. Modification for Changes No agreement or understanding to modify this IFB and resultant purchase orders or contract shall be binding upon the City unless made in writing by the Assistant City Manager or authorized representative of the City of Largo. 30. Order or Precedence In the event of an inconsistency between provisions of the IFB, the inconsistency shall be resolved by giving precedence in the following order: a. The schedule; b. Special provisions; c. Instructions to Bidders and General Instructions; d. Other provisions of the contract, whether incorporated by reference or otherwise; and e. The specifications. 31. Examination of Records The bidder shall keep adequate records and supporting documentation applicable to the subject matter of this bid to include, but not be limited to, records of costs, time worked, working papers and/or accumulations of data, criteria or standards by which findings or data are measured, and dates/times of pick-up or delivery. Said records and documentation shall be retained by the bidder for a minimum of one (1) year from the date the bid is completed and accepted by the City. If any litigation, claim, or audit is started before the expiration of the one (1) year period, the records shall be retained until all litigation, claims, or audit findings, involving the records have been resolved. Should any questions arise concerning this bid the City and its authorized agents shall have the right to review, inspect, and copy all such records and documentation during the record retention period stated above; provided, however, such activity shall be conducted only during normal business hours and shall be at City expense. Bidders shall be authorized to retain electronic copies in lieu of original records, if they so desire. Any subcontractor(s) employed by a bidder who is subject to these requirements shall be subject to these requirements and the bidder is required to so notify any such subcontractor(s). 32. Occupational Health and Safety In compliance with Chapter 442, Florida Statutes, any item delivered to the City resulting from this bid must be accompanied by a Material Safety Data Sheet (MSDS). The MSDS must be maintained by the user agency and must include the following information: a. The chemical name and the common name of the toxic substance. b. The hazards or other risks in the use of the toxic substance, including: 1. The potential for fire, explosion, corrosion, and reactivity; 2. The known acute and chronic health effects of risks from exposure, including the medical conditions which are generally recognized as being aggravated by exposure to the toxic substance; and 3. The primary routes of entry and symptoms of overexposure. c. The proper precautions, handling practices, necessary personal protective equipment, and other safety precautions in the use of or exposure to the toxic substances, including appropriate emergency treatment in case of over-exposure. d. The emergency procedure for spills, fire, disposal, and first aid. e. A description in lay terms of the known specific potential health risks posed by the toxic substance intended to alert any person reading this information. f. The year and month, if available, that the information was compiled and the name, address, and emergency telephone number of the manufacturer responsible for preparing the information. Any questions regarding these requirements should be directed to: Risk and Safety Manager, (727) 587- 6774. 33. Safety Clause Any and all work originated from this bid must comply with all applicable safety laws based on any City, County, State and/or Federal regulations. 34. Hold Harmless The parties recognize that the Contractor/Vendor is an independent contractor. The Contractor/Vendor agrees to assume liability for and indemnify, hold harmless, and defend the City, its commissioners, mayor, officers, employees, agents, and attorneys of, from, and against all liability and expense, including reasonable attorney’s fees, in connection with any and all claims, demands, damages, actions, causes of action, and suits in equity of whatever kind or nature, including claims for personal injury, property damage, equitable relief, or loss of use, arising out of the execution, performance, nonperformance, or enforcement of the terms and conditions of this Agreement, Invitation for Bid or Request for Proposal, whether or not due to or caused by the negligence of the City, its commissioners, mayor, officers, employees, agents, and attorneys excluding only the sole negligence of the City, its commissioners, mayor, officers, employees, agents, and attorneys. The Contractor’s/Vendor's liability hereunder shall include all attorney’s fees and costs incurred by the City in the enforcement of this indemnification provision. This includes claims made by the employees of the Contractor/Vendor against the City and the Contractor/Vendor hereby waives its entitlement, if any, to immunity under Section 440.11, Florida Statutes. The obligations contained in this provision shall survive termination of this Agreement and shall not be limited by the amount of any insurance required to be obtained or maintained under this Agreement. 35. Qualification of Bidders A bidder may be required, before the award of any contract, to show to the complete satisfaction of the City that he has the necessary facilities, equipment, ability and financial resources to perform the work in a satisfactory manner within the time specified. 36. Disqualification of Bidders Any or all proposals will be rejected if there is any reason for believing that collusion exists among the bidders, and participants in such collusion will not be considered in future proposals for the same work. 37. Licenses and Permits The Contractor shall secure all licenses and permits and shall comply with all applicable laws, regulations and codes as required by the State of Florida, or by the City of Largo. The Contractor must fully comply with all Federal and State Laws and County and Municipal Ordinances and Regulations in any manner affecting the performance of the work. 38. Vendor Site Inspection and Evaluation The City reserves the right to inspect the vendor's site prior to award or at any reasonable time throughout the contract period. 39. Applicable Law and Venue This Agreement shall be governed by, construed and interpreted in accordance with the laws of the State of Florida without regard to the conflicts or choice of law principals thereof. Each of the parties hereto: (a) irrevocably submits itself to the exclusive jurisdiction of the State of Florida, and agree that venue shall lie exclusively in the Sixth Judicial Circuit Court in and for Pinellas County, Florida for any state court action arising out of this Agreement, and exclusively in the United States District Court for the Middle District of Florida, Tampa Division, for any federal court action arising out of this Agreement; (b) waives and agrees not to assert against any party hereto, by way of motion, as a defense or otherwise, in any suit, action or other proceeding, (i) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason whatsoever, and (ii) any claim that such suit, action, or proceeding by any party hereto is brought in an inconvenient form or that venue of such suit, action, or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such courts. 40. Provisions for Other Agencies Unless otherwise stipulated by the bidder, the bidder agrees to make available to the Government agencies, departments, and municipalities the bid prices submitted in accordance with said bid terms and conditions therein, should any said governmental entity desire to buy under the proposal. 41. Request for Information Information may be obtained from the Office of Management and Budget, (727) 587-6727, or from the individual listed on the IFB cover letter. CITY OF LARGO, FLORIDA SPECIAL CONDITIONS FOR YARD TRASH, CLASS III & CONSTRUCTION DEMOLITION DEBRIS DISPOSAL BID # 18-B-641 1. Intent In accordance with the enclosed specifications, it is the intent of the City of Largo to receive bid proposals for a disposal facility for the items as described in the specifications. This bid is a Cooperative Bid for the City of Largo, City of Dunedin and the City of Clearwater. This facility must have approval from Pinellas County for recycling the majority of these materials. 2. Manufacturer's Reference Any such references, by brand or trade name or catalog number, are used for the purpose of describing the establishing general quality and performance levels. Unless otherwise stated in the bid section, consideration will be given for any product which meets or exceeds the quality of performance of the specification. Vendors are required to state exactly what they intend to furnish as provided in the proposal section, otherwise they shall be required to furnish the item as specified. 3. Warranty Failure by a manufacturer's authorized dealer to render proper warranty service/adjustments including providing a copy of the warranty work order to the City, shall subject that dealer to suspension from the City's approved vendor listing until satisfactory evidence of correction is presented to the Office of Management and Budget. Payment will not be withheld pending warranty repairs and adjustments. 4. Acceptance Delivery of equipment does not constitute acceptance for the purpose of payment. Final acceptance and authorization of payment shall be given only after thorough inspection indicates that the item meets specifications and conditions listed herein. Should the delivered equipment differ in any respect from specifications payment will be withheld until such time as the vendor takes necessary corrective action. If the proposed corrective action is not acceptable, the Office of Management and Budget may authorize recipient to refuse final acceptance of the time, in which case the item shall remain the property of the vendor and the City shall not be liable for payment for any portion thereof. 5. Delivery Bidders are cautioned that when stating delivery time, they are required to be as realistic as possible. as failure to deliver at stated may result in their removal from the City's bid list. 6. Performance Evaluation: Equipment and Vendor All equipment supplied to the City of Largo under any purchase order awarded as a result of this Invitation for Bid must be fully operational at the time of delivery, and complete with the specified options, attachments and accessories. Upon delivery, the equipment must perform at a level of effectiveness that would be reasonably expected from comparable unit in the same applications; failure of the equipment to perform acceptably will result in its return to the bidder without an obligation for payment. 7. Vendor Site Inspection and Evaluation The City reserves the right to inspect the vendor's site prior to award or at any reasonable time throughout the contract period. 8. Invoices Invoice copies (one original and one copy) shall be mailed to: City of Largo, Solid Waste Division, P.O. Box 296, Largo, Florida 33779-0296. 9. F.O.B. Point All prices quoted shall be F.O.B. destination with all delivery costs and charges included in the bid price. 10. Rejection of Delivery The City reserves the right to refuse delivery of any product which does not meet Federal, State or the specified safety standard. The City reserves the right to cancel any such item(s) on purchase orders and obtain such items from another source, when such items have not been delivered within a reasonable period of time as compared to the time stated in this bid. 11. Reporting Requirements Contractor shall provide the Solid Waste Manager or his/her designee a monthly report and an annual report with pertinent information about all materials delivered. This shall include total tonnage broken down into each major material type, and total cost to the City. Summaries of tonnages of all materials recovered by material type shall be included in the report. 12. Disposition of Recyclable Materials The Contractor shall not dispose of and/or landfill any designated recyclables or recovered materials processed that can otherwise be disposed of. The Contractor shall not knowingly, or without reasonable assumption, sell recyclables or recovered materials to another agent that landfills or disposes of material other than through recycling. The limitations of this paragraph do not apply to Rejects and Residue. The City reserves the right to cancel the use of the awarded bid if it finds that the Contractor is not disposing of materials in a fashion that complies with this paragraph. 13. Period of Contract Contract shall be for a period of three years effective the date of award. 14. Option of Renewal The contract may be renewed for one additional two year period by mutual agreement only if all prices, terms, and conditions remain the same. CITY OF LARGO, FLORIDA SPECIFICATIONS FOR YARD TRASH & CONSTRUCTION DEMOLITION DEBRIS DISPOSAL BID # 18-B-641 1. Estimated Volume City of Largo: Given monthly and seasonal cycles, the City of Largo's Solid Waste Division will transport approximately 28,000 tons of non-putricible waste annually. These materials will be transported in roll-off trucks, rear- load trucks and claw trucks, Monday through Friday and occasionally on Saturday (if facility is open). City of Dunedin: Given monthly and seasonal cycles, the City of Dunedin will transport approximately 8,000 tons of non-putricible waste annually. These materials will be transported in roll-off trucks, claw trucks and rear-load trucks, Monday through Friday and occasionally on Saturday (if facility is open). City of Clearwater: Given monthly and seasonal cycles, the City of Clearwater will transport approximately 26,000 tons of non-putricible waste annually. These materials will be transported in roll- off trucks, claw trucks and rear-load trucks, Monday through Friday and occasionally on Saturday (if facility is open). 2. Definitions The bidder is hereby advised that for the purpose of this bid the following definitions apply: Pure Construction & Demolition Debris Materials generally considered to be not water soluble and non-hazardous in nature, including, but not limited to, steel, glass, brick, concrete, asphalt roofing material, pipe, gypsum wall board, and lumber: from the construction or destruction of a structure as part of a construction or demolition project, and including rock, soils, tree remains, trees and other vegetative matter which normally results from land clearing or land development petitions for a construction project. Mixing of construction and demolition debris with other types of solid waste, including material from a construction or demolition site which is not from the actual construction or destruction of a structure, will cause it to be classified as other than construction and demolition debris. SPECIFICATIONS (continued) FOR YARD TRASH & CONSTRUCTION DEMOLITION DEBRIS DISPOSAL BID # 18-B-641 Yard Waste (Clean) Normal horticultural materials including but not limited to: grass clippings, tree trimmings, branches, stumps, leaves, weeds, and other bi-products of horticultural growth. These materials solely or in combination with less than 5% miscellaneous materials. Yard Waste (Clean in Plastic or Paper Bags) Normal horticultural materials including but not limited to: grass clippings, tree trimmings, branches, stumps, leaves, weeds, and other bi-products of horticultural growth. These materials solely or in combination with less than 20% materials in plastic or paper bags. Class III/Mixed Loads Loads consisting of the following items: couches, bedding, white goods, carpet, glass plastic, pails/buckets, paper, and general household / non-putricible waste . CITY OF LARGO, FLORIDA BID FORM FOR YARD TRASH & CONSTRUCTION DEMOLITION DEBRIS DISPOSAL BID #18-B-641 City of Largo Estimated Annual Price Tonnage Per Ton Total Cost Pure Construction-Demolition Debris 4,000 $ $ Yard Waste – Clean 3,000 $ $ Yard Waste – Clean w/ material in bags 4,000 $ $ Class III/Select Compactor Roll-offs 17,000 $ $ Days and Hours of Operation: __________________________________________ List holidays when business is closed: ___________________________________________ ____________________________________________________________________ Round Trip Driving Distance from each Cities facility to the disposal facility: City of Largo: Public Works Complex, 1000 2nd Street SE, Largo, FL 33771 – To Bidders Disposal Site __________________________________________ City of Dunedin: Solid Waste Yard, 1070 Virginia St., Dunedin, FL 34698 – To Bidders Disposal Site __________________________________________ City of Clearwater: Solid Waste Department, 1701 N. Hercules Avenue, Clearwater, Fl 33765 -To Bidders Disposal Site __________________________________________ Location of Disposal Site (address): __________________________________________ __________________________________________ ___________________________________________ CITY OF LARGO, FLORIDA BID FORM FOR YARD TRASH & CONSTRUCTION DEMOLITION DEBRIS DISPOSAL BID #18-B-641 PAGE 2 The undersigned bidder does hereby agree to furnish the City of Largo, Florida, the items listed in accordance with the Specifications shown by the Invitation to Bid to be delivered to the specified site for the price indicated. IT IS BIDDERS RESPONSIBILITY TO CHECK THE WEBSITE www.largo.com FOR FINAL DOCUMENTS AND ADDENDUMS BEFORE SUBMITTAL THIS BID MUST BE SIGNED BY A PERSON AUTHORIZED TO ACT FOR THE COMPANY IN HIS/HER OWN NAME. BIDDER NAME: ADDRESS: PURCHASE ORDER ADDRESS: PHONE NUMBER: FAX NUMBER: COMPANY CONTACT (REP): EMAIL ADDRESS(REP): SIGNATURE: TAX ID# SSN or EIN: CITY OF LARGO, FLORIDA REFERENCE INFORMATION FOR YARD TRASH & CONSTRUCTION DEMOLITION DEBRIS DISPOSAL BID #18-B-641 Organization __________________________________________________________________ Contact Person ________________________________________________________________ Address_______________________________________________________________________ City State Zip_______Phone Number ( ) _____ Project Cost Date Performed ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Organization __________________________________________________________________ Contact Person ________________________________________________________________ Address_______________________________________________________________________ City State Zip_______Phone Number ( ) _____ Project Cost Date Performed ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Organization __________________________________________________________________ Contact Person ________________________________________________________________ Address_______________________________________________________________________ City State Zip_______Phone Number ( ) _____ Project Cost Date Performed ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Organization __________________________________________________________________ Contact Person ________________________________________________________________ Address_______________________________________________________________________ City State Zip_______Phone Number ( ) _____ Project Cost Date Performed ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Organization __________________________________________________________________ Contact Person ________________________________________________________________ Address_______________________________________________________________________ City State Zip_______Phone Number ( ) _____ Project Cost Date Performed ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Representative Typed Name/Title___________________________________________________ Representative Signature ____________________________ Firm________________________ CITY OF LARGO, FLORIDA STATEMENT OF NO BID FOR YARD TRASH & CONSTRUCTION DEMOLITION DEBRIS DISPOSAL BID #18-B-641 IF YOU DO NOT INTEND TO BID ON THIS REQUIREMENT, PLEASE COMPLETE AND RETURN THIS FORM PRIOR TO DATE SHOWN FOR RECEIPT OF BIDS TO: City of Largo, Office of Management and Budget, Post Office Box 296, Largo, FL 33779-0296. OR FAX THIS PAGE ONLY to (727) 586-7420, OR EMAIL to jwheaton@largo.com WE, THE UNDERSIGNED, HAVE DECLINED TO BID FOR THE FOLLOWING REASON(S): WE DO NOT OFFER THIS PRODUCT OR EQUIVALENT. SPECIFICATIONS ARE TOO "TIGHT", I.E. GEARED TOWARD ONE BRAND OR MANUFACTURER ONLY (PLEASE EXPLAIN BELOW). UNABLE TO MEET SPECIFICATIONS (PLEASE EXPLAIN BELOW). SPECIFICATIONS UNCLEAR (PLEASE EXPLAIN BELOW). INSUFFICIENT TIME TO RESPOND TO INVITATION TO BID. OUR PRODUCT SCHEDULE WOULD NOT PERMIT US TO PERFORM. UNABLE TO MEET BOND REQUIREMENTS. OTHER (PLEASE SPECIFY BELOW). REMARKS: WE UNDERSTAND THAT IF THE "NO BID" LETTER IS NOT EXECUTED AND RETURNED, OUR NAME MAY BE DELETED FROM THE LIST OF QUALIFIED BIDDERS FOR THE CITY OF LARGO FOR FUTURE PROJECTS. Typed Name and Title __________________________________________________________ Signature ____________________________________________________________________ Company name _______________________________________________________________ Address _____________________________________________________________________ City State Zip Code ___________________ Telephone Number ( ) Fax ( ) _______________________ INSURANCE REQUIREMENTS CHECKLIST FOR BID #18-B-641 Items marked "X" must be provided X General Liability Minimum Limits Required x Commercial General Liability $ 2,000,000 General Aggregate x Occurrence Form $ 1,000,000 Product/Complete Operations Agg. $ 1,000,000 Personal & Advertising Injury $ 1,000,000 Each Occurrence $ X Automobile Liability Owned, Hired & Non-Owned $ 1,000,000 Combined Single Limit per Occurrence X Worker's Compensation Statutory and Employer's Liability $ 100,000 Each Accident $ 500,000 Disease - Policy Limit $ 100,000 Disease - Each employee Professional Liability - Errors & Omissions (*To be completed by Bidder) * Deductible: $ $ Aggregate * Claims Made (Y/N): $ Each Claim * Occurrence (Y/N): * Defense included in Limits (Y/N): Builder's Risk/Installation Floater (* To be completed by Bidder) * Flood Included $ Limit $ 100% of Completed or Installed Value * Transportation Included $ Limit All-Risk Form * Storage Included $ Limit City Must Be A Named Insured. Copy of Policy Will Be Required. Other $ $ X The Certificate of Insurance must show “The City of Largo,its elected officials and employees” as an additional insured. The Certificate shall bear the requisite endorsements providing that the City is an additional insured and providing for waiver of subrogation by the Vendor/Subcontractor when applicable. X Vendor/Subcontractor shall provide immediate notice of any Vendor/Subcontractor initiated cancellation, non-renewal or adverse change to the policies required to be obtained or maintained pursuant to this RFP/Bid. Vendor/Subcontractor shall immediately forward to the City any notice it receives of cancellation, non-renewal or adverse change to any policy that is initiated by a policy provider(s). X Certificates must identify bid number and bid title. _______ Subcontractors must carry same Insurance limits. _______ Insurance Carrier should be A rated. _______ The City reserves the right to request any additional information it deems necessary, and at a frequency it deems necessary, to confirm the requisite insurance remains in effect, at the required levels, for the duration of any contractural agreement entered into pursuant to this RFP/Bid and/or any Purchase Order issued in accordance with this RRP/Biid Statement of Bidder: We understand the requirements requested and agree to comply fully. Bidder - Authorized Signature A complete copy of this form with original signature must accompany bid. BID TABULATION SHEET –BID #18-B-641 YARD TRASH, CLASS III & CONSTRUCTION DEMOLITION DEBRIS DISPOSAL Opens: JUNE 14, 2018 3:00 P.M. B I N A M E Angelos Recycled Materials Consolidated Resource Recovery Waste Management Inc DESCRIPTION 1 2 3 4 5 Page #1 PURE CONSTRUCTION -DEMOLITION DEBRIS PRICE PER TON 34.00 No bid 45.00 TOTAL COST 136,000.00 180,000.00 YARD WASTE - CLEAN PRICE PER TON 34.00 31.95 45.00 TOTAL COST 102,000.00 98,850.00 135,000.00 YARD WASTE – CLEAN WITH MATERIAL IN BAGS PRICE PER TON 34.00 42.67 45.00 TOTAL COST 136,000.00 170,680.00 180,000.00 CLASS III – SELECT COMPACTOR/ROLL-OFFS PRICE PER TON 34.00 No bid 45.00 TOTAL COST 578,000.00 765,000.00 BID TABULATION SHEET –BID #18-B-641 YARD TRASH, CLASS III & CONSTRUCTION DEMOLITION DEBRIS DISPOSAL Opens: JUNE 14, 2018 3:00 P.M. B I N A M E Angelos Recycled Materials Consolidated Resource Recovery Waste Management Inc DESCRIPTION 1 2 3 4 5 Page #2 BID TABULATION SHEET –BID #18-B-641 YARD TRASH, CLASS III & CONSTRUCTION DEMOLITION DEBRIS DISPOSAL Opens: JUNE 14, 2018 3:00 P.M. B I N A M E Angelos Recycled Materials Consolidated Resource Recovery Waste Management Inc DESCRIPTION 1 2 3 4 5 Page #3 BID TABULATION SHEET –BID #18-B-641 YARD TRASH, CLASS III & CONSTRUCTION DEMOLITION DEBRIS DISPOSAL Opens: JUNE 14, 2018 3:00 P.M. B I N A M E Angelos Recycled Materials Consolidated Resource Recovery Waste Management Inc DESCRIPTION 1 2 3 4 5 Page #4 Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7199 Agenda Date: 12/19/2019 Status: Consent AgendaVersion: 1 File Type: Action ItemIn Control: Parks & Recreation Agenda Number: 7.6 SUBJECT/RECOMMENDATION: Authorize award of Invitation to Bid 03-20, Landscaping Maintenance Services, to Botanical Dimensions, Dean’s Environmental, Earth Designs, Gamco Properties, MMM Property Maintenance, and Valleycrest Landscape, for a nine month not-to-exceed amount of $500,000 for the period of January 1, 2020 through September 30, 2020, with the option for two one-year term extensions and authorize the appropriate officials to execute same. (consent) SUMMARY: On September 27, 2019, Invitation to Bid (ITB) 03-20 for Landscaping Maintenance Services was issued. The Scope of Services consists of eight zones covering 645 properties throughout the City. Zones 1 - 7 will be managed by the Parks and Recreation department and Zone 8 will be managed by the Public Utilities department. Each property is an area such as a right-of-way, median, city facility or park within the city. Vendors were asked to provide landscape maintenance services to the various properties which included one or all of the following services: turf maintenance, palm and tree maintenance, shrub and groundcover maintenance, weed control, mulch maintenance, and litter removal. Council authorization is requested for a nine month not-to-exceed award of $500,000 which includes a contingency for additional properties as they are added to a zone, supplemental work that may be requested, annual CPI contract increases, and other contractual management requirements. The award recommendation are as follows: Zone 1: Beach Dean’s Environmental Zone 2: Countryside Earth Designs Zone 3: Downtown Valleycrest Landscaping Zone 4: East Earth Designs Zone 5: Northwest Gamco Properties Zone 6: Southwest Botanical Dimensions Zone 7: Ballfields Botanical Dimensions Zone 8: Public Utilities MMM Property Maintenance Page 1 City of Clearwater Printed on 12/19/2019 File Number: ID#19-7199 The award methodology is summarized as follows: Zone 5: Northwest: Earth Designs was low bid in Zones 2, 4 and 5. Due to the workload involved, the City is recommending Gamco Properties for Zone 5, and Zone 2 and 4 to be awarded to Earth Designs. Zone 6: Southwest: MMM Property Maintenance was low bid in Zones 6 and 8. Due to MMM Properties being a new vendor for the City and Zone 8 being an added zone, the City is recommending Botanical Dimensions, our current vendor, for Zone 6 and awarding Zone 8 to MMM Property Maintenance. The initial award period is 9 months to stay on the fiscal year calendar. Incumbent landscapers are providing continued services throughout the end of 2019. Subsequent terms for years two and three will be for Fiscal Year 2021 and Fiscal Year 2022. APPROPRIATION CODE AND AMOUNT: Parks and Recreation Zone 1 - Zone 7: 0101867-530300 Public Utilities Zone 8: 4212051-530400 USE OF RESERVE FUNDS: N/A Page 2 City of Clearwater Printed on 12/19/2019 v. 11.2018 Purchasing Office 100 S Myrtle Ave 33756-5520 PO Box 4748 33758-4748 Clearwater FL 727-562-4633 INVITATION TO BID #03-20 Landscaping Maintenance Services September 27, 2019 NOTICE IS HEREBY GIVEN that sealed bids will be received by the City of Clearwater (City) until 10:00 A.M., Local Time, October 29, 2019, to provide Landscaping Maintenance Services. Brief Description: The City of Clearwater seeks multiple vendors to provide landscaping maintenance services at designated sites throughout the City. Eight (8) zones are represented in the bid. The award methodology will include consideration of vendor capacity and past performance (if applicable); determination that a Zone Bid is (or is not) reasonable for the work required, and that multi-zone awards may result in apparent low bidder(s) not being awarded additional zone(s). Bids must be in accordance with the provisions, specifications and instructions set forth herein and will be received by Purchasing until the above noted time, when they will be publicly acknowledged and accepted. Bid packets, any attachments and addenda are available for download at www.myclearwater.com/bid . Please read the entire solicitation package and submit the bid in accordance with the instructions. This document (less this invitation and the instructions) and any required response documents, attachments, and submissions will constitute the bid. General, Process or Technical Questions concerning this solicitation should be directed, IN WRITING, to the following Procurement Analyst: Kelly Rogers Procurement Analyst Kelly.Rogers@myclearwater.com This Invitation to Bid is issued by: Alyce Benge, CPPO, C.P.M. Purchasing Manager Alyce.Benge@myclearwater.com INSTRUCTIONS Landscaping Maintenance Services 2 ITB #03-20 i.1 VENDOR QUESTIONS: All questions regarding the contents of this solicitation, and solicitation process (including requests for ADA accommodations), shall be directed solely to the point-of- contact listed on page 1. Questions should be submitted in writing via letter, fax or email (in body of email – not as an attachment). Questions received less than seven (7) calendar days prior to the due date and time may be answered at the discretion of the City. i.2 ADDENDA/CLARIFICATIONS: Any changes to the specifications will be in the form of an addendum. Addenda are posted on the City website and mailed to those who register on the City website when downloading solicitations no less than seven (7) days prior to the Due Date. Vendors are cautioned to check the Purchasing Website for addenda and clarifications prior to submitting their bid. The City cannot be held responsible if a vendor fails to receive any addenda issued. The City shall not be responsible for any oral changes to these specifications made by any employees or officer of the City. Failure to acknowledge receipt of an addendum may result in disqualification of a bid. i.3 VENDOR PRE-BID MEETING: Yes No Mandatory Attendance: Yes No Date/Time: October 9, 2019, 10:00 a.m. Location: City of Clearwater – Municipal Services Building (MSB) 100 S Myrtle Avenue, Room 130 Clearwater, FL 33756 Note: Please bring a hardcopy of this solicitation with you for reference during the meeting. A valid ID is also required upon entry to the building. Attendance is not mandatory as a condition of submitting a bid. The pre-bid meeting provides interested parties an opportunity to discuss the City's needs and ask questions. i.4 DUE DATE & TIME FOR SUBMISSION AND OPENING: Date: October 29, 2019 Time: 10:00 A.M. (Local Time) The City will open all bids properly and timely submitted and will record the names and other information specified by law and rule. All bids become the property of the City and will not be returned except in the case of a late submission. Respondent names, as read at the bid opening, will be posted on the City website. Once a notice of intent to award is posted or 30 days from day of opening elapses, whichever occurs earlier, bids are available for inspection by contacting Purchasing. i.5 BID FIRM TIME: 90 days from Opening Bid shall remain firm and unaltered after opening for the number of days shown above. The City may accept the bid, subject to successful contract negotiations, at any time during this time. i.6 BID SECURITY: Yes No If so designated above, a bid security in the amount specified must be submitted with the bid. The security may be submitted in any one of the following forms: an executed surety bond issued by a firm licensed and registered to transact such business with the State of Florida; cash; certified check, or cashier's check payable to the City of Clearwater (personal or company checks are not acceptable); certificate of deposit or any other form of deposit issued by a financial institution and acceptable to the City. Such bid security shall be forfeited to the City of Clearwater should the bidder selected fail to execute a contract when requested. INSTRUCTIONS Landscaping Maintenance Services 3 ITB #03-20 PERFORMANCE SECURITY: Yes No If required herein, the Contractor, simultaneously with the execution of the Contract, will be required to furnish a performance security. The security may be submitted in one-year increments and in any one of the following forms: an executed surety bond issued by a firm licensed and registered to transact such business with the State of Florida; cash; certified check, cashier's check or money order payable to the City of Clearwater (personal and company checks are not acceptable); certificate of deposit or any other form of deposit issued by a financial institution and acceptable to the City. If the Contractor fails or refuses to fully comply with the terms and conditions of the contract, the City shall have the right to use all or such part of said security as may be necessary to reimburse the City for loss sustained by reason of such breach. The balance of said security, if any, will be returned to Contractor upon the expiration or termination of the contract. i.6 SUBMIT BIDS TO: Use label at the end of this solicitation package City of Clearwater Attn: Purchasing 100 S Myrtle Ave, 3rd Fl, Clearwater FL 33756-5520 or PO Box 4748, Clearwater FL 33758-4748 Bids will be received at this address. Bidders may mail or hand-deliver bids. E-mail or fax submissions will not be accepted. No responsibility will attach to the City of Clearwater, its employees or agents for premature opening of a bid that is not properly addressed and identified. i.7 LATE BIDS. The bidder assumes responsibility for having the bid delivered on time at the place specified. All bids received after the date and time specified shall not be considered and will be returned unopened to the bidder. The bidder assumes the risk of any delay in the mail or in handling of the mail by employees of the City of Clearwater, or any private courier, regardless whether sent by mail or by means of personal delivery. You must allow adequate time to accommodate all registration and security screenings at the delivery site. A valid photo I.D. may be required. It shall not be sufficient to show that you mailed or commenced delivery before the due date and time. All times are Clearwater, Florida local times. The bidder agrees to accept the time stamp in the City Purchasing Office as the official time. i.8 COMMENCEMENT OF WORK. If bidder begins any billable work prior to the City’s final approval and execution of the contract, bidder does so at its own risk. i.9 RESPONSIBILITY TO READ AND UNDERSTAND. Failure to read, examine and understand the solicitation will not excuse any failure to comply with the requirements of the solicitation or any resulting contract, nor shall such failure be a basis for claiming additional compensation. If a vendor suspects an error, omission or discrepancy in this solicitation, the vendor must immediately and in any case not later than seven (7) business days in advance of the due date notify the contact on page one (1). The City is not responsible for and will not pay any costs associated with the preparation and submission of the bid. Bidders are cautioned to verify their bids before submission, as amendments to or withdrawal of bids submitted after time specified for opening of bids may not be considered. The City will not be responsible for any bidder errors or omissions. i.10 FORM AND CONTENT OF BIDS. Unless otherwise instructed or allowed, bids shall be submitted on the forms provided. An original and the designated number of copies of each bid are required. Bids, including modifications, must be submitted in ink, typed, or printed form and signed by an authorized representative. Please line through and initial rather than erase changes. If the bid is not properly signed or if any changes are not initialed, it may be considered non-responsive. In the event of a disparity between the unit price and the extended price, the unit price shall prevail unless obviously in error, as determined by the City. The City may require that an electronic copy of the bid be submitted. The bid must provide all information requested and must address all points. The INSTRUCTIONS Landscaping Maintenance Services 4 ITB #03-20 City does not encourage exceptions. The City is not required to grant exceptions and depending on the exception, the City may reject the bid. i.11 SPECIFICATIONS. Technical specifications define the minimum acceptable standard. When the specification calls for “Brand Name or Equal,” the brand name product is acceptable. Alternates will be considered upon demonstrating the other product meets stated specifications and is equivalent to the brand product in terms of quality, performance and desired characteristics. Minor differences that do not affect the suitability of the supply or service for the City’s needs may be accepted. Burden of proof that the product meets the minimum standards or is equal to the brand name, product, is on the bidder. The City reserves the right to reject bids that the City deems unacceptable. i.12 MODIFICATION / WITHDRAWAL OF BID. Written requests to modify or withdraw the bid received by the City prior to the scheduled opening time will be accepted and will be corrected after opening. No oral requests will be allowed. Requests must be addressed and labeled in the same manner as the bid and marked as a MODIFICATION or WITHDRAWAL of the bid. Requests for withdrawal after the bid opening will only be granted upon proof of undue hardship and may result in the forfeiture of any bid security. Any withdrawal after the bid opening shall be allowed solely at the City’s discretion. i.13 DEBARMENT DISCLOSURE. If the vendor submitting this bid has been debarred, suspended, or otherwise lawfully precluded from participating in any public procurement activity, including being disapproved as a subcontractor with any federal, state, or local government, or if any such preclusion from participation from any public procurement activity is currently pending, the bidder shall include a letter with its bid identifying the name and address of the governmental unit, the effective date of this suspension or debarment, the duration of the suspension or debarment, and the relevant circumstances relating the suspension or debarment. i.14 RESERVATIONS. The City reserves the right to reject any or all bids or any part thereof; to rebid the solicitation; to reject non-responsive or non-responsible bids; to reject unbalanced bids; to reject bids where the terms, prices, and/or awards are conditioned upon another event; to reject individual bids for failure to meet any requirement; to award by item, part or portion of an item, group of items, or total; to make multiple awards; to waive minor irregularities, defects, omissions, technicalities or form errors in any bid. The City may seek clarification of the bid from bidder at any time, and failure to respond is cause for rejection. Submission of a bid confers on bidder no right to an award or to a subsequent contract. The City is charged by its Charter to make an award that is in the best interest of the City. All decisions on compliance, evaluation, terms and conditions shall be made solely at the City’s discretion and made to favor the City. No binding contract will exist between the bidder and the City until the City executes a written contract or purchase order. i.15 OFFICIAL SOLICITATION DOCUMENT. Changes to the solicitation document made by a bidder may not be acknowledged or accepted by the City. Award or execution of a contract does not constitute acceptance of a changed term, condition or specification unless specifically acknowledged and agreed to by the City. The copy maintained and published by the City shall be the official solicitation document. i.16 COPYING OF BIDS. Bidder hereby grants the City permission to copy all parts of its bid, including without limitation any documents and/or materials copyrighted by the bidder. The City’s right to copy shall be for internal use in evaluating the proposal. i.17 CONTRACTOR ETHICS. It is the policy of the City to promote courtesy, fairness, impartiality, integrity, service, professionalism, economy, and government by law in the Procurement process. The responsibility for implementing this policy rests with each individual who participates in the Procurement process, including Respondents and Contractors. To achieve the purpose of this Article, it is essential that Respondents and Contractors doing business with the City also observe the ethical standards prescribed herein. It shall be a breach of ethical standards to: INSTRUCTIONS Landscaping Maintenance Services 5 ITB #03-20 a. Exert any effort to influence any City employee or agent to breach the standards of ethical conduct. b. Intentionally invoice any amount greater than provided in Contract or to invoice for Materials or Services not provided. c. Intentionally offer or provide sub-standard Materials or Services or to intentionally not comply with any term, condition, specification or other requirement of a City Contract. i.18 GIFTS. The City will accept no gifts, gratuities or advertising products from bidders or prospective bidders and affiliates. The City may request product samples from vendors for product evaluation. i.19 PROTESTS AND APPEALS. If a Respondent believes there is a mistake, impropriety, or defect in the solicitation, believes the City improperly rejected its proposal, and/or believes the selected proposal is not in the City’s best interests, the Respondent may submit a written protest. All protests and appeals are governed by the City of Clearwater Purchasing Policy and Procedures. If any discrepancy exists between this Section and the Purchasing Policy, the language of the Purchasing Policy controls. Protests based upon alleged mistake, impropriety, or defect in a solicitation that is apparent before the bid opening must be filed with the Procurement Officer no later than five (5) business days before Bid Opening. Protests that only become apparent after the Bid Opening must be filed within ten (10) business days of the alleged violation of the applicable purchasing ordinance. The complete protest procedure can be obtained by contacting Purchasing. ADDRESS PROTESTS TO: Alyce Benge, CPPO, C.P.M. Purchasing Manager 100 S Myrtle Ave, 3rd Fl Clearwater FL 33756-5520 or PO Box 4748 Clearwater FL 33758-4748 INSTRUCTIONS – EVALUATION Landscaping Maintenance Services 6 ITB #03-20 i.20 EVALUATION PROCESS. Bids will be reviewed by Purchasing and representative(s) of the respective department(s). The City staff may or may not initiate discussions with bidders for clarification purposes. Clarification is not an opportunity to change the bid. Bidders shall not initiate discussions with any City employee or official. i.21 PRESENTATIONS/INTERVIEWS. The bidder must provide a formal presentation/interview upon request. i.22 CRITERIA FOR EVALUATION AND AWARD. The City evaluates three (3) categories of information: responsiveness, responsibility, and price. All bids must meet the following responsiveness and responsibility criteria to be considered further. a) Responsiveness. The City will determine whether the bid complies with the instructions for submitting bids including completeness of bid which encompasses the inclusion of all required attachments and submissions. The City must reject any bids that are submitted late. Failure to meet other requirements may result in rejection. b) Responsibility. The City will determine whether the bidder is one with whom it can or should do business. Factors that the City may evaluate to determine "responsibility" include, but are not limited to: excessively high or low priced bids, past performance, references (including those found outside the bid), compliance with applicable laws-including tax laws, bidder's record of performance and integrity - e.g. has the bidder been delinquent or unfaithful to any contract with the City, whether the bidder is qualified legally to contract with the City, financial stability and the perceived ability to perform completely as specified. A bidder must at all times have financial resources sufficient, in the opinion of the City, to ensure performance of the contract and must provide proof upon request. City staff may also use Dun & Bradstreet and/or any generally available industry information. The City reserves the right to inspect and review bidder’s facilities, equipment and personnel and those of any identified subcontractors. The City will determine whether any failure to supply information, or the quality of the information, will result in rejection. c) Price. We will then evaluate the bids that have met the requirements above. i.23 COST JUSTIFICATION. In the event only one response is received, the City may require that the bidder submit a cost proposal in sufficient detail for the City to perform a cost/price analysis to determine if the bid price is fair and reasonable. i.24 CONTRACT NEGOTIATIONS AND ACCEPTANCE. Bidder must be prepared for the City to accept the bid as submitted. If bidder fails to sign all documents necessary to successfully execute the final contract within a reasonable time as specified, or negotiations do not result in an acceptable agreement, the City may reject bid or revoke the award, and may begin negotiations with another bidder. Final contract terms must be approved or signed by the appropriately authorized City official(s). No binding contract will exist between the bidder and the City until the City executes a written contract or purchase order. i.25 NOTICE OF INTENT TO AWARD. Notices of the City’s intent to award a Contract are posted to Purchasing’s website. It is the bidder’s responsibility to check the City of Clearwater’s website at www.myclearwater.com/bid to view relevant bid information and notices. i.26 BID TIMELINE. Dates are tentative and subject to change. Release ITB: September 27, 2019 Advertise Tampa Bay Times: September 28, 2019 Bids due: October 29, 2019 Review bids: October 29 – November 8, 2019 Award recommendation: November 12, 2019 Council authorization: December 5, 2019 Contract begins: January 2020 STANDARD TERMS AND CONDITIONS Landscaping Maintenance Services 7 ITB #03-20 S.1 DEFINITIONS. Uses of the following terms are interchangeable as referenced: “vendor, contractor, supplier, proposer, company, parties, persons”, “purchase order, PO, contract, agreement”, “city, Clearwater, agency, requestor, parties”, “bid, proposal, response, quote”. S.2 INDEPENDENT CONTRACTOR. It is expressly understood that the relationship of Contractor to the City will be that of an independent contractor. Contractor and all persons employed by Contractor, either directly or indirectly, are Contractor’s employees, not City employees. Accordingly, Contractor and Contractor’s employees are not entitled to any benefits provided to City employees including, but not limited to, health benefits, enrollment in a retirement system, paid time off or other rights afforded City employees. Contractor employees will not be regarded as City employees or agents for any purpose, including the payment of unemployment or workers’ compensation. If any Contractor employees or subcontractors assert a claim for wages or other employment benefits against the City, Contractor will defend, indemnify and hold harmless the City from all such claims. S.3 SUBCONTRACTING. Contractor may not subcontract work under this Agreement without the express written permission of the City. If Contractor has received authorization to subcontract work, it is agreed that all subcontractors performing work under the Agreement must comply with its provisions. Further, all agreements between Contractor and its subcontractors must provide that the terms and conditions of this Agreement be incorporated therein. S.4 ASSIGNMENT. This Agreement may not be assigned either in whole or in part without first receiving the City’s written consent. Any attempted assignment, either in whole or in part, without such consent will be null and void and in such event the City will have the right at its option to terminate the Agreement. No granting of consent to any assignment will relieve Contractor from any of its obligations and liabilities under the Agreement. S.5 SUCCESSORS AND ASSIGNS, BINDING EFFECT. This Agreement will be binding upon and inure to the benefit of the parties and their respective permitted successors and assigns. S.6 NO THIRD-PARTY BENEFICIARIES. This Agreement is intended for the exclusive benefit of the parties. Nothing set forth in this Agreement is intended to create, or will create, any benefits, rights, or responsibilities in any third parties. S.7 NON- EXCLUSIVITY. The City, in its sole discretion, reserves the right to request the materials or services set forth herein from other sources when deemed necessary and appropriate. No exclusive rights are encompassed through this Agreement. S.8 AMENDMENTS. There will be no oral changes to this Agreement. This Agreement can only be modified in a writing signed by both parties. No charge for extra work or material will be allowed unless approved in writing, in advance, by the City and Contractor. S.9 TIME OF THE ESSENCE. Time is of the essence to the performance of the parties’ obligations under this Agreement. S.10 COMPLIANCE WITH APPLICABLE LAWS. a. General. Contractor must procure all permits and licenses and pay all charges and fees necessary and incidental to the lawful conduct of business. Contractor must stay fully informed of existing and future federal, state, and local laws, ordinances, and regulations that in any manner affect the fulfillment of this Agreement and must comply with the same at its own expense. Contractor bears full responsibility for training, safety, and providing necessary equipment for all Contractor personnel to achieve throughout the term of the Agreement. Upon request, Contractor will demonstrate to the City's satisfaction any programs, procedures, and other activities used to ensure compliance. b. Drug-Free Workplace. Contractor is hereby advised that the City has adopted a policy establishing a drug-free workplace for itself and those doing business with the City to ensure the safety and health of all persons working on City contracts and projects. Contractor will require a drug-free workplace for all Contractor personnel working under this Agreement. Specifically, all Contractor personnel who are working under this Agreement must be notified STANDARD TERMS AND CONDITIONS Landscaping Maintenance Services 8 ITB #03-20 in writing by Contractor that they are prohibited from the manufacture, distribution, dispensation, possession, or unlawful use of a controlled substance in the workplace. Contractor agrees to prohibit the use of intoxicating substances by all Contractor personnel and will ensure that Contractor personnel do not use or possess illegal drugs while in the course of performing their duties. c. Federal and State Immigration Laws. Contractor agrees to comply with the Immigration Reform and Control Act of 1986 (IRCA) in performance under this Agreement and to permit the City and its agents to inspect applicable personnel records to verify such compliance as permitted by law. Contractor will ensure and keep appropriate records to demonstrate that all Contractor personnel have a legal right to live and work in the United States. (i) As applicable to Contractor, under this provision, Contractor hereby warrants to the City that Contractor and each of its subcontractors will comply with, and are contractually obligated to comply with, all federal immigration laws and regulations that relate to their employees (hereinafter “Contractor Immigration Warranty”). (ii) A breach of the Contractor Immigration Warranty will constitute as a material breach of this Agreement and will subject Contractor to penalties up to and including termination of this Agreement at the sole discretion of the City. (iii) The City retains the legal right to inspect the papers of all Contractor personnel who provide services under this Agreement to ensure that Contractor or its subcontractors are complying with the Contractor Immigration Warranty. Contractor agrees to assist the City in regard to any such inspections. (iv) The City may, at its sole discretion, conduct random verification of the employment records of Contractor and any subcontractor to ensure compliance with the Contractor Immigration Warranty. Contractor agrees to assist the City in regard to any random verification performed. (v) Neither Contractor nor any subcontractor will be deemed to have materially breached the Contractor Immigration Warranty if Contractor or subcontractor establishes that it has complied with the employment verification provisions prescribed by Sections 274A and 274B of the Federal Immigration and Nationality Act. d. Nondiscrimination. Contractor represents and warrants that it does not discriminate against any employee or applicant for employment or person to whom it provides services because of race, color, religion, sex, national origin, or disability, and represents and warrants that it complies with all applicable federal, state, and local laws and executive orders regarding employment. Contractor and Contractor’s personnel will comply with applicable provisions of Title VII of the U.S. Civil Rights Act of 1964, as amended, Section 504 of the Federal Rehabilitation Act, the Americans with Disabilities Act (42 U.S.C. § 12101 et seq.), and applicable rules in performance under this Agreement. S.11 SALES/USE TAX, OTHER TAXES. Contractor is responsible for the payment of all taxes including federal, state, and local taxes related to or arising out of Contractor’s services under this Agreement, including by way of illustration but not limitation, federal and state income tax, Social Security tax, unemployment insurance taxes, and any other taxes or business license fees as required. If any taxing authority should deem Contractor or Contractor employees an employee of the City, or should otherwise claim the City is liable for the payment of taxes that are Contractor’s responsibility under this Agreement, Contractor will indemnify the City for any tax liability, interest, and penalties imposed upon the City. The City is exempt from paying state and local sales/use taxes and certain federal excise taxes and will furnish an exemption certificate upon request. S.12 AMOUNTS DUE THE CITY. Contractor must be current and remain current in all obligations due to the City during the performance of services under the Agreement. Payments to Contractor may be offset by any delinquent amounts due the City or fees and charges owed to the City. STANDARD TERMS AND CONDITIONS Landscaping Maintenance Services 9 ITB #03-20 S.13 OPENNESS OF PROCUREMENT PROCESS. Written competitive proposals, replies, oral presentations, meetings where vendors answer questions, other submissions, correspondence, and all records made thereof, as well as negotiations or meetings where negotiation strategies are discussed, conducted pursuant to this Invitation to Bid (ITB), shall be handled in compliance with Chapters 119 and 286, Florida Statutes. Proposals or replies received by the City pursuant to this ITB are exempt from public disclosure until such time that the City provides notice of an intended decision or until 30 days after opening the proposals, whichever is earlier. If the City rejects all proposals or replies pursuant to this ITB and provides notice of its intent to reissue the ITB, then the rejected proposals or replies remain exempt from public disclosure until such time that the City provides notice of an intended decision concerning the reissued ITB or until the City withdraws the reissued ITB. A proposal or reply shall not be exempt from public disclosure longer than 12 months after the initial City notice rejecting all proposals or replies. Oral presentations, meetings where vendors answer questions, or meetings convened by City staff to discuss negotiation strategies, if any, shall be closed to the public (and other proposers) in compliance with Chapter 286 Florida Statutes. A complete recording shall be made of such closed meeting. The recording of, and any records presented at, the exempt meeting shall be available to the public when the City provides notice of an intended decision or until 30 days after opening proposals or final replies, whichever occurs first. If the City rejects all proposals or replies pursuant to this ITB and provides notice of its intent to reissue the ITB, then the recording and any records presented at the exempt meeting remain exempt from public disclosure until such time that the City provides notice of an intended decision concerning the reissued ITB or until the City withdraws the reissued ITB. A recording and any records presented at an exempt meeting shall not be exempt from public disclosure longer than 12 months after the initial City notice rejecting all proposals or replies. In addition to all other contract requirements as provided by law, the contractor executing this agreement agrees to comply with public records law. IF THE CONTRACTOR HAS QUESTIONS REGARDING THE APPLICATION OF CHAPTER 119, FLORIDA STATUTES, TO THE CONTRACTOR’S DUTY TO PROVIDE PUBLIC RECORDS RELATING TO THIS CONTRACT, CONTACT THE CUSTODIAN OF PUBLIC RECORDS, Rosemarie Call, phone: 727-562-4092 or Rosemarie.Call@myclearwater.com, One Clearwater Tower, 6th Floor, 600 Cleveland Street, Clearwater, FL 33756. The contractor’s agreement to comply with public records law applies specifically to: a) Keep and maintain public records required by the City of Clearwater (hereinafter “public agency”) to perform the service being provided by the contractor hereunder. b) Upon request from the public agency’s custodian of public records, provide the public agency with a copy of the requested records or allow the records to be inspected or copied within a reasonable time at a cost that does not exceed the cost provided for in Chapter 119, Florida Statutes, as may be amended from time to time, or as otherwise provided by law. c) Ensure that the public records that are exempt or confidential and exempt from public records disclosure requirements are not disclosed except as authorized by law for the duration of the contract term and following completion of the contract if the contractor does not transfer the records to the public agency. d) Upon completion of the contract, transfer, at no cost, to the public agency all public records in possession of the contractor or keep and maintain public records required by the public agency STANDARD TERMS AND CONDITIONS Landscaping Maintenance Services 10 ITB #03-20 to perform the service. If the contractor transfers all public records to the public agency upon completion of the contract, the contractor shall destroy any duplicate public records that are exempt or confidential and exempt from public records disclosure requirements. If the contractor keeps and maintains public records upon completion of the contract, the contractor shall meet all applicable requirements for retaining public records. All records stored electronically must be provided to the public agency, upon request from the public agency’s custodian of public records, in a format that is compatible with the information technology systems of the public agency. e) A request to inspect or copy public records relating to a public agency’s contract for services must be made directly to the public agency. If the public agency does not possess the requested records, the public agency shall immediately notify the contractor of the request and the contractor must provide the records to the public agency or allow the records to be inspected or copied within a reasonable time. f) The contractor hereby acknowledges and agrees that if the contractor does not comply with the public agency’s request for records, the public agency shall enforce the contract provisions in accordance with the contract. g) A contractor who fails to provide the public records to the public agency within a reasonable time may be subject to penalties under Section 119.10, Florida Statutes. h) If a civil action is filed against a contractor to compel production of public records relating to a public agency’s contract for services, the court shall assess and award against the contractor the reasonable costs of enforcement, including reasonable attorney fees, if: 1. The court determines that the contractor unlawfully refused to comply with the public records request within a reasonable time; and 2. At least eight (8) business days before filing the action, the plaintiff provided written notice of the public records request, including a statement that the contractor has not complied with the request, to the public agency and to the contractor. i) A notice complies with subparagraph (h)2. if it is sent to the public agency’s custodian of public records and to the contractor at the contractor’s address listed on its contract with the public agency or to the contractor’s registered agent. Such notices must be sent by common carrier delivery service or by registered, Global Express Guaranteed, or certified mail, with postage or shipping paid by the sender and with evidence of delivery, which may be in an electronic format. A contractor who complies with a public records request within 8 business days after the notice is sent is not liable for the reasonable costs of enforcement. S.14 AUDITS AND RECORDS. Contractor must preserve the records related to this Agreement for five (5) years after completion of the Agreement. The City or its authorized agent reserves the right to inspect any records related to the performance of work specified herein. In addition, the City may inspect any and all payroll, billing or other relevant records kept by Contractor in relation to the Agreement. Contractor will permit such inspections and audits during normal business hours and upon reasonable notice by the City. The audit of records may occur at Contractor’s place of business or at City offices, as determined by the City. S.15 BACKGROUND CHECK. The City may conduct criminal, driver history, and all other requested background checks of Contractor personnel who would perform services under the Agreement or who will have access to the City’s information, data, or facilities in accordance with the City’s current background check policies. Any officer, employee, or agent that fails the background check must be replaced immediately for any reasonable cause not prohibited by law. STANDARD TERMS AND CONDITIONS Landscaping Maintenance Services 11 ITB #03-20 S.16 SECURITY CLEARANCE AND REMOVAL OF CONTRACTOR PERSONNEL. The City will have final authority, based on security reasons: (i) to determine when security clearance of Contractor personnel is required; (ii) to determine the nature of the security clearance, up to and including fingerprinting Contractor personnel; and (iii) to determine whether or not any individual or entity may provide services under this Agreement. If the City objects to any Contractor personnel for any reasonable cause not prohibited by law, then Contractor will, upon notice from the City, remove any such individual from performance of services under this Agreement. S.17 DEFAULT. a. A party will be in default if that party: (i) is or becomes insolvent or is a party to any voluntary bankruptcy or receivership proceeding, makes an assignment for a creditor, or there is any similar action that affects Contractor’s capability to perform under the Agreement; (ii) is the subject of a petition for involuntary bankruptcy not removed within sixty (60) calendar days; (iii) conducts business in an unethical manner or in an illegal manner; or (iv) fails to carry out any term, promise, or condition of the Agreement. b. Contractor will be in default of this Agreement if Contractor is debarred from participating in City procurements and solicitations in accordance with the City’s Purchasing Policy and Procedures Manual. c. Notice and Opportunity to Cure. In the event a party is in default then the other party may, at its option and at any time, provide written notice to the defaulting party of the default. The defaulting party will have thirty (30) days from receipt of the notice to cure the default; the thirty (30) day cure period may be extended by mutual agreement of the parties, but no cure period may exceed ninety (90) days. A default notice will be deemed to be sufficient if it is reasonably calculated to provide notice of the nature and extent of such default. Failure of the non-defaulting party to provide notice of the default does not waive any rights under the Agreement. d. Anticipatory Repudiation. Whenever the City in good faith has reason to question Contractor’s intent or ability to perform, the City may demand that Contractor give a written assurance of its intent and ability to perform. In the event that the demand is made and no written assurance is given within five (5) calendar days, the City may treat this failure as an anticipatory repudiation of the Agreement. S.18 REMEDIES. The remedies set forth in this Agreement are not exclusive. Election of one remedy will not preclude the use of other remedies. In the event of default: a. The non-defaulting party may terminate the Agreement, and the termination will be effective immediately or at such other date as specified by the terminating party. b. The City may purchase the services required under the Agreement from the open market, complete required work itself, or have it completed at the expense of Contractor. If the cost of obtaining substitute services exceeds the contract price, the City may recover the excess cost by: (i) requiring immediate reimbursement to the City; (ii) deduction from an unpaid balance due to Contractor; (iii) collection against the proposal and/or performance security, if any; (iv) collection against liquidated damages (if applicable); or (v) a combination of the aforementioned remedies or other remedies as provided by law. Costs includes any and all, fees, and expenses incurred in obtaining substitute services and expended in obtaining reimbursement, including, but not limited to, administrative expenses, attorneys’ fees, and costs. c. The non-defaulting party will have all other rights granted under this Agreement and all rights at law or in equity that may be available to it. d. Neither party will be liable for incidental, special, or consequential damages. S.19 CONTINUATION DURING DISPUTES. Contractor agrees that during any dispute between the parties, Contractor will continue to perform its obligations until the dispute is settled, instructed to cease performance by the City, enjoined or prohibited by judicial action, or otherwise required or obligated to cease performance by other provisions in this Agreement. STANDARD TERMS AND CONDITIONS Landscaping Maintenance Services 12 ITB #03-20 S.20 TERMINATION FOR CONVENIENCE. The City reserves the right to terminate this Agreement in part or in whole upon thirty (30) calendar days’ written notice. S.21 TERMINATION FOR CONFLICT OF INTEREST Florida Statutes Section 112. Pursuant to F.S. Section 112, the City may cancel this Agreement after its execution, without penalty or further obligation, if any person significantly involved in initiating, securing, drafting, or creating the Agreement for the City becomes an employee or agent of Contractor. S.22 TERMINATION FOR NON-APPROPRIATION AND MODIFICATION FOR BUDGETARY CONSTRAINT. The City is a governmental agency which relies upon the appropriation of funds by its governing body to satisfy its obligations. If the City reasonably determines that it does not have funds to meet its obligations under this Agreement, the City will have the right to terminate the Agreement without penalty on the last day of the fiscal period for which funds were legally available. In the event of such termination, the City agrees to provide written notice of its intent to terminate thirty (30) calendar days prior to the stated termination date. S.23 PAYMENT TO CONTRACTOR UPON TERMINATION. Upon termination of this Agreement, Contractor will be entitled only to payment for those services performed up to the date of termination, and any authorized expenses already incurred up to such date of termination. The City will make final payment within thirty (30) calendar days after the City has both completed its appraisal of the materials and services provided and received Contractor’s properly prepared final invoice. S.24 NON-WAIVER OF RIGHTS. There will be no waiver of any provision of this agreement unless approved in writing and signed by the waiving party. Failure or delay to exercise any rights or remedies provided herein or by law or in equity, or the acceptance of, or payment for, any services hereunder, will not release the other party of any of the warranties or other obligations of the Agreement and will not be deemed a waiver of any such rights or remedies. S.25 INDEMNIFICATION/LIABILITY. a. To the fullest extent permitted by law, Contractor agrees to defend, indemnify, and hold the City, its officers, agents, and employees, harmless from and against any and all liabilities, demands, claims, suits, losses, damages, causes of action, fines or judgments, including costs, attorneys’, witnesses’, and expert witnesses’ fees, and expenses incident thereto, relating to, arising out of, or resulting from: (i) the services provided by Contractor personnel under this Agreement; (ii) any negligent acts, errors, mistakes or omissions by Contractor or Contractor personnel; and (iii) Contractor or Contractor personnel’s failure to comply with or fulfill the obligations established by this Agreement. b. Contractor will update the City during the course of the litigation to timely notify the City of any issues that may involve the independent negligence of the City that is not covered by this indemnification. c. The City assumes no liability for actions of Contractor and will not indemnify or hold Contractor or any third party harmless for claims based on this Agreement or use of Contractor-provided supplies or services. S.26 WARRANTY. Contractor warrants that the services and materials will conform to the requirements of the Agreement. Additionally, Contractor warrants that all services will be performed in a good, workman-like and professional manner. The City’s acceptance of service or materials provided by Contractor will not relieve Contractor from its obligations under this warranty. If any materials or services are of a substandard or unsatisfactory manner as determined by the City, Contractor, at no additional charge to the City, will provide materials or redo such services until in accordance with this Agreement and to the City’s reasonable satisfaction. Unless otherwise agreed, Contractor warrants that materials will be new, unused, of most current manufacture and not discontinued, will be free of defects in materials and workmanship, will be provided in accordance with manufacturer's standard warranty for at least one (1) year unless otherwise specified, and will perform in accordance with manufacturer's published specifications. STANDARD TERMS AND CONDITIONS Landscaping Maintenance Services 13 ITB #03-20 S.27 THE CITY’S RIGHT TO RECOVER AGAINST THIRD PARTIES. Contractor will do nothing to prejudice the City’s right to recover against third parties for any loss, destruction, or damage to City property, and will at the City’s request and expense, furnish to the City reasonable assistance and cooperation, including assistance in the prosecution or defense of suit and the execution of instruments of assignment in favor of the City in obtaining recovery. S.28 NO GUARANTEE OF WORK. Contractor acknowledges and agrees that it is not entitled to deliver any specific amount of materials or services or any materials or services at all under this Agreement and acknowledges and agrees that the materials or services will be requested by the City on an as needed basis at the sole discretion of the City. Any document referencing quantities or performance frequencies represent the City's best estimate of current requirements, but will not bind the City to purchase, accept, or pay for materials or services which exceed its actual needs. S.29 OWNERSHIP. All deliverables, services, and information provided by Contractor or the City pursuant to this Agreement (whether electronically or manually generated) including without limitation, reports, test plans, and survey results, graphics, and technical tables, originally prepared in the performance of this Agreement, are the property of the City and will not be used or released by Contractor or any other person except with prior written permission by the City. S.30 USE OF NAME. Contractor will not use the name of the City of Clearwater in any advertising or publicity without obtaining the prior written consent of the City. S.31 PROHIBITED ACTS. Pursuant to Florida Constitution Article II Section 8, a current or former public officer or employee within the last two (2) years shall not represent another organization before the City on any matter for which the officer or employee was directly concerned and personally participated in during their service or employment or over which they had a substantial or material administrative discretion. S.32 FOB DESTINATION FREIGHT PREPAID AND ALLOWED. All deliveries will be FOB destination freight prepaid and allowed unless otherwise agreed. S.33 RISK OF LOSS. Contractor agrees to bear all risks of loss, injury, or destruction of goods or equipment incidental to providing these services and such loss, injury, or destruction will not release Contractor from any obligation hereunder. S.34 SAFEGUARDING CITY PROPERTY. Contractor will be responsible for any damage to City real property or damage or loss of City personal property when such property is the responsibility of or in the custody of Contractor or its employees. S.35 WARRANTY OF RIGHTS. Contractor warrants it has title to, or the right to allow the City to use, the materials and services being provided and that the City may use same without suit, trouble or hindrance from Contractor or third parties. S.36 PROPRIETARY RIGHTS INDEMNIFICATION. Without limiting the foregoing, Contractor will without limitation, at its expense defend the City against all claims asserted by any person that anything provided by Contractor infringes a patent, copyright, trade secret or other intellectual property right and must, without limitation, pay the costs, damages and attorneys' fees awarded against the City in any such action, or pay any settlement of such action or claim. Each party agrees to notify the other promptly of any matters to which this provision may apply and to cooperate with each other in connection with such defense or settlement. If a preliminary or final judgment is obtained against the City’s use or operation of the items provided by Contractor hereunder or any part thereof by reason of any alleged infringement, Contractor will, at its expense and without limitation, either: (a) modify the item so that it becomes non-infringing; (b) procure for the City the right to continue to use the item; (c) substitute for the infringing item other item(s) having at least equivalent capability; or (d) refund to the City an amount equal to the price paid, less reasonable usage, from the time of installation acceptance through cessation of use, which amount will be calculated on a useful life not less than five (5) years, plus any additional costs the City may incur to acquire substitute supplies or services. S.37 CONTRACT ADMINISTRATION. The contract will be administered by the Purchasing Administrator and/or an authorized representative from the using department. All questions STANDARD TERMS AND CONDITIONS Landscaping Maintenance Services 14 ITB #03-20 regarding the contract will be referred to the administrator for resolution. Supplements may be written to the contract for the addition or deletion of services. Payment will be negotiated and determined by the contract administrator(s). S.38 FORCE MAJEURE. Failure by either party to perform its duties and obligations will be excused by unforeseeable circumstances beyond its reasonable control, including acts of nature, acts of the public enemy, riots, fire, explosion, legislation, and governmental regulation. The party whose performance is so affected will within five (5) calendar days of the unforeseeable circumstance notify the other party of all pertinent facts and identify the force majeure event. The party whose performance is so affected must also take all reasonable steps, promptly and diligently, to prevent such causes if it is feasible to do so, or to minimize or eliminate the effect thereof. The delivery or performance date will be extended for a period equal to the time lost by reason of delay, plus such additional time as may be reasonably necessary to overcome the effect of the delay, provided however, under no circumstances will delays caused by a force majeure extend beyond one hundred-twenty (120) calendar days from the scheduled delivery or completion date of a task unless agreed upon by the parties. S.39 COOPERATIVE USE OF CONTRACT. The City has entered into various cooperative purchasing agreements with other Florida government agencies, including the Tampa Bay Area Purchasing Cooperative. Under a Cooperative Purchasing Agreement, any contract may be extended for use by other municipalities, school districts and government agencies in the State of Florida with the approval of Contractor. Any such usage by other entities must be in accordance with the statutes, codes, ordinances, charter and/or procurement rules and regulations of the respective government agency. Orders placed by other agencies and payment thereof will be the sole responsibility of that agency. The City is not responsible for any disputes arising out of transactions made by others. S.40 FUEL CHARGES AND PRICE INCREASES. No fuel surcharges will be accepted. No price increases will be accepted without proper request by Contractor and response by the City’s Purchasing Division. S.41 NOTICES. All notices to be given pursuant to this Agreement must be delivered to the parties at their respective addresses. Notices may be (i) personally delivered; (ii) sent via certified or registered mail, postage prepaid; (iii) sent via overnight courier; or (iv) sent via facsimile. If provided by personal delivery, receipt will be deemed effective upon delivery. If sent via certified or registered mail, receipt will be deemed effective three (3) calendar days after being deposited in the United States mail. If sent via overnight courier or facsimile, receipt will be deemed effective two (2) calendar days after the sending thereof. S.42 GOVERNING LAW, VENUE. This Agreement is governed by the laws of the State of Florida. The exclusive venue selected for any proceeding or suit in law or equity arising from or incident to this Agreement will be Pinellas County, Florida. S.43 INTEGRATION CLAUSE. This Agreement, including all attachments and exhibits hereto, supersede all prior oral or written agreements, if any, between the parties and constitutes the entire agreement between the parties with respect to the work to be performed. S.44 PROVISIONS REQUIRED BY LAW. Any provision required by law to be in this Agreement is a part of this Agreement as if fully stated in it. STANDARD TERMS AND CONDITIONS Landscaping Maintenance Services 15 ITB #03-20 S.45 SEVERABILITY. If any provision of this Agreement is declared void or unenforceable, such provision will be severed from this Agreement, which will otherwise remain in full force and effect. The parties will negotiate diligently in good faith for such amendment(s) of this Agreement as may be necessary to achieve the original intent of this Agreement, notwithstanding such invalidity or unenforceability. S.46 SURVIVING PROVISIONS. Notwithstanding any completion, termination, or other expiration of this Agreement, all provisions which, by the terms of reasonable interpretation thereof, set forth rights and obligations that extend beyond completion, termination, or other expiration of this Agreement, will survive and remain in full force and effect. Except as specifically provided in this Agreement, completion, termination, or other expiration of this Agreement will not release any party from any liability or obligation arising prior to the date of termination. DETAILED SPECIFICATIONS Landscaping Maintenance Services 16 ITB #03-20 1. INTRODUCTION. The City of Clearwater (City) is located on the West Coast of Florida in the Tampa Bay region. It is the third largest city in the region with an estimated population of 110,000 residents. The City of Clearwater is a major tourist destination – Clearwater Beach was recently rated #1 U.S. Beach by TripAdvisor, previously named “Florida’s Best Beach Town 2013 and 2019” by USA Today, and was on the “Top Ten List of Best Beaches from Maine to Hawaii”. The City of Clearwater is home to the Philadelphia Phillies Spring Training and Clearwater Threshers Minor League Baseball and hosts several sports tournaments through the year that attract visitors from across the country. Clearwater is home for Winter the Dolphin and the Clearwater Marine Aquarium. Winter’s story has made it all the way to Hollywood in the motion pictures “Dolphin Tale” and “Dolphin Tale 2”, both filmed here in Clearwater. 2. SCOPE OF WORK. Work under this contract shall include the furnishing of all labor, material, equipment, supervision, transportation, and other services necessary to perform landscaping maintenance services at designated sites specified herein. Landscaping maintenance services includes, but is not limited to: mowing, edging, and trimming of lawns; removing trash, clippings, and debris from landscape, lawn areas, and hard surfaces (i.e. sidewalks, parking lots, etc.); and the maintenance of plant beds and landscape materials; at designated areas in the City of Clearwater. Throughout the contract term all plant material shall be maintained in a healthy, growing condition equal to or better than conditions at the beginning of the contract. Contractors will work with the Clearwater Parks and Recreation and Public Utilities Departments (also referred to herein as “responsible department”) to coordinate all maintenance activities in this contract and reporting irregularities in their respective work zones. The following documents are part of this ITB: Exhibit_A_Landscaping_Maintenance_Services_Bid_Pricing Exhibit_B_Landscaping_Maintenance_Services_Calendar Exhibit_C_Sample_Landscaping_Maintenance_Services_Contract Property Maps are available on the City’s FTP site: ftp://ftpserver.myclearwater.com Username: vendor Password: clearwater (lower case 'c') Directory: Purchasing File: ITB 03-20 LANDSCAPING MAINTENANCE SERVICES The City reserves the right to add and/or delete a location from the Contract with thirty days written notice. Payments for services shall be adjusted accordingly based on negotiated cost for a new site, and deduction of bid price for a deleted site. 2.1 Contractor’s Responsibilities 2.1.1 Local Office and Representative(s) Contractors shall maintain a local office within the Tampa Bay Area with a company representative who can be reached during normal business hours and authorized to discuss matters pertaining to the contract with a Parks and Recreation or Public Utilities Department Representative. The Contractors will meet with a representative of the City at least once per month for a complete inspection of the maintained grounds. 2.1.2 Employees All employees of the Contractors shall at all times be considered the sole employees of the Contractor under his/her sole direction and not an employee or agent of the City. All personnel will be skilled in the field in which they work. The Contractors shall provide a list to the City, no later than thirty (30) after an Intent to Award has been issued, outlining the name(s) of employees and respective task assignments. DETAILED SPECIFICATIONS Landscaping Maintenance Services 17 ITB #03-20 2.1.3 Scheduling of Work The Contractors shall perform all maintenance required between the hours of 7 A.M. and 7 P.M., Monday through Saturday, excluding observed holidays. The responsible department may grant, on an individual basis, permission to perform contract maintenance at other times due to extenuating circumstances. All work must be completed in a continuous manner, whereby the weeding, mowing, edging, trimming, etc., shall all be completed before leaving the job site. The City encourages the disposal of organic plant materials to a certified mulching facility. Landscape Best Management Practices for Pinellas County shall be followed. This is a mandatory training for any person(s) providing landscaping services in Pinellas County. Occasional circumstances (standing water, prolonged inclement weather, parked vehicles, etc.) may make all or portions of a location unserviceable during the regular schedule. The Contractor shall notify the responsible department of such occurrences and shall schedule to perform the required maintenance at the locations as soon as the conditions improve. Completion of Work. The Contractor will notify the responsible department’s representative assigned to monitor the contract (in person, by phone or via email) of prior week’s completion prior to 8:00 A.M. Monday morning of the new week. Inspection and Approval. Upon receiving notification from the Contractor, the City shall inspect the serviced location the following business day. If, upon inspection, the work specified has not been completed, the City shall contact the Contractor to indicate the necessary corrective measures. The Contractor will be given 48 hours from a corrective notification to take appropriate action. Only when work has been completed successfully will the City pay for services. 2.1.4 Repairs to Existing Facilities All portions of the existing structure, facility services, utility roads, and irrigation systems shall always be protected against damage or interrupted service by the Contractor. Any damage to City property as a result of the performance of work by the Contractor, shall be repaired or replaced in-kind and in an approved manner. All work of this kind shall be performed by the Contractor at no cost to the City and shall be as directed by the respective department representative. Repairs to facilities shall be made immediately after damage or alteration occurs unless otherwise directed. The Contractor shall notify the respective department within 24 hours after discovery of any damage caused by accident, vandalism, theft, acts of God, or undetermined causes. Such repairs to the existing structures or facilities, including irrigation systems, which are not the result of the Contractor’s work, shall be repaired by the City at no cost to the Contractor. 2.1.5 Safety Requirements and Uniforms The respective department reserves the right to issue work cease orders to a Contractor when unsafe or harmful acts are observed or reported relative to the performance of work under this contract. All grounds maintenance crews will be required to wear approved company uniform, abide by any and all company OSHA (Occupational Safety and Health Act) safety standards, and conduct themselves in a well-mannered, orderly fashion while on City properties. 2.1.6 Traffic Control and Pedestrian Safety The Contractor is responsible for establishing and maintaining safe work zones in vehicular traffic areas, as well as pedestrian and park user areas. The Contractor shall coordinate maintenance operations in certain high pedestrian use areas and peak time periods with the City (the winter tourist season is generally not an acceptable time to close traffic lanes for maintenance). The Parks DETAILED SPECIFICATIONS Landscaping Maintenance Services 18 ITB #03-20 and Recreation Department reserves the right to limit the hours of operation in certain high pedestrian used areas. Two-way traffic shall be maintained at all times through intersections and roadways. Closure is not permitted. The Contractor shall be fully acquainted and comply with City of Clearwater’s safety requirements and Maintenance of Traffic (MOT). Installing Contractor is responsible for all MOT coordination and notification of appropriate agencies. If applicable, the MOT plan must be submitted to and approved by the City prior to partial lane closure and commencement of the work. All necessary lane closures shall be approved by the City’s Traffic Operations Division and Parking Division, a minimum of forty-eight (48) hours in advance of scheduled operations. Any and all proposed traffic control shall conform to the current edition of the Manual on Uniform Traffic Control Devices (MUTCD), the Florida Department of Transportation Roadway and Traffic Design Standards, (600 Series), and the Florida Department of Transportation Standard Specifications for Road and Bridge Construction. The Contractor shall use these guidelines whenever construction equipment is relocated or driven on existing open travel lanes. The Contractor shall position advance-warning signs as appropriate for the existing field conditions. The Contractor shall provide a crew to be responsible to construct, relocate, and maintain all traffic control devices, to cover, add or remove signs as needed, and do all work necessary to maintain a safe work zone. 2.1.7 Hazardous Conditions The Contractor shall maintain all work sites free of hazards to persons and/or property resulting from performance of work. Any hazardous condition noted by the Contractor, which is not a result of performance of work, shall immediately be reported to the respective department representative. 2.1.8 Failure to Perform Satisfactorily All maintenance shall be performed in a good and workmanlike manner, consistent with trade practices and prevailing industry standards. It is agreed and understood that in the short term, if the Contractor fails to perform the work as specified herein, the respective department will only pay for the amount of service received as determined by the representative, with an appropriate downward adjustment in contract price, or may have such work performed by a third party vendor at the expense of the Contractor. The long-term protection for the City if the Contractor fails to perform the work as specified herein is the required performance bond. 2.1.9 Maintenance Scheduling Each location has been designated a level of service identifying the frequency of maintenance it will receive. Designations are: Level 1P, 2P, 3P; Level 1G, 2G, and 3G, etc. The specific level of service and scheduling is established by the City. Monthly visits should occur within the designated week, as identified in Exhibit B, Landscaping Maintenance Services Calendar unless approved by the respective department. The City reserves the right to increase or decrease the number of visits based on local conditions or other variables and such change(s) will be reflected in a base bid adjustment. The Contractor will adhere to the work schedule provided by the City (Exhibit B, Landscaping Maintenance Services Calendar). Authorized representatives of both parties must approve any variations to that schedule in writing. DETAILED SPECIFICATIONS Landscaping Maintenance Services 19 ITB #03-20 2.2 Work Specifications. The Contractor shall provide the following full scope of services at each designated location during each scheduled visit. ALL services are required – the variance is only in frequency and schedule for each location. 2.2.1 Litter Removal Cleaning of the entire grounds shall be performed as part of regular maintenance. During each scheduled maintenance visit, remove trash and debris from the site. Properly dispose of the trash and debris, including cigarette butts, loose paper, and other bits of small debris. All paper, trash, leaves, twigs, branches, dead plants, trimmings, pruning and other objectionable materials shall be picked up and removed from all landscape areas as well as adjacent parking lots, driveways, underside of bridges, pedestrian bridge, sidewalks and entrances within the site limits. Remove all debris, which accumulates in the corners of the parking lots and besides parking stops. Remove all broken glass that is present in parking lot and on walkways, curbs, or other hard surfaces. All sand, gravel, and soils shall be thoroughly cleaned, swept or blown off all pavements adjacent to maintenance areas and disposed of properly off site. The Contractor shall not allow landscape debris and trash to accumulate in any area. All parking lots shall be cleaned of debris on each service event, preferably when a minimal number of cars are parked in the lots. All waste materials generated by the Contractor’s operations will be disposed of properly off-site. Under no circumstances will trash or debris be swept in or disposed of in catch basins, drainpipes, storm drains or open culverts of storm sewers. Extraordinary amounts of debris caused by hurricanes, tornadoes, vandalism, special events or roadside dumping will not be the responsibility of the Contractor and removal may be requested by the City as additional services. The Contractor should report such accumulations of debris when encountered. Quotations for any extraordinary cleanup from the Contractor will be considered. 2.2.2 Turf Maintenance Lawn mower blades shall be clean, kept sharp, and well-adjusted to provide a clean cut. No more than one-third (1/3) of the total grass blade shall be removed per mowing, while cutting grass too closely (scalping) shall be avoided. Mowing patterns shall be changed regularly to avoid rutting. Use small mowers for difficult or tight areas where larger commercial mowing units cannot maneuver. Turf areas shall be maintained at the appropriate height indicated below: TURFGRASS MOWING HEIGHT St. Augustine Three (3) to four (4) inches* Bahia Three (3) to four (4) inches* *Higher cutting heights to be used during dry conditions Mowing shall be done optimally when the grass is dry; however, mowing wet turf is acceptable. Bagging is not required, and grass clippings can be left on the grass so long as no readily visible clumps remain on the grass surface after mowing. If clippings are excessive or diseased, they shall be removed after mowing to enhance overall turf appearance and to prevent matting, clumping, and thatch buildup. In the case of fungal disease outbreaks, clippings will be collected and disposed of offsite until the disease is controlled. The Contractor will clean all clippings, dirt and debris from sidewalks, curbs, storm drains, valve boxes and roadways after mowing and/or edging. Mowers should not direct discharge into the street or landscape beds, unless unavoidable. Approved deflector chutes must be attached on the discharge points of the mower. Clippings, dirt, and debris will not be swept, blown or otherwise disposed of in any landscaped bed areas, roadways, sewer drains, catch basins, drain pipes, storm drains or open culverts of storm sewers. The final appearance after mowing shall present a neat appearance. DETAILED SPECIFICATIONS Landscaping Maintenance Services 20 ITB #03-20 In the event that the turf becomes sparse or barren due to neglect by the Contractor, the Contractor shall repair or replace sod to meet its previous healthy condition at no additional cost to the City of Clearwater. Turf areas shall be kept at all times as green and healthy as possible, while maintaining a high level of appearance. Care shall be taken with mowing equipment to avoid obstructions such as trees, shrubs, utility boxes, signage, buildings, etc. Contractor shall be responsible for damage caused by its operations. Seeding and sodding is not a requirement of this Invitation to Bid. Such work may result in an additional charge to the contract, based on a request from the City for quotations and must be approved by the City of Clearwater in writing. Turf edging shall be performed at the same frequency as mowing and shall include walks, drives, curbs, planting bed perimeters, tree rings, storm drains, valve boxes, bollards, air reliefs, and other structures that accumulate grass around them. String trimming is not to be performed against the base of any tree or shrub. Isolated trees and shrubs growing in lawn areas require a mulched buffer area around the base of the plant to avoid bark injury from mowers and to reduce root competition from turfgrass (minimum one (1) foot radius from edge of trunk or shrub drip line). Grass adjacent to all valve boxes and quick couplers shall be trimmed to maintain a clean appearance. Grass adjacent to structures, poles, etc. that cannot be serviced by standard mowing procedures, shall be regularly trimmed using a line trimmer to eliminate uneven edges or an approved herbicide may be used to create a buffer around infrastructure and trees. Herbicides shall not be used as an "edger" adjacent to walks and curbs but may be used around shrubs and trees by a certified applicator with the written approval of the City. 2.2.3 Palm Maintenance Palm Pruning is required to regularly remove dead fronds and sucker growth to provide an attractive and clean trunk as characteristic of each particular palm species, limited to fronds reachable under twelve (12) feet high. Remove dead or unsightly fronds and seed heads from palms. No green palm fronds shall be removed unless the foliage is interfering with access for pedestrians, bike riders or vehicular traffic. Dead, yellowing or unsightly fronds should be removed as needed in routine maintenance. The objective is to retain the arching form of the fronds. Care shall be taken not to cause trauma or damage to the bud during pruning. Saws shall be sterilized, using standard ISA sterilization protocols, between each Phoenix dactlyifera ‘Medjool’ palms as to not cross contaminate other trees. Remove only the dead descending fronds below the “9-to-3 o’clock” horizontal line; only palms dead or yellowing shall be removed above the “9-to-3 o’clock” horizontal line under (12) feet high. No spikes or sharp objects are to be used that would penetrate the trunk during pruning; ladders or “cherry picker” type vehicles shall be used to accomplish this task. Palm trunks shall be maintained with a neat, rounded classic cut on all boots. All dead and/or pruned fronds, seeds, seed heads and suckers are to be removed from the site the same day and disposed of properly by the Contractor. Contractor shall be responsible for removing any fronds that are nicked by the saws but do not drop until later. Additionally, palms should be routinely checked for signs of distress or disease in the trunks, buds or fronds. Any evidence of disease affecting the palms is to be promptly reported to the respective department representative. In the event an extraordinary amount of debris caused by severe storm damage, hurricanes, tornadoes or vandalism; clean up and removal of all fallen or broken palm tree branches shall be the responsibility of the City of Clearwater. The Contractor shall notify the City of any large amounts of debris. Such work may result in a request from the City for quotations and must be approved by the City of Clearwater in writing. 2.2.4 Shrub and Groundcover Maintenance Pruning is defined as the selective elimination of branches to maintain or improve the size or shape of a plant. Trimming is defined for shrubs and ground cover as cutting of the overall tips of a plant to give a smooth, squared, hedge-like appearance. The growth characteristics of some plant DETAILED SPECIFICATIONS Landscaping Maintenance Services 21 ITB #03-20 species require pruning; others require trimming to look their best. All plant materials shall be maintained in a neat, well-manicured fashion at all times. All shrubs and ground covers shall be pruned to maintain the suitable size and character of the plant. No shrubs or groundcovers shall be allowed to grow above the Florida Department of Transportation (FDOT) "Clear Sight Window" Criteria when in sight visibility triangle. Plants that have a natural "unpruned" form should be selectively pruned, except for removal of dead or damaged branches and leaves or to maintain a certain height required by the plant material usage. These shrubs will be pruned with hand shears as needed to provide an informal shape, fullness and bloom. Examples of these types of plants are Parson's Juniper, Bird of Paradise, Crinum Lily, Cardboard Palm, King Sago, Heavenly Bamboo, Split- Leaf Philodendron, Red Fountain Grass and Schefflera. Plants used as linear hedges or borders should be trimmed squarely with top of hedge slightly narrower than the bottom to facilitate exposure to sun and prevent heavy shading of lower foliage. Use a "rounding" method when the hedge forms the bordering edge of a serpentine bed design, in which case round only vertical faces of border. As new foliage fills in, remove excessively long branches to encourage fullness and good shape. Examples of these types of plants are Pittosporum, Podocarpus, Silverthorn, Oleander, Boxthorn, Viburnum and Indian Hawthorn. Groundcover species shall be confined within the perimeter of the planting bed and shall be maintained a minimum of twelve (12) inches away from building structures. Groundcovers shall be edged and maintained along all hardscapes with each site visit. Supplemental top shearing may be required to present a neat appearance. In addition, all climbing vine-like groundcovers shall not climb up through other plant species within planting bed or structures, unless specified by the City of Clearwater. Examples of groundcover types include Confederate Jasmine, Lantana, Liriope, Aztec grass, Ivy, Ornamental Sweet Potato and Perennial Peanut. During the growing season (March-October), all high maintenance shrubs and groundcovers may require additional trimming during each visit. All low maintenance shrubs and groundcovers will be trimmed as needed. During the winter season (November-February) all shrubs and groundcovers shall be trimmed as needed to maintain a neat appearance. Ornamental grass species shall be renewal pruned down to eight (8) to twelve (12) inches in height in late February each year. Perennial Peanut shall be maintained between three (3) to six (6) inches in height and shall be mowed and/or line trimmed during one (1) monthly visit in the months of April, June, and August, or unless changed by the request of the respective department representative. Do not trim or shear shrubs into topiary forms unless specifically requested by the City. Allow shrubs to form a dense mass of plants at the height determined by the City. 2.2.5 Weed Control in Landscaped Areas The Contractor shall monitor the landscape for weeds at each scheduled service visit. All planting beds and tree rings are to be kept weed-free throughout the year to avoid competition with desirable plants, as well as to enhance the appearance of the overall design. All weeds shall be removed from landscape beds and properly disposed from the site, on the same day by the Contractor. Undesirable weed species shall be removed by hand or through chemical applications using City approved products according to manufacturer's recommendations and label instructions. Chemical products such as a selective, non-selective or a pre-emergent approved by the Environmental Protection Agency may be used for weed control with the City’s approval. Approved herbicide treatment shall be applied by an experienced applicator under the direct supervision of a licensed, certified pest control professional and only with the City’s approval. Weeds, which have been chemically treated, shall be removed from the landscape after overall plant color quality has changed from green to yellow. Should these chemicals damage any DETAILED SPECIFICATIONS Landscaping Maintenance Services 22 ITB #03-20 desirable plant material, including sod, the Contractor at no cost to the City, shall immediately replace the same size, quantity and quality of plants. "Volunteers", invasive plants and trees which germinated from seeds dropped by birds or spread by wind in a planting bed and are not of the same species, shall be declared and removed like a weed, including the roots through treatment or hand removal methods. Weeds on hardscapes such as walkways, permanent and temporary parking lots, adjacent public and private roadways, pavement cracks and any other paved areas, including rights-of-way and adjacent work areas within the contract limits, shall be removed by hand or chemically killed and removed with each service. 2.2.6 Fertilization Program The Contractor shall perform routine inspections during site visits and notify City staff of any findings – to include but not limited to: stressed plants, dying sod, etc. – which require the City’s attention. Fertilizer shall be applied by City staff. 2.2.7 Diseases and Pests The Contractor shall practice Integrated Pest Management (I.P.M.) to control insects and diseases at each site. Upon confirmation of a specific problem requiring treatment, the Contractor shall report to the City the proposed treatment. Fire ants and wasps, as well as any other damaging or health-endangering pest, will be treated promptly by the Contractor so as not to present a hazard. If the population appears to be too large for an application, it must be reported to the City for prompt treatment. The City will make alternative arrangements for any bee removal necessary. All damage occurring from improper or careless application of chemicals shall be the responsibility of the Contractor. Turf. The Contractor shall inspect turf each visit for indications of pest infestation. Diagnosis and any specific treatments shall be submitted in writing or by phone to the City for approval prior to application. Treatment program of turf areas shall be on a site-specific basis, which extends beyond the boundaries of the infestation by 25% of the area's diameter. Trees, Shrubs and Groundcovers. Any abnormalities in trees, shrubs, and groundcovers shall be brought to the attention of the City staff so that appropriate treatment measures can be applied. Palms. During the site maintenance visit if there are any signs of a disease, the City shall be promptly notified including a location map of the palm, whereby the city shall direct appropriate action on a case-by-case basis. Every precaution will be made to contain the disease and keep it from spreading to other palms. While pruning smaller palms, proper care and procedures with equipment and maintenance will be in accordance with the University of Florida Cooperative Extension Service recommendations. This will include the cleansing of tools through use of a soap detergent or alcohol. 2.2.8 Insecticide Maintenance The Contractor may remove and dispose of wasps and other subterranean insects in plant materials, on the ground, or on-site structures/furnishings. The City will make alternative arrangements for any necessary bee removal. 2.2.9 Irrigation Maintenance Any visual evidence of damaged or defective irrigation shall be promptly reported to the City by phone so that a timely repair can be made. The Contractor is required to promptly notify the City of any dry spots found in the turf. DETAILED SPECIFICATIONS Landscaping Maintenance Services 23 ITB #03-20 2.2.10 Mulch Maintenance The Contractor shall notify the City if the level of mulch or condition of mulch in any particular area has deteriorated. The Contractor will maintain the mulch to be free of weeds around individual trees, shrubs and palms in turf areas. The City may at its option request a quote for mulching applications from the Contractor, for which the City would provide the mulch. 2.2.11 Inspections Each site should be checked for irregularities, such as irrigation leaks, vehicle damage, dead turf or plant material, heavy insect infestations (especially fire ants), vandalism, etc., and any findings should be promptly reported to the respective department representative. The Contractor will assist the City by reporting vandalism, graffiti, damage or need of repair/refurbishing of public and private property, such as for traffic or directory signs, structures, site furnishings, monuments, fences, lighting, utilities and paving. The Contractor will be responsive to special conditions or unexpected problems that may occur during the contract term. The City expects the full cooperation and prompt response by the Contractor. The Contractor may be requested to provide additional services, such as seasonal flowers and plants for various occasions and functions within the City. Such work would be requested by quote and must be approved by the City of Clearwater in writing. 2.3 Additional Details for Public Utilities Department Where Section 2.3 details may conflict with information provided in Section 2.2, Section 2.3 instructions take precedence for Public Utilities Department sites only. All visits to the Public Utilities sites will require a member of the Contractor’s team to sign in/out at the operations office at each site. Mowing shall consist of all areas within the fenced area of the named facility. All site locations shall be mowed at a maximum height of two (2) inches and no debris shall remain after mowing. Mow the pond banks and storm water swells as close to the water as possible. If area is too wet to service on the scheduled visit, area shall either be line trimmed or mowed on the next scheduled visit to avoid damaging of the grade. Prune all shrubbery as required, to maintain clear walkways and driveways. All hedges must be trimmed every other visit to maintain a clean appearance. Trim around all trees, shrubs, bushes, buildings, sidewalks, valve boxes, storm drains, structures and other objects as part of each visit. Clear all fence lines and fence posts of grass, vines, weeds and debris during each visit. Herbicides shall not be used at any location within Public Utilities’ sites unless otherwise approved in writing by a department representative. 3. MINIMUM QUALIFICATIONS. The Contractor Owner/Principal must have a minimum of three (3) years demonstrated experience with commercial or institutional landscaping services (this requirement is applicable to the “person”, not the company). References. Three (3) current references are required for whom the Contractor has performed similar work, preferably for a public agency of similar size, preferably in the Tampa Bay region. Staff Certifications. The Contractor is required to have one or more permanent full- time commercial limited lawn and ornamental applicators on staff and shall provide to the city a copy of their Department of Agriculture Pesticide Applicators License. The Contractor will also DETAILED SPECIFICATIONS Landscaping Maintenance Services 24 ITB #03-20 provide a list to the City containing the names, license or certificate number, and expiration date, for permanent (full-time) staff members who are ISA Certified Arborists, Florida Certified Horticulture Professionals, Landscape Best Management Practices for Pinellas County (BMP) Certified, or GI-BMP (Green Industries) Certified. Equipment. All Contractors shall include a list of equipment to be used in the performance of this Contract. Such equipment must be available for inspection by the Landscape Maintenance Manager, or designee, prior to award of the contract, and at any time during the contract term. Vehicles. All Contractor vehicles on City properties must have their company name and telephone number visible. 4. INSURANCE REQUIREMENTS. The Vendor shall, at its own cost and expense, acquire and maintain (and cause any subcontractors, representatives or agents to acquire and maintain) during the term with the City, sufficient insurance to adequately protect the respective interest of the parties. Coverage shall be obtained with a carrier having an AM Best Rating of A-VII or better. In addition, the City has the right to review the Contractor’s deductible or self-insured retention and to require that it be reduced or eliminated. Specifically the Vendor must carry the following minimum types and amounts of insurance on an occurrence basis or in the case of coverage that cannot be obtained on an occurrence basis, then coverage can be obtained on a claims-made basis with a minimum three (3) year tail following the termination or expiration of this Agreement: a. Commercial General Liability Insurance coverage, including but not limited to, premises operations, products/completed operations, products liability, contractual liability, advertising injury, personal injury, death, and property damage in the minimum amount of $1,000,000 (one million dollars) per occurrence and $2,000,000 (two million dollars) general aggregate. b. Commercial Automobile Liability Insurance coverage for any owned, non-owned, hired or borrowed automobile is required in the minimum amount of $1,000,000 (one million dollars) combined single limit. c. Unless waived by the State of Florida and proof of waiver is provided to the City, statutory Workers’ Compensation Insurance coverage in accordance with the laws of the State of Florida, and Employer’s Liability Insurance in the minimum amount of $500,000 (five hundred thousand dollars) each employee each accident, $500,000 (five hundred thousand dollars) each employee by disease, and $500,000 (five hundred thousand dollars) disease policy limit. Coverage should include Voluntary Compensation, Jones Act, and U.S. Longshoremen’s and Harbor Worker’s Act coverage where applicable. Coverage must be applicable to employees, contractors, subcontractors, and volunteers, if any. The above insurance limits may be achieved by a combination of primary and umbrella/excess liability policies. Other Insurance Provisions. a. Prior to the execution of this Agreement, and then annually upon the anniversary date(s) of the insurance policy’s renewal date(s) for as long as this Agreement remains in effect, the Vendor will furnish the City with a Certificate of Insurance(s) (using appropriate ACORD certificate, SIGNED by the Issuer, and with applicable endorsements) evidencing all of the coverage set forth above and naming the City as an “Additional Insured” on the Commercial General Liability Insurance and the Automobile Liability Insurance. In addition, when requested in writing from the City, Vendor will provide the City with certified copies of all applicable policies. The address where such certificates and certified policies shall be sent or delivered is as follows: DETAILED SPECIFICATIONS Landscaping Maintenance Services 25 ITB #03-20 City of Clearwater Attn: Purchasing Department, ITB # 03-20 P.O. Box 4748 Clearwater, FL 33758-4748 b. Vendor shall provide thirty (30) days written notice of any cancellation, non-renewal, termination, material change or reduction in coverage. c. Vendor’s insurance as outlined above shall be primary and non-contributory coverage for Vendor’s negligence. d. Vendor reserves the right to appoint legal counsel to provide for the Vendor’s defense, for any and all claims that may arise related to Agreement, work performed under this Agreement, or to Vendor’s design, equipment, or service. Vendor agrees that the City shall not be liable to reimburse Vendor for any legal fees or costs as a result of Vendor providing its defense as contemplated herein. The stipulated limits of coverage above shall not be construed as a limitation of any potential liability to the City, and City’s failure to request evidence of this insurance shall not be construed as a waiver of Vendor’s (or any contractors’, subcontractors’, representatives’ or agents’) obligation to provide the insurance coverage specified. MILESTONES Landscaping Maintenance Services 26 ITB #03-20 1. BEGINNING AND END DATE OF INITIAL TERM. January 2020 through September 2020. If the commencement of performance is delayed because the City does not execute the contract on the start date, the City may adjust the start date, end date and milestones to reflect the delayed execution. 2. EXTENSION. The City reserves the right to extend the term of this contract, provided however, that the City shall give written notice of its intentions to extend this contract no later than thirty (30) days prior to the expiration date of the contract. 3. RENEWAL. At the end of the initial term of this contract, the City may initiate renewal(s) as provided. The decision to renew a contract rests solely with the City. The City will give written notice of its intention to renew the contract no later than thirty (30) days prior to the expiration. Two (2), one (1) year renewals possible at the City’s option. 4. PRICES. All pricing shall be firm for the initial term of one (1) year; except where otherwise provided by the specifications, and include all transportation, insurance and warranty costs. The City shall not be invoiced at prices higher than those stated in any contract resulting from this bid. The Contractor certifies that the prices offered are no higher than the lowest price the Contractor charges other buyers for similar quantities under similar conditions. The Contractor further agrees that any reductions in the price of the goods or services covered by this bid and occurring after award will apply to the undelivered balance. The Contractor shall promptly notify the City of such price reductions. During the sixty (60) day period prior to each annual anniversary of the contract effective date, the Contractor may submit a written request that the City increase the prices for an amount for no more than the twelve month change in the Consumer Price Index for All Urban Consumers (CPI-U), US City Average, All Items, Not Seasonally Adjusted as published by the U.S. Department of Labor, Bureau of Labor Statistics (http://www.bls.gov/ppi/home.htm). The City shall review the request for adjustment and respond in writing; such response and approval shall not be unreasonably withheld. At the end of the initial term, pricing may be adjusted for amounts other than inflation based on mutual agreement of the parties after review of appropriate documentation. Renewal prices shall be firm for at least one year, and may be adjusted thereafter as outlined in the previous paragraph. No fuel surcharges will be accepted. BID SUBMISSION Landscaping Maintenance Services 27 ITB #03-20 1. BID SUBMISSION. Submit one (1) signed original bid, and one (1) electronic copy on a CD or thumb drive of the bid in a sealed container. 2. BIDDER RESPONSE CHECKLIST. This checklist is provided for your convenience. It is not necessary to return a copy of this solicitation’s Instructions, Terms and Conditions, or Detailed Specifications with your bid response. Only submit the requested forms and any other requested or descriptive literature. Original and proper number of copies with electronic format Bid container properly labeled W-9 Form to be provided by Bidder (http://www.irs.gov/pub/irs-pdf/fw9.pdf) Bid Pricing forms, pages 28 & 29 Exhibit A – Landscape Maintenance Services Bid Pricing spreadsheet shall be submitted in Excel format Exceptions/Additional Materials/Addenda form Vendor Information forms Scrutinized Businesses form Offer Certification form Copies of applicable Certificate(s) and License(s) held by Contractor staff Current Equipment List BID PRICING Landscaping Maintenance Services 28 ITB #03-20 BIDDING INSTRUCTIONS: A valid bid requires that bid pricing be entered on the protected Excel worksheet that is provided as Exhibit A – Landscaping Maintenance Services Bid Pricing; no other pricing format will be accepted. As (B) Per Service Cost on the spreadsheet is populated with pricing the imbedded formulas will calculate (C) Annual Cost Per Property. There are eight (8) pricing tabs and a Bid Summary Page tab in the spreadsheet. Eight (8) zones are designated in the City: Zone 1: Beach, sites B001 – B077 Zone 2: Countryside, sites CS001 – CS072 Zone 3: Downtown, sites DT001 – DT034 Zone 4: East, sites E001 – E115 Zone 5: Northwest, sites NW001 - NW176 Zone 6: Southwest, sites SW001 - SW150 Zone 7: Ballfields, sites BF001 – BF007 Zone 8: Public Utilities, sites PU001 – PU014 If bid submission includes election for multiple zones, please indicate order of preference for service areas (1-8), if considered for award: Zone 1: Beach Zone 2: Countryside Zone 3: Downtown Zone 4: East Zone 5: Northwest Zone 6: Southwest Zone 7: Ballfields Zone 8: Public Utilities A Vendor may bid on any combination of the eight (8) zones. EVERY SITE within a zone must be priced for a valid “bid zone”. Partial zone bids will be deemed non-responsive. Bid pricing for each zone must be independent – there is no co-dependence of pricing between zones and no guarantee that a Vendor will be awarded every zone they bid. A Vendor may be awarded more than one (1) zone; however, due to the quantity of work represented, the City does not anticipate awarding all eight (8) zones to a single Vendor. Award methodology will include consideration of vendor capacity and past performance (if applicable). The City will make the determination whether a Zone Bid is (or is not) reasonable for the work required. Multi-zone awards may result in apparent low bidder(s) not being awarded additional zone(s). BID PRICING Landscaping Maintenance Services 29 ITB #03-20 Vendor signature on this page is required to indicate an understanding of the pricing structure set forth, the City’s intended award strategy, and validation of the pricing submitted. PAYMENT TERMS Select one choice of payment terms: Net 30, City of Clearwater’s standard payment terms 2%15, Net 30 _____%10, Net 30 (identify discount not less than 3%) Vendor: _________________________________________ Date: _______________________________ EXCEPTIONS/ADDITIONAL MATERIALS/ADDENDA Landscaping Maintenance Services 30 ITB #03-20 Bidders shall indicate any and all exceptions taken to the provisions or specifications in this solicitation document. Exceptions that surface elsewhere and that do not also appear under this section shall be considered invalid and void and of no contractual significance. Exceptions (mark one): Note – Any material exceptions taken to the City’s Standard Terms and Conditions will render a Bid Non-responsive. No exceptions Exceptions taken (describe--attach additional pages if needed) Additional Materials submitted (mark one): No additional materials have been included with this bid Additional Materials attached (describe--attach additional pages if needed) Addenda Bidders are responsible for verifying receipt of any addenda issued by checking the City’s website at http://www.myclearwater.com/business/bid-information/ prior to the bid opening. Failure to acknowledge any addenda issued may result in a response being deemed non-responsive. Acknowledgement of Receipt of Addenda (initial for each addenda received, if applicable): Addenda Number Initial to acknowledge receipt Vendor Name ____ Date: ____ VENDOR INFORMATION Landscaping Maintenance Services 31 ITB #03-20 Company Legal/Corporate Name: Doing Business As (if different than above): Address: City: State: Zip: - Phone: Fax: E-Mail Address: Website: DUNS # Remit to Address (if different than above): Order from Address (if different from above): Address: Address: City: State: Zip: City: State: Zip: Contact for Questions about this bid: Name: Fax: Phone: E-Mail Address: Day-to-Day Project Contact (if awarded): Name: Fax: Phone: E-Mail Address: Certified Small Business Certifying Agency: Certified Minority, Woman or Disadvantaged Business Enterprise Certifying Agency: VENDOR INFORMATION Landscaping Maintenance Services 32 ITB #03-20 Instructions: The bidder shall submit a minimum of three (3) customer references for which the vendor has recently performed similar services. Additional pages may be added, if needed. Complete and return with bid submittal. Reference # 1 Project Name: Contract Value: Date Began: Date Completed: Address City / State / Zip Contact Person: Email: Phone: Fax: Notes: Reference # 2 Project Name: Contract Value: Date Began: Date Completed: Address City / State / Zip Contact Person: Email: Phone: Fax: Notes: Reference # 3 Project Name: Contract Value: Date Began: Date Completed: Address City / State / Zip Contact Person: Email: Phone: Fax: Notes: Vendor Name Date: SCRUTINIZED COMPANIES FORM Landscaping Maintenance Services 33 ITB #03-20 SCRUTINIZED COMPANIES THAT BOYCOTT ISRAEL LIST CERTIFICATION FORM THIS FORM MUST BE COMPLETED AND SUBMITTED WITH THE BID/PROPOSAL. FAILURE TO SUBMIT THIS FORM AS REQUIRED MAY DEEM YOUR SUBMITTAL NONRESPONSIVE. The affiant, by virtue of the signature below, certifies that: 1. The vendor, company, individual, principal, subsidiary, affiliate, or owner is aware of the requirements of section 287.135, Florida Statutes, regarding companies on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel; and 2. The vendor, company, individual, principal, subsidiary, affiliate, or owner is eligible to participate in this solicitation and is not listed on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel; and 3. “Boycott Israel” or “boycott of Israel” means refusing to deal, terminating business activities, or taking other actions to limit commercial relations with Israel, or persons or entities doing business in Israel or in Israeli-controlled territories, in a discriminatory manner. A statement by a company that it is participating in a boycott of Israel, or that it has initiated a boycott in response to a request for a boycott of Israel or in compliance with, or in furtherance of, calls for a boycott of Israel, may be considered as evidence that a company is participating in a boycott of Israel; and 4. If awarded the Contract (or Agreement), the vendor, company, individual, principal, subsidiary, affiliate, or owner will immediately notify the City of Clearwater in writing, no later than five (5) calendar days after any of its principals are placed on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel. __________________________________________ Authorized Signature __________________________________________ Printed Name __________________________________________ Title __________________________________________ Name of Entity/Corporation STATE OF _____________________ COUNTY OF ___________________ The foregoing instrument was acknowledged before me on this ______ day of _____________________, 20____, by _________________________________ (name of person whose signature is being notarized) as the ________________________ (title) of ________________________________________ (name of corporation/entity), personally known to me as described herein _____________________, or produced a _________________________ (type of identification) as identification, and who did/did not take an oath. _______________________________________ Notary Public ____________________________________ Printed Name My Commission Expires: __________________ NOTARY SEAL ABOVE OFFER CERTIFICATION Landscaping Maintenance Services 34 ITB #03-20 By signing and submitting this Bid, the Vendor certifies that: a) It is under no legal prohibition on contracting with the City of Clearwater. b) It has read, understands, and is in compliance with the specifications, terms and conditions stated herein, as well as its attachments, and any referenced documents. c) It has no known, undisclosed conflicts of interest. d) The prices offered were independently developed without consultation or collusion with any of the other respondents or potential respondents or any other anti-competitive practices. e) No offer of gifts, payments or other consideration were made to any City employee, officer, elected official, or consultant who has or may have had a role in the procurement process for the services and or goods/materials covered by this contract. f) It understands the City of Clearwater may copy all parts of this response, including without limitation any documents and/or materials copyrighted by the respondent, for internal use in evaluating respondent’s offer, or in response to a public records request under Florida’s public records law (F.S. 119) or other applicable law, subpoena, or other judicial process; provided that Clearwater agrees not to change or delete any copyright or proprietary notices. g) Respondent hereby warrants to the City that the respondent and each of its subcontractors (“Subcontractors”) will comply with, and are contractually obligated to comply with, all Federal Immigration laws and regulations that relate to their employees. h) Respondent certifies that they are not in violation of section 6(j) of the Federal Export Administration Act and not debarred by any Federal or public agency. i) It will provide the materials or services specified in compliance with all Federal, State, and Local Statutes and Rules if awarded by the City. j) It is current in all obligations due to the City. k) It will accept such terms and conditions in a resulting contract if awarded by the City. l) The signatory is an officer or duly authorized agent of the respondent with full power and authority to submit binding offers for the goods or services as specified herein. ACCEPTED AND AGREED TO: Company Name: Signature: Printed Name: Title: Date: MAILING LABEL CUT ALONG THE LINE AND AFFIX TO THE FRONT OF YOUR BID CONTAINER Landscaping Maintenance Services 35 ITB #03-20 --------------------------------------------------------------------------------- For US Mail ------------------------------------------------------------------------------ SEALED BID Submitted by: Company Name: Address: City, State, Zip: ITB #03-20, Landscaping Maintenance Services Due Date: October 29, 2019, at 10:00 A.M. City of Clearwater Attn: Purchasing PO Box 4748 Clearwater FL 33758-4748 --------------------------------------------------------------------------------- For US Mail ------------------------------------------------------------------------------ ---------------------------------------------- For Hand Deliveries, FEDEX, UPS or Other Courier Services ------------------------------------------------ SEALED BID Submitted by: Company Name: Address: City, State, Zip: ITB #03-20, Landscaping Maintenance Services Due Date: October 29, 2019, at 10:00 A.M. ---------------------------------------------- For Hand Deliveries, FEDEX, UPS or Other Courier Services ------------------------------------------------ City of Clearwater Attn: Purchasing 100 S Myrtle Ave 3rd Fl Clearwater FL 33756-5520 NO BID 56,123.00$ 81,845.07$ NO BID 40,024.95$ 44,300.00$ NO BID NO BID NO BID NO BID NO BID NO BID 82,010.00$ 91,861.35$ NO BID 91,861.35$ 56,870.00$ 113,576.00$ 72,350.00$ NO BID 118,130.56$ NO BID Incumbent NO BID 52,180.00$ 63,543.94$ NO BID NO BID 49,140.00$ NO BID NO BID 53,250.00$ NO BID 44,724.00$ NO BID 96,895.00$ NO BID NO BID NO BID 42,291.00$ 70,348.00$ 66,160.00$ NO BID NO BID NO BID Incumbent NO BID 99,515.00$ NO BID NO BID NO BID 60,540.00$ 79,372.00$ NO BID NO BID NO BID NO BID *See Note 1 64,590.00$ 68,050.00$ NO BID NO BID NO BID NO BID 61,752.00$ 59,308.00$ 73,518.00$ NO BID NO BID Non-Responsive Incumbent *See Note 2 NO BID 38,720.00$ 109,312.00$ 160,000.00$ NO BID 78,400.00$ NO BID NO BID NO BID NO BID 40,960.00$ Incumbent NO BID 47,230.00$ 165,959.90$ NO BID NO BID 106,360.00$ 126,545.00$ 38,260.00$ NO BID NO BID NO BID Note 1) Earth Designs was the low bid in Zone 2, Zone 4 and Zone 5. Recommending Gamco Properties for Zone 5. BID TABULATION CITY OF CLEARWATER ITB # 03-20, Landscaping Maintenance Services DUE DATE: October 30, 2019; 10:00 AM ZONE 7 - BALLFIELDS ZONE 8 - PUBLIC UTILTIES ZONE 4 EAST TOTAL ZONE 5 NORTHWEST TOTAL ZONE 6 SOUTHWEST TOTAL ZONE 1 BEACH TOTAL ZONE 2 COUNTRYSIDE TOTAL ZONE 3 DOWNTOWN TOTAL CUT-UPS LAWN SERVICE DEAN'S ENVIRONMENTAL Note 2) MMM Property was the low bid in Zone 6 and Zone 8. Due to capacity/new zone coverage, recommending award Zone 8 only. With Affordable Lawn Services being non-responsive, recommending award to incumbent, Botanical Dimensions for Zone 6. Valleycrest Landscape MMM PROPERTY MAINTENANCE Precise Property Maintenance RUSSELL LANDSCAPE GAMCO PROPERTIESAFFORDABLE LAWN SERVICES BOTANICAL DIMENSIONS Central Florida Landscaping EARTH DESIGNS Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7200 Agenda Date: 12/19/2019 Status: Consent AgendaVersion: 1 File Type: Action ItemIn Control: Parks & Recreation Agenda Number: 7.7 SUBJECT/RECOMMENDATION: Authorize award of Request for Proposal 31-19, Special Events Production Services, to American Mobile Staging of Schaumburg, IL and RCS Corporation of Clearwater, FL in an annual not to exceed amount of $100,000 with three one-year renewal options at the City's discretion and authorize the appropriate officials to execute same. (consent) SUMMARY: Request for Proposal (RFP) 31-19, Special Events Production Services was issued on May 2, 2019 and responses were received from three vendors. A committee of Parks Department city staff and an events’ community representative carefully reviewed each of the submittals received from three companies and recommended both American Mobile Staging and RCS Corporation to provide these services. American Mobile Staging will provide a mobile stage for timelier set up and breakdown for events while RCS Corporation has the more traditional stage options which have been used at Coachman Park in previous years. RCS Corporation’s staging offers the additional functionality to host high profile entertainers for the City’s large-scale events. The Parks and Recreation Department will use RCS Corporation and American Mobile Staging for a variety of events, both indoor and outdoor, ranging from large music festivals to small community events and ceremonies. Both companies have excellent records working with events across the Tampa Bay Area and will provide the City with exceptional options for staging events. Staff is requesting the flexibility to allocate the $100,000 not-to-exceed amount between the two companies as needed. APPROPRIATION CODE AND AMOUNT: Funding for these purchase contracts will come from various cost centers, primarily special events operating (0101804) and special events program (PRSE190001). USE OF RESERVE FUNDS: N/A Page 1 City of Clearwater Printed on 12/19/2019 Purchasing Office 100 S Myrtle Ave Clearwater FL 33756-5520 PO Box 4748, 33758-4748 727-562-4633 Tel v 11.2018 REQUEST FOR PROPOSALS #31-19 Special Events Production Services May 2, 2019 NOTICE IS HEREBY GIVEN that sealed proposals will be received by the City of Clearwater (City) until 10:00 AM, Local Time, June 5, 2019 to provide Special Events Production Services. Brief Description: The City of Clearwater seeks quality vendor(s) to provide superior audio, lighting, and staging/roofing. It is the City’s intention that the successful proposers have the ability to provide the equipment, staffing, and resources necessary to provide, install, and operate audio and lighting systems, and stage/roofing structures, for City events at Coachman Park and other locations. Proposals must be in accordance with the provisions, specifications and instructions set forth herein and will be received by Purchasing until the above noted time, when they will be publicly acknowledged and accepted. Proposal packets, any attachments and addenda are available for download at: https://www.myclearwater.com/bid Please read the entire solicitation package and submit the bid in accordance with the instructions. This document (less this invitation and the instructions) and any required response documents, attachments, and submissions will constitute the bid. General, Process or Technical Questions concerning this solicitation should be directed, IN WRITING, to the following Sr. Procurement Analyst: Lori Vogel Sr. Procurement Analyst Lori.vogel@myclearwater.com This Request for Proposals is issued by: Alyce Benge, CPPO, C.P.M. Purchasing Manager Alyce.Benge@myclearwater.com INSTRUCTIONS Special Events Production Services 2 RFP #31-19 i.1 VENDOR QUESTIONS: All questions regarding the contents of this solicitation, and solicitation process (including requests for ADA accommodations), shall be directed solely to the Purchasing Manager listed on Page 1. Questions should be submitted in writing via letter, fax or email. Questions received less than seven (7) calendar days prior to the due date and time may be answered at the discretion of the City. i.2 ADDENDA/CLARIFICATIONS: Any changes to the specifications will be in the form of an addendum. Addenda are posted on the City website and mailed to those who register on the City website when downloading solicitations no less than seven (7) days prior to the Due Date. Vendors are cautioned to check the Purchasing Website for addenda and clarifications prior to submitting their proposal. The City cannot be held responsible if a vendor fails to receive any addenda issued. The City shall not be responsible for any oral changes to these specifications made by any employees or officer of the City. Failure to acknowledge receipt of an addendum may result in disqualification of a proposal. i.3 VENDOR CONFERENCE / SITE VISIT: Yes No Mandatory Attendance: Yes No If so designated above, attendance is mandatory as a condition of submitting a proposal. The conference/site visit provides interested parties an opportunity to discuss the City's needs, inspect the site and ask questions. During any site visit you must fully acquaint yourself with the conditions as they exist and the character of the operations to be conducted under the resulting contract. i.4 DUE DATE & TIME FOR SUBMISSION AND OPENING: Date: June 5, 2019 Time: 10:00 AM (Local Time) The City will open all proposals properly and timely submitted, and will record the names and other information specified by law and rule. All proposals become the property of the City and will not be returned except in the case of a late submission. Respondent names, as read at the bid opening, will be posted on the City website. Once a notice of intent to award is posted or 30 days from day of opening elapses, whichever occurs earlier, proposals are available for inspection by contacting Purchasing. i.5 PROPOSAL FIRM TIME: 90 Days from Opening Proposal shall remain firm and unaltered after opening for the number of days shown above. The City may accept the proposal, subject to successful contract negotiations, at any time during this time. i.6 PROPOSAL SECURITY: Yes No If so designated above, a proposal security in the amount specified must be submitted with the proposal. The security may be submitted in any one of the following forms: an executed surety bond issued by a firm licensed and registered to transact such business with the State of Florida; cash; certified check, or cashier's check payable to the City of Clearwater (personal or company checks are not acceptable); certificate of deposit or any other form of deposit issued by a financial institution and acceptable to the City. Such proposal security shall be forfeited to the City of Clearwater should the proposer selected fail to execute a contract when requested. PERFORMANCE SECURITY: Yes No If required herein, the Contractor, simultaneously with the execution of the Contract, will be required to furnish a performance security. The security may be submitted in one-year increments and in any one of the following forms: an executed surety bond issued by a firm licensed and registered to transact such business with the State of Florida; cash; certified check, cashier's check or money order payable to the City of Clearwater (personal and company checks are not acceptable); certificate of deposit or any other form of deposit issued by a financial institution and acceptable to the City. If the Contractor fails or refuses to fully comply with the terms and INSTRUCTIONS Special Events Production Services 3 RFP #31-19 conditions of the contract, the City shall have the right to use all or such part of said security as may be necessary to reimburse the City for loss sustained by reason of such breach. The balance of said security, if any, will be returned to Contractor upon the expiration or termination of the contract. i.7 SUBMIT PROPOSALS TO: Use label at the end of this solicitation package City of Clearwater Attn: Purchasing 100 S Myrtle Ave, 3rd Fl, Clearwater FL 33756-5520 or PO Box 4748, Clearwater FL 33758-4748 Proposals will be received at this address. Proposers may mail or hand-deliver proposals; e-mail or fax submissions will not be accepted. No responsibility will attach to the City of Clearwater, its employees or agents for premature opening of a proposal that is not properly addressed and identified. i.8 LATE PROPOSALS. The proposer assumes responsibility for having the proposal delivered on time at the place specified. All proposals received after the date and time specified shall not be considered and will be returned unopened to the proposer. The proposer assumes the risk of any delay in the mail or in handling of the mail by employees of the City of Clearwater, or any private courier, regardless whether sent by mail or by means of personal delivery. It shall not be sufficient to show that you mailed or commenced delivery before the due date and time. All times are Clearwater, Florida local times. The proposer agrees to accept the time stamp in the City Purchasing Office as the official time. i.9 LOBBYING. The integrity of the procurement process is critical. Communication regarding this solicitation for purpose of influencing the process or the award, between any person or affiliates seeking an award from this solicitation and the City, including but not limited to the City Council, employees, and consultants hired to assist in the solicitation, is strongly discouraged. This does not prohibit public comment at any City Council meeting, study session or Council committee meeting. This shall not apply to vendor-initiated communication with the contact(s) identified in the solicitation or City-initiated communications for the purposes of conducting the procurement including but not limited to pre-bid conferences, clarification of responses, presentations if provided in the solicitation, requests for Best and Final Proposals, contract negotiations, protest/appeal resolution, or surveying non-responsive vendors. i.10 COMMENCEMENT OF WORK. If proposer begins any billable work prior to the City’s final approval and execution of the contract, proposer does so at its own risk. i.11 RESPONSIBILITY TO READ AND UNDERSTAND. Failure to read, examine and understand the solicitation will not excuse any failure to comply with the requirements of the solicitation or any resulting contract, nor shall such failure be a basis for claiming additional compensation. If a vendor suspects an error, omission or discrepancy in this solicitation, the vendor must immediately and in any case not later than seven (7) business days in advance of the due date notify the contact on page one (1). The City is not responsible for and will not pay any costs associated with the preparation and submission of the proposal. Proposers are cautioned to verify their proposals before submission, as amendments to or withdrawal of proposals submitted after time specified for opening of proposals may not be considered. The City will not be responsible for any proposer errors or omissions. i.12 FORM AND CONTENT OF PROPOSALS. Unless otherwise instructed or allowed, proposals shall be submitted on the forms provided. An original and the designated number of copies of each proposal are required. Proposals, including modifications, must be submitted in ink, typed, or printed form and signed by an authorized representative. Please line through and initial rather than erase changes. If the proposal is not properly signed or if any changes are not initialed, it INSTRUCTIONS Special Events Production Services 4 RFP #31-19 may be considered non-responsive. In the event of a disparity between the unit price and the extended price, the unit price shall prevail unless obviously in error, as determined by the City. The City may require that an electronic copy of the proposal be submitted. The proposal must provide all information requested and must address all points. The City does not encourage exceptions. The City is not required to grant exceptions and depending on the exception, the City may reject the proposal. i.13 SPECIFICATIONS. Technical specifications define the minimum acceptable standard. When the specification calls for “Brand Name or Equal,” the brand name product is acceptable. Other products will be considered upon showing the other product meets stated specifications and is equivalent to the brand product in terms of quality, performance and desired characteristics. Minor differences that do not affect the suitability of the supply or service for the City’s needs may be accepted. Burden of proof that the product meets the minimum standards or is equal to the brand name product is on the proposer. The City reserves the right to reject proposals that the City deems unacceptable. i.14 MODIFICATION / WITHDRAWAL OF PROPOSAL. Written requests to modify or withdraw the proposal received by the City prior to the scheduled opening time will be accepted and will be corrected after opening. No oral requests will be allowed. Requests must be addressed and labeled in the same manner as the proposal and marked as a MODIFICATION or WITHDRAWAL of the proposal. Requests for withdrawal after the bid opening will only be granted upon proof of undue hardship and may result in the forfeiture of any proposal security. Any withdrawal after the bid opening shall be allowed solely at the City’s discretion. i.15 DEBARMENT DISCLOSURE. If the vendor submitting a proposal has been debarred, suspended, or otherwise lawfully precluded from participating in any public procurement activity, including being disapproved as a subcontractor with any federal, state, or local government, or if any such preclusion from participation from any public procurement activity is currently pending, the proposer shall include a letter with its proposal identifying the name and address of the governmental unit, the effective date of this suspension or debarment, the duration of the suspension or debarment, and the relevant circumstances relating to the suspension or debarment. If suspension or debarment is currently pending, a detailed description of all relevant circumstances including the details enumerated above must be provided. A proposal from a proposer who is currently debarred, suspended or otherwise lawfully prohibited from any public procurement activity may be rejected. i.16 RESERVATIONS. The City reserves the right to reject any or all proposals or any part thereof; to rebid the solicitation; to reject non-responsive or non-responsible proposals; to reject unbalanced proposals; to reject proposals where the terms, prices, and/or awards are conditioned upon another event; to reject individual proposals for failure to meet any requirement; to award by item, part or portion of an item, group of items, or total; to make multiple awards; to waive minor irregularities, defects, omissions, technicalities or form errors in any proposal. The City may seek clarification of the proposal from proposer at any time, and failure to respond is cause for rejection. Submission of a proposal confers on proposer no right to an award or to a subsequent contract. The City is responsible to make an award that is in the best interest of the City. All decisions on compliance, evaluation, terms and conditions shall be made solely at the City’s discretion and made to favor the City. No binding contract will exist between the proposer and the City until the City executes a written contract or purchase order. i.17 OFFICIAL SOLICITATION DOCUMENT. Changes to the solicitation document made by a proposer may not be acknowledged or accepted by the City. Award or execution of a contract does not constitute acceptance of a changed term, condition or specification unless specifically acknowledged and agreed to by the City. The copy maintained and published by the City shall be the official solicitation document. i.18 COPYING OF PROPOSALS. Proposer hereby grants the City permission to copy all parts of its proposal, including without limitation any documents and/or materials copyrighted by the proposer. The City’s right to copy shall be for internal use in evaluating the proposal. INSTRUCTIONS Special Events Production Services 5 RFP #31-19 i.19 CONTRACTOR ETHICS. It is the intention of the City to promote courtesy, fairness, impartiality, integrity, service, professionalism, economy, and government by law in the Procurement process. The responsibility for implementing this policy rests with each individual who participates in the Procurement process, including Respondents and Contractors. To achieve this purpose, it is essential that Respondents and Contractors doing business with the City also observe the ethical standards prescribed herein. It shall be a breach of ethical standards to: a. Exert any effort to influence any City employee or agent to breach the standards of ethical conduct. b. Intentionally invoice any amount greater than provided in Contract or to invoice for Materials or Services not provided. c. Intentionally offer or provide sub-standard Materials or Services or to intentionally not comply with any term, condition, specification or other requirement of a City Contract. i.20 GIFTS. The City will accept no gifts, gratuities or advertising products from proposers or prospective proposers and affiliates. The City may request product samples from vendors for product evaluation. i.21 PROTESTS AND APPEALS. If a Respondent believes there is a mistake, impropriety, or defect in the solicitation, believes the City improperly rejected its proposal, and/or believes the selected proposal is not in the City’s best interests, the Respondent may submit a written protest. All protests and appeals are governed by the City of Clearwater Purchasing Policy and Procedures Section 18 (“Purchasing Policy”). If there exists any discrepancy in this Section i.21 and the Purchasing Policy, the language of the Purchasing Policy controls. Protests based upon alleged mistake, impropriety, or defect in a solicitation that is apparent before the bid opening must be filed with the Purchasing Manager no later than five (5) business days before Bid Opening. Protests that only become apparent after the Bid Opening must be filed within the earlier of ten (10) business days of the alleged violation of the applicable purchasing ordinance. The complete protest procedure can be obtained by contacting Purchasing. ADDRESS PROTESTS TO: Alyce Benge, CPPO, C.P.M. Purchasing Manager 100 So Myrtle Ave, 3rd Fl Clearwater FL 33756-5520 or PO Box 4748 Clearwater FL 33758-4748 INSTRUCTIONS – EVALUATION Special Events Production Services 6 RFP #31-19 i.22 EVALUATION PROCESS. Proposals will be reviewed by a screening committee comprised of City employees. The City staff may or may not initiate discussions with proposers for clarification purposes. Clarification is not an opportunity to change the proposal. Proposers shall not initiate discussions with any City employee or official. i.23 CRITERIA FOR EVALUATION AND AWARD. The City evaluates three (3) categories of information: responsiveness, responsibility, the technical proposal/price. All proposals must meet the following responsiveness and responsibility criteria. a) Responsiveness. The City will determine whether the proposal complies with the instructions for submitting proposals including completeness of proposal which encompasses the inclusion of all required attachments and submissions. The City must reject any proposals that are submitted late. Failure to meet other requirements may result in rejection. b) Responsibility. The City will determine whether the proposer is one with whom it can or should do business. Factors that the City may evaluate to determine "responsibility" include, but are not limited to: excessively high or low priced proposals, past performance, references (including those found outside the proposal), compliance with applicable laws, proposer's record of performance and integrity- e.g. has the proposer been delinquent or unfaithful to any contract with the City, whether the proposer is qualified legally to contract with the City, financial stability and the perceived ability to perform completely as specified. A proposer must at all times have financial resources sufficient, in the opinion of the City, to ensure performance of the contract and must provide proof upon request. City staff may also use Dun & Bradstreet and/or any generally available industry information. The City reserves the right to inspect and review proposer’s facilities, equipment and personnel and those of any identified subcontractors. The City will determine whether any failure to supply information, or the quality of the information, will result in rejection. c) Technical Proposal. The City will determine how well proposals meet its requirements in terms of the response to the specifications and how well the offer addresses the needs of the project. The City will rank offers using a point ranking system (unless otherwise specified) as an aid in conducting the evaluation. d) If less than three (3) responsive proposals are received, at the City’s sole discretion, the proposals may be evaluated using simple comparative analysis instead of any announced method of evaluation, subject to meeting administrative and responsibility requirements. For this RFP, the criteria that will be evaluated and their relative weights are: Evaluation Criteria Points Successful experience providing audio systems, lighting systems, and/or stage and roofing structures at outdoor venues; including all equipment, staffing, and resources necessary to support events of size and duration similar to Scope of Services (Tab 2a) 30 Qualifications and experience of supervisors and key personnel (Tab 2b) 20 Three (3) references within public or private sector, with established working relationship providing similar services (Tab 3) 15 Event production experience – time for setup/show time/breakdown; for stage/roofing respondents TES documents to be included (Tab 4) 15 Equipment inventory and pricing – variety, quantity, and age/appearance (Tab 5) 20 i.24 SHORT-LISTING. The City at its sole discretion may create a short-list of the highest scored proposals based on evaluation against the evaluation criteria. Short-listed proposers may be invited to give presentations and/or interviews. Upon conclusion of any presentations/interviews, the City will finalize the ranking of shortlisted firms. INSTRUCTIONS – EVALUATION Special Events Production Services 7 RFP #31-19 i.25 PRESENTATIONS/INTERVIEWS. Presentations and/or interviews may be requested at the City’s discretion. The proposer must provide a formal presentation/interview on-site at a City location upon request. i.26 BEST & FINAL OFFERS. The City may request best & final offers if deemed necessary, and will determine the scope and subject of any best & final request. However, the proposer should not expect that the City will ask for best & finals and should submit their best offer based on the terms and conditions set forth in this solicitation. i.27 COST JUSTIFICATION. In the event only one response is received, the City may require that the proposer submit a cost proposal in sufficient detail for the City to perform a cost/price analysis to determine if the proposal price is fair and reasonable. i.28 CONTRACT NEGOTIATIONS AND ACCEPTANCE. Proposer must be prepared for the City to accept the proposal as submitted. If proposer fails to sign all documents necessary to successfully execute the final contract within a reasonable time as specified, or negotiations do not result in an acceptable agreement, the City may reject proposal or revoke the award, and may begin negotiations with another proposer. Final contract terms must be approved or signed by the appropriately authorized City official(s). No binding contract will exist between the proposer and the City until the City executes a written contract or purchase order. i.29 NOTICE OF INTENT TO AWARD. Notices of the City’s intent to award a Contract are posted to Purchasing’s website. It is the proposer’s responsibility to check the City of Clearwater’s website at https://www.myclearwater.com/bid to view relevant RFP information and notices. i.30 RFP TIMELINE. Dates are tentative and subject to change. Release RFP: May 2, 2019 Advertise Tampa Bay Times: May 3, 2019 Responses due: June 5, 2019 Review proposals: June 5 – 19, 2019 Presentations (if requested): week of July 8, 2019 Award recommendation: July 12, 2019 Council authorization: August 1, 2019 Contract begins: August 2019 TERMS AND CONDITIONS Special Events Production Services 8 RFP #31-19 S.1 DEFINITIONS. Uses of the following terms are interchangeable as referenced: “vendor, contractor, supplier, proposer, company, parties, persons”, “purchase order, PO, contract, agreement”, “city, Clearwater, agency, requestor, parties”, “bid, proposal, response, quote”. S.2 INDEPENDENT CONTRACTOR. It is expressly understood that the relationship of Contractor to the City will be that of an independent contractor. Contractor and all persons employed by Contractor, either directly or indirectly, are Contractor’s employees, not City employees. Accordingly, Contractor and Contractor’s employees are not entitled to any benefits provided to City employees including, but not limited to, health benefits, enrollment in a retirement system, paid time off or other rights afforded City employees. Contractor employees will not be regarded as City employees or agents for any purpose, including the payment of unemployment or workers’ compensation. If any Contractor employees or subcontractors assert a claim for wages or other employment benefits against the City, Contractor will defend, indemnify and hold harmless the City from all such claims. S.3 SUBCONTRACTING. Contractor may not subcontract work under this Agreement without the express written permission of the City. If Contractor has received authorization to subcontract work, it is agreed that all subcontractors performing work under the Agreement must comply with its provisions. Further, all agreements between Contractor and its subcontractors must provide that the terms and conditions of this Agreement be incorporated therein. S.4 ASSIGNMENT. This Agreement may not be assigned either in whole or in part without first receiving the City’s written consent. Any attempted assignment, either in whole or in part, without such consent will be null and void and in such event the City will have the right at its option to terminate the Agreement. No granting of consent to any assignment will relieve Contractor from any of its obligations and liabilities under the Agreement. S.5 SUCCESSORS AND ASSIGNS, BINDING EFFECT. This Agreement will be binding upon and inure to the benefit of the parties and their respective permitted successors and assigns. S.6 NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the exclusive benefit of the parties. Nothing set forth in this Agreement is intended to create, or will create, any benefits, rights, or responsibilities in any third parties. S.7 NON- EXCLUSIVITY. The City, in its sole discretion, reserves the right to request the materials or services set forth herein from other sources when deemed necessary and appropriate. No exclusive rights are encompassed through this Agreement. S.8 AMENDMENTS. There will be no oral changes to this Agreement. This Agreement can only be modified in a writing signed by both parties. No charge for extra work or material will be allowed unless approved in writing, in advance, by the City and Contractor. S.9 TIME OF THE ESSENCE. Time is of the essence to the performance of the parties’ obligations under this Agreement. S.10 COMPLIANCE WITH APPLICABLE LAWS. a. General. Contractor must procure all permits and licenses, and pay all charges and fees necessary and incidental to the lawful conduct of business. Contractor must stay fully informed of existing and future federal, state, and local laws, ordinances, and regulations that in any manner affect the fulfillment of this Agreement and must comply with the same at its own expense. Contractor bears full responsibility for training, safety, and providing necessary equipment for all Contractor personnel to achieve throughout the term of the Agreement. Upon request, Contractor will demonstrate to the City's satisfaction any programs, procedures, and other activities used to ensure compliance. b. Drug-Free Workplace. Contractor is hereby advised that the City has adopted a policy establishing a drug-free workplace for itself and those doing business with the City to ensure the safety and health of all persons working on City contracts and projects. Contractor will require a drug-free workplace for all Contractor personnel working under this Agreement. Specifically, all Contractor personnel who are working under this Agreement must be notified TERMS AND CONDITIONS Special Events Production Services 9 RFP #31-19 in writing by Contractor that they are prohibited from the manufacture, distribution, dispensation, possession, or unlawful use of a controlled substance in the workplace. Contractor agrees to prohibit the use of intoxicating substances by all Contractor personnel, and will ensure that Contractor personnel do not use or possess illegal drugs while in the course of performing their duties. c. Federal and State Immigration Laws. Contractor agrees to comply with the Immigration Reform and Control Act of 1986 (IRCA) in performance under this Agreement and to permit the City and its agents to inspect applicable personnel records to verify such compliance as permitted by law. Contractor will ensure and keep appropriate records to demonstrate that all Contractor personnel have a legal right to live and work in the United States. (i) As applicable to Contractor, under this provision, Contractor hereby warrants to the City that Contractor and each of its subcontractors will comply with, and are contractually obligated to comply with, all federal immigration laws and regulations that relate to their employees (hereinafter “Contractor Immigration Warranty”). (ii) A breach of the Contractor Immigration Warranty will constitute as a material breach of this Agreement and will subject Contractor to penalties up to and including termination of this Agreement at the sole discretion of the City. (iii) The City retains the legal right to inspect the papers of all Contractor personnel who provide services under this Agreement to ensure that Contractor or its subcontractors are complying with the Contractor Immigration Warranty. Contractor agrees to assist the City in regard to any such inspections. (iv) The City may, at its sole discretion, conduct random verification of the employment records of Contractor and any subcontractor to ensure compliance with the Contractor Immigration Warranty. Contractor agrees to assist the City in regard to any random verification performed. (v) Neither Contractor nor any subcontractor will be deemed to have materially breached the Contractor Immigration Warranty if Contractor or subcontractor establishes that it has complied with the employment verification provisions prescribed by Sections 274A and 274B of the Federal Immigration and Nationality Act. d. Nondiscrimination. Contractor represents and warrants that it does not discriminate against any employee or applicant for employment or person to whom it provides services because of race, color, religion, sex, national origin, or disability, and represents and warrants that it complies with all applicable federal, state, and local laws and executive orders regarding employment. Contractor and Contractor’s personnel will comply with applicable provisions of Title VII of the U.S. Civil Rights Act of 1964, as amended, Section 504 of the Federal Rehabilitation Act, the Americans with Disabilities Act (42 U.S.C. § 12101 et seq.), and applicable rules in performance under this Agreement. S.11 SALES/USE TAX, OTHER TAXES. a. Contractor is responsible for the payment of all taxes including federal, state, and local taxes related to or arising out of Contractor’s services under this Agreement, including by way of illustration but not limitation, federal and state income tax, Social Security tax, unemployment insurance taxes, and any other taxes or business license fees as required. If any taxing authority should deem Contractor or Contractor employees an employee of the City, or should otherwise claim the City is liable for the payment of taxes that are Contractor’s responsibility under this Agreement, Contractor will indemnify the City for any tax liability, interest, and penalties imposed upon the City. b. The City is exempt from paying state and local sales/use taxes and certain federal excise taxes and will furnish an exemption certificate upon request. TERMS AND CONDITIONS Special Events Production Services 10 RFP #31-19 S.12 AMOUNTS DUE THE CITY. Contractor must be current and remain current in all obligations due to the City during the performance of services under the Agreement. Payments to Contractor may be offset by any delinquent amounts due the City or fees and charges owed to the City. S.13 OPENNESS OF PROCUREMENT PROCESS. Written competitive proposals, replies, oral presentations, meetings where vendors answer questions, other submissions, correspondence, and all records made thereof, as well as negotiations or meetings where negotiation strategies are discussed, conducted pursuant to this RFP, shall be handled in compliance with Chapters 119 and 286, Florida Statutes. Proposals or replies received by the City pursuant to this RFP are exempt from public disclosure until such time that the City provides notice of an intended decision or until 30 days after opening the proposals, whichever is earlier. If the City rejects all proposals or replies pursuant to this RFP and provides notice of its intent to reissue the RFP, then the rejected proposals or replies remain exempt from public disclosure until such time that the City provides notice of an intended decision concerning the reissued RFP or until the City withdraws the reissued RFP. A proposal or reply shall not be exempt from public disclosure longer than 12 months after the initial City notice rejecting all proposals or replies. Oral presentations, meetings where vendors answer questions, or meetings convened by City staff to discuss negotiation strategies, if any, shall be closed to the public (and other proposers) in compliance with Chapter 286 Florida Statutes. A complete recording shall be made of such closed meeting. The recoding of, and any records presented at, the exempt meeting shall be available to the public when the City provides notice of an intended decision or until 30 days after opening proposals or final replies, whichever occurs first. If the City rejects all proposals or replies pursuant to this RFP and provides notice of its intent to reissue the RFP, then the recording and any records presented at the exempt meeting remain exempt from public disclosure until such time that the City provides notice of an intended decision concerning the reissued RFP or until the City withdraws the reissued RFP. A recording and any records presented at an exempt meeting shall not be exempt from public disclosure longer than 12 months after the initial City notice rejecting all proposals or replies. In addition to all other contract requirements as provided by law, the contractor executing this agreement agrees to comply with public records law. IF THE CONTRACTOR HAS QUESTIONS REGARDING THE APPLICATION OF CHAPTER 119, FLORIDA STATUTES, TO THE CONTRACTOR’S DUTY TO PROVIDE PUBLIC RECORDS RELATING TO THIS CONTRACT, CONTACT THE CUSTODIAN OF PUBLIC RECORDS, Rosemarie Call, phone: 727-562-4092 or Rosemarie.Call@myclearwater.com, 112 S. Osceola Ave., Clearwater, FL 33756. The contractor’s agreement to comply with public records law applies specifically to: a) Keep and maintain public records required by the City of Clearwater (hereinafter “public agency”) to perform the service being provided by the contractor hereunder. b) Upon request from the public agency’s custodian of public records, provide the public agency with a copy of the requested records or allow the records to be inspected or copied within a reasonable time at a cost that does not exceed the cost provided for in Chapter 119, Florida Statutes, as may be amended from time to time, or as otherwise provided by law. c) Ensure that the public records that are exempt or confidential and exempt from public records disclosure requirements are not disclosed except as authorized by law for the duration of the contract term and following completion of the contract if the contractor does not transfer the records to the public agency. TERMS AND CONDITIONS Special Events Production Services 11 RFP #31-19 d) Upon completion of the contract, transfer, at no cost, to the public agency all public records in possession of the contractor or keep and maintain public records required by the public agency to perform the service. If the contractor transfers all public records to the public agency upon completion of the contract, the contractor shall destroy any duplicate public records that are exempt or confidential and exempt from public records disclosure requirements. If the contractor keeps and maintains public records upon completion of the contract, the contractor shall meet all applicable requirements for retaining public records. All records stored electronically must be provided to the public agency, upon request from the public agency’s custodian of public records, in a format that is compatible with the information technology systems of the public agency. e) A request to inspect or copy public records relating to a public agency’s contract for services must be made directly to the public agency. If the public agency does not possess the requested records, the public agency shall immediately notify the contractor of the request and the contractor must provide the records to the public agency or allow the records to be inspected or copied within a reasonable time. f) The contractor hereby acknowledges and agrees that if the contractor does not comply with the public agency’s request for records, the public agency shall enforce the contract provisions in accordance with the contract. g) A contractor who fails to provide the public records to the public agency within a reasonable time may be subject to penalties under Section 119.10, Florida Statutes. h) If a civil action is filed against a contractor to compel production of public records relating to a public agency’s contract for services, the court shall assess and award against the contractor the reasonable costs of enforcement, including reasonable attorney fees, if: 1. The court determines that the contractor unlawfully refused to comply with the public records request within a reasonable time; and 2. At least eight (8) business days before filing the action, the plaintiff provided written notice of the public records request, including a statement that the contractor has not complied with the request, to the public agency and to the contractor. i) A notice complies with subparagraph (h)2. if it is sent to the public agency’s custodian of public records and to the contractor at the contractor’s address listed on its contract with the public agency or to the contractor’s registered agent. Such notices must be sent by common carrier delivery service or by registered, Global Express Guaranteed, or certified mail, with postage or shipping paid by the sender and with evidence of delivery, which may be in an electronic format. A contractor who complies with a public records request within 8 business days after the notice is sent is not liable for the reasonable costs of enforcement. S.14 AUDITS AND RECORDS. Contractor must preserve the records related to this Agreement for five (5) years after completion of the Agreement. The City or its authorized agent reserves the right to inspect any records related to the performance of work specified herein. In addition, the City may inspect any and all payroll, billing or other relevant records kept by Contractor in relation to the Agreement. Contractor will permit such inspections and audits during normal business hours and upon reasonable notice by the City. The audit of records may occur at Contractor’s place of business or at City offices, as determined by the City. S.15 BACKGROUND CHECK. The City may conduct criminal, driver history, and all other requested background checks of Contractor personnel who would perform services under the Agreement or who will have access to the City’s information, data, or facilities in accordance with the City’s TERMS AND CONDITIONS Special Events Production Services 12 RFP #31-19 current background check policies. Any officer, employee, or agent that fails the background check must be replaced immediately for any reasonable cause not prohibited by law. S.16 SECURITY CLEARANCE AND REMOVAL OF CONTRACTOR PERSONNEL. The City will have final authority, based on security reasons: (i) to determine when security clearance of Contractor personnel is required; (ii) to determine the nature of the security clearance, up to and including fingerprinting Contractor personnel; and (iii) to determine whether or not any individual or entity may provide services under this Agreement. If the City objects to any Contractor personnel for any reasonable cause not prohibited by law, then Contractor will, upon notice from the City, remove any such individual from performance of services under this Agreement. S.17 DEFAULT. a. A party will be in default if that party: (i) Is or becomes insolvent or is a party to any voluntary bankruptcy or receivership proceeding, makes an assignment for a creditor, or there is any similar action that affects Contractor’s capability to perform under the Agreement; (ii) Is the subject of a petition for involuntary bankruptcy not removed within sixty (60) calendar days; (iii) Conducts business in an unethical manner or in an illegal manner; or (iv) Fails to carry out any term, promise, or condition of the Agreement. b. Contractor will be in default of this Agreement if Contractor is debarred from participating in City procurements and solicitations in accordance with Section 27 of the City’s Purchasing and Procedures Manual. c. Notice and Opportunity to Cure. In the event a party is in default then the other party may, at its option and at any time, provide written notice to the defaulting party of the default. The defaulting party will have thirty (30) days from receipt of the notice to cure the default; the thirty (30) day cure period may be extended by mutual agreement of the parties, but no cure period may exceed ninety (90) days. A default notice will be deemed to be sufficient if it is reasonably calculated to provide notice of the nature and extent of such default. Failure of the non-defaulting party to provide notice of the default does not waive any rights under the Agreement. d. Anticipatory Repudiation. Whenever the City in good faith has reason to question Contractor’s intent or ability to perform, the City may demand that Contractor give a written assurance of its intent and ability to perform. In the event that the demand is made and no written assurance is given within five (5) calendar days, the City may treat this failure as an anticipatory repudiation of the Agreement. S.18 REMEDIES. The remedies set forth in this Agreement are not exclusive. Election of one remedy will not preclude the use of other remedies. In the event of default: a. The non-defaulting party may terminate the Agreement, and the termination will be effective immediately or at such other date as specified by the terminating party. b. The City may purchase the services required under the Agreement from the open market, complete required work itself, or have it completed at the expense of Contractor. If the cost of obtaining substitute services exceeds the contract price, the City may recover the excess cost by: (i) requiring immediate reimbursement to the City; (ii) deduction from an unpaid balance due to Contractor; (iii) collection against the proposal and/or performance security, if any; (iv) collection against liquidated damages (if applicable); or (v) a combination of the aforementioned remedies or other remedies as provided by law. Costs includes any and all, fees, and expenses incurred in obtaining substitute services and expended in obtaining reimbursement, including, but not limited to, administrative expenses, attorneys’ fees, and costs. TERMS AND CONDITIONS Special Events Production Services 13 RFP #31-19 c. The non-defaulting party will have all other rights granted under this Agreement and all rights at law or in equity that may be available to it. d. Neither party will be liable for incidental, special, or consequential damages. S.19 CONTINUATION DURING DISPUTES. Contractor agrees that during any dispute between the parties, Contractor will continue to perform its obligations until the dispute is settled, instructed to cease performance by the City, enjoined or prohibited by judicial action, or otherwise required or obligated to cease performance by other provisions in this Agreement. S.20 TERMINATION FOR CONVENIENCE. The City reserves the right to terminate this Agreement in part or in whole upon thirty (30) calendar days’ written notice. S.21 CONFLICT OF INTEREST F.S. Section 112. Pursuant to F.S. Section 112, the City may cancel this Agreement after its execution, without penalty or further obligation, if any person significantly involved in initiating, securing, drafting, or creating the Agreement for the City becomes an employee or agent of Contractor. S.22 TERMINATION FOR NON-APPROPRIATION AND MODIFICATION FOR BUDGETARY CONSTRAINT. The City is a governmental agency which relies upon the appropriation of funds by its governing body to satisfy its obligations. If the City reasonably determines that it does not have funds to meet its obligations under this Agreement, the City will have the right to terminate the Agreement without penalty on the last day of the fiscal period for which funds were legally available. In the event of such termination, the City agrees to provide written notice of its intent to terminate thirty (30) calendar days prior to the stated termination date. S.23 PAYMENT TO CONTRACTOR UPON TERMINATION. Upon termination of this Agreement, Contractor will be entitled only to payment for those services performed up to the date of termination, and any authorized expenses already incurred up to such date of termination. The City will make final payment within thirty (30) calendar days after the City has both completed its appraisal of the materials and services provided and received Contractor’s properly prepared final invoice. S.24 NON-WAIVER OF RIGHTS. There will be no waiver of any provision of this agreement unless approved in writing and signed by the waiving party. Failure or delay to exercise any rights or remedies provided herein or by law or in equity, or the acceptance of, or payment for, any services hereunder, will not release the other party of any of the warranties or other obligations of the Agreement and will not be deemed a waiver of any such rights or remedies. S.25 INDEMNIFICATION/LIABILITY. a. To the fullest extent permitted by law, Contractor agrees to defend, indemnify, and hold the City, its officers, agents, and employees, harmless from and against any and all liabilities, demands, claims, suits, losses, damages, causes of action, fines or judgments, including costs, attorneys’, witnesses’, and expert witnesses’ fees, and expenses incident thereto, relating to, arising out of, or resulting from: (i) the services provided by Contractor personnel under this Agreement; (ii) any negligent acts, errors, mistakes or omissions by Contractor or Contractor personnel; and (iii) Contractor or Contractor personnel’s failure to comply with or fulfill the obligations established by this Agreement. b. Contractor will update the City during the course of the litigation to timely notify the City of any issues that may involve the independent negligence of the City that is not covered by this indemnification. c. The City assumes no liability for actions of Contractor and will not indemnify or hold Contractor or any third party harmless for claims based on this Agreement or use of Contractor-provided supplies or services. S.26 WARRANTY. Contractor warrants that the services and materials will conform to the requirements of the Agreement. Additionally, Contractor warrants that all services will be performed in a good, workman-like and professional manner. The City’s acceptance of service or materials provided by Contractor will not relieve Contractor from its obligations under this TERMS AND CONDITIONS Special Events Production Services 14 RFP #31-19 warranty. If any materials or services are of a substandard or unsatisfactory manner as determined by the City, Contractor, at no additional charge to the City, will provide materials or redo such services until in accordance with this Agreement and to the City’s reasonable satisfaction. Unless otherwise agreed, Contractor warrants that materials will be new, unused, of most current manufacture and not discontinued, will be free of defects in materials and workmanship, will be provided in accordance with manufacturer's standard warranty for at least one (1) year unless otherwise specified, and will perform in accordance with manufacturer's published specifications. S.27 THE CITY’S RIGHT TO RECOVER AGAINST THIRD PARTIES. Contractor will do nothing to prejudice the City’s right to recover against third parties for any loss, destruction, or damage to City property, and will at the City’s request and expense, furnish to the City reasonable assistance and cooperation, including assistance in the prosecution or defense of suit and the execution of instruments of assignment in favor of the City in obtaining recovery. S.28 NO GUARANTEE OF WORK. Contractor acknowledges and agrees that it is not entitled to deliver any specific amount of materials or services or any materials or services at all under this Agreement and acknowledges and agrees that the materials or services will be requested by the City on an as needed basis at the sole discretion of the City. Any document referencing quantities or performance frequencies represent the City's best estimate of current requirements, but will not bind the City to purchase, accept, or pay for materials or services which exceed its actual needs. S.29 OWNERSHIP. All deliverables, services, and information provided by Contractor or the City pursuant to this Agreement (whether electronically or manually generated) including without limitation, reports, test plans, and survey results, graphics, and technical tables, originally prepared in the performance of this Agreement, are the property of the City and will not be used or released by Contractor or any other person except with prior written permission by the City. S.30 USE OF NAME. Contractor will not use the name of the City of Clearwater in any advertising or publicity without obtaining the prior written consent of the City. S.31 PROHIBITED ACTS. Pursuant to Florida Constitution Article II Section 8, a current or former public officer or employee within the last two (2) years shall not represent another organization before the City on any matter for which the officer or employee was directly concerned and personally participated in during their service or employment or over which they had a substantial or material administrative discretion. S.32 FOB DESTINATION FREIGHT PREPAID AND ALLOWED. All deliveries will be FOB destination freight prepaid and allowed unless otherwise agreed. S.33 RISK OF LOSS. Contractor agrees to bear all risks of loss, injury, or destruction of goods or equipment incidental to providing these services and such loss, injury, or destruction will not release Contractor from any obligation hereunder. S.34 SAFEGUARDING CITY PROPERTY. Contractor will be responsible for any damage to City real property or damage or loss of City personal property when such property is the responsibility of or in the custody of Contractor or its employees. S.35 WARRANTY OF RIGHTS. Contractor warrants it has title to, or the right to allow the City to use, the materials and services being provided and that the City may use same without suit, trouble or hindrance from Contractor or third parties. S.36 PROPRIETARY RIGHTS INDEMNIFICATION. Without limiting the foregoing, Contractor will without limitation, at its expense defend the City against all claims asserted by any person that anything provided by Contractor infringes a patent, copyright, trade secret or other intellectual property right and must, without limitation, pay the costs, damages and attorneys' fees awarded against the City in any such action, or pay any settlement of such action or claim. Each party agrees to notify the other promptly of any matters to which this provision may apply and to cooperate with each other in connection with such defense or settlement. If a preliminary or final TERMS AND CONDITIONS Special Events Production Services 15 RFP #31-19 judgment is obtained against the City’s use or operation of the items provided by Contractor hereunder or any part thereof by reason of any alleged infringement, Contractor will, at its expense and without limitation, either: (a) modify the item so that it becomes non-infringing; (b) procure for the City the right to continue to use the item; (c) substitute for the infringing item other item(s) having at least equivalent capability; or (d) refund to the City an amount equal to the price paid, less reasonable usage, from the time of installation acceptance through cessation of use, which amount will be calculated on a useful life not less than five (5) years, plus any additional costs the City may incur to acquire substitute supplies or services. S.37 CONTRACT ADMINISTRATION. The contract will be administered by the Purchasing Department and/or an authorized representative from the using department. All questions regarding the contract will be referred to the Purchasing Department for resolution. Supplements may be written to the contract for the addition or deletion of services. S.38 FORCE MAJEURE. Failure by either party to perform its duties and obligations will be excused by unforeseeable circumstances beyond its reasonable control, including acts of nature, acts of the public enemy, riots, fire, explosion, legislation, and governmental regulation. The party whose performance is so affected will within five (5) calendar days of the unforeseeable circumstance notify the other party of all pertinent facts and identify the force majeure event. The party whose performance is so affected must also take all reasonable steps, promptly and diligently, to prevent such causes if it is feasible to do so, or to minimize or eliminate the effect thereof. The delivery or performance date will be extended for a period equal to the time lost by reason of delay, plus such additional time as may be reasonably necessary to overcome the effect of the delay, provided however, under no circumstances will delays caused by a force majeure extend beyond one hundred-twenty (120) calendar days from the scheduled delivery or completion date of a task unless agreed upon by the parties. S.39 COOPERATIVE USE OF CONTRACT. The City has entered into various cooperative purchasing agreements with other Florida government agencies, including the Tampa Bay Area Purchasing Cooperative. Under a Cooperative Purchasing Agreement, any contract may be extended for use by other municipalities, school districts and government agencies with the approval of Contractor. Any such usage by other entities must be in accordance with the statutes, codes, ordinances, charter and/or procurement rules and regulations of the respective government agency. Orders placed by other agencies and payment thereof will be the sole responsibility of that agency. The City is not responsible for any disputes arising out of transactions made by others. S.40 FUEL CHARGES AND PRICE INCREASES. No fuel surcharges will be accepted. No price increases will be accepted without proper request by Contractor and response by the City’s Purchasing Division. S.41 NOTICES. All notices to be given pursuant to this Agreement must be delivered to the parties at their respective addresses. Notices may be (i) personally delivered; (ii) sent via certified or registered mail, postage prepaid; (iii) sent via overnight courier; or (iv) sent via facsimile. If provided by personal delivery, receipt will be deemed effective upon delivery. If sent via certified or registered mail, receipt will be deemed effective three (3) calendar days after being deposited in the United States mail. If sent via overnight courier or facsimile, receipt will be deemed effective two (2) calendar days after the sending thereof. S.42 GOVERNING LAW, VENUE. This Agreement is governed by the laws of the State of Florida. The exclusive venue selected for any proceeding or suit in law or equity arising from or incident to this Agreement will be Pinellas County, Florida. S.43 INTEGRATION CLAUSE. This Agreement, including all attachments and exhibits hereto, supersede all prior oral or written agreements, if any, between the parties and constitutes the entire agreement between the parties with respect to the work to be performed. S.44 PROVISIONS REQUIRED BY LAW. Any provision required by law to be in this Agreement is a part of this Agreement as if fully stated in it. TERMS AND CONDITIONS Special Events Production Services 16 RFP #31-19 S.45 SEVERABILITY. If any provision of this Agreement is declared void or unenforceable, such provision will be severed from this Agreement, which will otherwise remain in full force and effect. The parties will negotiate diligently in good faith for such amendment(s) of this Agreement as may be necessary to achieve the original intent of this Agreement, notwithstanding such invalidity or unenforceability. S.46 SURVIVING PROVISIONS. Notwithstanding any completion, termination, or other expiration of this Agreement, all provisions which, by the terms of reasonable interpretation thereof, set forth rights and obligations that extend beyond completion, termination, or other expiration of this Agreement, will survive and remain in full force and effect. Except as specifically provided in this Agreement, completion, termination, or other expiration of this Agreement will not release any party from any liability or obligation arising prior to the date of termination. DETAILED SPECIFICATIONS Special Events Production Services 17 RFP #31-19 1. INTRODUCTION. The City of Clearwater (City) is located on the West Coast of Florida in the Tampa Bay region. It is the third largest city in the region with an estimated population of 110,000 residents. The City of Clearwater is also a major tourist destination – Clearwater Beach has been rated #1 U.S. Beach by TripAdvisor, “Florida’s Best Beach Town 2013” by USA Today, and was on the “Top Ten List of Best Beaches from Maine to Hawaii”. The City of Clearwater is home to the Philadelphia Phillies Spring Training and Clearwater Threshers Minor League Baseball, as well as hosting several sports tournaments through the year that attract visitors from across the country. Clearwater is home for Winter the Dolphin and the Clearwater Marine Aquarium. Winter’s story made it all the way to Hollywood in the motion pictures “Dolphin Tale” and “Dolphin Tale 2”, both filmed here in Clearwater. 2. PROJECT GOAL. The objective of this Request for Proposals (RFP) is to establish contracts with multiple vendors capable of providing the equipment, staffing, and resources necessary to provide, install, and operate audio and lighting systems, and stage/roofing structures, for City sponsored events when the City oversees the production of such events. NOTE: Each equipment segment will be evaluated separately which will likely result in multiple contract awards. 3. BACKGROUND. The City of Clearwater has some of the best venues for concerts and entertainment in the state of Florida and is looking to provide its guests with a quality experience during events. Most notably the City has sponsored several special events at Coachman Park including Hispanic Heritage Festival, Clearwater Celebrates America, Clearwater Sea Blues Festival, among others. The City seeks quality vendors to provide superior audio, lighting, staging/roofing for the guests attending these events in both visual presentation and sound excellence at Coachman Park and other City locations. Rental Equipment History: Stage and Roofing: Roof system to cover stage, main stage with skirting, Front of House (FOH) platform, spot platform, 4’ x 8’ connecting platform decks with rolling legs, and tents for FOH sound wings Audio: DigiDesign Profile Console, Yamaha M7 Console, Digico SD5 / Digico SD10, and Sennheiser G3 IEM Lighting: MA Light Series 1 Console, 8 Light Mole Fay Blinders, Leko Specials, Communication Packages with 48 Channel Dimmer Racks, 3-Phase Moving Light PD, and Atomic 3K Strobe 4. SCOPE OF SERVICES. VENDOR RESPONSIBILITIES – PERFORMANCE STAGE AND ROOFING ❖ Vendor to provide all labor, equipment, and resources required to: o Assemble, maintain, and teardown a temporary event structure (TES) for City sponsored events at Coachman Park and other City locations. o Vendor to provide a minimum of 40’ x 40’ stage footprint with ability to add in an additional two (2) 16’ x 20’ wings and possess the ability to provide “thrusts” or additional staging per artist rider specifications or for additional storage areas as needed. o Each TES shall consist of a covered stage roof with separate audio towers, an elevated stage platform, and stage accessories. ❖ Vendor is responsible for keeping all operations and equipment areas organized in a clean, safe manner. ❖ Vendor must have the ability to mobilize and load-in a minimum of two (2) days prior to event start; status check-in at 48-hour and 24-hour prior; demobilize within 72 hours; weather conditions to be considered to avoid damage to grounds during inclement periods. ❖ Vendor must have ability to provide for all costs associated with event operations and maintenance of their services, including liability insurance, auto liability insurance, workers comp, personnel costs, equipment transportation, and security. DETAILED SPECIFICATIONS Special Events Production Services 18 RFP #31-19 ❖ Vendor must certify their compliance with minimum structural performance requirements – Temporary Event Structure (“TES”) Requirements and Structural Standards – Exhibit A. ❖ Vendor responsible for pre-event walkthroughs with structural engineers to gain approvals necessary to operate. ❖ Vendor is required to have a staff person onsite throughout the entirety of events while stage is in use. ❖ Vendor is responsible to ensure the roof can safely be raised and lowered due unforeseen issues, i.e. high winds, etc. ❖ Vendor must be able to state exact specifications for weight capacity of installed roof structure. VENDOR RESPONSIBILITIES – AUDIO ❖ Vendor to provide all labor, equipment, and resources required to: o Set-up and teardown audio equipment – integrating audio equipment into the stage/roof vendor’s TES and audio towers – for City sponsored events at Coachman Park and other City locations. o Set-up and teardown audio equipment for smaller events that may not involve a TES. ❖ Vendor is responsible for keeping all operations and equipment areas organized in a clean, safe manner. ❖ Vendor must be able mobilize and load-in a minimum of two (2) days prior to event start; status check-in at 48-hour and 24-hour prior; demobilize within 72 hours; weather conditions to be considered to avoid damage to grounds during inclement periods. ❖ Vendor must have ability to provide for all costs associated with event operations and maintenance of their services, including liability insurance, auto liability insurance, workers comp, personnel costs, equipment transportation, and security. ❖ Vendor must have experience working with national tour and production managers, navigate through artist riders, and negotiate with artists representatives to ensure the best value for the City. ❖ Vendor to demonstrate ability to advance audio riders with tour and production managers for national recording artists. ❖ Vendor is required to have a supervisor and crew on site during events to handle any/all technical issues that may arise. VENDOR RESPONSIBILITIES – LIGHTING ❖ Vendor to provide all labor, equipment, and resources required to: o Set-up and teardown lighting equipment – integrating lighting equipment into the state/roof vendor’s TES and audio towers – for City sponsored events at Coachman Park and other City locations. o Set-up and teardown lighting equipment for smaller events that may not involve a TES. ❖ Vendor is responsible for keeping all operations and equipment areas organized in a clean, safe manner ❖ Vendor must be able mobilize and load-in a minimum of two (2) days prior to event start; status check-in at 48-hour and 24-hour prior; demobilize within 72 hours; weather conditions to be considered to avoid damage to grounds during inclement periods. ❖ Vendor must have ability to provide for all costs associated with event operations and maintenance of their services, including liability insurance, auto liability insurance, workers comp, personnel costs, equipment transportation, and security. ❖ Vendor must have experience working with national tour and production managers, navigate through artist riders, and negotiate with artists representatives to ensure the best value for the City. ❖ Vendor to demonstrate ability to advance lighting riders with tour and production managers for national recording artists. ❖ Vendor is required to have a supervisor and crew on site during events to handle any/all technical issues that may arise. DETAILED SPECIFICATIONS Special Events Production Services 19 RFP #31-19 CITY RESPONSIBILITIES. The City of Clearwater will provide tables, utilities, and sheltered areas for operations and equipment. The City will supply an electrician as best available to assist in powering up equipment and electricity to the stage. City will provide access to areas as needed to fulfil the job. City will process payments to the vendor in a timely fashion in accordance with terms of the RFP. 5. MINIMUM QUALIFICATIONS. Vendors should have a minimum of three (3) years’ experience providing quality services and equipment as outlined in the RFP. 6. DELIVERY. Delivery shall be made to the location(s) within Clearwater as determined by the event schedule, set-up requirements, equipment requested, etc., as established for each event. 7. INSURANCE REQUIREMENTS. The Contractor shall, at its own cost and expense, acquire and maintain (and cause any subcontractors to acquire and maintain) during the term with the City, sufficient insurance to adequately protect the respective interest of the parties. Coverage shall be obtained with a carrier having an AM Best Rating of A-VII or better. In addition, the City has the right to review the Contractor’s deductible or self-insured retention and to require that it be reduced or eliminated. Specifically the Contractor must carry the following minimum types and amounts of insurance on an occurrence basis or in the case of coverage that cannot be obtained on an occurrence basis, then coverage can be obtained on a claims-made basis with a minimum three (3) year tail following the termination or expiration of this Agreement: a. Stage and Roofing (TES) Commercial General Liability Insurance coverage, including but not limited to, personal injury, death, and property damage, premises operations, products/completed operations, products liability, contractual liability, and advertising injury, in the minimum amount of $5,000,000 (five million dollars) per occurrence and $10,000,000 (ten million dollars) general aggregate. b. Audio and Lighting Commercial General Liability Insurance coverage, including but not limited to, premises operations, products/completed operations, products liability, contractual liability, advertising injury, personal injury, death, and property damage in the minimum amount of $1,000,000 (one million dollars) per occurrence and $2,000,000 (two million dollars) general aggregate. c. Commercial Automobile Liability Insurance coverage for any owned, non-owned, hired or borrowed automobile is required in the minimum amount of $1,000,000 (one million dollars) combined single limit. d. Unless waived by the State of Florida, statutory Workers’ Compensation Insurance coverage in accordance with the laws of the State of Florida, and Employer’s Liability Insurance in the minimum amount of $100,000 (one hundred thousand dollars) each employee each accident, $100,000 (one hundred thousand dollars) each employee by disease and $500,000 (five hundred thousand dollars) aggregate by disease with benefits afforded under the laws of the State of Florida. Coverage should include Voluntary Compensation, Jones Act, and U.S. Longshoremen’s and Harbor Worker’s Act coverage where applicable. Coverage must be applicable to employees, contractors, subcontractors, and volunteers, if any. e. Professional Liability Insurance coverage appropriate for the type of business engaged in by the Contractor with minimum limits of $1,000,000 (one million dollars) per occurrence. If a claims made form of coverage is provided, the retroactive date of coverage shall be no later than the inception date of claims made coverage, unless prior policy was extended indefinitely to cover prior acts. Coverage shall be extended beyond the policy year either by a supplemental extended reporting period (SERP) of as great a duration as available, and with no less coverage and with reinstated aggregate limits, or by requiring that any new policy provide a retroactive date no later than the inception date of claims made coverage. DETAILED SPECIFICATIONS Special Events Production Services 20 RFP #31-19 The above insurance limits may be achieved by a combination of primary and umbrella/excess liability policies. Other Insurance Provisions. a. Prior to the execution of this Agreement/Contract, and then annually upon the anniversary date(s) of the insurance policy’s renewal date(s) for as long as this Agreement/Contract remains in effect, the Contractor will furnish the City with a Certificate of Insurance(s) (using appropriate ACORD certificate, SIGNED by the Issuer, and with applicable endorsements) evidencing all of the coverage set forth above and naming the City as an “Additional Insured” on the Commercial Liability Insurance policies stated above. In addition, when requested in writing from the City, Contractor will provide the City with certified copies of all applicable policies. The address where such certificates and certified policies shall be sent or delivered is as follows: City of Clearwater Attn: Purchasing Department, RFP #31-19 P.O. Box 4748 Clearwater, FL 33758-4748 b. Contractor shall provide thirty (30) days written notice of any cancellation, non-renewal, termination, material change or reduction in coverage. c. Contractor’s insurance as outlined above shall be primary and non-contributory coverage for Contractor’s negligence. d. Contractor reserves the right to appoint legal counsel to provide for the Contractor’s defense, for any and all claims that may arise related to Agreement, work performed under this Agreement, or to Contractor’s design, equipment, or service. Contractor agrees that the City shall not be liable to reimburse Contractor for any legal fees or costs as a result of Contractor providing its defense as contemplated herein. The stipulated limits of coverage above shall not be construed as a limitation of any potential liability to the City, and failure to request evidence of this insurance shall not be construed as a waiver of Contractor’s obligation to provide the insurance coverage specified. MILESTONES Special Events Production Services 21 RFP #31-19 1. ANTICIPATED BEGINNING AND END DATE OF INITIAL TERM. August 2019 through July 2020. If the commencement of performance is delayed because the City does not execute the contract on the start date, the City may adjust the start date, end date and milestones to reflect the delayed execution. 2. EXTENSION. The City reserves the right to extend the term of this contract, provided however, that the City shall give written notice of its intentions to extend this contract no later than thirty (30) days prior to the expiration date of the contract. 3. RENEWAL. At the end of the initial term of this contract, the City may initiate renewal(s) as provided herein. The decision to renew a contract rests solely with the City. The City will give written notice of its intention to renew the contract no later than thirty (30) days prior to the expiration. Three (3), one (1) year renewals are possible at the City’s option. 4. PRICES. All pricing shall be firm for term of this agreement except where otherwise provided by the specifications, and include all transportation, insurance and warranty costs. The City shall not be invoiced at prices higher than those stated in any contract resulting from this proposal. a. The Contractor certifies that the prices offered are no higher than the lowest price the Contractor charges other buyers for similar quantities under similar conditions. The Contractor further agrees that any reductions in the price of the goods or services covered by this proposal and occurring after award will apply to the undelivered balance. The Contractor shall promptly notify the City of such price reductions. b. At the end of the initial term, pricing may be adjusted for amounts other than inflation based on mutual agreement of the parties after review of appropriate documentation. Renewal prices shall be firm for at least one (1) year and may be adjusted thereafter as outlined in the previous paragraph. c. No fuel surcharges will be accepted. RESPONSE ELEMENTS ` Special Events Production Services 22 RFP #31-19 1. PROPOSAL SUBMISSION - Submit one (1) signed original proposal, four (4) copies of the proposal, and one (1) electronic format copy on a disc or thumb drive, in a sealed container/envelope. 2. PROPOSAL FORMAT (the following should be included and referenced with index tabs) Table of Contents: Identify contents by tab and page number TAB 1 - Letter of Transmittal. A brief letter of transmittal should be submitted that includes the following information: a. The proposer’s understanding of the work to be performed. b. A positive commitment to perform the service within the time period specified. c. The names of key persons who will be the main contacts for the City. TAB 2 – Experience. Demonstrate successful experience as follows: a. providing audio systems, lighting systems, and/or stage and roofing structures at outdoor venues; including all equipment, staffing, and resources necessary to support events of size and duration similar to Scope of Services. b. Qualifications and experience of site supervisors and key personnel. TAB 3 – References. Provide three (3) references within public or private sector, with established working relationship providing similar services. Include name, phone, email, company/municipality and location, timeframe of contract, and specific services provided. TAB 4 – Event Production Experience. Clearly explain company’s specific event production experience, including time duration for delivery/setup, show time, and breakdown/removal. Overview any specific considerations, concerns, or other factors related to production experience. For stage/roofing structure respondents, provide TES documents in Tab 4, as required by Exhibit A. TAB 5 – Equipment Inventory and Pricing. Provide a complete Equipment Inventory available to the City including variety, quantity, age/appearance (pictures are encouraged), and brand. Listing must indicate whether each type of equipment is owned by the respondent or to be rented from a 3rd party. The Equipment Inventory must include pricing for varying durations (list by number of days, one (1) week, two (2) weeks, etc.) most typical for the respective equipment market. TAB 6 – Other Forms. The following forms and submittals are required in proposal: a. Exceptions/Additional Materials/Addenda form b. Vendor Information form c. Vendor Certification form d. Scrutinized Companies form e. W-9 Form. Include a current W-9 form (http://www.irs.gov/pub/irs-pdf/fw9.pdf) EXCEPTIONS / ADDITIONAL MATERIAL / ADDENDA Special Events Production Services 23 RFP #31-19 Proposers shall indicate any and all exceptions taken to the provisions or specifications in this solicitation document. Exceptions that surface elsewhere and that do not also appear under this section shall be considered invalid and void and of no contractual significance. Exceptions (mark one): **Special Note – Any material exceptions taken to the City’s Terms and Conditions may render a Proposal non-responsive. No exceptions Exceptions taken (describe--attach additional pages if needed) Additional Materials submitted (mark one): No additional materials have been included with this proposal Additional Materials attached (describe--attach additional pages if needed) Acknowledgement of addenda issued for this solicitation: Prior to submitting a response to this solicitation, it is the vendor’s responsibility to confirm if any addenda have been issued. Addenda Number Initial to acknowledge receipt Vendor Name Date: VENDOR INFORMATION Special Events Production Services 24 RFP #31-19 Company Legal/Corporate Name: Doing Business As (if different than above): Address: City: State: Zip: - Phone: Fax: E-Mail Address: Website: DUNS # Remit to Address (if different than above): Order from Address (if different from above): Address: Address: City: State: Zip: City: State: Zip: Contact for Questions about this proposal: Name: Fax: Phone: E-Mail Address: Day-to-Day Project Contact (if awarded): Name: Fax: Phone: E-Mail Address: Certified Small Business Certifying Agency: Certified Minority, Woman or Disadvantaged Business Enterprise Certifying Agency: VENDOR CERTIFICATION OF PROPOSAL Special Events Production Services 25 RFP #31-19 By signing and submitting this Proposal, the Vendor certifies that: a) It is under no legal prohibition to contract with the City of Clearwater. b) It has read, understands, and is in compliance with the specifications, terms and conditions stated herein, as well as its attachments, and any referenced documents. c) It has no known, undisclosed conflicts of interest. d) The prices offered were independently developed without consultation or collusion with any of the other respondents or potential respondents or any other anti-competitive practices. e) No offer of gifts, payments or other consideration were made to any City employee, officer, elected official, or consultant who has or may have had a role in the procurement process for the services and or goods/materials covered by this contract. f) It understands the City of Clearwater may copy all parts of this response, including without limitation any documents and/or materials copyrighted by the respondent, for internal use in evaluating respondent’s offer, or in response to a public records request under Florida’s public records law (F.S. 119) or other applicable law, subpoena, or other judicial process. g) Respondent hereby warrants to the City that the respondent and each of its subcontractors (“Subcontractors”) will comply with, and are contractually obligated to comply with, all Federal Immigration laws and regulations that relate to their employees. h) Respondent certifies that they are not in violation of section 6(j) of the Federal Export Administration Act and not debarred by any Federal or public agency. i) It will provide the materials or services specified in compliance with all Federal, State, and Local Statutes and Rules if awarded by the City. j) It is current in all obligations due to the City. k) It will accept such terms and conditions in a resulting contract if awarded by the City. l) The signatory is an officer or duly authorized agent of the respondent with full power and authority to submit binding offers for the goods or services as specified herein. ACCEPTED AND AGREED TO: Company Name: Signature: Printed Name: Title: Date: SCRUTINIZED COMPANIES FORM Special Events Production Services 26 RFP #31-19 SCRUTINIZED COMPANIES THAT BOYCOTT ISRAEL LIST CERTIFICATION FORM THIS FORM MUST BE COMPLETED AND SUBMITTED WITH THE BID/PROPOSAL. FAILURE TO SUBMIT THIS FORM AS REQUIRED MAY DEEM YOUR SUBMITTAL NONRESPONSIVE. The affiant, by virtue of the signature below, certifies that: 1. The vendor, company, individual, principal, subsidiary, affiliate, or owner is aware of the requirements of section 287.135, Florida Statutes, regarding companies on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel; and 2. The vendor, company, individual, principal, subsidiary, affiliate, or owner is eligible to participate in this solicitation and is not listed on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel; and 3. “Boycott Israel” or “boycott of Israel” means refusing to deal, terminating business activities, or taking other actions to limit commercial relations with Israel, or persons or entities doing business in Israel or in Israeli-controlled territories, in a discriminatory manner. A statement by a company that it is participating in a boycott of Israel, or that it has initiated a boycott in response to a request for a boycott of Israel or in compliance with, or in furtherance of, calls for a boycott of Israel, may be considered as evidence that a company is participating in a boycott of Israel; and 4. If awarded the Contract (or Agreement), the vendor, company, individual, principal, subsidiary, affiliate, or owner will immediately notify the City of Clearwater in writing, no later than five (5) calendar days after any of its principals are placed on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel. ______________________________________ Authorized Signature ______________________________________ Printed Name ______________________________________ Title ______________________________________ Name of Entity/Corporation STATE OF _____________________ COUNTY OF ___________________ The foregoing instrument was acknowledged before me on this ______ day of _____________________, 20____, by _________________________________ (name of person whose signature is being notarized) as the ________________________ (title) of ________________________________________ (name of corporation/entity), personally known to me as described herein _____________________, or produced a _________________________ (type of identification) as identification, and who did/did not take an oath. __________________________________________ Notary Public __________________________________________ Printed Name My Commission Expires: __________________ NOTARY SEAL ABOVE MAILING LABEL CUT ALONG THE LINE AND AFFIX TO THE FRONT OF YOUR BID CONTAINER Special Events Production Services 27 RFP #31-19 --------------------------------------------------------------------------------- For US Mail ------------------------------------------------------------------------------ SEALED PROPOSAL Submitted by: Company Name: Address: City, State, Zip: RFP #31-19, Special Events Production Services Due Date: June 5, 2019, at 10:00 A.M. City of Clearwater Attn: Purchasing PO Box 4748 Clearwater FL 33758-4748 --------------------------------------------------------------------------------- For US Mail ------------------------------------------------------------------------------ ---------------------------------------------- For Hand Deliveries, FEDEX, UPS or Other Courier Services ------------------------------------------------ SEALED PROPOSAL Submitted by: Company Name: Address: City, State, Zip: RFP #31-19, Special Events Production Services Due Date: June 5, 2019, at 10:00 A.M. City of Clearwater Attn: Purchasing 100 S Myrtle Ave 3rd Fl Clearwater FL 33756-5520 ---------------------------------------------- For Hand Deliveries, FEDEX, UPS or Other Courier Services ------------------------------------------------ American Mobile Staging 847-584-0350 Americanmobilestaging.com 1 American Mobile Staging Clearwater Proposal 2019 #31-19 Special Events Production Services American Mobile Staging 847-584-0350 Americanmobilestaging.com 2 Equipment Inventory and Pricing American Mobile Staging owns and operates a Stageline SL 320 40’ x 40’ Mobile Stage Unit. Included are pictures of our SL 320 40x40 Stage from our 97x BBQ Festival 2019 Coachman Park load in and setup. American Mobile Staging 847-584-0350 Americanmobilestaging.com 3 American Mobile Staging 847-584-0350 Americanmobilestaging.com 4 American Mobile Staging 847-584-0350 Americanmobilestaging.com 5 American Mobile Staging 847-584-0350 Americanmobilestaging.com 6 American Mobile Staging 847-584-0350 Americanmobilestaging.com 7 American Mobile Staging 847-584-0350 Americanmobilestaging.com 8 American Mobile Staging 847-584-0350 Americanmobilestaging.com 9 Stageline SL 320 40’ x 40’ Mobile Stage Unit. Our 40 x 40 Sl 320 Includes: 42 x 42 hard-shell roof system 40 x 40 deck (2) stairs skirting backdrop and side wind walls American Mobile Staging 847-584-0350 Americanmobilestaging.com 10 Assorted railing for upstage edge and wings (12) 4x8 decks banner hardware Included are the structural and engineering specs from the manufacturer of the stage. Our pricing for our SL 320 stage for a one day event that loads in the day before the event is $9,500. Our price for each individual day after that is $2,500. 16x16 Front of House Mobile unit. Stage size: 16 x 16 16 x 16 deck 16 x 17 solid hard shell roof system Stage deck height is 30 inches Spot Platform One set of stairs Skirting on 3 sides American Mobile Staging 847-584-0350 Americanmobilestaging.com 11 American Mobile Staging 847-584-0350 Americanmobilestaging.com 12 American Mobile Staging 847-584-0350 Americanmobilestaging.com 13 American Mobile Staging 847-584-0350 Americanmobilestaging.com 14 American Mobile Staging 847-584-0350 Americanmobilestaging.com 15 16 x 16 Mobile Stage Front of House Unit is priced at $3,000 per show. Onsite labor, defined as any site labor additional to the set-up and take down of the stages, is priced at $60 an hour per person on site. Information provided by the city does not give clear definition of on-site hours and other requirements needed for this bid. This bid is the nearest estimate we can give based on information provided by the city. Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7157 Agenda Date: 12/19/2019 Status: Consent AgendaVersion: 1 File Type: Action ItemIn Control: Engineering Department Agenda Number: 7.8 SUBJECT/RECOMMENDATION: Approve a professional services agreement and design work order with Wannemacher Jenson Architects, Inc. (WJA) of St. Petersburg, FL for the design of Fire Station 46 (18-0028-FD) in the amount of $734,109 and authorize the appropriate officials to execute same. (consent) SUMMARY: Fire Station 46, located at the north end of Mandalay Park on Clearwater Beach, was built in 1964. In the early 1980s, a remodel project added a lounge with kitchen and dining area. Due to the structure’s age, the station no longer meets current best practices and standards and needs replacement. In February 2019, a Request for Qualifications (RFQ 18-19) was issued seeking an architectural firm to design the replacement for Fire Station 46. The RFQ selection committee, consisting of five representatives from the Fire, Engineering and Building & Maintenance departments, conducted interviews with four of the eight architectural firms that submitted qualifications. The committee selected Wannemacher Jenson Architects to design the replacement Fire Station 46. WJA’s initial work order includes design (architectural, structural, civil, mechanical, electrical, plumbing, fire protection & alarm, interior design, landscape), permitting, and architecture/engineering services during construction for a new 2.5 bay fire station adjacent to the existing structure. The existing Fire Station 46 site will become open park space after completion of the new station and demolition of the existing building. The Fire Department is responsible for owning and operating Fire Station 46. APPROPRIATION CODE AND AMOUNT: FD00190001-DSGN-PROSVC $734,109 Funds are available in capital improvement project FD00190001, Fire Station 46, to fund this work order. Page 1 City of Clearwater Printed on 12/19/2019 WORK ORDER INITIATION FORM 1 of 16 Revised: 7/22/2019 Wannemacher Jensen Architects, Inc (WJA) WORK ORDER INITIATION FORM for the CITY OF CLEARWATER Date: November 8, 2019___ Consultant Project Number: 1931______________ City Project Number: 18-0028-FD________ City Plan Set Number: 2018014__________ 1. PROJECT TITLE: Fire Station #46 Consulting Services 2. SCOPE OF SERVICES: It is the City’s intent to bring the fire station up to current building standards while maintaining the pedestrian friendly and nostalgic look of the current structure. Dependent on the Pre-Design Phase, a new building would be on or near the footprint of the existing station. New construction would include amenities such as two and a half (2.5) apparatus bays, offices, day room with kitchen, (minimum) seven separate dorm rooms, first aid treatment area for walk-ins from the beach, and a weight/workout room. WJA will be responsible for completing a conceptual design to inform City decisions regarding the rebuild, including the requirements to analyze the building configuration, site conditions, research current City Code, Zoning, Stormwater, and FEMA Floodplain requirements and needs. Anticipated services following the Pre-Design Phase include, but are not limited to, design development, cost estimating, construction drawings, specifications, bid documents, as-needed permit(s) acquisition and post-design construction services through the duration of the project. Construction services shall include shop drawing review, responding to RFI’s, inspecting critical portions of the project, conducting regular progress meetings with stakeholders, certifying drawings, certifying completed work as necessary, and closeout. The design plans shall be compiled using the City of Clearwater CAD standards, as attached. I. PRE-DESIGN PHASE Task 1.1 Conceptual Design and Preliminary Site Planning Based upon the City approved program of spaces, which includes the amount and type of spaces, equipment, and furniture needed to function efficiently, WJA will prepare WORK ORDER INITIATION FORM 2 of 16 Revised: 7/22/2019 conceptual floor plans and site plans of the new fire station for review and approval and provide an opinion of cost related to the findings of the Preliminary Feasibility Study. Consultant will prepare preliminary site plans and preliminary drainage calculations based on a new building footprint (provided by Architect) to demonstrate zoning items, setbacks, landscape buffers, parking etc. The drainage calculations will allow the City to make some decisions based on the proposed pond sizing in regard to potential vault placement and/or outfall replacement. Deuel will perform the calculations to include the existing fire station and without including the existing fire station to determine the effects on the pond sizing. Consultant will also provide preliminary pond/vault sizing utilizing a new storm outfall that would cross Mandalay Ave for comparison. WJA will provide a conceptual cost opinion based on the conceptual design. Task 1.2 Phase 1: Flood Map Revision Feasibility Study 1. Conduct site visits, as necessary, and obtain topographic information for cross-sections which transect the subject property and align the cross-section locations within the FEMA hydraulic model. Obtain additional topographic information within the subject property to supplement the hydraulic model and topographic mapping. 2. Modify the respective coastal cross-sections and add new cross-sections, to more accurately reflect the existing conditions. 3. Execute coastal analysis model to determine 100-year wave conditions at the project site. 4. Document resulting wave heights and determine if additional site improvements are needed to achieve the lowest attainable BFE. 5. Provide summary of analysis and results to Project team and client for review and consideration. Provide recommendation on next steps in process. Based on the results of the Phase 1 Feasibility Analysis, one of the following Phase 2 options will be selected to complete the process. A. Option 1: LOMR Application and Analysis (Based on Existing Conditions and No Needed Improvements). B. Option 2: CLOMR Application and Analysis (Based on Proposed Improvements) & As-Built LOMR Process (Based on Completion of Improvements). Scope and fees do not include other professionals that may be required such as a Land-Use Attorney or Environmental Specialist. Expert Witness services are not included. Task 1.3.1 Phase 2: Task 1: CLOMR Application and Analysis (Based on Proposed Improvements) 1. Modify the updated coastal model to incorporate the proposed structural feature located along the western portion of the site, covering the building footprint. 2. Prepare structural analysis for proposed feature, which will evaluate wave energy forces on the structure. WORK ORDER INITIATION FORM 3 of 16 Revised: 7/22/2019 3. Prepare construction plans and specifications detailing the structural feature. 4. Prepare a topographic work map and annotated FIRM map for inclusion in CLOMR application package. 5. Coordinate with U.S. Fish and Wildlife Service to obtain letter of no impact on any listed species or critical habitat as consistent with the Endangered Species Act (ESA) and FEMA requirements. 6. Prepare the required FEMA forms for a Conditional Letter of Map Revision and other supporting documentation. Submit CLOMR application package to FEMA and City of Clearwater Beach staff for review. 7. Coordinate with City of Clearwater Beach staff to obtain concurrence and acknowledgement signatures. 8. Coordinate with City staff with the preparation and issuance of public notifications of the CLOMR application. 9. Provide follow up communication with FEMA and their technical contractor during their review of the application through the receipt of the Final Determination Documentation from FEMA. 10. Conduct conference calls with Client and project team to discuss project and schedule. Task 1.3.2 Phase 2: Task 2: As-Built LOMR Process (Based on Completion of Improvements) 1. Obtain and review as-built documents and information. Verify that the as-built information is consistent with the CLOMR analysis specifications. 2. Prepare the required FEMA forms for a Letter of Map Revision with other supporting documentation. 3. Prepare Structural Maintenance Plan Document. 4. Submit LOMR package to FEMA for review. 5. Coordinate with FEMA and their technical contractors during review through receipt of the Final Determination Document from FEMA. The Scope and Fee for PHASE 2-Option 2, Task 2: LOMR is based upon the verification that the as-built information is consistent with the CLOMR analysis and specifications. Should the as-built conditions vary from the CLOMR analysis, the scope and fee for PHASE 2-Option 2, Task 2: LOMR shall be adjusted to include additional services. II. DESIGN PHASE Task 2.1 Geotechnical Soils Testing and Report The purpose of this study is to obtain information on the general subsurface conditions at the proposed project site. The subsurface materials encountered will then be evaluated with respect to the available project characteristics. The scope of our services does not include a thorough environmental assessment or investigation for the presence or absence of hazardous or toxic materials in the soil, groundwater, or surface water within or beyond the site studied. In this regard, engineering assessments for the following items will be formulated: WORK ORDER INITIATION FORM 4 of 16 Revised: 7/22/2019 • General location and description of potentially deleterious materials encountered in the borings, which may interfere with construction progress or structure performance, including existing fills or surficial/subsurface organics. • Identification of the existing groundwater levels and evaluation of normal seasonal high groundwater levels. • Conduct and evaluate a SUE, Quality Level – A, ground penetrating radar (GPR) survey for the purpose of determining the lateral extent of subsurface soils, location of abandoned foundations, utilities, and miscellaneous underground structures and sediments at the proposed building site and the area where the Wave Dispersion Wall will be located. Isolated discontinuities in the subsurface materials may be evaluated to represent sites where karst erosion might have occurred during the geologic past. Results to be identified on a grid system to identify location of conflict. • Evaluate active raveling (“sinkhole-type”) activity, if any, in the borings performed. • Evaluation of utilizing a deep foundation system for support of the proposed structure. Identification of recommended foundation design parameters, including minimum foundation dimensions, allowable capacities, and estimated total and differential settlements. • Pavement thickness design and construction suggestions, considering the encountered subgrade soils and the measured groundwater conditions. • Determination of the vertical infiltration characteristics of the upper soils in the designated areas. • Recommended soil subgrade preparation operations, including stripping, grubbing and compaction. Recommended engineering criteria for placement and compaction of approved fill materials. • Evaluation of the suitability and availability of materials on-site that may be moved during site grading for use as structural fill in future buildings area, as pavement subgrade fill, and as general backfill. • Presentation of construction recommendations, including expected ground water control measures, temporary slope stability recommendations, and unsuitable soil removal guidelines. The following services will be provided in order to achieve the preceding objectives: • Review readily available aerial photographs obtained from Google Earth Pro and the Florida Department of Transportation (FDOT). • Review readily available published geologic information. This information will be obtained from soil survey information published by the United States Department of Agriculture (USDA) Soil Conservation Service (SCS). • Coordinate underground utility location services through Sunshine State One Call of Florida, Inc. • Execute a program of subsurface exploration consisting of subsurface sampling and field testing. It is noted that the boring locations are currently expected to be WORK ORDER INITIATION FORM 5 of 16 Revised: 7/22/2019 performed in soil-surfaced areas which are readily accessible to track/trailer- mounted drilling equipment. • Perform two Standard Penetration Test (SPT) borings in the proposed building area to depths of fifty feet below the existing grade. Perform one SPT boring in the pond area to a depth of 20 feet below the existing grade. It is understood that steel casing to maintain drilling fluid circulation will not be required, the boreholes will be grout/bentonite sealed, and that drilling fluid and soil cuttings may not be readily disposed on-site, subcontractor to remove all soil cuttings. • Perform seven auger borings in the pavement areas to a depth of 10 feet below the existing grade. The shallow boreholes may be backfilled with on-site soils. • Perform one Double Ring Infiltration (DRI) test in general accordance with the American Society of Testing and Materials (ASTM) test designation D-3385. The DRI test is planned to be performed at an approximate depth range of 1 to 3 feet below the existing ground surface elevations. • Visually classify and stratify representative soil samples in the laboratory using the Unified Soil Classification System. Identify soil conditions at each boring location and form an opinion of the site soil stratigraphy. The results of the field exploration and laboratory tests will be used in the engineering analysis and in the formulation of recommendations. The results of the subsurface exploration, including the recommendations and the data upon which they are based, will be presented in a formal written report prepared by an experienced Geotechnical Engineer. Task 2.2 Civil Engineering Consultant will prepare Site Construction Plan documents to meet the requirements of the City of Clearwater’s Land Development Code and the Southwest Florida Water Management District. The Site Construction Plans will include the following: 1. Existing Conditions/Demolition Plan/Erosion Control Plan. 2. Site Geometrics and Layout (including Site Data Table). 3. Paving, Grading and Drainage Plan. 4. Utility Service Plan. 5. General Notes and Specifications. 6. Site Construction and Utility Details.. 7. Conformed drawings and specifications if necessary, after bid addenda issuance. Permitting will include: A. City of Clearwater Responses to Comments at each design Phase. B. Southwest Florida Water Management Environmental Resource Permit Application Construction Observation to include: • Attendance at a pre-bid meeting with the project team and prospective bidders. • Attendance at a pre-construction meeting with the project team and successful bidder. • Review/approval of contractor provided, site related material submittals/shop drawings. WORK ORDER INITIATION FORM 6 of 16 Revised: 7/22/2019 • Attend up to ten combined total project team meetings and site related inspections, meetings with contractor, etc. • Based on the contractor provided, signed/sealed as built survey, Deuel will prepare record drawings as required by the permitting agencies. • Consultant will prepare final certification letters and forms as required for final acceptance by the permitting agencies. Task 2.2.1 Civil Engineering for Offsite Storm Sewer Replacement The City wants to include specific storm pipe replacement adjacent to the north side of the project site on Bay Esplanade and at the southeast side of the project site at the connection point to the storm main on Mandalay Ave (not within the roadway). Consultant will provide plan details for the replacement of these specific storm pipes and check for conflicts with existing utilities (based on SUE locates provided by others). Task 2.3 Landscape Architecture Landscape and Irrigation Plan to include grading, sod, and simple landscaping around perimeter of building. 1. Code-required landscape plans (Signed and Sealed Planting Plan) will address the following: location, size, quantity of trees, palms, shrubs, and ground covers, typical planting details and specifications. i. Code-required landscape plans will contain site landscape calculations, as needed, for submittal requirements. ii. It is assumed code-required landscape plan preparation will include: up to two rounds of revisions for comments; up to one (1) Meeting in Clearwater or St. Petersburg. Based on Architect and City Comments, the planting plan will be finalized, and one final plan prepared. Standard planting installation details and specifications for the proposed landscape will be provided. 2. Prepare Detailed Irrigation Plan. i. Consultant will provide irrigation zones for limit of work area only with irrigation spray head locations, lateral and mainline layout, pipe sizing, sleeving, remote control valve locations, point of connection to municipal potable water, and equipment list within the limit of work area. It is assumed irrigation to be connected to master controller. ii. Standard irrigation installation details will be provided for proposed landscape areas. 3. Prepare Tree Inventory. i. Consultant will perform one (1) site visit to rate and identify the trees within the limit of work. Prior to site visit, Client will have the trees located in a survey (AutoCAD format) along with DBH measurements and provide Consultant with the AutoCAD file. Consultant will identify and rate the trees on the survey in a tree inventory prepared on a 24”x36” sheet. The inventory will include a matrix that identifies species and rating. Tree ratings will be provided on a 0-6 rating basis with added comments when a notable observation is made. Inventory will be prepared by an ISA Certified Arborist. 4. Scope includes planting and irrigation design only. WORK ORDER INITIATION FORM 7 of 16 Revised: 7/22/2019 Task 2.4 Site Lighting Design The electrical engineer will provide site lighting photometric and branch wiring design for parking areas at the Fire Station. Task 2.5 Interior Design and Furniture Selection Our scope of services will include interior design services for the project. We will: 1. Attend meetings with the City's design team to assess new furniture needs. 2. Survey selected existing building furniture and equipment if required. 3. Prepare furniture plans and drawings to assist with placement & installation. 4. Perform materials research and compile selections. 5. Provide specifications and select all room finishes, including carpet, paint, wallcovering, wall base, plastic laminate at millwork cabinets, vinyl composition tile, furniture fabric, exterior window blinds, etc. 6. Provide assistance with new furniture selection and furniture specifications. 7. Provide assistance with the solicitation and review of competitive bids from furniture manufacturers. 8. Provide on-site assistance during move-in. Task 2.6 Audio/Visual & Voice/Data Our scope of services will include the coordination and incorporation of audio/visual & voice/data infrastructure for the project into the design documents. We will: 1. Identify quantity, location, cable type, termination hardware, etc. for the voice/data and audio / visual infrastructure. 2. Layout the telecommunications room and associated equipment. Task 2.7 Security Coordination Our scope of services will include the incorporation of all required interior and exterior infrastructure into the design documents and coordination with the City’s security system vendor. We will: 1. Identify quantity, location, cable type, camera type, NVR / DVR type, etc. for the CCTV surveillance system. 2. Identification of quantity, location, cable type, hardware, etc. for the access control system. Task 2.8 Fire Protection System Design Fire alarm engineering documents will define the work to be done by a delegated engineer in accordance with the Florida Administrative Code (FAC). Fire Alarm contract documents will identify fire alarm device locations and the Alarm Systems Engineer of Record who will (a) provide design requirements as part of the contract documents for use by the delegated engineer and (b) will review the signed and sealed design documents prepared by the delegated engineer for conformance with the Engineer of Record’s fire alarm layout. All Fire Alarm Delegated Engineering Documents will be included in the final set of documents filed WORK ORDER INITIATION FORM 8 of 16 Revised: 7/22/2019 for permit. The fire alarm contractor will be responsible to create the signed and sealed shop drawings for submission to the local permitting agency. Fire protection engineering documents will define the work to be done by a delegated engineer in accordance with Florida Administrative Code (FAC). The fire protection contract documents will identify the Fire Protection Systems Engineer of Record who will (a) provide design requirements as part of the contract documents for use by the delegated engineer and (b) will review the design documents prepared by the delegated engineer for conformance with the Engineer of Record’s written instructions. All Fire Protection Delegated Engineering Documents will be included in the final set of documents filed for permit. Consultant will include coordination of the reflected ceiling plan with sprinklers, lighting and air distribution systems in preparing the fire protection engineering documents. Task 2.9 Lightning Protection Our scope of services will include a Lighting protection design specification for the project as requested by the City. Task 2.10 Emergency Generator Our scope of services will include a back-up generator design complete with ATS and exterior mounted generator tap box for load bank test or portable genset connection as requested by the City and per current National Electrical Code. Task 2.11 Cost Estimating Following approval of the 30% Design Documents, a preliminary construction cost estimate will be developed. Following approval of 60% Design Documents, a detailed Design Development cost estimate will be prepared. Following approval of 90% Design Documents, a detailed Construction Document cost estimate will be prepared. Following approval of 100% Design Documents, a final cost estimate will be prepared. Task 2.12 Public or City Council Meetings/Presentations Attendance at up to two public or City Council meetings/presentations. Task 2.13 Renderings WJA will provide one photorealistic rendering of the project design. Task 2.14 DRC Application WJA will prepare and submit Planning and Development Application and will attend the required meeting or public hearings as required. III. FINAL DESIGN PHASE Task 3.1 30% Submittal Based upon an approved program of spaces we will prepare 30% Design Documents for the City’s review and approval. The documents will consist of items necessary to convey the WORK ORDER INITIATION FORM 9 of 16 Revised: 7/22/2019 nature of the schematic approach, including an architectural site plan, preliminary building plans and other drawings or graphics as needed for City personnel & stakeholder review and feedback. We will: 1. Determine building code requirements and incorporate them into the design. 2. Determine site development constraint information and incorporate into the design. 3. Prepare site plan concepts and alternatives. 4. Prepare floor plan concepts and alternatives. 5. Identify preliminary materials and equipment. 6. Up to three meetings with City personnel as needed to develop and coordinate the 30% Design Documents. Task 3.2 60% Submittal Based upon the City’s approval of the 30% Design Documents, we will prepare 60% Design Documents for the City’s review and approval. The Design Development Documents will consist of items necessary to illustrate and describe the development of the schematic design, including building plans, sections, elevations and diagrammatic layouts of building systems necessary to convey the character of the project. We will: 1. Meet with all design team consultants and coordinate systems and drawing backgrounds. 2. Up to two meetings with City personnel to review project progress and design documents. 3. Prepare a progress set of Construction Documents at 60% Completion, including detailed design plans, detailed building system plans, specifications identifying materials, systems and their respective standard of quality. Task 3.3 90% Submittal Based upon the City’s approval of the 60% Design Documents, we will prepare 90% Design Documents for the City’s review and approval. The 90% Design Documents will illustrate and describe the further development of the approved 60% Design Drawings and will consist of detailed Drawings and Specifications that describe requirements for the construction of the work. The 90% documents will consist of drawings and specifications for Architectural, MEPFP, and Structural. We will: 1. Prepare a progress set of Construction Documents at 90% Completion, including detailed design plans, detailed building system plans, specifications identifying materials, systems and their respective standard of quality. 2. Up to two meetings with City personnel to review project progress and design documents. Task 3.4 Final Construction Documents WORK ORDER INITIATION FORM 10 of 16 Revised: 7/22/2019 Based upon the City’s approval of the 90% Design Documents, we will prepare Final Construction Documents for the City’s review and approval. Final Construction Documents will be used for the purpose of bidding, permitting, and construction. We will: 1. Prepare a set of Construction Documents at 100% Completion, including detailed design plans, detailed building system plans, specifications identifying materials, systems and their respective standard of quality. IV. BIDDING PHASE Task 4.1 Permitting and Bidding Following the Client’s approval of the Permit Documents, the Architect will assist the Client/Contractor with permitting and obtaining bids from subcontractors. We will: 1. Provide Signed and Sealed document sets for the building permit. 2. Modify documents as required in response to Building Permit Review comments. 3. Assist the Client/Contractor with preparation and distribution of bid documents. 4. Respond to questions and provide clarifications and interpretations of the Construction Documents to Client/Contractor and prospective subcontractors via addendum/addenda. 5. Provide Conformed Drawings and Specifications per bid addendum/addenda. V. CONSTRUCTION PHASE Task 5.1 Construction Administration Our Scope of Services will provide construction oversight to ensure the project is built according to the Construction Documents. We will assist the Contractor when conflicts or clarifications are needed. The Architect and Engineers will make periodic site visits to observe construction and follow the progress as required by the City of Plant City. We will: 1. Review of Contractor's pay application. 2. Attend meetings at the project site once per month for 10 months. 3. Provide review of and respond to the contractor’s submittals and shop drawings. 4. Provide telephone and email correspondence as necessary. 5. Respond to the contractor's questions and need for clarifications. 6. Attend the Substantial Completion walk-through. 7. Prepare a Punch List. 8. Attend the Final Completion Walk-Through. 9. Prepare Record Drawings based on Contractor's prepared as-built drawings. 10. Attend Called Meetings. The scope and fee assume Construction Administration will be provided for a 10 month period. If the construction exceeds 10 months, an additional fee for construction administration will be required. 3. PROJECT GOALS: • Conceptual Design and Preliminary Site Planning Documents in PDF Format. WORK ORDER INITIATION FORM 11 of 16 Revised: 7/22/2019 • Up to seven meetings with City personnel to review project progress. • 30% Design Documents in PDF Format. Five (5) Arch. D size and five (5) 11”x17” drawings. • 30% construction cost estimate in PDF Format. • 60% Design Documents in PDF Format. Five (5) Arch. D size and five (5) 11”x17” drawings. • 60% construction cost estimate in PDF Format. • 90% Design Documents in PDF Format. Five (5) Arch. D size and five (5) 11”x17” drawings. • 90% construction cost estimate in PDF Format. • Final Construction Documents in PDF Format. Five (5) Arch. D size and five (5) 11”x17” drawings. • 100% construction cost estimate in PDF Format. • Conformed Design Documents in PDF Format. • Record Drawings in PDF, AutoCad, Arch. D (signed & sealed) and 11”x 17” Format. • Eight signed and sealed Document sets for Building Permit Submittal. • 10 project site visits/meetings during Construction. • Substantial and Final completion walk-through. • 1 photorealistic rendering. 4. BUDGET: See Attachment “B” This price includes all labor and expenses anticipated to be incurred by Wannemacher Jensen Architects, Inc. for the completion of these tasks in accordance with Professional Services Method “B” – Lump Sum – Percentage of Completion by Task for a fee not to exceed Seven Hundred Thirty-Four Thousand, One Hundred and Nine Dollars ($734,109). The permit application fees will be paid by the consultant and invoiced to the City as a reimbursable. 5. SCHEDULE: The project design is anticipated to be completed 9 months from issuance of notice-to-proceed. The project deliverables are to be phased as follows: Concept Design and Preliminary Site Planning 60 calendar days 30% Construction Plans 60 calendar days 60% Construction Plans and Permit Applications 90 calendar days 90% Construction Plans 30 calendar days Final Construction Documents 30 calendar days Zoning and City review and approval periods are not included schedule above. 6. STAFF ASSIGNMENT (Consultant): Wannemacher Jensen Architects – Architecture and Interiors WORK ORDER INITIATION FORM 12 of 16 Revised: 7/22/2019 Principal in Charge – Jason Jensen Project Manager – Jeff McDowell VoltAir Consulting Engineers – Mechanical, Electrical, Plumbing, & Fire Protection Engineering Master Consulting Engineers – Structural Engineering Placemaker Design Studio – Landscape Architecture Deuel & Associates – Civil Engineering City of Clearwater Staff Jeff Walker, P.E. Project Manager Tim Kurtz Engineering Construction Services Manager Elliot Shoberg, P.E Engineering Assistant Director Tara Kivett, P.E. City Engineer/Engineering Director 7. CORRESPONDENCE/REPORTING PROCEDURES: Architects’s project correspondence shall be directed to: Jeff McDowell 180 Mirror Lake Drive N St. Petersburg, FL 33701 727.822.5566 jeff@wjarc.com All City project correspondence shall be directed to: Jeff Walker, P.E. 100 S. Myrtle Ave. Clearwater, FL 33756 727 562-4827 Jeff.walker@myclearwater.com with copies to others as may be appropriate. 8. INVOICING/FUNDING PROCEDURES: For work performed, invoices shall be submitted monthly to the: City of Clearwater, Engineering Department Att. Veronica Josef, Senior Staff Assistant PO Box 4748 Clearwater, Florida 33758-4748. Contingency services will be billed as incurred only after written authorization provided by the City to proceed with those services. Code: FD00190001-DSGN-PROSVC WORK ORDER INITIATION FORM 13 of 16 Revised: 7/22/2019 9. INVOICING PROCEEDURES At a minimum, in addition to the invoice amount(s) the following information shall be provided on all invoices submitted on the Work Order: A. Purchase Order, Project and Invoice Numbers and Contract Amount. B. The time period (begin and end date) covered by the invoice. C. A short narrative summary of activities completed in the time period D. Contract billing method – Lump Sum or Cost Times Multiplier E. If Lump Sum, the percent completion, amount due, previous amount earned and total earned to date for all tasks (direct costs, if any, shall be included in lump sum amount). F. If Cost Times Multiplier, hours, hourly rates, names of individuals being billed, amount due, previous amount earned, total earned to date for each task and other direct costs (receipts will be required for any single item with a cost of $50 or greater or cumulative monthly expenses greater than $100). G. If the Work Order is funded by multiple funding codes, an itemization of tasks and invoice amounts by funding code. 10. SPECIAL CONSIDERATIONS: The consultant named above is required to comply with Section 119.0701, Florida Statutes (2013) where applicable. PREPARED BY: APPROVED BY: ________________________ ________________________ Jason Jensen, AIA, LEED AP Tara Kivett, PE President City Engineer Wannemacher Jensen Architects City of Clearwater ___________________ ___________________ Date Date Attachment “A” WORK ORDER INITIATION FORM 14 of 16 Revised: 7/22/2019 CITY OF CLEARWATER ENGINEERING DEPARTMENT WORK ORDER INITIATION FORM CITY DELIVERABLES 1. FORMAT The design plans shall be compiled utilizing the following methods: 1. City of Clearwater CAD standards. 2. Datum: Horizontal and Vertical datum shall be referenced to North American Vertical Datum of 1988 (vertical) and North American Datum of 1983/90 (horizontal). The unit of measurement shall be the United States Foot. Any deviation from this datum will not be accepted unless reviewed by City of Clearwater Engineering/Geographic Technology Division. 2. DELIVERABLES The design plans shall be produced on bond material, 24" x 36" at a scale of 1" = 20’ unless approved otherwise. Upon completion the consultant shall deliver all drawing files in digital format with all project data in Autodesk Civil 3D file format. If not available Land Desktop files are still acceptable, however the City or Clearwater is currently phasing out Land Desktop. NOTE: If approved deviation from Clearwater CAD standards are used the Consultant shall include all necessary information to aid in manipulating the drawings including either PCP, CTB file or pen schedule for plotting. The drawing file shall include only authorized fonts, shapes, line types or other attributes contained in the standard release of Autodesk, Inc. software. All block references and references contained within the drawing file shall be included. Please address any questions regarding format to Mr. Tom Mahony, at (727) 562 4762 or email address Tom.Mahony@myClearwater.com. All electronic files (CAD and Specification files) must be delivered upon completion of project or with 100% plan submittal to City of Clearwater. Attachment “B” WORK ORDER INITIATION FORM 15 of 16 Revised: 7/22/2019 Fire Station #46 Consulting Services Wannemacher Jensen Architects, Inc. WORK ORDER INITIATION FORM PROJECT BUDGET Task Description Subconsultant Services Labor Total 1.0 Pre-Design 1.1 Concept Design and Preliminary Site Planning $5,500 $11,768 $17,268 1.2 Flood Map Revision Feasibility Study $4,175 $0 $4,175 1.3.1 CLOMR Application and Analysis $34,650 $0 $34,650 1.3.2 As-Built LOMR Process $11,700 $0 $11,700 $67,793 2.0 Design 2.1 Geotechnical Soils Testing and Report $10,500 $0 $10,500 2.2 Civil Engineering $78,700 $0 $78,700 2.2.1 Civil Eng. for Offsite Storm Sewer Replacement $14,100 $0 $14,100 2.3 Landscape Architecture $15,375 $0 $15,375 2.4 Site Lighting Design $2,400 $0 $2,400 2.5 Interior Design and Furniture Selection $500 $12,788 $13,288 2.6 Audio/Visual & Voice/Data $3,800 $0 $3,800 2.7 Security Coordination $3,500 $0 $3,500 2.8 Fire Protection System Design $3,600 $0 $3,600 2.9 Lightning Protection $1,800 $0 $1,800 2.10 Emergency Generator $1,600 $0 $1,600 2.11 Cost Estimating $12,500 $0 $12,500 2.12 Public Meetings/Presentations $500 $3,196 $3,696 2.13 Renderings $0 $1,587 $1,587 2.14 DRC Application $500 $5,447 $5,947 $172,393 3.0 Final Design Plans and Specifications 3.1 30% Submittal $28,480 $60,620 $89,100 3.2 60% Submittal $34,975 $75,635 $110,610 3.3 90% Submittal $34,325 $74,234 $108,559 3.4 Final Construction Documents $17,640 $31,860 $49,500 $357,769 4.0 Permitting and Bidding Services 4.1 Permitting Review $4,747 $8,920 $13,667 4.2 Permit Fees $10,500 $10,500 4.3 Bidding Services $4,748 $8,769 $13,517 $37,684 5.0 Construction Phase Services 5.1 Construction Administration $26,485 $51,985 $78,470 Attachment “B” WORK ORDER INITIATION FORM 16 of 16 Revised: 7/22/2019 $78,470 Subtotal, Labor and Subcontractors $714,109 6.1 Contingency $20,000 Grand Total $734,109 1 AGREEMENT FOR PROFESSIONAL SERVICES BETWEEN CITY OF CLEARWATER AND WANNEMACHER JENSEN ARCHITECTS, INC. RFQ #18-19 FIRE STATION #46 CONSULTING SERVICES This AGREEMENT is made and entered into on the _____ day of December 2019 by and between the City of Clearwater, Florida (CITY) and Wannemacher Jensen Architects, Inc. (CONSULTANT). WITNESSETH: WHEREAS, the CITY desires to engage the CONSULTANT to perform certain professional services pertinent to such work in accordance with this Agreement; and WHEREAS, the CONSULTANT desires to provide such professional services in accordance with this Agreement; and WHEREAS, the CITY selected the CONSULTANT in accordance with the competitive selection process described in Section 287.055 of the Florida Statutes, and based on information and representations given by the CONSULTANT in a response to Request For Qualifications #18-19. NOW, THEREFORE, in consideration of the premises and the mutual benefits which will accrue to the parties hereto in carrying out the terms of this Agreement, it is mutually understood and agreed as follows: 1.0 GENERAL SCOPE OF THIS AGREEMENT The relationship of the CONSULTANT to the CITY will be that of a professional consultant, and the CONSULTANT will provide the professional and technical services required under this Agreement in accordance with acceptable architectural practices, by exercising the skill and ability ordinarily required of architects performing the same or similar services, under the same or similar circumstances, in the State of Florida, and ethical standards. 2.0 PROFESSIONAL TECHNICAL SERVICES 2.1 It shall be the responsibility of the CONSULTANT to work with and for the CITY to perform an array of services for the City as set forth in RFQ #18-19, Scope of Services. 2.2 The CONSULTANT’S services under this Agreement will be provided under a project specific Work Order(s). Each Work Order will include the services for a single project, phase, task or assignment, and will contain a mutually agreed-upon detailed scope of services, project goals, fee and schedule of performance in accordance with applicable fiscal and budgetary constraints. Work Orders will be incorporated by reference and attached hereto this Agreement. 2 Total compensation for all services shall not exceed $734,109.00 (seven hundred thirty-four thousand one hundred nine U.S. dollars) unless specifically authorized by the City Council. See Work Order attached hereto as Exhibit B. 2.3 The CONSULTANT shall maintain an adequate and competent staff of professionally qualified personnel available to the CITY for the purpose of rendering the required architectural and/or consultant services hereunder, and shall diligently execute the work to meet the completion time established in the Work Orders. The CONSULTANT shall notify the CITY by U.S. Mail addressed to the City Engineer of any changes in company contact information, including but not limited to contact phone, address, project manager, email addresses, etc. 2.4 The CITY reserves the right to enter into contracts with other engineering and/or architect firms for similar services. The CONSULTANT will, when directed to do so by the CITY, coordinate and work with other engineering and/or architectural firms retained by the CITY. 2.5 The CITY reserves the right to remove any and all projects, phases, tasks or assignments in Section 2.1 of this Agreement. The CITY further reserves the right to enter into contracts with other architectural firms for services related to such projects, phases, tasks or assignments. The CONSULTANT will, when directed to do so by the CITY, coordinate and work with other architectural firms retained by the CITY. 3.0 PERIOD OF SERVICES 3.1 The CONSULTANT shall begin work promptly after receipt of a fully executed Work Order. Receipt of a fully executed Work Order shall constitute written notice to proceed. 3.2 If the CONSULTANT’S services are delayed for reasons beyond the CONSULTANT’S control, the time of performance shall be adjusted as appropriate. 3.3 It is the intent of the parties hereto that this Agreement continue in force for a period not to exceed to two (2) years, subject to the provisions for termination contained herein. Assignments that are in progress at the Termination Date shall be completed by the CONSULTANT unless specifically terminated by the CITY. Should the CONSULTANT be in the progress of completing work under this Agreement at the Termination Date, this Agreement shall continue with all terms, conditions and obligations being in full force and effect until such time as the work is completed. All provisions expressly intended to survive termination shall do so. 4.0 PROFESSIONAL SERVICES/CONSULTANT’S COMPETITIVE NEGOTIATION ACT (CCNA) Professional Services provided under this Agreement are within the scope of the practice of architecture, landscape architecture, professional engineering, or registered land 3 surveying and mapping, as defined by the laws of the State of Florida. Provisions of F.S. 287.055 apply. 5.0 GENERAL CONSIDERATIONS 5.1 All documents including field books, drawings, specifications, calculations, geotechnical investigation reports, etc., used in the preparation of the work shall be supplied by the CONSULTANT and shall become the property of the CITY. The CITY acknowledges that such documents are not intended or represented to be suitable for use by the CITY or others for purposes other than those for which the documents are prepared. Any reuse of these documents without written verification or adaptation by the CONSULTANT for the specific purpose intended will be at the CITY’s sole risk without liability or legal exposure to the CONSULTANT. 5.2 The CONSULTANT shall prepare preliminary construction cost estimates with each design submittal to verify the proposed design is within the City project budgets. The CONSULTANT shall prepare a final estimate of probable construction costs, following CITY approval of the bid documents and other pre-bid activities. The CITY hereby acknowledges that estimates of probable construction costs cannot be guaranteed, and such estimates are not to be construed as a promise that designed facilities will not exceed a cost limitation. 5.3 The CONSULTANT will provide expert witnesses, if required, to testify in connection with any suit at law. A supplemental agreement will be negotiated between the CITY and the CONSULTANT describing the services desired and providing a basis for compensation to the CONSULTANT. 5.4 Upon the CONSULTANT’S written request, the CITY will furnish or cause to be furnished such reports, studies, instruments, documents, and other information as the CONSULTANT and CITY mutually deem necessary. 5.5 The CITY and the CONSULTANT each bind themselves and their successors, legal representatives and assigns to the other party to this Agreement and to the partners, successors, legal representatives and assigns of each other party, in respect to all covenants of this Agreement; and, neither the CITY nor the CONSULTANT will assign or transfer its interest in this Agreement without written consent of the other. 5.6 To the fullest extent permitted by law, the CONSULTANT agrees to indemnify and hold harmless the CITY, and its officers and employees, from liabilities, damages, losses, and costs, including, but not limited to, reasonable attorneys’ fees, to the extent caused by the negligence, recklessness, or intentionally wrongful conduct of the CONSULTANT and other persons employed or utilized by the CONSULTANT in the performance of this CONSULTANT under this AGREEMENT. Notwithstanding any provision herein to the contrary, this paragraph shall not be construed as a waiver of any immunity to which CITY is entitled or the extent of any limitation of liability pursuant to § 768.28, Florida Statutes. Furthermore, this provision is not intended to nor shall it be interpreted as limiting or in any way affecting any defense CITY may have under § 768.28, Florida Statutes or as 4 consent to be sued by third parties. The obligations under this paragraph shall expressly survive termination or expiration of this Agreement. 5.7 The CONSULTANT agrees not to engage the services of any person or persons in the employ of the CITY to an allied capacity, on either a full or part-time basis, on the date of the signing of this Agreement, or during its term. 5.8 Key personnel assigned to CITY projects by the CONSULTANT shall not be removed from the projects until alternate personnel acceptable to the CITY are approved in writing by the CITY. Key personnel are identified as: Project Manager and technical experts. 5.9 The CONSULTANT shall attach a brief status report on the projects with each request for payment. 5.10 Unless otherwise required by law or judicial order, the CONSULTANT agrees that it shall make no statements, press releases or other public communication concerning this Agreement or its subject matter or otherwise disclose or permit to be disclosed any of the data, technical processes, business affairs or other information obtained or furnished in the conduct of work under this Agreement without first notifying the CITY and securing its consent in writing. The CONSULTANT also agrees that it shall not publish copyright or patent any of the site-specific data or reports furnished for or resulting from work under this Agreement. This does not include materials previously or concurrently developed by the CONSULTANT for “In House” use. Only data and reports generated by the CONSULTANT under this Agreement shall be the property of the CITY. 5.11 Public Records. The CONSULTANT will be required to comply with Section 119.0701, Florida Statutes, as may be amended from time to time, specifically to: IF THE CONSULTANT HAS QUESTIONS REGARDING THE APPLICATION OF CHAPTER 119, FLORIDA STATUTES, TO THE CONSULTANT’S DUTY TO PROVIDE PUBLIC RECORDS RELATING TO THIS CONTRACT, CONTACT THE CUSTODIAN OF PUBLIC RECORDS AT: 727-562-4092, Rosemarie.Call@myclearwater.com, 600 Cleveland Street, Suite 600, Clearwater, FL 33755. CONSULTANT shall comply with the following: a) Keep and maintain public records required by the City of Clearwater (hereinafter “public agency”) to perform the service being provided by the contractor hereunder. b) Upon request from the public agency’s custodian of public records, provide the public agency with a copy of the requested records or allow the records to be inspected or copied within a reasonable time at a cost that does not exceed the cost provided for in Chapter 119, Florida Statutes, as may be amended from time to time, or as otherwise provided by law. 5 c) Ensure that the public records that are exempt or confidential and exempt from public records disclosure requirements are not disclosed except as authorized by law for the duration of the contract term and following completion of the contract if the contractor does not transfer the records to the public agency. d) Upon completion of the contract, transfer, at no cost, to the public agency all public records in possession of the contractor or keep and maintain public records required by the public agency to perform the service. If the contractor transfers all public records to the public agency upon completion of the contract, the contractor shall destroy any duplicate public records that are exempt or confidential and exempt from public records disclosure requirements. If the contractor keeps and maintains public records upon completion of the contract, the contractor shall meet all applicable requirements for retaining public records. All records stored electronically must be provided to the public agency, upon request from the public agency’s custodian of public records, in a format that is compatible with the information technology systems of the public agency. e) A request to inspect or copy public records relating to a public agency’s contract for services must be made directly to the public agency. If the public agency does not possess the requested records, the public agency shall immediately notify the contractor of the request and the contractor must provide the records to the public agency or allow the records to be inspected or copied within a reasonable time. f) The contractor hereby acknowledges and agrees that if the contractor does not comply with the public agency’s request for records, the public agency shall enforce the contract provisions in accordance with the contract. g) A contractor who fails to provide the public records to the public agency within a reasonable time may be subject to penalties under Section 119.10, Florida Statutes. h) If a civil action is filed against a contractor to compel production of public records relating to a public agency’s contract for services, the court shall assess and award against the contractor the reasonable costs of enforcement, including reasonable attorney fees, if: 1. The court determines that the contractor unlawfully refused to comply with the public records request within a reasonable time; and 2. At least 8 business days before filing the action, the plaintiff provided written notice of the public records request, including a statement that the contractor has not complied with the request, to the public agency and to the contractor. 6 i) A notice complies with subparagraph (h)2. if it is sent to the public agency’s custodian of public records and to the contractor at the contractor’s address listed on its contract with the public agency or to the contractor’s registered agent. Such notices must be sent by common carrier delivery service or by registered, Global Express Guaranteed, or certified mail, with postage or shipping paid by the sender and with evidence of delivery, which may be in an electronic format. A contractor who complies with a public records request within 8 business days after the notice is sent is not liable for the reasonable costs of enforcement. 6.0 COMPENSATION 6.1 The CONSULTANT shall be compensated for services rendered under this Agreement in accordance with the provisions of each Work Order, upon presentation of CONSULTANT’S invoice and as provided for below. 6.2 Compensation for services shall be invoiced by the CONSULTANT and paid by the CITY in accordance with the Florida Local Government Prompt Payment Act, § 218.70, Florida Statutes. 6.3 The CONSULTANT agrees to allow full and open inspection of payroll records and expenditures in connection with hourly rate and cost-plus fixed fee work assignments upon request of the CITY. 7.0 PROHIBITION AGAINST CONTINGENT FEES The CONSULTANT warrants that it has not employed or retained any company or person, other than a bona fide employee working solely for the CONSULTANT to solicit or secure this Agreement and that it has not paid or agreed to pay any persons, company, corporation, individual or Firm, other than a bona fide employee working for the CONSULTANT any fee, commission, percentage, gift, or any other consideration, contingent upon or resulting from the award or making of this Agreement. 8.0 TERMINATION FOR CAUSE This Agreement may be terminated by either party with seven (7) days prior written notice, in the event of substantial failure to perform in accordance with the terms hereof by the other party through no fault of the terminating party. If this Agreement is terminated, the CONSULTANT shall be paid in accordance with the provisions of outstanding Work Orders for all work performed up to the date of termination. 9.0 SUSPENSION, CANCELLATION OR ABANDONMENT If the project described in any Work Order is suspended, canceled, or abandoned by the CITY, without affecting any other Work Order or this Agreement, the CONSULTANT shall be given five (5) days prior written notice of such action and shall be compensated 7 for professional services provided up to the date of suspension, cancellation or abandonment. 10.0 GOVERNING LAW This Agreement shall be administered and interpreted under the laws of the State of Florida. The exclusive venue for any proceeding or suit in law or equity arising from or incident to this Agreement will be in Pinellas County Florida. 11.0 TERMINATION FOR CONVENIENCE Either the CITY or the CONSULTANT may terminate the Agreement at any time by giving written notice to the other of such termination and specifying the effective date of such termination at least thirty (30) days before said termination date. If the Agreement is terminated by the CITY as provided herein, the CONSULTANT will be paid for services rendered through the date of termination. 12.0 PUBLIC ENTITY CRIMES Pursuant to Florida Statute § 287.132-133, the City of Clearwater, as a public entity, may not accept any proposal from, award any contract to, or transact any business in excess of the threshold amount provided in § 287.017, F.S., for Category Two (currently $35,000) with any person or affiliate on the convicted vendor list for a period of 36 months from the date that person or affiliate was placed on the convicted vendor list unless that person of affiliate has been removed from the list pursuant to § 287.133 (3)(f), F.S. By submitting a proposal, CONSULTANT is certifying that Florida Statute 287.132 and 287.133 does not restrict submission. 13.0 SCRUTINIZED COMPANIES AND BUSINESS OPERATIONS The CONSULTANT will be required to comply with Section 287.135, Florida Statues, specifically by executing the forms provided (attached). 14.0 RFQ #18-19, STANDARD TERMS AND CONDITIONS All terms and conditions as set forth in RFQ #18-19, Standard Terms of Conditions are incorporated by reference and hereto attached as Exhibit A. 15.0 ORDER OF PRECEDENCE Any inconsistency in documents relating to this Agreement shall be resolved by giving precedence in the following order: (i) this Agreement and subsequent Amendments; (ii) RFQ #18-19, Standard Terms and Conditions; and (iii) Work Orders. 8 16.0 INSURANCE REQUIREMENTS Insurance Requirements are set forth in Exhibit C, which is incorporated by reference and attached hereto. 17.0 TERMINATION FOR LACK OF FUNDING The CITY’S performance and obligation to pay under this Agreement is contingent upon an annual appropriation by the Clearwater City Council. In the event the Clearwater City Council does not appropriate funds in a sufficient amount for CITY to perform its obligations hereunder, CITY may terminate this Agreement upon thirty (30) days written notice to CONSULTANT. 9 IN WITNESS WHEREOF, the parties hereto have made and executed this Agreement on the date and year first above written. ____________________________________ WANNEMACHER JENSEN ARCHITECTS, INC. By: ______________________________ Print Name: ____________________ Title: __________________________ WITNESS: By: ______________________________ Print Name: ____________________ Countersigned: CITY OF CLEARWATER ____________________________ ___________________________________ George N. Cretekos William B. Horne II Mayor City Manager Approved as to form: Attest: ____________________________ ___________________________________ Owen Kohler Rosemarie Call Assistant City Attorney City Clerk 10 SCRUTINIZED COMPANIES AND BUSINESS OPERATIONS WITH CUBA AND SYRIA CERTIFICATION FORM PER SECTION III, ITEM 25, IF YOUR BID IS $1,000,000 OR MORE, THIS FORM MUST BE COMPLETED AND SUBMITTED WITH THE BID PROPOSAL. FAILURE TO SUBMIT THIS FORM AS REQUIRED, MAY DEEM YOUR SUBMITTAL NONRESPONSIVE. The affiant, by virtue of the signature below, certifies that: 1. The vendor, company, individual, principal, subsidiary, affiliate, or owner is aware of the requirements of section 287.135, Florida Statutes, regarding companies on the Scrutinized Companies with Activities in Sudan List, the Scrutinized Companies with Activities in the Iran Petroleum Energy Sector List, or engaging in business operations in Cuba and Syria; and 2. The vendor, company, individual, principal, subsidiary, affiliate, or owner is eligible to participate in this solicitation and is not listed on either the Scrutinized Companies with Activities in Sudan List, the Scrutinized Companies with Activities in the Iran Petroleum Sector List, or engaged in business operations in Cuba and Syria; and 3. Business Operations means, for purposes specifically related to Cuba or Syria, engaging in commerce in any form in Cuba or Syria, including, but not limited to, acquiring, developing, maintaining, owning, selling, possessing, leasing or operating equipment, facilities, personnel, products, services, personal property, real property, military equipment, or any other apparatus of business or commerce; and 4. If awarded the Contract (or Agreement), the vendor, company, individual, principal, subsidiary, affiliate, or owner will immediately notify the City of Clearwater in writing, no later than five (5) calendar days after any of its principals are placed on the Scrutinized Companies with Activities in Sudan List, the Scrutinized Companies with Activities in the Iran Petroleum Sector List, or engaged in business operations in Cuba and Syria. __________________________________________ Authorized Signature __________________________________________ Printed Name __________________________________________ Title __________________________________________ Name of Entity/Corporation STATE OF _____________________ COUNTY OF ___________________ The foregoing instrument was acknowledged before me on this ______ day of _____________________, 20____, by _________________________________ (name of person whose signature is being notarized) as the ________________________ (title) of ________________________________________ (name of corporation/entity), personally known to me as described herein _____________________, or produced a _________________________ (type of identification) as identification, and who did/did not take an oath. _______________________________________ Notary Public ____________________________________ Printed Name My Commission Expires: __________________ NOTARY SEAL ABOVE 11 SCRUTINIZED COMPANIES THAT BOYCOTT ISRAEL LIST CERTIFICATION FORM PER SECTION III, ITEM 25, THIS FORM MUST BE COMPLETED AND SUBMITTED WITH THE BID PROPOSAL. FAILURE TO SUBMIT THIS FORM AS REQUIRED, MAY DEEM YOUR SUBMITTAL NONRESPONSIVE. The affiant, by virtue of the signature below, certifies that: 5. The vendor, company, individual, principal, subsidiary, affiliate, or owner is aware of the requirements of section 287.135, Florida Statutes, regarding companies on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel; and 6. The vendor, company, individual, principal, subsidiary, affiliate, or owner is eligible to participate in this solicitation and is not listed on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel; and 7. “Boycott Israel” or “boycott of Israel” means refusing to deal, terminating business activities, or taking other actions to limit commercial relations with Israel, or persons or entities doing business in Israel or in Israeli-controlled territories, in a discriminatory manner. A statement by a company that it is participating in a boycott of Israel, or that it has initiated a boycott in response to a request for a boycott of Israel or in compliance with, or in furtherance of, calls for a boycott of Israel, may be considered as evidence that a company is participating in a boycott of Israel; and 8. If awarded the Contract (or Agreement), the vendor, company, individual, principal, subsidiary, affiliate, or owner will immediately notify the City of Clearwater in writing, no later than five (5) calendar days after any of its principals are placed on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel. __________________________________________ Authorized Signature __________________________________________ Printed Name __________________________________________ Title __________________________________________ Name of Entity/Corporation STATE OF _____________________ COUNTY OF ___________________ The foregoing instrument was acknowledged before me on this ______ day of _____________________, 20____, by _________________________________ (name of person whose signature is being notarized) as the ________________________ (title) of ________________________________________ (name of corporation/entity), personally known to me as described herein _____________________, or produced a _________________________ (type of identification) as identification, and who did/did not take an oath. _______________________________________ Notary Public ____________________________________ Printed Name My Commission Expires: __________________ NOTARY SEAL ABOVE RFQ #18-19, EXHIBIT A STANDARD TERMS AND CONDITIONS 1 S.1 DEFINITIONS. Uses of the following terms are interchangeable as referenced: “vendor, contractor, consultant, supplier, proposer, company, parties, persons”, “purchase order, PO, contract, agreement”, “city, Clearwater, agency, requestor, parties”, “bid, proposal, response, quote”. S.2 INDEPENDENT CONTRACTOR. It is expressly understood that the relationship of Contractor to the City will be that of an independent contractor. Contractor and all persons employed by Contractor, either directly or indirectly, are Contractor’s employees, not City employees. Accordingly, Contractor and Contractor’s employees are not entitled to any benefits provided to City employees including, but not limited to, health benefits, enrollment in a retirement system, paid time off or other rights afforded City employees. Contractor employees will not be regarded as City employees or agents for any purpose, including the payment of unemployment or workers’ compensation. If any Contractor employees or subcontractors assert a claim for wages or other employment benefits against the City, Contractor will defend, indemnify and hold harmless the City from all such claims. S.3 SUBCONTRACTING. Contractor may not subcontract work under this Agreement without the express written permission of the City. If Contractor has received authorization to subcontract work, it is agreed that all subcontractors performing work under the Agreement must comply with its provisions. Further, all agreements between Contractor and its subcontractors must provide that the terms and conditions of this Agreement be incorporated therein. S.4 ASSIGNMENT. This Agreement may not be assigned either in whole or in part without first receiving the City’s written consent. Any attempted assignment, either in whole or in part, without such consent will be null and void and in such event the City will have the right at its option to terminate the Agreement. No granting of consent to any assignment will relieve Contractor from any of its obligations and liabilities under the Agreement. S.5 SUCCESSORS AND ASSIGNS, BINDING EFFECT. This Agreement will be binding upon and inure to the benefit of the parties and their respective permitted successors and assigns. S.6 NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the exclusive benefit of the parties. Nothing set forth in this Agreement is intended to create, or will create, any benefits, rights, or responsibilities in any third parties. S.7 NON- EXCLUSIVITY. The City, in its sole discretion, reserves the right to request the materials or services set forth herein from other sources when deemed necessary and appropriate. No exclusive rights are encompassed through this Agreement. S.8 AMENDMENTS. There will be no oral changes to this Agreement. This Agreement can only be modified in a writing signed by both parties. No charge for extra work or material will be allowed unless approved in writing, in advance, by the City and Contractor. S.9 TIME OF THE ESSENCE. Time is of the essence to the performance of the parties’ obligations under this Agreement. S.10 COMPLIANCE WITH APPLICABLE LAWS. a. General. Contractor must procure all permits and licenses, and pay all charges and fees necessary and incidental to the lawful conduct of business. Contractor must stay fully informed of existing and future federal, state, and local laws, ordinances, and regulations that in any manner affect the fulfillment of this Agreement and must comply with the same at its own expense. Contractor bears full responsibility for training, safety, and providing necessary equipment for all Contractor personnel to achieve throughout the term of the Agreement. Upon request, Contractor will demonstrate to the City's satisfaction any programs, procedures, and other activities used to ensure compliance. b. Drug-Free Workplace. Contractor is hereby advised that the City has adopted a policy establishing a drug-free workplace for itself and those doing business with the City to ensure the safety and health of all persons working on City contracts and projects. Contractor will RFQ #18-19, EXHIBIT A STANDARD TERMS AND CONDITIONS 2 require a drug-free workplace for all Contractor personnel working under this Agreement. Specifically, all Contractor personnel who are working under this Agreement must be notified in writing by Contractor that they are prohibited from the manufacture, distribution, dispensation, possession, or unlawful use of a controlled substance in the workplace. Contractor agrees to prohibit the use of intoxicating substances by all Contractor personnel, and will ensure that Contractor personnel do not use or possess illegal drugs while in the course of performing their duties. c. Federal and State Immigration Laws. Contractor agrees to comply with the Immigration Reform and Control Act of 1986 (IRCA) in performance under this Agreement and to permit the City and its agents to inspect applicable personnel records to verify such compliance as permitted by law. Contractor will ensure and keep appropriate records to demonstrate that all Contractor personnel have a legal right to live and work in the United States. (i) As applicable to Contractor, under this provision, Contractor hereby warrants to the City that Contractor and each of its subcontractors will comply with, and are contractually obligated to comply with, all federal immigration laws and regulations that relate to their employees (hereinafter “Contractor Immigration Warranty”). (ii) A breach of the Contractor Immigration Warranty will constitute as a material breach of this Agreement and will subject Contractor to penalties up to and including termination of this Agreement at the sole discretion of the City. (iii) The City retains the legal right to inspect the papers of all Contractor personnel who provide services under this Agreement to ensure that Contractor or its subcontractors are complying with the Contractor Immigration Warranty. Contractor agrees to assist the City in regard to any such inspections. (iv) The City may, at its sole discretion, conduct random verification of the employment records of Contractor and any subcontractor to ensure compliance with the Contractor Immigration Warranty. Contractor agrees to assist the City in regard to any random verification performed. (v) Neither Contractor nor any subcontractor will be deemed to have materially breached the Contractor Immigration Warranty if Contractor or subcontractor establishes that it has complied with the employment verification provisions prescribed by Sections 274A and 274B of the Federal Immigration and Nationality Act. d. Nondiscrimination. Contractor represents and warrants that it does not discriminate against any employee or applicant for employment or person to whom it provides services because of race, color, religion, sex, national origin, or disability, and represents and warrants that it complies with all applicable federal, state, and local laws and executive orders regarding employment. Contractor and Contractor’s personnel will comply with applicable provisions of Title VII of the U.S. Civil Rights Act of 1964, as amended, Section 504 of the Federal Rehabilitation Act, the Americans with Disabilities Act (42 U.S.C. § 12101 et seq.), and applicable rules in performance under this Agreement. S.11 SALES/USE TAX, OTHER TAXES. Contractor is responsible for the payment of all taxes including federal, state, and local taxes related to or arising out of Contractor’s services under this Agreement, including by way of illustration but not limitation, federal and state income tax, Social Security tax, unemployment insurance taxes, and any other taxes or business license fees as required. If any taxing authority should deem Contractor or Contractor employees an employee of the City, or should otherwise claim the City is liable for the payment of taxes that are Contractor’s responsibility under this Agreement, Contractor will indemnify the City for any tax liability, interest, and penalties imposed upon the City. The City is exempt from paying state and local sales/use taxes and certain federal excise taxes and will furnish an exemption certificate upon request. RFQ #18-19, EXHIBIT A STANDARD TERMS AND CONDITIONS 3 S.12 AMOUNTS DUE THE CITY. Contractor must be current and remain current in all obligations due to the City during the performance of services under the Agreement. Payments to Contractor may be offset by any delinquent amounts due the City or fees and charges owed to the City. S.13 OPENNESS OF PROCUREMENT PROCESS. Written competitive proposals, replies, oral presentations, meetings where vendors answer questions, other submissions, correspondence, and all records made thereof, as well as negotiations or meetings where negotiation strategies are discussed, conducted pursuant to this Invitation to Bid (ITB), shall be handled in compliance with Chapters 119 and 286, Florida Statutes. Proposals or replies received by the City pursuant to this ITB are exempt from public disclosure until such time that the City provides notice of an intended decision or until 30 days after opening the proposals, whichever is earlier. If the City rejects all proposals or replies pursuant to this ITB and provides notice of its intent to reissue the ITB, then the rejected proposals or replies remain exempt from public disclosure until such time that the City provides notice of an intended decision concerning the reissued ITB or until the City withdraws the reissued ITB. A proposal or reply shall not be exempt from public disclosure longer than 12 months after the initial City notice rejecting all proposals or replies. Oral presentations, meetings where vendors answer questions, or meetings convened by City staff to discuss negotiation strategies, if any, shall be closed to the public (and other proposers) in compliance with Chapter 286 Florida Statutes. A complete recording shall be made of such closed meeting. The recording of, and any records presented at, the exempt meeting shall be available to the public when the City provides notice of an intended decision or until 30 days after opening proposals or final replies, whichever occurs first. If the City rejects all proposals or replies pursuant to this ITB and provides notice of its intent to reissue the ITB, then the recording and any records presented at the exempt meeting remain exempt from public disclosure until such time that the City provides notice of an intended decision concerning the reissued ITB or until the City withdraws the reissued ITB. A recording and any records presented at an exempt meeting shall not be exempt from public disclosure longer than 12 months after the initial City notice rejecting all proposals or replies. In addition to all other contract requirements as provided by law, the contractor executing this agreement agrees to comply with public records law. IF THE CONTRACTOR HAS QUESTIONS REGARDING THE APPLICATION OF CHAPTER 119, FLORIDA STATUTES, TO THE CONTRACTOR’S DUTY TO PROVIDE PUBLIC RECORDS RELATING TO THIS CONTRACT, CONTACT THE CUSTODIAN OF PUBLIC RECORDS, Rosemarie Call, phone: 727-562-4092 or Rosemarie.Call@myclearwater.com, 112 S. Osceola Ave., Clearwater, FL 33756. The contractor’s agreement to comply with public records law applies specifically to: a) Keep and maintain public records required by the City of Clearwater (hereinafter “public agency”) to perform the service being provided by the contractor hereunder. b) Upon request from the public agency’s custodian of public records, provide the public agency with a copy of the requested records or allow the records to be inspected or copied within a reasonable time at a cost that does not exceed the cost provided for in Chapter 119, Florida Statutes, as may be amended from time to time, or as otherwise provided by law. c) Ensure that the public records that are exempt or confidential and exempt from public records disclosure requirements are not disclosed except as authorized by law for the duration of the contract term and following completion of the contract if the contractor does not transfer the records to the public agency. RFQ #18-19, EXHIBIT A STANDARD TERMS AND CONDITIONS 4 d) Upon completion of the contract, transfer, at no cost, to the public agency all public records in possession of the contractor or keep and maintain public records required by the public agency to perform the service. If the contractor transfers all public records to the public agency upon completion of the contract, the contractor shall destroy any duplicate public records that are exempt or confidential and exempt from public records disclosure requirements. If the contractor keeps and maintains public records upon completion of the contract, the contractor shall meet all applicable requirements for retaining public records. All records stored electronically must be provided to the public agency, upon request from the public agency’s custodian of public records, in a format that is compatible with the information technology systems of the public agency. e) A request to inspect or copy public records relating to a public agency’s contract for services must be made directly to the public agency. If the public agency does not possess the requested records, the public agency shall immediately notify the contractor of the request and the contractor must provide the records to the public agency or allow the records to be inspected or copied within a reasonable time. f) The contractor hereby acknowledges and agrees that if the contractor does not comply with the public agency’s request for records, the public agency shall enforce the contract provisions in accordance with the contract. g) A contractor who fails to provide the public records to the public agency within a reasonable time may be subject to penalties under Section 119.10, Florida Statutes. h) If a civil action is filed against a contractor to compel production of public records relating to a public agency’s contract for services, the court shall assess and award against the contractor the reasonable costs of enforcement, including reasonable attorney fees, if: 1. The court determines that the contractor unlawfully refused to comply with the public records request within a reasonable time; and 2. At least eight (8) business days before filing the action, the plaintiff provided written notice of the public records request, including a statement that the contractor has not complied with the request, to the public agency and to the contractor. i) A notice complies with subparagraph (h)2. if it is sent to the public agency’s custodian of public records and to the contractor at the contractor’s address listed on its contract with the public agency or to the contractor’s registered agent. Such notices must be sent by common carrier delivery service or by registered, Global Express Guaranteed, or certified mail, with postage or shipping paid by the sender and with evidence of delivery, which may be in an electronic format. A contractor who complies with a public records request within eight (8) business days after the notice is sent is not liable for the reasonable costs of enforcement. S.14 AUDITS AND RECORDS. Contractor must preserve the records related to this Agreement for five (5) years after completion of the Agreement. The City or its authorized agent reserves the right to inspect any records related to the performance of work specified herein. In addition, the City may inspect any and all payroll, billing or other relevant records kept by Contractor in relation to the Agreement. Contractor will permit such inspections and audits during normal business hours and upon reasonable notice by the City. The audit of records may occur at Contractor’s place of business or at City offices, as determined by the City. RFQ #18-19, EXHIBIT A STANDARD TERMS AND CONDITIONS 5 S.15 BACKGROUND CHECK. The City may conduct criminal, driver history, and all other requested background checks of Contractor personnel who would perform services under the Agreement or who will have access to the City’s information, data, or facilities in accordance with the City’s current background check policies. Any officer, employee, or agent that fails the background check must be replaced immediately for any reasonable cause not prohibited by law. S.16 SECURITY CLEARANCE AND REMOVAL OF CONTRACTOR PERSONNEL. The City will have final authority, based on security reasons: (i) to determine when security clearance of Contractor personnel is required; (ii) to determine the nature of the security clearance, up to and including fingerprinting Contractor personnel; and (iii) to determine whether or not any individual or entity may provide services under this Agreement. If the City objects to any Contractor personnel for any reasonable cause not prohibited by law, then Contractor will, upon notice from the City, remove any such individual from performance of services under this Agreement. S.17 DEFAULT. a. A party will be in default if that party: (i) is or becomes insolvent or is a party to any voluntary bankruptcy or receivership proceeding, makes an assignment for a creditor, or there is any similar action that affects Contractor’s capability to perform under the Agreement; (ii) is the subject of a petition for involuntary bankruptcy not removed within sixty (60) calendar days; (iii) conducts business in an unethical manner or in an illegal manner; or (iv) fails to carry out any term, promise, or condition of the Agreement. b. Contractor will be in default of this Agreement if Contractor is debarred from participating in City procurements and solicitations in accordance with the City’s Purchasing Policy and Procedures Manual. c. Notice and Opportunity to Cure. In the event a party is in default then the other party may, at its option and at any time, provide written notice to the defaulting party of the default. The defaulting party will have thirty (30) days from receipt of the notice to cure the default; the thirty (30) day cure period may be extended by mutual agreement of the parties, but no cure period may exceed ninety (90) days. A default notice will be deemed to be sufficient if it is reasonably calculated to provide notice of the nature and extent of such default. Failure of the non-defaulting party to provide notice of the default does not waive any rights under the Agreement. d. Anticipatory Repudiation. Whenever the City in good faith has reason to question Contractor’s intent or ability to perform, the City may demand that Contractor give a written assurance of its intent and ability to perform. In the event that the demand is made and no written assurance is given within five (5) calendar days, the City may treat this failure as an anticipatory repudiation of the Agreement. S.18 REMEDIES. The remedies set forth in this Agreement are not exclusive. Election of one remedy will not preclude the use of other remedies. In the event of default: a. The non-defaulting party may terminate the Agreement, and the termination will be effective immediately or at such other date as specified by the terminating party. b. The City may purchase the services required under the Agreement from the open market, complete required work itself, or have it completed at the expense of Contractor. If the cost of obtaining substitute services exceeds the contract price, the City may recover the excess cost by: (i) requiring immediate reimbursement to the City; (ii) deduction from an unpaid balance due to Contractor; (iii) collection against the proposal and/or performance security, if any; (iv) collection against liquidated damages (if applicable); or (v) a combination of the aforementioned remedies or other remedies as provided by law. Costs includes any and all, fees, and expenses incurred in obtaining substitute services and expended in obtaining reimbursement, including, but not limited to, administrative expenses, attorneys’ fees, and costs. RFQ #18-19, EXHIBIT A STANDARD TERMS AND CONDITIONS 6 c. The non-defaulting party will have all other rights granted under this Agreement and all rights at law or in equity that may be available to it. d. Neither party will be liable for incidental, special, or consequential damages. S.19 CONTINUATION DURING DISPUTES. Contractor agrees that during any dispute between the parties, Contractor will continue to perform its obligations until the dispute is settled, instructed to cease performance by the City, enjoined or prohibited by judicial action, or otherwise required or obligated to cease performance by other provisions in this Agreement. S.20 TERMINATION FOR CONVENIENCE. The City reserves the right to terminate this Agreement in part or in whole upon thirty (30) calendar days’ written notice. S.21 TERMINATION FOR CONFLICT OF INTEREST Florida Statutes Section 112. Pursuant to F.S. Section 112, the City may cancel this Agreement after its execution, without penalty or further obligation, if any person significantly involved in initiating, securing, drafting, or creating the Agreement for the City becomes an employee or agent of Contractor. S.22 TERMINATION FOR NON-APPROPRIATION AND MODIFICATION FOR BUDGETARY CONSTRAINT. The City is a governmental agency which relies upon the appropriation of funds by its governing body to satisfy its obligations. If the City reasonably determines that it does not have funds to meet its obligations under this Agreement, the City will have the right to terminate the Agreement without penalty on the last day of the fiscal period for which funds were legally available. In the event of such termination, the City agrees to provide written notice of its intent to terminate thirty (30) calendar days prior to the stated termination date. S.23 PAYMENT TO CONTRACTOR UPON TERMINATION. Upon termination of this Agreement, Contractor will be entitled only to payment for those services performed up to the date of termination, and any authorized expenses already incurred up to such date of termination. The City will make final payment within thirty (30) calendar days after the City has both completed its appraisal of the materials and services provided and received Contractor’s properly prepared final invoice. S.24 NON-WAIVER OF RIGHTS. There will be no waiver of any provision of this agreement unless approved in writing and signed by the waiving party. Failure or delay to exercise any rights or remedies provided herein or by law or in equity, or the acceptance of, or payment for, any services hereunder, will not release the other party of any of the warranties or other obligations of the Agreement and will not be deemed a waiver of any such rights or remedies. S.25 INDEMNIFICATION/LIABILITY. a. To the fullest extent permitted by law, Contractor agrees to defend, indemnify, and hold the City, its officers, agents, and employees, harmless from and against any and all liabilities, demands, claims, suits, losses, damages, causes of action, fines or judgments, including costs, attorneys’, witnesses’, and expert witnesses’ fees, and expenses incident thereto, relating to, arising out of, or resulting from: (i) the services provided by Contractor personnel under this Agreement; (ii) any negligent acts, errors, mistakes or omissions by Contractor or Contractor personnel; and (iii) Contractor or Contractor personnel’s failure to comply with or fulfill the obligations established by this Agreement. b. Contractor will update the City during the course of the litigation to timely notify the City of any issues that may involve the independent negligence of the City that is not covered by this indemnification. c. The City assumes no liability for actions of Contractor and will not indemnify or hold Contractor or any third party harmless for claims based on this Agreement or use of Contractor-provided supplies or services. RFQ #18-19, EXHIBIT A STANDARD TERMS AND CONDITIONS 7 S.26 WARRANTY. Contractor warrants that the services and materials will conform to the requirements of the Agreement. Additionally, Contractor warrants that all services will be performed in a good, workman-like and professional manner. The City’s acceptance of service or materials provided by Contractor will not relieve Contractor from its obligations under this warranty. If any materials or services are of a substandard or unsatisfactory manner as determined by the City, Contractor, at no additional charge to the City, will provide materials or redo such services until in accordance with this Agreement and to the City’s reasonable satisfaction. Unless otherwise agreed, Contractor warrants that materials will be new, unused, of most current manufacture and not discontinued, will be free of defects in materials and workmanship, will be provided in accordance with manufacturer's standard warranty for at least one (1) year unless otherwise specified, and will perform in accordance with manufacturer's published specifications. S.27 THE CITY’S RIGHT TO RECOVER AGAINST THIRD PARTIES. Contractor will do nothing to prejudice the City’s right to recover against third parties for any loss, destruction, or damage to City property, and will at the City’s request and expense, furnish to the City reasonable assistance and cooperation, including assistance in the prosecution or defense of suit and the execution of instruments of assignment in favor of the City in obtaining recovery. S.28 NO GUARANTEE OF WORK. Contractor acknowledges and agrees that it is not entitled to deliver any specific amount of materials or services or any materials or services at all under this Agreement and acknowledges and agrees that the materials or services will be requested by the City on an as needed basis at the sole discretion of the City. Any document referencing quantities or performance frequencies represent the City's best estimate of current requirements, but will not bind the City to purchase, accept, or pay for materials or services which exceed its actual needs. S.29 OWNERSHIP. All deliverables, services, and information provided by Contractor or the City pursuant to this Agreement (whether electronically or manually generated) including without limitation, reports, test plans, and survey results, graphics, and technical tables, originally prepared in the performance of this Agreement, are the property of the City and will not be used or released by Contractor or any other person except with prior written permission by the City. S.30 USE OF NAME. Contractor will not use the name of the City of Clearwater in any advertising or publicity without obtaining the prior written consent of the City. S.31 PROHIBITED ACTS. Pursuant to Florida Constitution Article II Section 8, a current or former public officer or employee within the last two (2) years shall not represent another organization before the City on any matter for which the officer or employee was directly concerned and personally participated in during their service or employment or over which they had a substantial or material administrative discretion. S.32 FOB DESTINATION FREIGHT PREPAID AND ALLOWED. All deliveries will be FOB destination freight prepaid and allowed unless otherwise agreed. S.33 RISK OF LOSS. Contractor agrees to bear all risks of loss, injury, or destruction of goods or equipment incidental to providing these services and such loss, injury, or destruction will not release Contractor from any obligation hereunder. S.34 SAFEGUARDING CITY PROPERTY. Contractor will be responsible for any damage to City real property or damage or loss of City personal property when such property is the responsibility of or in the custody of Contractor or its employees. S.35 WARRANTY OF RIGHTS. Contractor warrants it has title to, or the right to allow the City to use, the materials and services being provided and that the City may use same without suit, trouble or hindrance from Contractor or third parties. S.36 PROPRIETARY RIGHTS INDEMNIFICATION. Without limiting the foregoing, Contractor will RFQ #18-19, EXHIBIT A STANDARD TERMS AND CONDITIONS 8 without limitation, at its expense defend the City against all claims asserted by any person that anything provided by Contractor infringes a patent, copyright, trade secret or other intellectual property right and must, without limitation, pay the costs, damages and attorneys' fees awarded against the City in any such action, or pay any settlement of such action or claim. Each party agrees to notify the other promptly of any matters to which this provision may apply and to cooperate with each other in connection with such defense or settlement. If a preliminary or final judgment is obtained against the City’s use or operation of the items provided by Contractor hereunder or any part thereof by reason of any alleged infringement, Contractor will, at its expense and without limitation, either: (a) modify the item so that it becomes non-infringing; (b) procure for the City the right to continue to use the item; (c) substitute for the infringing item other item(s) having at least equivalent capability; or (d) refund to the City an amount equal to the price paid, less reasonable usage, from the time of installation acceptance through cessation of use, which amount will be calculated on a useful life not less than five (5) years, plus any additional costs the City may incur to acquire substitute supplies or services. S.37 CONTRACT ADMINISTRATION. The agreement will be administered by the Purchasing Administrator and/or an authorized representative from the using department. All questions regarding the agreement will be referred to the administrator for resolution. Supplements may be written to the agreement for the addition or deletion of services. Payment will be negotiated and determined by the contract administrator(s). S.38 FORCE MAJEURE. Failure by either party to perform its duties and obligations will be excused by unforeseeable circumstances beyond its reasonable control, including acts of nature, acts of the public enemy, riots, fire, explosion, legislation, and governmental regulation. The party whose performance is so affected will within five (5) calendar days of the unforeseeable circumstance notify the other party of all pertinent facts and identify the force majeure event. The party whose performance is so affected must also take all reasonable steps, promptly and diligently, to prevent such causes if it is feasible to do so, or to minimize or eliminate the effect thereof. The delivery or performance date will be extended for a period equal to the time lost by reason of delay, plus such additional time as may be reasonably necessary to overcome the effect of the delay, provided however, under no circumstances will delays caused by a force majeure extend beyond one hundred-twenty (120) calendar days from the scheduled delivery or completion date of a task unless agreed upon by the parties. S.39 COOPERATIVE USE OF CONTRACT. The City has entered into various cooperative purchasing agreements with other Florida government agencies, including the Tampa Bay Area Purchasing Cooperative. Under a Cooperative Purchasing Agreement, any contract may be extended for use by other municipalities, school districts and government agencies in the State of Florida with the approval of Contractor. Any such usage by other entities must be in accordance with the statutes, codes, ordinances, charter and/or procurement rules and regulations of the respective government agency. Orders placed by other agencies and payment thereof will be the sole responsibility of that agency. The City is not responsible for any disputes arising out of transactions made by others. S.40 FUEL CHARGES AND PRICE INCREASES. No fuel surcharges will be accepted. No price increases will be accepted without proper request by Contractor and response by the City’s Purchasing Division. S.41 NOTICES. All notices to be given pursuant to this Agreement must be delivered to the parties at their respective addresses. Notices may be (i) personally delivered; (ii) sent via certified or registered mail, postage prepaid; (iii) sent via overnight courier; or (iv) sent via facsimile. If provided by personal delivery, receipt will be deemed effective upon delivery. If sent via certified or registered mail, receipt will be deemed effective three (3) calendar days after being deposited in the United States mail. If sent via overnight courier or facsimile, receipt will be deemed effective two (2) calendar days after the sending thereof. RFQ #18-19, EXHIBIT A STANDARD TERMS AND CONDITIONS 9 S.42 GOVERNING LAW, VENUE. This Agreement is governed by the laws of the State of Florida. The exclusive venue selected for any proceeding or suit in law or equity arising from or incident to this Agreement will be Pinellas County, Florida. S.43 INTEGRATION CLAUSE. This Agreement, including all attachments and exhibits hereto, supersede all prior oral or written agreements, if any, between the parties and constitutes the entire agreement between the parties with respect to the work to be performed. S.44 PROVISIONS REQUIRED BY LAW. Any provision required by law to be in this Agreement is a part of this Agreement as if fully stated in it. S.45 SEVERABILITY. If any provision of this Agreement is declared void or unenforceable, such provision will be severed from this Agreement, which will otherwise remain in full force and effect. The parties will negotiate diligently in good faith for such amendment(s) of this Agreement as may be necessary to achieve the original intent of this Agreement, notwithstanding such invalidity or unenforceability. S.46 SURVIVING PROVISIONS. Notwithstanding any completion, termination, or other expiration of this Agreement, all provisions which, by the terms of reasonable interpretation thereof, set forth rights and obligations that extend beyond completion, termination, or other expiration of this Agreement, will survive and remain in full force and effect. Except as specifically provided in this Agreement, completion, termination, or other expiration of this Agreement will not release any party from any liability or obligation arising prior to the date of termination. AGREEMENT FOR PROFESSIONAL SERVICES BETWEEN CITY OF CLEARWATER AND WANNEMACHER JENSEN, INC. RFQ #18-19 FIRE STATION #46 CONSULTING SERVICES EXHIBIT C INSURANCE REQUIREMENTS. The CONSULTANT shall, at its own cost and expense, acquire and maintain (and cause any subcontractors, representatives or agents to acquire and maintain) during the term with the City, sufficient insurance to adequately protect the respective interest of the parties. Coverage shall be obtained with a carrier having an AM Best Rating of A-VII or better. In addition, the City has the right to review the CONSULTANT’S deductible or self-insured retention and to require that it be reduced or eliminated. Specifically, the CONSULTANT must carry the following minimum types and amounts of insurance on an occurrence basis or in the case of coverage that cannot be obtained on an occurrence basis, then coverage can be obtained on a claims-made basis with a minimum three (3) year tail following the termination or expiration of this Agreement. Specific work may require additional coverage on a case by case basis: a. Commercial General Liability Insurance coverage, including but not limited to, premises operations, products/completed operations, products liability, contractual liability, advertising injury, personal injury, death, and property damage in the minimum amount of $1,000,000 (one million dollars) per occurrence and $2,000,000 (two million dollars) general aggregate. b. Commercial Automobile Liability Insurance coverage for any owned, non-owned, hired or borrowed automobile is required in the minimum amount of $1,000,000 (one million dollars) combined single limit. c. Unless waived by the State of Florida, statutory Workers’ Compensation Insurance coverage in accordance with the laws of the State of Florida, and Employer’s Liability Insurance in the minimum amount of $100,000 (one hundred thousand dollars) each employee each accident, $100,000 (one hundred thousand dollars) each employee by disease and $500,000 (five hundred thousand dollars) aggregate by disease with benefits afforded under the laws of the State of Florida. Coverage should include Voluntary Compensation, Jones Act, and U.S. Longshoremen’s and Harbor Worker’s Act coverage where applicable. Coverage must be applicable to employees, contractors, subcontractors, and volunteers, if any. d. If the CONSULTANT is using its own property, or the property of the City or other provider, in connection with the performance of its obligations under this Agreement, then CONSULTANT’S Equipment Insurance or Property Insurance on an “All Risks” basis with replacement cost coverage for property and equipment in the care, custody and control of others is required. e. Professional Liability Insurance coverage appropriate for the type of business engaged in by the CONSULTANT with minimum limits of $1,000,000 (one million dollars) per occurrence. If a claims made form of coverage is provided, the retroactive date of coverage shall be no later than the inception date of claims made coverage, unless prior policy was extended indefinitely to cover prior acts. Coverage shall be extended beyond the policy year either by a supplemental extended reporting period (ERP) of as great a duration as available, and with no less coverage and with reinstated aggregate limits, or by requiring that any new policy provide a retroactive date no later than the inception date of claims made coverage. The above insurance limits may be achieved by a combination of primary and umbrella/excess liability policies. OTHER INSURANCE PROVISIONS. a. Prior to the execution of this Agreement, and then annually upon the anniversary date(s) of the insurance policy’s renewal date(s) for as long as this Agreement remains in effect, the CONSULTANT will furnish the City with a Certificate of Insurance(s) (using appropriate ACORD certificate, SIGNED by the Issuer, and with applicable endorsements) evidencing all of the coverage set forth above and naming the City as an “Additional Insured.” In addition, when requested in writing from the City, CONSULTANT will provide the City with certified copies of all applicable policies. The address where such certificates and certified policies shall be sent or delivered is as follows: City of Clearwater Attn: Purchasing, RFQ #18-19 P.O. Box 4748 Clearwater, FL 33758-4748 b. CONSULTANT shall provide thirty (30) days written notice of any cancellation, non-renewal, termination, material change or reduction in coverage. c. CONSULTANT’S insurance as outlined above shall be primary and non-contributory coverage for CONSULTANT’S negligence. d. CONSULTANT reserves the right to appoint legal counsel to provide for the CONSULTANT’S defense, for any and all claims that may arise related to Agreement, work performed under this Agreement, or to CONSULTANT’S design, equipment, or service. CONSULTANT agrees that the City shall not be liable to reimburse CONSULTANT for any legal fees or costs as a result of CONSULTANT providing its defense as contemplated herein. The stipulated limits of coverage above shall not be construed as a limitation of any potential liability to the City, and failure to request evidence of this insurance shall not be construed as a waiver of CONSULTANT’S obligation to provide the insurance coverage specified. Fire Station 46Proposed location Fire Station 46 Existing location MANDALAY AVE BAY ESPLANADE ROCKAWAY ST ² N.T.S.Scale: Document Path: C:\Users\Kieffer.Nyland\City of Clearwater\Engineering Geographic Technology - Location Maps\Fire Station 46 - FS 46 (18-0028-FD)\Footprint-New&Prop-8.5x11.mxd Fire Station 46 (18-0028-FD) - Existing & Proposed Location Prepared by:Engineering DepartmentGeographic Technology Division100 S. Myrtle Ave, Clearwater, FL 33756Ph: (727)562-4750, Fax: (727)526-4755www.MyClearwater.com Legend Page 1 of 1Aerial Flown 2019 Date:11/19/2019 Proposed LocationExisting Location 05-29s-15eS-T-R:258AGrid #:KNMap Gen By:JWReviewed By: Purchasing Office 100 S Myrtle Ave Clearwater FL 33756-5520 PO Box 4748, 33578-4748 727-562-4630 Tel REQUEST FOR QUALIFICATIONS RFQ #18-19 Fire Station #46 Consulting Services February 5, 2019 NOTICE IS HEREBY GIVEN that sealed Statements of Qualifications will be received by the City of Clearwater (City) until 10:00 AM, Local Time, March 7, 2019 to provide Fire Station #46 Consulting Services. Description: The City of Clearwater is seeking an architectural or engineering firm to provide consulting services related to Fire Station #46. The professional services commence with a feasibility study and Owner (City) decision associated with renovation of existing building; and resultant services for design, bidding, construction engineering inspection (CEI) services related to renovation or reconstruction of Fire Station #46. Responses must be in accordance with the provisions, specifications and instructions set forth herein and will be received by Purchasing until the above noted time, when they will be publicly acknowledged and accepted. This Request for Qualifications, any attachments and addenda are available for download at www.myclearwater.com/bid . Please read the entire solicitation package and submit the response in accordance with the instructions. This document (less this invitation and the instructions) and any required documents, attachments, and submissions will constitute the response. General, Process, or Technical Questions concerning this solicitation should be directed, IN WRITING, to the Purchasing Manager. This Request for Qualifications is issued by: Alyce Benge, CPPO, C.P.M. Purchasing Manager Alyce.Benge@myclearwater.com INSTRUCTIONS FS #46 Consulting Services 2 RFQ #18-19 i.1 VENDOR QUESTIONS: All questions regarding the contents of this solicitation, and solicitation process (including requests for ADA accommodations), shall be directed solely to the Contact listed on Page One (1) - the Purchasing Manager. Questions should be submitted in writing via letter, fax or email. Questions received less than seven (7) calendar days prior to the due date and time may be answered at the discretion of the City. i.2 ADDENDA/CLARIFICATIONS: Any changes to the specifications will be in the form of an addendum. Addenda are posted on the City website and mailed to those who register on the City website when downloading solicitations no less than seven (7) days prior to the Due Date. Vendors are cautioned to check the Purchasing Website for addenda and clarifications prior to submitting their response. The City cannot be held responsible if a vendor fails to receive any addenda issued. The City shall not be responsible for any oral changes to these specifications made by any employees or officer of the City. Failure to acknowledge receipt of an addendum may result in disqualification of a response. i.3 DUE DATE & TIME FOR SUBMISSION AND OPENING: Date: March 7, 2019 Time: 10:00 AM (Local Time) The City will open all responses properly and timely submitted, and will record the names and other information specified by law and rule. All responses become the property of the City and will not be returned except in the case of a late submission. Respondent names, as read at the opening, will be posted on the City website. Once a notice of intent to award is posted or 30 days from day of opening elapses, whichever occurs earlier, responses are available for inspection by contacting Purchasing. i.4 SUBMIT RESPONSES TO: Use label at the end of this solicitation package City of Clearwater Attn: Purchasing 100 S Myrtle Ave, 3rd Fl, Clearwater FL 33756-5520 or PO Box 4748, Clearwater FL 33758-4748 Responses will be received publicly at this address. Respondents may mail or hand-deliver responses. E-mail or fax submissions will not be accepted. No responsibility will attach to the City of Clearwater, its employees or agents for premature opening of a response that is not properly addressed and identified. i.5 LATE RESPONSES. The respondent assumes responsibility for having the response delivered on time at the place specified. All responses received after the date and time specified shall not be considered and will be returned unopened to the respondent. The respondent assumes the risk of any delay in the mail or in handling of the mail by employees of the City of Clearwater, or any private courier, regardless whether sent by mail or by means of personal delivery. It shall not be sufficient to show that you mailed or commenced delivery before the due date and time. All times are Clearwater, Florida local times. The respondent agrees to accept the time stamp in the City Purchasing Office as the official time. i.6 LOBBYING PROHIBITION. Any communication regarding this solicitation for the purpose of influencing the process or the award, between any person or affiliates seeking an award from this solicitation and the City, including but not limited to the City Council, employees, and consultants hired to assist in the solicitation, is prohibited. This prohibition is imposed from the time of the first public notice of the solicitation until the City cancels the solicitation, rejects all responses, awards a contract or otherwise takes action which ends the solicitation process. This section shall not prohibit public comment at any City Council meeting, study session or Council committee meeting. INSTRUCTIONS FS #46 Consulting Services 3 RFQ #18-19 This prohibition shall not apply to communication with the contact(s) identified in the solicitation or City-initiated communications for the purposes of conducting the procurement including but not limited to clarification of responses, presentations if provided in the solicitation, contract negotiations, protest/appeal resolution, or surveying non-responsive vendors. Violations of this provision shall be reported to the Purchasing Manager. Persons violating this prohibition may be subject to a warning letter or rejection of their response depending on the nature of the violation. i.7 RESPONSIBILITY TO READ AND UNDERSTAND. Failure to read, examine and understand the solicitation will not excuse any failure to comply with the requirements of the solicitation or any resulting contract, nor shall such failure be a basis for claiming additional compensation. If a vendor suspects an error, omission or discrepancy in this solicitation, the vendor must immediately and in any case not later than seven (7) business days in advance of the due date notify the contact on page One (1). The City is not responsible for and will not pay any costs associated with the preparation and submission of the response. Respondents are cautioned to verify their responses before submission, as amendments to or withdrawal of responses submitted after time specified for opening of responses may not be considered. The City will not be responsible for any respondent errors or omissions. i.8 FORM AND CONTENT OF RESPONSES. Unless otherwise instructed or allowed, responses shall be submitted on the forms provided. An original and the designated number of copies of each response are required. Responses, including modifications, must be submitted in ink, typed, or printed form and signed by an authorized representative. Please line through and initial rather than erase changes. If the response is not properly signed or if any changes are not initialed, it may be considered non-responsive. The City may require that an electronic copy of the response be submitted. The response must provide all information requested and must address all points. The City does not encourage exceptions. The City is not required to grant exceptions and depending on the exception, the City may reject the response. i.9 DEBARMENT DISCLOSURE. If the respondent has been debarred, suspended, or otherwise lawfully precluded from participating in any public procurement activity, including being disapproved as a (sub)contractor with any federal, state, or local government, or if any such preclusion from participation from any public procurement activity is currently pending, the respondent shall include a letter with its response identifying the name and address of the governmental unit, the effective date of this suspension or debarment, the duration of the suspension or debarment, and the relevant circumstances relating to the suspension or debarment. If suspension or debarment is currently pending, a detailed description of all relevant circumstances including the details enumerated above must be provided. A response from a respondent who is currently debarred, suspended or otherwise lawfully prohibited from any public procurement activity may be rejected. i.10 RESERVATIONS. The City reserves the right to reject any or all responses or any part thereof; to reissue the solicitation; to reject non-responsive or non-responsible responses; to reject unbalanced responses; to reject responses where the terms and/or awards are conditioned upon another event; to reject individual responses for failure to meet any requirement; to award by part or portion, or total; to make multiple awards; to waive minor irregularities, defects, omissions, technicalities or form errors in any response. The City may seek clarification of the response from respondent at any time, and failure to respond is cause for rejection. Submission of a response confers on respondent no right to an award or to a subsequent contract. The City is responsible to make an award that is in the best interest of the City. All decisions on compliance, evaluation, terms and conditions shall be made solely at the City’s discretion and made to favor the City. No binding contract will exist between the respondent and the City until the City executes a written contract or purchase order. i.11 OFFICIAL SOLICITATION DOCUMENT. Changes to the solicitation document made by a respondent may not be acknowledged or accepted by the City. Award or execution of a contract does not constitute acceptance of a changed term, condition or specification unless specifically acknowledged and agreed to by the City. The copy maintained and published by the City shall be the official solicitation document. INSTRUCTIONS FS #46 Consulting Services 4 RFQ #18-19 i.12 ETHICS. It is the intention of the City to promote courtesy, fairness, impartiality, integrity, service, professionalism, economy, and government by law in the Procurement process. The responsibility for implementing this policy rests with each individual who participates in the procurement process, including respondents and contractors. To achieve the purpose of this Article, it is essential that respondents and contractors doing business with the City also observe the ethical standards prescribed herein. It shall be a breach of ethical standards to: a. Exert any effort to influence any City employee or agent to breach the standards of ethical conduct. b. Intentionally invoice any amount greater than provided in Contract or to invoice for Materials or Services not provided. c. Intentionally offer or provide sub-standard Materials or Services or to intentionally not comply with any term, condition, specification or other requirement of a City Contract. i.13 GIFTS. The City will accept no gifts, gratuities or advertising products from respondents or prospective respondents and affiliates. i.14 PROTESTS AND APPEALS. If a respondent believes there is a mistake, impropriety, or defect in the solicitation, believes the City improperly rejected its response, and/or believes the selected response is not in the City’s best interests, the respondent may submit a written protest. All protests and appeals are governed by the City of Clearwater Purchasing Policies and Procedures. If any discrepancy exists between this Section and the Procurement Rules, the language of the Procurement Rules controls. Protests based upon alleged mistake, impropriety, or defect in a solicitation that is apparent before the opening must be filed with the Purchasing Manager no later than five (5) business days before Opening. Protests that only become apparent after the Bid Opening must be filed within ten (10) business days of the alleged violation of the applicable purchasing ordinance. The complete protest procedure can be obtained by contacting Purchasing. ADDRESS PROTESTS TO: Alyce Benge, CPPO, C.P.M. Purchasing Manager City of Clearwater 100 So Myrtle Ave, 3rd Fl Clearwater FL 33756-5520 or PO Box 4748 Clearwater FL 33758-4748 INSTRUCTIONS – EVALUATION FS #46 Consulting Services 5 RFQ #18-19 i.15 EVALUATION PROCESS. Responses will be reviewed by a screening committee comprised of City employees and/or authorized agents. The City staff may or may not initiate discussions with respondents for clarification purposes. Clarification is not an opportunity to change the response. Respondents shall not initiate discussions with any City employee or official. i.16 CRITERIA FOR EVALUATION AND AWARD. The City evaluates three (3) categories of information: responsiveness, responsibility, and the technical response. All responses must meet the following responsiveness and responsibility criteria. a) Responsiveness. The City will determine whether the response complies with the instructions for submitting responses including completeness of response which encompasses the inclusion of all required attachments and submissions. The City must reject any responses that are submitted late. Failure to meet other requirements may result in rejection. b) Responsibility. The City will determine whether the respondent is one with whom it can or should do business. Factors that the City may evaluate to determine "responsibility" include, but are not limited to: past performance, references (including those found outside the response), compliance with applicable laws, respondent's record of performance and integrity- e.g. has the respondent been delinquent or unfaithful to any contract with the City, whether the respondent is qualified legally to contract with the City, financial stability and the perceived ability to perform completely as specified. A respondent must at all times have financial resources sufficient, in the opinion of the City, to ensure performance of the contract and must provide proof upon request. City staff may also use Dun & Bradstreet and/or any generally available industry information. The City reserves the right to inspect and review respondent’s facilities, equipment and personnel and those of any identified subcontractors. The City will determine whether any failure to supply information, or the quality of the information, will result in rejection. c) Technical Response. The City will determine how well responses meet its requirements in terms of the response to the solicitation and how well the offer addresses the needs of the project. The City will rank offers using a point ranking system (unless otherwise specified) as an aid in conducting the evaluation. The criteria that will be evaluated and their relative weights are: Evaluation Criteria (Response Format, page 11) Points Qualifications (Tab 2) 30 Relevant Experience and References (Tab 3) 30 Technical Approach (Tab 4) 15 Work Plan and Schedule (Tab 5) 15 Quality Management Plan (Tab 6) 10 i.17 SHORT-LISTING. The City will create a short-list of the highest scored responses based on the evaluation criteria. A minimum of three (3) top listed firms may be contacted for discussions and/or invited to interviews. Upon conclusion of any discussions/interviews, the City will finalize the rankings and initiate negotiations with the top ranked firm. i.18 INTERVIEWS. The respondent must attend a formal interview at a City location upon request. i.19 CONTRACT NEGOTIATIONS AND ACCEPTANCE. Respondent must be prepared for the City to accept the response as submitted. If respondent fails to sign all documents necessary to successfully execute the final contract within a reasonable time as specified, or negotiations do not result in an acceptable agreement, the City may reject response or revoke the award, and may begin negotiations with another Respondent. Final contract terms must be approved or signed by the appropriately authorized City official(s). No binding contract will exist between the respondent and the City until the City executes a written contract or purchase order. INSTRUCTIONS – EVALUATION FS #46 Consulting Services 6 RFQ #18-19 i.20 NOTICE OF INTENT TO AWARD. Notices of the City’s intent to award a Contract are posted to Purchasing’s website. It is the respondent’s responsibility to check the City of Clearwater’s Purchasing website at http://www.myclearwater.com/bid to view Purchasing’s Intent to Award postings. i.21 RFP TIMELINE. All dates are tentative and subject to change. Release RFQ: February 5, 2019 Advertise Tampa Bay Times: February 6, 2019 Responses due: March 7, 2019 Review responses/interviews: March 8 – April 5, 2019 Award recommendation: April 5, 2019 Council authorization: April 15, 2019 Contract begins: April 16, 2019 DETAILED SPECIFICATIONS FS #46 Consulting Services 7 RFQ #18-19 1. PROJECT MISSION. The City of Clearwater is dedicated to providing superior services to its customers in order to improve the quality of life for Clearwater residents, businesses and visitors. The City is looking for vendors who share that dedication and will help the City meet that goal. 2. INTRODUCTION. The City of Clearwater (City) is seeking an architectural or engineering firm to provide consulting services related to Fire Station #46, located on North Clearwater Beach, 534 Mandalay Avenue, Clearwater, FL 33767. The professional services commence with a feasibility study and Owner (City) decision associated with renovation of existing building; and resultant services for design, bidding, construction engineering inspection (CEI) services related to renovation or reconstruction of Fire Station #46. 3. BACKGROUND. Fire Station #46, formerly Fire Station #2, was built in 1964; designed by Edmond N. MacCollin, A.I.A. The two (2) story, 7,400 square foot, facility provides fire protection and advanced life support response coverage for the beach community. Fire Station #46 services the beach area, including a year-round residential community, restaurants, a variety of specialty shops, high-rise hotels, and condominiums. In the early 1980s a remodel project added a lounge with kitchen and dining area. Due to the structure’s age, the station is no longer in compliance with current co-ed living and ADA standards. The following building information is posted on the City’s FTP site (note that access issues are typically due to user’s firewall settings): FTP Site Access ftp://ftpserver.myclearwater.com Logon user name: vendor Logon password: clearwater (note lower case “c”) Directory: Purchasing Folder: RFQ 18-19 Fire Station 46 Consulting Services • Edmond N. MacCollin, A.I.A. (December 1963) Fire Station No. 2 (File: 46_Fire Station Architect_Plan Set ORIG 2 N Beach.pdf) • Peter Marich (December 1981) Remodeling & Renovation Fire Station No. 2 (File: 46_Fire Station ORIG 2 N Beach Renov.pdf) 4. SCOPE OF SERVICES. It is the City’s intent to bring the fire station into current building standards while maintaining the pedestrian friendly and nostalgic look of the current structure. Dependent on the feasibility study, a new building would be on or near the footprint of the existing station. Renovations or new construction would include amenities such as an elevator, two and a half (2.5) apparatus bays, updated offices, day room with kitchen, increased number of private sleeping quarters, triage area for walk-ins from the beach, and a weights/workout room. The selected firm will be responsible for completing a feasibility study to inform decisions regarding renovation of the current structure or to rebuild, including the requirements to analyze the existing building configuration, site conditions, research current City Code, Zoning, and FEMA Floodplain requirements and needs. If the findings indicate the building can be renovated or reconstructed on-site then design would commence. If the study indicates the building cannot be renovated or reconstructed on-site then the contract would pause until an alternate site is identified. Anticipated services following the feasibility study include, but are not limited to, conceptual design development, cost estimating, construction drawings, specifications, bid documents, as-needed permit(s) acquisition and post-design construction services through the duration of the project. Construction services shall include shop drawing review, responding to RFI’s, inspecting critical portions of the project, conducting regular progress meetings with stakeholders, certifying drawings, certifying completed work as necessary, and closeout of all permit(s). 5. QUALIFICATIONS. Respondents must demonstrate the necessary ability, financial resources, and experience to perform the work in a satisfactory manner. Each respondent shall demonstrate a thorough understanding of the City’s planning and development codes and policies and procedures as it relates to land development and construction. DETAILED SPECIFICATIONS FS #46 Consulting Services 8 RFQ #18-19 6. INSURANCE REQUIREMENTS. The Contractor (respondent) shall, at its own cost and expense, acquire and maintain (and cause any subcontractors, representatives or agents to acquire and maintain) during the term with the City, sufficient insurance to adequately protect the respective interest of the parties. Coverage shall be obtained with a carrier having an AM Best Rating of A- VII or better. In addition, the City has the right to review the Contractor’s deductible or self-insured retention and to require that it be reduced or eliminated. Specifically the Contractor must carry the following minimum types and amounts of insurance on an occurrence basis or in the case of coverage that cannot be obtained on an occurrence basis, then coverage can be obtained on a claims-made basis with a minimum three (3) year tail following the termination or expiration of this Agreement. Specific work may require additional coverage on a case by case basis: a. Commercial General Liability Insurance coverage, including but not limited to, premises operations, products/completed operations, products liability, contractual liability, advertising injury, personal injury, death, and property damage in the minimum amount of $1,000,000 (one million dollars) per occurrence and $2,000,000 (two million dollars) general aggregate. b. Commercial Automobile Liability Insurance coverage for any owned, non-owned, hired or borrowed automobile is required in the minimum amount of $1,000,000 (one million dollars) combined single limit. c. Unless waived by the State of Florida, statutory Workers’ Compensation Insurance coverage in accordance with the laws of the State of Florida, and Employer’s Liability Insurance in the minimum amount of $100,000 (one hundred thousand dollars) each employee each accident, $100,000 (one hundred thousand dollars) each employee by disease and $500,000 (five hundred thousand dollars) aggregate by disease with benefits afforded under the laws of the State of Florida. Coverage should include Voluntary Compensation, Jones Act, and U.S. Longshoremen’s and Harbor Worker’s Act coverage where applicable. Coverage must be applicable to employees, contractors, subcontractors, and volunteers, if any. d. Professional Liability Insurance coverage appropriate for the type of business engaged in by the Contractor with minimum limits of $1,000,000 (one million dollars) per occurrence. If a claims made form of coverage is provided, the retroactive date of coverage shall be no later than the inception date of claims made coverage, unless prior policy was extended indefinitely to cover prior acts. Coverage shall be extended beyond the policy year either by a supplemental extended reporting period (ERP) of as great a duration as available, and with no less coverage and with reinstated aggregate limits, or by requiring that any new policy provide a retroactive date no later than the inception date of claims made coverage. The above insurance limits may be achieved by a combination of primary and umbrella/excess liability policies. OTHER INSURANCE PROVISIONS. a. Prior to the execution of this Agreement, and then annually upon the anniversary date(s) of the insurance policy’s renewal date(s) for as long as this Agreement remains in effect, the Contractor will furnish the City with a Certificate of Insurance(s) (using appropriate ACORD certificate, SIGNED by the Issuer, and with applicable endorsements) evidencing all of the coverage set forth above and naming the City as an “Additional Insured.” In addition when requested in writing from the City, Contractor will provide the City with certified copies of all applicable policies. The address where such certificates and certified policies shall be sent or delivered is as follows: City of Clearwater Attn: Purchasing, RFQ #18-19 P.O. Box 4748 Clearwater, FL 33758-4748 DETAILED SPECIFICATIONS FS #46 Consulting Services 9 RFQ #18-19 b. Contractor shall provide thirty (30) days written notice of any cancellation, non-renewal, termination, material change or reduction in coverage. c. Contractor’s insurance as outlined above shall be primary and non-contributory coverage for Contractor’s negligence. d. Contractor reserves the right to appoint legal counsel to provide for the Contractor’s defense, for any and all claims that may arise related to Agreement, work performed under this Agreement, or to Contractor’s design, equipment, or service. Contractor agrees that the City shall not be liable to reimburse Contractor for any legal fees or costs as a result of Contractor providing its defense as contemplated herein. The stipulated limits of coverage above shall not be construed as a limitation of any potential liability to the City, and failure to request evidence of this insurance shall not be construed as a waiver of Contractor’s obligation to provide the insurance coverage specified. MILESTONES FS #46 Consulting Services 10 RFQ #18-19 1. ANTICIPATED BEGINNING AND END DATE OF INITIAL TERM. Initial term for feasibility study is anticipated for April through October 2019. Subsequent work phases will depend on feasibility study results and shall be mutually agreed upon by the Consultant and City. If the commencement of performance is delayed because the City does not execute the contract on the start date, the City may adjust the start date, end date and milestones to reflect the delayed execution. 2. EXTENSION. The City reserves the right to extend the term of this contract, provided however, that the City shall give written notice of its intentions to extend this contract no later than thirty (30) days prior to the expiration date of the contract. RESPONSE FORMAT FS #46 Consulting Services 11 RFQ #18-19 1. RESPONSE SUBMISSION - Submit one (1) signed original (identified as ORIGINAL) along with seven (7) copies of the Qualifications Response and ONE (1) electronic format copy on a disc or thumb drive in a sealed envelope/container. 2. RESPONSE FORMAT - Qualifications shall be submitted in bound volumes on standard 8½" x 11" paper (one [1] sheet of paper printed both sides equals two [2] pages). All information must be assembled and indexed in the order indicated below. The page count shall include typed text, graphics, charts and photographs, but does not include supporting documents for Tabs 7 and 8, and the tabbed separator pages, cover page, and back page. TAB 1 – Letter of Interest (two [2] pages). A letter of interest detailing qualifications, related experience, ability to perform the work and to meet the evaluation criteria set forth herein. Name, address, contact person and phone number, shall be provided. TAB 2 – Qualifications (six [6] pages). Describe the firm’s background, experience, and qualifications of key personnel proposed to work on the project. Include resumes for key team members (including subcontractors) demonstrating specific project experience relevant to the project. Include an organizational chart and an affirmative statement indicating that the firm and all assigned key professional staff are properly licensed to practice in Florida. Include the expected amount of involvement for each consultant team member and confirm their availability. Any change in key personnel after the contract award must be approved by the City. TAB 3 – Relevant Experience and References (two [2] pages). Provide information for three (3) projects, preferably within the last 10 years, for which the firm has provided services closely related to this scope of services. Include contact information for the projects including name, position/title, email address, and phone number. TAB 4 – Technical Approach (two [2] pages). Describe the firm’s understanding of the project and methodology for meeting the needs of the City. Include a summary of knowledge of local conditions, City permitting processes, local codes and ordinances, and challenges. TAB 5 – Work Plan and Schedule (four [4] pages). Provide a detailed work plan, including a tentative schedule to complete the feasibility study including estimated number of hours per task, by personnel/position, and durations for design and construction phases. TAB 6 – Quality Management Plan (two [2] pages). Provide detailed information as to the firm’s Quality Assurance/Quality Control policy. Indicate specific steps conducted for technical review of any type of deliverable prior to submission to a client. Identify standard processes used and key factors that demonstrate the policy is successful and effective. Explain methodology of project reporting systems, scheduling, cost estimating, constructability reviews, value engineering, and QA/QC procedures for municipal projects. TAB 7 – Litigation. 1. Provide a complete listing of any convictions or fines incurred by the respondent firm or any of its principals for violations of any state or federal law within the past three (3) years. Identify firm’s executives who have current claims or who have participated in litigation against the City of Clearwater while with another firm. Executives of firms currently under litigation with the City may not be considered for this project. 2. Provide a complete listing of all litigation involving a construction project or contract (excluding personal injury and workers’ compensation) whether currently pending or concluded within the past three (3) years in which the respondent firm was a named party. 3. Provide a complete listing of all administrative proceedings involving a construction project or contract, whether currently pending or concluded within the past three (3) years, in which the respondent firm was a named party. (NOTE: Administrative Proceedings shall include: (i) any action taken or proceeding brought by a governmental agency, department, or officer to enforce any law, regulation, code, legal, or contractual requirement, except for those brought in state or federal courts; (ii) any action taken by a governmental agency, RESPONSE FORMAT FS #46 Consulting Services 12 RFQ #18-19 department, or officer imposing penalties, fines, or other sanctions for failure to comply with any such legal or contractual requirement, or (iii) any other matter before an administrative body.) 4. Provide a complete listing of all arbitrations involving a construction project or contract, whether currently pending or concluded in the past three (3) years, in which the respondent firm was a named party. TAB 8 - Other Forms. The following forms should be completed and signed: 1. Exceptions, Additional Materials, Addenda form 2. Company Information form 3. Response Certification form 4. Copy of the firm’s current Florida Department of Business and Professional Regulation’s License and Contractor License 5. Copy of the firm’s contracting license in the State of Florida at the time of submittal 6. If the firm is a corporation, a copy of the current Florida Corporation Registration 7. Include a current W-9 form. (http://www.irs.gov/pub/irs-pdf/fw9.pdf) EXCEPTIONS/ADDITIONAL MATERIALS/ADDENDA FS #46 Consulting Services 13 RFQ #18-19 Respondents shall indicate any and all exceptions taken to the provisions or requirements in this solicitation document. Exceptions that surface elsewhere and that do not also appear under this section shall be considered invalid and void and of no contractual significance. Exceptions (mark one): **Special Note – Any material exceptions taken to the City’s Terms and Conditions may render a Response non-responsive. No exceptions Exceptions taken (describe--attach additional pages if needed) Additional Materials submitted (mark one): No additional materials have been included with this response Additional Materials attached (describe--attach additional pages if needed) Addenda Respondents are responsible for verifying receipt of any addenda issued by checking the City’s website at www.myclearwater.com/apps20/cityprojects/invitationtobid.aspx/ prior to the bid opening. Failure to acknowledge any addenda issued may render a Bid Non-responsive. Acknowledgement of Receipt of Addenda (initial for each addenda received, if applicable): Addenda Number Initial to acknowledge receipt Vendor Name__________________________________________________ Date__________________ COMPANY INFORMATION FS #46 Consulting Services 14 RFQ #18-19 Company Legal/Corporate Name: Doing Business As (if different than above): Address: City: State: Zip: - Phone: Fax: E-Mail Address: Website: DUNS # Remit to Address (if different than above): Order from Address (if different from above): Address: Address: City: State: Zip: City: State: Zip: Contact for Questions about this response: Name: Fax: Phone: E-Mail Address: Day-to-Day Project Contact (if awarded): Name: Fax: Phone: E-Mail Address: Certified Small Business Certifying Agency: Certified Minority, Woman or Disadvantaged Business Enterprise Certifying Agency: RESPONSE CERTIFICATION FS #46 Consulting Services 15 RFQ #18-19 By signing and submitting this Response, the Company certifies that: a) It is under no legal prohibition to contract with the City of Clearwater. b) It has read, understands, and is in compliance with the specifications, terms and conditions stated herein, as well as its attachments, and any referenced documents. c) It has no known, undisclosed conflicts of interest. d) No offer of gifts, payments or other consideration were made to any City employee, officer, elected official, or consultant who has or may have had a role in the procurement process for the services and or goods/materials covered by this contract. e) It understands the City of Clearwater may copy all parts of this response, including without limitation any documents and/or materials copyrighted by the respondent, for internal use in evaluating respondent’s offer, or in response to a public records request under Florida’s public records law (F.S. 119) or other applicable law, subpoena, or other judicial process. f) Respondent hereby warrants to the City that the respondent and each of its subcontractors (“Subcontractors”) will comply with, and are contractually obligated to comply with, all Federal Immigration laws and regulations that relate to their employees. g) Respondent certifies that they are not in violation of section 6(j) of the Federal Export Administration Act and not debarred by any Federal or public agency. h) It will provide the materials or services specified in compliance with all Federal, State, and Local Statutes and Rules if awarded by the City. i) It is current in all obligations due to the City. j) It will accept such terms and conditions in a resulting contract if awarded by the City. k) The signatory is an officer or duly authorized agent of the respondent with full power and authority to submit binding offers for the services as specified herein. ACCEPTED AND AGREED TO: Company Name: Signature: Printed Name: Title: Date: MAILING LABEL CUT ALONG THE LINE AND AFFIX TO THE FRONT OF YOUR BID CONTAINER FS #46 Consulting Services 16 RFQ #18-19 --------------------------------------------------------------------------------- For US Mail ------------------------------------------------------------------------------ SEALED RESPONSE Submitted by: Company Name: Address: City, State, Zip: RFQ #18-19, Fire Station #46 Consulting Services Due Date: March 7, 2019, at 10:00 A.M. City of Clearwater Attn: Purchasing PO Box 4748 Clearwater FL 33758-4748 --------------------------------------------------------------------------------- For US Mail ------------------------------------------------------------------------------ ---------------------------------------------- For Hand Deliveries, FEDEX, UPS or Other Courier Services ------------------------------------------------ SEALED RESPONSE Submitted by: Company Name: Address: City, State, Zip: RFQ #18-19, Fire Station #46 Consulting Services Due Date: March 7, 2019, at 10:00 A.M. City of Clearwater Attn: Purchasing 100 So. Myrtle Ave 3rd Fl Clearwater FL 33756 ---------------------------------------------- For Hand Deliveries, FEDEX, UPS or Other Courier Services ------------------------------------------------ Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7169 Agenda Date: 12/19/2019 Status: Consent AgendaVersion: 1 File Type: Action ItemIn Control: Engineering Department Agenda Number: 7.9 SUBJECT/RECOMMENDATION: Approve a proposal from Precision Sidewalk Safety Corporation of Ocala, Florida for Sidewalk Grinding (16-0016-EN) in the amount of $250,000.00 in accordance with Clearwater Code of Ordinances, Section 2.564 (1)(d) Other Government Entities Bids and authorize the appropriate officials to execute same. (consent) SUMMARY: The Engineering Department is assisting the Parks and Recreation Department, Streets and Sidewalk Division, in maintaining city sidewalks in a reasonable condition, free of significant deflections, to ensure safe conditions for pedestrians. Precision Sidewalk Safety Corporation performs specialty services, removing vertical variations utilizing a horizontal cutting technology that produces a uniform appearance and texture from one end of a sidewalk joint to the other, leaving no gap between slabs, and a smooth pedestrian walkway. Precision Sidewalk Safety Corporation is currently under contract with the Panhandle Area Educational Consortium (PAEC). The City of Clearwater proposes to piggy-back on the PAEC RFP 16-08 which began on September 12, 2019 and will expire September 12, 2020. APPROPRIATION CODE AND AMOUNT: ENRD180004-CONS-CNSTRC 250,000 Funding is available in Capital Improvement Project ENRD180004, Streets and Sidewalks, to fund the construction contract. Page 1 City of Clearwater Printed on 12/19/2019 THE INFORMATION IN THIS PROPOSAL IS CONFIDENTIAL It is to be used only by the intended recipient and Precision Sidewalk Safety Corp in evaluating the project. Any copying or unauthorized disclosure of this information is prohibited. 1 of 2 SPECIFICATION AND PRICE AGREEMENT Marny Donnelly • 877-799-6783 x503 • Proposal FLM542 PROPOSAL FLM542 UNITS DESCRIPTION PRICE TOTAL 5,000.00 Deliver a minimum of 5,000 inch-feet of sidewalk trip hazard repairs measuring ¼” to 1½” high, using a slope of 1:12. Repairs to be completed first on the driveway panels at 2950 Elysium Way then continue in Section 18 of the City. When Section 18 is completed, repairs will continue in additional sections in the order determined by the Engineering Department until 5,000 inch-feet have been completed. (5,000 Inch-Feet X $40 per inch-foot). $40.00 $200,000 1,288.66 After the above repairs are completed, deliver a minimum of 1,288.66 additional inch-feet of repairs using the same specification, applying volume discount. Repairs to be completed in the order determined by the Engineering Department until 1,288.66 inch-feet have been completed. (1,288.66 Inch-Feet X $38.80 per inch-foot). $38.80 $50,000 NOTES 1. Inch-feet is a measure of the average height (in 8ths of an inch) multiplied by the width of each hazard (in feet). 2. Pricing is based on PAEC Contract #16-08, “Florida Buy Program.” Unit (inch-feet) price for 1:12 slope (without prior estimate) is $40. A 3% discount will be applied to the inch foot rate for rendered services exceeding $200,000 during the contract year. 3. Trip hazard repair on the driveway at 2950 Elysium Way ONLY will be for hazards measuring ¼” – 2½” 4. This proposal provides a price which will not be exceeded given the scope of work specified. Once on site, PSSC may not complete a repair(s) because; 1. a hazard’s actual measurement at the time of repair exceeds approved customer specifications, and/or 2. in the crew leader’s judgement, our repair attempt would cause further damage to the concrete slab or be insufficient to satisfactorily remove the existing hazard and/or mitigate its potential liability. Such excluded hazards, if any, will be left “as found” and will require customer’s alternative remedy. PSSC repairs only those uneven sidewalks specifically requested by you, our customer, and therefore makes no guarantee that the property is free of uneven sidewalk hazards or other trip hazards. After the project is completed, new trip hazards will occur or reoccur due to tree roots, water, settling, and other natural and man- made causes outside of PSSC’s control. Upon completion of the project, PSSC is not liable for any related claims, losses, or damages. PSSC will not be held responsible for cracks or defects in poured concrete that may exist due to materials or methods used by original installer. 5. Work will not commence until a purchase order is received by PSSC. $250,000 TOTAL November 15, 2019 City of Clearwater Engineering Department • Clearwater, FL • Mr. Bennett Elbo, PTP/Traffic Engineering Please sign and complete page 2 and return to Marny Donnelly: Email: marny@precisionsidewalksafety.com or FAX: 866-669-1175 THE INFORMATION IN THIS PROPOSAL IS CONFIDENTIAL It is to be used only by the intended recipient and Precision Sidewalk Safety Corp in evaluating the project. Any copying or unauthorized disclosure of this information is prohibited. 2 of 2 SPECIFICATION AND PRICE AGREEMENT Marny Donnelly • 877-799-6783 x503 • Proposal FLM542 Items with X indicate customer’s agreed specifications for PSSC hazard repair: __ Customer designated repairs marked w/ ____colored paint or w/ ____ X Intact, stable, not settled, and w/ sufficient concrete remaining after the repair X Cracks, X hairline or X multiple (panel otherwise stable and intact) X Access ramps transitioning sidewalk to crosswalk, include: __curb __ gutter __ asphalt X Driveway aprons having identical width to connecting sidewalks up to 12 /8ths inch. X Oversized Driveway at 2950 Elysium Way NOT having identical width to connecting sidewalks up to 20/8ths inch X Aprons X at access ramps __ at driveways where they meet sidewalks X Panels w/ surface imperfections (e.g. spalling) X Missing piece(s) or X “sunken” piece(s) of concrete if panel is 95% useable X Storm drains obstructing flow of traffic up to 12/8ths inch __ Utility boxes up to /8ths deep, __ but only if __ sides are flush w/ panel __ Curb abutting sidewalk where 6 - 8 inch step down to street is required __ Front entry way, or __ under building roofline up to __ /8ths __ Secondary walkway from street to: __ front, __ side, __rear, __ other: __ Decorative: __ stamped, __ painted, __ other: ___________________ __ Presently has “fill” material ___ Customer will remove prior to PSSC repairs ___ PSSC Removes @ $30/location __ Abutting bricks or pavers which are NOT grouted in place (customer could otherwise re-level to remove hazard) X Hazards next to elevated spacers at 2950 Elysium Way (spacers must be removed or adjusted by property owner prior to hazard repair) __ Side-by-Side panels; repair is parallel to traffic between double-wide panels __ Repairs to: __ bricks __ paver __ asphalt __ other: _________________ SCOPE Repair to hazards as identified in Proposal FLM542 CUSTOMER CITY OF CLEARWATER APPROVED BY NAME SIGNATURE TITLE PHONE ALT. PHONE EMAIL BILLING INFO INVOICE TO NAME ADDRESS Upon receipt of this signed agreement AND receipt of a purchase order, PSSC will schedule the requested repairs. Every effort will be made to accommodate the requested start date. Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7194 Agenda Date: 12/19/2019 Status: Consent AgendaVersion: 1 File Type: Action ItemIn Control: Engineering Department Agenda Number: 7.10 SUBJECT/RECOMMENDATION: Approve Request for Qualifications (RFQ) 52-19 agreement with Construction Manager at Risk (CMAR) Skanska USA Building, Inc., of Tampa, FL and Preconstruction Proposal, in the amount of $425,000, for Imagine Clearwater and authorize the appropriate officials to execute same. (consent) SUMMARY: The City issued RFQ# 52-19 in August 2019 for CMAR firms for the Imagine Clearwater and Clearwater Main Library Renovation project in Clearwater. Five firms responded to this solicitation. A team of city staff, representing City Administration, Parks and Recreation, and Engineering Departments, carefully reviewed each of the submittals received and shortlisted Biltmore Construction, Moss & Associates and Skanska USA Building for further consideration. The shortlisted firms participated in formal presentations to the selection committee. Skanska was recommended by the selection committee due to their comprehensive experience building numerous waterfront parks and amphitheaters throughout the United States and Florida. Skanska will provide preconstruction phase services including design and constructability reviews, construction cost estimating, and value engineering. Once design approaches final construction documents, staff will present a Guaranteed Maximum Price (GMP) proposal for construction of the Main Library Renovation and Imagine Clearwater projects to Council for approval. Staff anticipates bringing GMP proposals to City Council for approval in May and August 2020 to align with completion of design and permitting of the two phases. The new park and amphitheater will be owned and maintained by the Parks & Recreation Department. The renovated library will be owned and maintained by the Library Department. APPROPRIATION CODE AND AMOUNT: ENGF180013-DSGN-PROSVC $425,000 Funds are available in capital improvement project ENGF180013, Imagine Clearwater, to fund this proposal. Page 1 City of Clearwater Printed on 12/19/2019 Skanska USA Building Inc. 4030 Boy Scout Blvd., Suite 200 Tampa, Florida 33607 Phone 813-282-7100 www.skanska.com Re: Imagine Clearwater Project Preconstruction Services Proposal Dear Mr. Kurtz and City Council Members, The importance of the Imagine Clearwater project to enhancing the vibrancy and quality of life in downtown Clearwater cannot be overstated. At Skanska, we build what matters, and this project matters for this community. As we partner with the City of Clearwater and Stantec and their consultants to deliver your vision for this project, I am reminded of this line from your RFP: “The City of Clearwater is dedicated to providing superior services to its customers in order to improve the quality of life for Clearwater residents, business and visitors.” Skanska shares that dedication—in fact, we exist to build for a better society. Whether it’s a hospital, school or beloved community landmark, such as Coachman Park, Skanska is committed to delivering projects that transform the neighborhoods and cities in which we live. Preconstruction will be the first phase of the Imagine Clearwater project—a critical period where we will lay the groundwork for a successful project outcome. On the following pages, you will find our complete, transparent proposal for preconstruction services. This plan is a continuation of our Target Value Design approach, which we detailed in our written proposal and discussed during our presentation to the City. As you will see, Skanska is so dedicated to the success of this project, that we are offering the City of Clearwater our preconstruction services at a reduced price, lower than our own cost to deliver the services. Our preconstruction services will include, but are not limited to: Deliverables – On the library, there will be three in total: the design development estimate, 60 percent construction documents and 100 percent construction documents. With the park, there will be four deliverables: schematic design, design development estimate, 60 percent construction documents and 100 percent construction documents. These deliverables will be incremental from this initial proposal until the GMP submission. Interim deliverables enable us to monitor project goals and make sure all park elements are designed to achieve your vision and fit your budget. As each deliverable is done, we will continue to implement Target Value Design and update the schedule. Laser Scanning – This technology is a powerful tool for renovation projects, saving time and money and resulting in a higher-quality final product. On the interior of the library, we will laser scan both below and above the ceiling for each floor. On the exterior, we will scan all four sides of the library and the roof. This will provide us with actual, real-time conditions—which are often not reflected in as-built drawings. Laser scanning can dramatically reduce the possibility of future, costly change orders. November 25, 2019 City of Clearwater Tim Kurtz Engineering Construction Manager 100 S. Myrtle Ave 3rd Floor Clearwater, FL 33756-5520 Page 2 For the park, we will laser scan the entire site and conduct site walks and workshops with the major site subcontractors, such as our landscaping contractor, and utility companies, so we can gain an understanding of all conditions—both above and below ground. From these laser scans, we will build highly accurate models and drawings. Workshops – Collaboration is key to a successful project. While we already feel as if we are a part of your team, we have found that team workshops give everyone an opportunity to feel a sense of ownership in the project’s success. Personal commitment and accountability facilitates stronger communication and a more rewarding experience for all involved. In addition to holding workshops that are exclusively for the City, Skanska and the design team, we will also hold workshops with each project team member, key subcontractor trade partner and major vendor. This will include site engineers, equipment rental companies, hardscape architects, landscape architects, the bandshell trade partner and many more. Together, we will develop a schedule for each and every activity to maximize schedule and minimize costs. Full-Time, Onsite Management – Our project team will be onsite full time during the construction phase. Our field office will be the site for weekly owner, architect and contractor (OAC) meetings as well as subcontractor preconstruction workshops and orientation sessions. The Skanska preconstruction team—steered by Project Leader Chuck Jablon and Preconstruction Leader Jon Meese—will be able to maximize the City’s budget to its highest potential. Our 30-year relationships with the local trade partner community and utility companies—combined with our expertise in steering each design deliverable through the Target Value Design process—uniquely qualify us to deliver best value for the Imagine Clearwater project. We are ready to get started on this exciting, important project for the City of Clearwater and look forward to working with you to bring the Imagine Clearwater project to life. On behalf of myself and the entire Skanska project team, we wish you a happy and safe Thanksgiving. Please contact me with any questions on the enclosed proposal. Sincerely, Chuck Jablon Senior Vice President Skanska USA Building Inc. Imagine Clearwater - Total Project Precon Services TBD through TBD Description Library Imagine Project Totals Preconstruction Setup / Project Alignment / Discovery 3,074 3,950 7,024 Laser Scanning of Existing Conditions 10,072 16,609 26,681 InitialWalkthrough / Coordination Workshops - Validate/Align Target Value Design 4,927 14,608 19,535 Schematic Design - Target Value Budget Deliverable - 37,246 37,246 Design Development Estimate Deliverable - Baseline Budget 23,031 37,246 60,277 60% Construction Documents - GMP Deliverable 33,293 49,576 82,869 100% Construction Documents - Validate GMP Documents 18,387 28,634 47,021 Ongoing Preconstruction Services 30,215 100,131 130,347 Total 123,000 288,000 411,000 Skanska In-House Peer Review - 7,500 7,500 Reproduction Costs 1,500 3,500 5,000 Copying / Office Supplies 500 1,000 1,500 Total 2,000 12,000 14,000 COST OF PRECONSTRUCTION SERVICES TO IMAGINE CLEARWATER 125,000 300,000 425,000 Exclusions Additional Services Beyond What Is Proposed Above SUMMARY - STAFF SUMMARY - MISC. November 26, 2019 PRECONSTRUCTION & PLANNING SERVICES Imagine Clearwater - Library Precon Services TBD through TBD Service Notes Start Finish Hours Cost Preconstruction Setup / Project Alignment / Discovery TBD TBD 3,074 Meet w/ City of Clearwater to Establish Project Guiding Principles / Team Charter Initial Kick-Off with Design Team(s) Initial Internal Setup/Kick-Off Laser Scanning of Existing Library Conditions TBD TBD 10,072 Review Existing Conditions Above Ceiling Review Existing Conditions Below Ceiling Review Existing Conditions of Exterior / Enclosure Initial Library Project Walkthrough / Coordination Workshops - Validate/Align Target Value Design TBD TBD 4,927 Coordinate workshop w/ Trade Partners / Subcontractor Community Coordinate workshop w/ Vendors Facilitate Project Workshop w/ Design Team Update Target Value Design w/ Market Input Design Development Estimate Deliverable - Baseline Budget TBD TBD 23,031 Document Scrub / Constructability Review Detailed Estimate / Target Value Pricing Clarifications, Assumptions, & Responsibility Matrix Logistics / Phasing Plan Baseline Schedule Value Engineering / Value Management (if applicable) 60% Construction Documents - GMP Deliverable TBD TBD 33,293 Document Scrub / Constructability Review GMP Deliverable - Bid Results Clarifications, Assumptions, & Responsibility Matrix Logistics / Phasing Plan Baseline Schedule Value Engineering / Value Management (if applicable) 100% Construction Documents - Validate GMP Documents TBD TBD 18,387 Document Scrub / Constructability Review Updated Subcontractor Validation Bidding of Remaining Trades (if applicable) Value Engineering / Value Management (if applicable) Ongoing Preconstruction Services TBD TBD 30,215 Weekly Meetings Coordination/Working Sessions w/ Design Team Various Interim Cost Studies / Target Value Updates Trade Partner / Specialty Contractor / Vendor Workshops or Input Total - 123,000 Peer Review - Reproduction Costs 1,500 Copying / Office Supplies 500 Total - 2,000 TOTAL OF PRECON SERVICES 125,000 Exclusions Additional Services Beyond What Is Proposed Above PRECONSTRUCTION & PLANNING SERVICES SUMMARY - STAFF SUMMARY - MISC. November 26, 2019 November 26, 2019 Imagine Clearwater - Library Precon Services TBD through TBD Service Start Finish Hours Cost Assignment Duration TBD TBD Precon Lead 8 676 Estimator - Civil 2 105 Estimator - Structural 2 146 Estimator - Architectural 2 105 VDC Manager 2 113 Estimator - Mechanical 2 134 Estimator - Electrical 2 134 Account Manager 8 857 Project Executive 2 161 Sr Project Manager - Sr. Superintendent 2 214 Superintendent/Logistics 4 306 Scheduler 2 124 Total 38 3,074 Assignment Duration TBD TBD Precon Lead - Estimator - Civil - Estimator - Structural - Estimator - Architectural - VDC Manager 24 1,359 Estimator - Mechanical - Estimator - Electrical - Precon Admin. Assistant - Account Manager 8 857 Project Executive - Sr Project Manager 60 3,274 Sr. Superintendent - Superintendent/Logistics 60 4,583 Scheduler - Total 152 10,072 Preconstruction Setup / Project Alignment / Discovery Laser Scanning of Existing Library Conditions PRECONSTRUCTION & PLANNING SERVICES November 26, 2019 Imagine Clearwater - Library Precon Services TBD through TBD Service Start Finish Hours Cost PRECONSTRUCTION & PLANNING SERVICES Assignment Duration TBD TBD Precon Lead 8 676 Estimator - Civil - Estimator - Structural 8 584 Estimator - Architectural 8 420 VDC Manager 4 226 Estimator - Mechanical 8 535 Estimator - Electrical 8 535 Account Manager 4 428 Project Executive 4 322 Sr Project Manager 4 218 Sr. Superintendent 4 428 Superintendent/Logistics 4 306 Scheduler 4 248 Total 68 4,927 Assignment Duration TBD TBD Precon Lead 40 3,382 Estimator - Civil 16 840 Estimator - Structural 40 2,919 Estimator - Architectural 60 3,151 VDC Manager 24 1,359 Estimator - Mechanical 32 2,139 Estimator - Electrical 32 2,139 Account Manager 16 1,713 Project Executive 12 966 Sr Project Manager - Sr. Superintendent 1 107 Superintendent/Logistics 24 1,833 Scheduler 40 2,482 Total 337 23,031 Assignment Duration TBD TBD Precon Lead 60 5,074 Estimator - Civil 20 1,050 Estimator - Structural 60 4,379 Estimator - Architectural 80 4,202 VDC Manager 32 1,812 Estimator - Mechanical 40 2,674 Estimator - Electrical 40 2,674 Account Manager 20 2,141 Project Executive 20 1,609 Sr Project Manager - Sr. Superintendent 20 2,141 Superintendent/Logistics 40 3,055 Scheduler 40 2,482 Total 472 33,293 Initial Library Project Walkthrough / Coordination Workshops - Validate/Align Target Value Design Design Development Estimate Deliverable - Baseline Budget 60% Construction Documents - GMP Deliverable November 26, 2019 Imagine Clearwater - Library Precon Services TBD through TBD Service Start Finish Hours Cost PRECONSTRUCTION & PLANNING SERVICES Assignment Duration TBD TBD Precon Lead 40 3,382 Estimator - Civil 8 420 Estimator - Structural 24 1,752 Estimator - Architectural 32 1,681 VDC Manager 16 906 Estimator - Mechanical 20 1,337 Estimator - Electrical 20 1,337 Account Manager 16 1,713 Project Executive 24 1,931 Sr Project Manager - Sr. Superintendent 16 1,713 Superintendent/Logistics 16 1,222 Scheduler 16 993 Total 248 18,387 Assignment Duration TBD TBD Precon Lead 80 6,765 Estimator - Civil 24 1,260 Estimator - Structural 24 1,752 Estimator - Architectural 24 1,260 VDC Manager 40 2,265 Estimator - Mechanical 24 1,604 Estimator - Electrical 24 1,604 Account Manager 40 4,283 Project Executive 24 1,931 Sr Project Manager 16 873 Sr. Superintendent 24 2,570 Superintendent/Logistics 40 3,055 Scheduler 16 993 Total 400 30,215 STAFF TOTALS 1,715.00 123,000 100% Construction Documents - Validate GMP Documents Ongoing Preconstruction Services Imagine Clearwater - Park Precon Services TBD through TBD Service Notes Start Finish Hours Cost Project Kick-Off TBD TBD 3,950 Meet w/ City of Clearwater to Establish Project Guiding Principles / Team Charter Initial Kick-Off with Design Team(s) Initial Internal Setup/Kick-Off Laser Scanning of Existing Park TBD TBD 16,609 Verify Existing Above Grade Conditions / Structures Verify Existing Grades w/ Civil Engineer Workshop w/ Utility Companies, Engineers, & Trade Partners - Verify Known Conditions Initial Imagine Clearwater Walkthrough / Coordination Workshops - Validate/Align Target Value Design TBD TBD 14,608 Coordinate workshop w/ Trade Partners / Subcontractor Community Coordinate workshop w/ Vendors Facilitate Project Workshop w/ Design Team Update Target Value Design w/ Market Input Schematic Design - Target Value Budget Deliverable TBD TBD 37,246 Document Scrub / Constructability Review Detailed Estimate / Target Value Pricing Clarifications, Assumptions, & Responsibility Matrix Logistics / Phasing Plan Baseline Schedule Value Engineering / Value Management (if applicable) Design Development Estimate Deliverable TBD TBD 37,246 Document Scrub / Constructability Review Detailed Estimate / Target Value Pricing Clarifications, Assumptions, & Responsibility Matrix Logistics / Phasing Plan Baseline Schedule Value Engineering / Value Management (if applicable) 60% Construction Documents - GMP Deliverable TBD TBD 49,576 Document Scrub / Constructability Review GMP Deliverable - Bid Results Clarifications, Assumptions, & Responsibility Matrix Logistics / Phasing Plan Baseline Schedule Value Engineering / Value Management (if applicable) 100% Construction Documents - Validate GMP Documents TBD TBD 28,634 Document Scrub / Constructability Review Updated Subcontractor Validation Bidding of Remaining Trades (if applicable) Value Engineering / Value Management (if applicable) Ongoing Preconstruction Services 100,131 Weekly Meetings Coordination/Working Sessions w/ Design Team Various Interim Cost Studies / Target Value Updates Trade Partner / Specialty Contractor / Vendor Workshops or Input Total - 288,000 Peer Review 7,500 Reproduction Costs 3,500 Copying / Office Supplies 1,000 Total - 12,000 TOTAL OF PRECON SERVICES 300,000 Exclusions Additional Services Beyond What Is Proposed Above November 26, 2019 PRECONSTRUCTION & PLANNING SERVICES SUMMARY - STAFF SUMMARY - MISC. November 26, 2019 Imagine Clearwater - Park Precon Services TBD through TBD Service Start Finish Hours Cost Assignment Duration TBD TBD Precon Lead 8 869 Estimator - Civil 2 135 Estimator - Structural 2 188 Estimator - Architectural 2 135 VDC Manager 2 145 Estimator - Mechanical 2 172 Estimator - Electrical 2 172 Account Manager 8 1,100 Project Executive 2 207 Sr Project Manager - Sr. Superintendent 2 275 Superintendent/Logistics 4 392 Scheduler 2 159 Total 38 3,950 Assignment Duration TBD TBD Precon Lead 4 435 Estimator - Civil 4 270 Estimator - Structural - Estimator - Architectural - VDC Manager 24 1,746 Estimator - Mechanical - Estimator - Electrical - Account Manager 40 5,502 Project Executive 8 827 Sr Project Manager 40 2,804 Sr. Superintendent 8 1,100 Superintendent/Logistics 40 3,925 Scheduler - Total 168 16,609 PRECONSTRUCTION & PLANNING SERVICES Project Kick-Off Laser Scanning of Existing Park November 26, 2019 Imagine Clearwater - Park Precon Services TBD through TBD Service Start Finish Hours Cost PRECONSTRUCTION & PLANNING SERVICES Assignment Duration TBD TBD Precon Lead 24 2,607 Estimator - Civil 16 1,080 Estimator - Structural 16 1,500 Estimator - Architectural 16 1,080 VDC Manager 8 582 Estimator - Mechanical 16 1,374 Estimator - Electrical 16 1,374 Account Manager 8 1,100 Project Executive 8 827 Sr Project Manager 8 561 Sr. Superintendent 8 1,100 Superintendent/Logistics 8 785 Scheduler 8 638 Total 160 14,608 Assignment Duration TBD TBD Precon Lead 40 4,346 Estimator - Civil 40 2,699 Estimator - Structural 40 3,751 Estimator - Architectural 60 4,048 VDC Manager 40 2,909 Estimator - Mechanical 24 2,061 Estimator - Electrical 24 2,061 Account Manager 32 4,402 Project Executive 16 1,654 Sr Project Manager - Sr. Superintendent 16 2,201 Superintendent/Logistics 40 3,925 Scheduler 40 3,189 Total 412 37,246 Initial Imagine Clearwater Walkthrough / Coordination Workshops - Validate/Align Target Value Design Schematic Design - Target Value Budget Deliverable November 26, 2019 Imagine Clearwater - Park Precon Services TBD through TBD Service Start Finish Hours Cost PRECONSTRUCTION & PLANNING SERVICES Assignment Duration TBD TBD Precon Lead 40 4,346 Estimator - Civil 40 2,699 Estimator - Structural 40 3,751 Estimator - Architectural 60 4,048 VDC Manager 40 2,909 Estimator - Mechanical 24 2,061 Estimator - Electrical 24 2,061 Account Manager 32 4,402 Project Executive 16 1,654 Sr Project Manager - Sr. Superintendent 16 2,201 Superintendent/Logistics 40 3,925 Scheduler 40 3,189 Total 412 37,246 Assignment Duration TBD TBD Precon Lead 80 8,691 Estimator - Civil 60 4,048 Estimator - Structural 40 3,751 Estimator - Architectural 80 5,398 VDC Manager 24 1,746 Estimator - Mechanical 40 3,435 Estimator - Electrical 40 3,435 Account Manager 40 5,502 Project Executive 32 3,308 Sr Project Manager - Sr. Superintendent 40 5,502 Superintendent/Logistics 16 1,570 Scheduler 40 3,189 Total 532 49,576 60% Construction Documents - GMP Deliverable Design Development Estimate Deliverable November 26, 2019 Imagine Clearwater - Park Precon Services TBD through TBD Service Start Finish Hours Cost PRECONSTRUCTION & PLANNING SERVICES Assignment Duration TBD TBD Precon Lead 40 4,346 Estimator - Civil 16 1,080 Estimator - Structural 16 1,500 Estimator - Architectural 32 2,159 VDC Manager 16 1,164 Estimator - Mechanical 16 1,374 Estimator - Electrical 16 1,374 Account Manager 24 3,301 Project Executive 40 4,135 Sr Project Manager - Sr. Superintendent 40 5,502 Superintendent/Logistics 8 785 Scheduler 24 1,913 Total 288 28,634 Assignment Duration TBD TBD Precon Lead 200 21,728 Estimator - Civil 120 8,097 Estimator - Structural 120 11,252 Estimator - Architectural 120 8,097 VDC Manager 80 5,819 Estimator - Mechanical 80 6,870 Estimator - Electrical 80 6,870 Account Manager 100 13,756 Project Executive 40 4,135 Sr Project Manager 40 2,804 Sr. Superintendent 40 5,502 Superintendent/Logistics 40 3,925 Scheduler 16 1,275 Total 1,076 100,131 STAFF TOTALS 3,086 288,000 100% Construction Documents - Validate GMP Documents Ongoing Preconstruction Services Imagine Clearwater Estimated Cost Estimated Construction Cost 1 $53,600,000 Owner Contingency $3,000,000 Total Imagine Clearwater $56,600,000 1- Includes Construction Cost, Design Evolution (16%), Bid Allowance (0.5%), CMAR Fee (2.5%) & Construction Contingency (15%) Downtown Library Renovation Esttimated Cost Estimated Construction Cost $5,720,000 Owner Contingency $430,000 Total Library $6,150,000 Total $62,750,000 1 Construction Manager at Risk Services Skanska USA Building, Inc. RFQ #52-19 – Imagine Clearwater This CONTRACT made and entered into this 19th day of December 2019, by and between the City of Clearwater, Florida, a municipal corporation, hereinafter designated as the “City” or “Owner”, and Skanska USA Building, Inc., a corporation incorporated in Delaware and authorized to do business in Pinellas County and State of Florida, hereinafter designated as the “Construction Manager”. The contracting entities shall collectively be known as the “Parties.” WITNESSETH: WHEREAS, the Clearwater City Council has approved using the Construction Manager at Risk approach on appropriate projects as determined by the City’s Engineering Department; and WHEREAS, the City desires to engage the services of a Construction Manager (CM) at Risk firm to provide management of the preconstruction and construction services (the “Services”) as described herein for the Imagine Clearwater Project (Project # 17-0031-EN); and WHEREAS, the City selected the Construction Manager in accordance with the competitive selection process based on information and representations given by the Construction Manager in a response to Request For Qualifications #52-19; and WHEREAS, the City has engaged the services of Stantec Consulting Services, Inc. hereinafter designated as the “Architect-Engineer” to manage the design services to be performed by itself and its other design consultants. NOW, THEREFORE, IT IS AGREED BY THE PARTIES: ARTICLE 1: SCOPE OF WORK AND CONTRACT DOCUMENTS 1.1 The Construction Manager and its successors, assigns, executors or administrators, in consideration of the sums of money, as herein after set forth to be paid by the City to the Construction Manager, shall and will at its own cost and expense perform all labor, furnish all materials, tools and equipment for all individual projects assigned as a result of this contract. 1.2 For each individual project assigned, in accordance with such proposal and technical supplemental specifications and such other special provisions and drawings, if any, which will be submitted by the City, together with any advertisement, instructions to bidders, general conditions, proposal and bond, which may be hereto attached, and any drawings, if any, which may be herein referred to, are hereby made a part of this contract, and all of said work to be performed and completed by the contractor and its successors and assigns shall be fully completed in a good and workmanlike manner to the satisfaction of the City. 2 1.3 Unless otherwise specified in this Contract, all work shall be completed in accordance with Section III and Section IV of the City of Clearwater Contract Specifications (the “Specifications”). For the purposes of this Contract, the term Contractor in Section III shall include the Construction Manager. The Specifications, as may be supplemented and changed, along with this Contract constitute the “Contract Documents.” All terms and conditions as set forth in RFQ #52-19, Standard Terms of Conditions are incorporated by reference and attached hereto. Any inconsistency in documents relating to this Contract shall be resolved by giving precedence in the following order: (i) GMP Proposal(s); (ii) this Contract and any subsequent amendments; (iii) Specifications; (iv) RFQ #52-19, Standard Terms and Conditions; and (v) Preconstruction Services Proposal(s). ARTICLE 2: CONSTRUCTION MANAGER’S DUTIES AND STATUS 2.1 The Construction Manager recognizes the relationship of trust and confidence established between it and the City by this Agreement, and agrees with the City to furnish its best skill and judgment and the overall supervision of its executives; to furnish efficient business administration and superintendence; and to use every effort to keep upon the project site at all times an adequate supply of workforce and materials to secure its execution and completion in the most expeditious and economical manner. 2.2 The Construction Manager represents that it has made a thorough examination of the premises and is thoroughly familiar with the conditions under which it is to work. 2.3 The Construction Manager agrees to perform and complete the Services in accordance with laws, rules, and regulations of all governmental authorities and departments thereof. 2.4 The Construction Manager agrees to cooperate with the City, Architect-Engineer, or any other Design Professional in all respects, including, but not limited to, providing necessary preconstruction services, such as evaluation of methods, availability and costs of the various components of the Services while under design consideration; supervising the Services and the progress thereof; the coordination of the Services and suggesting changes in the Services; and supplying information as to costs and availability of materials and methods of construction in order, amongst other things, to reduce costs wherever the same may be practicably consistent with the quality of the Services presented in the Contract Documents. 2.5 The Construction Manager agrees to the following: a) In connection with the performance of work under this Contract, the Construction Manager agrees not to discriminate against any employee or applicant for employment because of race, sex, religion, color, or national origin. The aforesaid provision shall include, but not be limited to, the following employment: - upgrading - demotion or transfer - recruitment or recruitment advertising - lay-off or termination - rates of pay or other forms of compensation; and 3 - selection for training, including apprenticeship b) The Construction Manager agrees to post hereafter in conspicuous places, available for employees or applicants for employment, notices to be provided by the contracting officer setting forth the provisions of the non-discrimination clause. c) The Construction Manager further agrees to insert the foregoing provisions in all contracts hereunder, including contracts or agreements with labor unions and/or worker’s representatives, except sub-contractors for standard commercial supplies or raw materials. ARTICLE 3: SCOPE OF THE SERVICES 3.1 The services that the Construction Manager shall provide include but are not limited to those described in the following sections. 3.2 Reporting - Written reports shall be provided with the monthly pay requests as follows: a) Monthly Executive Summary which provides an overview of current issues and pending decisions, future developments and expected achievements, and any problems or delays, including code violations found by any permitting agency. b) A Monthly Construction Progress Report that includes a cost narrative, a scheduling narrative and that summarizes the work of the various subcontractors. This report shall include information from the weekly job site meetings as applicable such as: - general conditions - long lead supplies - current deliveries - safety and labor relations programs permits - construction problems and recommendations; and - plans for the succeeding month 3.3 Scheduling a) Upon award of this Contract, the Construction Manager shall submit a master project schedule covering the planning and design approvals, construction, and Owner occupancy of the Project. This schedule will serve as the framework for the subsequent development of all detailed schedules. The master project schedule shall be produced and updated monthly throughout the project. b) Within thirty (30) days after the date of the Owner’s issuance of a Notice to Proceed, the Construction Manager shall prepare and submit to the Owner two copies of a Critical Path Method (CPM) construction schedule graphically depicting the activities contemplated to occur as a necessary incident to performance of the work required to complete the project, showing the sequence in which the Construction Manager 4 proposes for each such activity to occur and duration (dates of commencement and completion, respectively) of each activity. c) Following development and submittal of the construction schedule the Construction Manager shall, at the end of each calendar month during the project, or at such earlier intervals as circumstances may require, update and/or revise the construction schedule to show the actual progress of the work performed and the occurrences of all events which have affected the progress of performance of work already performed or will affect the progress of the performance of the work yet to be performed in contrast with the planned progress of performance of such work, as depicted on the original construction schedule and all updates and/or revisions thereto as reflected in the updated and/or revised construction schedule last submitted prior to submittal of each such monthly update and revision. Each such update and/or revision to the construction schedule shall be submitted to the Owner in duplicate. d) The Construction Manager shall provide current scheduling information and provide direction and coordination regarding milestones, beginning and finishing dates, responsibilities for performance and the relationships of the Construction Manager’s work to the work of his subcontractors and suppliers to enable them to perform their respective tasks so that the development of construction progresses in a smooth and efficient manner in conformance with the overall project schedule. The schedule shall include all phases of the construction work, material supplies, long lease procurement, approval of shop drawings, change orders in progress, schedules for change orders, and performance testing requirements. The Construction Manager shall advise the Owner, its representatives, and the Architect-Engineer of their required participation in any meeting or inspection giving each at least one week notice unless such notice is made impossible by conditions beyond his control. The Construction Manager shall hold job-site meetings at least once each month with the Construction Team and at least once each week with the subcontractors and the Architect-Engineer’s Field Representative, or more frequently as required by work progress, to review progress, discuss problems and their solutions and coordinate future work with all subcontractors. e) Twice per month corresponding as closely as possible with progress review meetings, a “two week” look ahead report shall be prepared and submitted to Owner and Architect / Engineer. 3.4 Design Review and Recommendations a) The Construction Manager shall familiarize himself thoroughly with the evolving architectural, civil, mechanical, plumbing, electrical and structural plans and specifications and shall follow the development of design through Contract Documents. The Construction Manager shall make recommendations with respect to the selection of systems and materials, and cost reducing alternatives including assistance to the Architect-Engineer and Owner in evaluating alternative comparisons versus long term cost effect. The evaluation shall speak to the benefits 5 of the speed of erection and early completion of the project. The Construction Manager shall furnish pertinent information as to the availability of materials and labor that will be required. The Construction Manager shall submit to the Owner and Architect-Engineer such comments as may be appropriate concerning construction, feasibility, and practicality. The Construction Manager shall bring to the Owner and the Architect-Engineer’s attention any apparent defects in the design, drawing and specifications, or other documents. The Construction Manager shall prepare an estimate of the construction cost at appropriate milestones during the design and shall evaluate such estimate with the project budget. The Construction Manager shall recommend cost saving alternatives, as appropriate, at each design milestone. At each design milestone the Owner, Architect Engineer and Construction Manager shall conduct a value engineering review. b) After receiving the Construction Documents for each phase of the project, the Construction Manager shall perform a specific review thereof. Promptly after completion of the review, the Construction Manager shall submit to the Owner, with a duplicate to the Architect-Engineer, a written report covering suggestions or recommendations previously submitted, additional suggestions or recommendations as the Construction Manager may deem appropriate, and all actions taken by the Architect-Engineer with respect to same, any comments he may deem to be appropriate with respect to separating the work into separate contracts and/or alternative materials. c) At completion of the Construction Manager’s review of the plans and specifications, except only as to specific matters as may be identified by appropriate comments pursuant to this section, the Construction Manager shall warrant, without assuming any architectural or engineering responsibility, that the plans and specifications are consistent, practical, feasible and constructible. The Construction Manager shall warrant that the work described in the plans and specifications for the various bidding packages is constructible within the scheduled construction time. d) The Construction Manager shall review the design for the purpose of identifying long lead procurement items (i.e. machinery, equipment, materials, and supplies). When each item is identified, the Construction Manager shall notify the subcontractors, the Owner, and the Architect-Engineer of the required procurement and schedule. Such information shall be included in the bid documents and made a part of all affected sub-contracts. As soon as the Architect-Engineer has completed drawings and technical specifications and the Construction Manager has obtained permitting approval, the Construction Manager shall prepare invitations for bids. The Construction Manager shall keep informed of the progress of the respective subcontractors or suppliers, manufacturing or fabricating such items and advise Project Director, Owner and Architect-Engineer of any problems or prospective delay in delivery. 6 3.5 Staffing - Key personnel assigned to City projects by the Construction Manager shall not be removed from the project until alternate personnel acceptable to the City are approved in writing by the City. 3.6 Soliciting Bids a) Without assuming responsibilities of the Architect-Engineer, and unless waived in writing by the Owner, the Construction Manager shall prepare invitations for bids, or requests for proposal when applicable, for all procurements of long lead items, materials, and services, and for Subcontractor contracts. Such invitations for bids shall be prepared in accordance with the following guidelines: i) Contracts totaling $1,000 but not exceeding $10,000 may be entered into by the Construction Manager with the firm which is qualified and submits the lowest verbal quotation. The Construction Manager shall obtain a minimum of two (2) verbal quotations. These quotations shall be entered on a bid tabulation sheet and a copy of such tabulation sent to the Owner, Architect-Engineer and to each firm. The successful quotation shall be confirmed by written contract or purchase order to the low bid firm defining the scope and quality of work to be provided. ii) Contracts totaling $10,000 but not exceeding $200,000 may be entered into by the Construction Manager with the firm who is qualified and submits the lowest responsive proposal. The Construction Manager shall request at least three (3) firms to submit sealed written proposals based on written drawings and/or specifications. The written proposals shall all be opened publicly at the location, date and time named by the Construction Manager in his request for proposal. A tabulation of the results shall be furnished to the Owner, Architect-Engineer and to each firm. iii) Contracts totaling $200,000 but not exceeding $500,000 may be entered into by the Construction Manager with the firm who is pre-qualified and submits the lowest responsive proposal. The Construction Manager shall advertise these projects at least once with the last advertisement appearing at least 21 calendar days prior to the established bid opening date. These proposals shall be based on approved plans and specifications. Bids shall be received and opened publicly at the location, date and time established in the bid advertisement. iv) Contracts totaling $500,000 or greater shall be treated the same as described under iii above except that the advertisement shall be run for at least 30 days prior to the established bid opening and at least 5 days prior to any scheduled pre-bid conference. v) Individual purchases of materials or rentals or leases of equipment of up to $999.99 each may be made without bids or quotes when reasonably necessary to expedite work on the project; however, the Construction Manager shall not 7 divide or separate a procurement in order to avoid the requirements set forth above. vi) Site utilities may be acquired at market rates from the entity(ies) providing such in the franchise area. b) For each separate construction contract exceeding $35,000, the Construction Manager shall, unless waived by Owner, conduct a pre-bid conference with prospective bidders, the Architect-Engineer, and the Owner. In the event questions are raised which require an interpretation of the bidding documents or otherwise indicate a need for clarification or correction of the invitation, the Construction Manager shall transmit these to the Architect-Engineer and upon receiving clarification or correction in writing shall prepare an addendum to the bidding document, and issue same to all of the prospective bidders. 3.7 Quality Control - The Construction Manager shall develop and maintain a program, acceptable to the Owner and Architect-Engineer that assures quality control of the construction. The Construction Manager shall supervise the work of all subcontractors providing instruction to each when their work does not conform to the requirements of the plans and specifications and shall continue to assert influence and control over each subcontractor to ensure that corrections are made in a timely manner so as to not affect the efficient progress of the work. Should disagreement occur between the Construction Manager, the Owner, or the Architect-Engineer over acceptability of work and conformance with the requirements of the specifications and plans, the Owner shall be the final judge of performance and acceptability. 3.8 Subcontractor Interfacing - The Construction Manager shall be the single point of interface with all subcontractors for any work done under this Contract. The Construction Manager shall negotiate all change orders, field orders and request for proposals, with all affected subcontractors and shall review the costs of those proposals and advise the Owner and Architect-engineer of their validity and reasonableness, acting in the Owner’s best interest prior to requesting approval of each change order from the Owner. Before any work is begun on any change order, a written authorization from the Owner must be issued. When health and safety are threatened, however, the Construction Manager shall act immediately to remove such threat to health and safety. The Construction Manager shall also carefully review all shop drawings and then forward the same to the Architect-Engineer for review and actions. The Architect-Engineer will transmit them back to the Construction Manager who will then issue the shop drawings to the affected subcontractor for fabrication or revision. The Construction Manager shall maintain a record to promote expeditious handling. The Construction Manager shall request the Architect-Engineer to make interpretations of the drawings or specifications requested of him by the subcontractors and shall maintain a record to promote timely response. The Construction Manager shall advise the Owner and Architect-Engineer when timely response is not occurring on any of the above. The Construction Manager shall collect, review, and submit to the Owner, all project closeout documentation including operation, maintenance, and training manuals. 8 ARTICLE 4: MAXIMUM PROJECT COST AND FEES FOR SERVICES 4.1 Guaranteed Maximum Price for Construction a) When the Construction Documents are sufficiently complete to establish the scope of work for the project or any portion thereof, the Construction Manager will establish and submit in writing to the Owner for his approval a Guaranteed Maximum Price (GMP) guaranteeing the maximum price to the Owner, for the construction cost of the project or designated part thereof. Such Guaranteed Maximum Price will be subject to modification for changes in the project as provided in article 4.1(e) below. Actual price paid for the work by the Owner, however, shall be the actual cost of all work subcontracts, supply contracts, direct labor costs, direct supervision costs and direct job costs, plus the Construction Manager’s fees or the GMP, whichever is less when the work is complete. Invoicing shall occur monthly for completed work with 5% retainage withheld until final completion and acceptance of all work covered in the contract documents in accordance to the City’s General Conditions. GMP Proposals will be incorporated by reference and attached hereto as an exhibit. b) At the time of submission of a Guaranteed Maximum Price, the Construction Manager will verify the time schedule for activities and work which were adopted and used to determine the Construction Manager’s cost of work. In addition to the cost of work, a GMP will include an agreed upon sum as the construction contingency which is included for the purpose of defraying the expenses due to unforeseen circumstances relating to construction. The Construction Manager will be required to furnish documentation evidencing expenditures charged to the contingency prior to the release of funds by the Owner. If bids are received below the applicable line items in the GMP, the surplus will be added to the contingency. c) If bids are received above the applicable line item in the GMP, the deficiency will be taken from the contingency; however, such occurrence shall not be cause to increase the GMP. d) If bids are not received for a portion of the work at or below the applicable line item amount in the GMP, the Construction Manager reserves the right to perform that portion of the work as acknowledged by the Owner or negotiate for its performance for the specified line item lump sum amount or less. e) The increase or decrease in the Guaranteed Maximum Price resulting from a change in the Project shall be determined in one or more of the following ways: i. By mutual acceptance of a lump sum properly itemized and supported by sufficient substantiating data to permit evaluation by the Architect Engineer and Owner; ii. By unit prices stated in the Agreement or subsequently agreed upon; iii. If none of the methods is agreed upon, the Construction Manager, provided it has received a signed written order by the Owner, shall promptly proceed 9 with the work involved. The cost of such work shall then be determined on the basis of the reasonable expenditures and savings of those performing the work attributed to the change. In the event a Change Order is issued under these conditions, however, the Architect-Engineer will establish an estimated cost of the work and the Construction Manager shall not perform any work whose cost exceeds that estimate without prior written approval by the Owner. In such case, the Construction Manager shall keep and present, in such form as the Owner may prescribe, an itemized accounting together with appropriate supporting data of the increase in the Cost of the Project. The amount of decrease in the Guaranteed Maximum Price to be allowed by the Construction Manager to the Owner for any deletion or change which results in a net decrease in cost will be the amount of the actual net decrease; iv. The Architect-Engineer will have authority to order minor changes in the Project not involving an adjustment in the Guaranteed Maximum Price or an extension of the Construction Completion Date and not inconsistent with the intent of the Drawings and Specifications. Such changes shall be affected by written order. Documentation of changes shall be determined by the Architect-Engineer. Changes shall be approved by the Architect- Engineer. 4.2 Construction Manager’s Fee - In consideration of the performance of the contract, the Owner agrees to pay the Construction Manager as compensation for his services, fees as set forth below: Preconstruction Phase Fee - shall be based on design costs if applicable, constructability review, value engineering and fee determination of Guaranteed Maximum Price. The fee for this phase in the amount of $425,000.00 shall be paid at the negotiated price upon receipt of the Guaranteed Maximum Price. Preconstruction Services Proposals will be incorporated by reference and attached hereto as an exhibit. Construction Phase Fee - Prior to commencement of the Construction Phase, the Owner will direct the Construction Manager in writing to proceed into the Construction Phase. The Construction Manager’s compensation for work or service performed during the Construction Phase shall be a fee of $ TBD. The Construction Phase Fee shall be invoiced and paid in TBD months. Payments will be remitted monthly at the cost of $ TBD each and one final monthly payment of $ TBD. The first monthly payment shall become due thirty days following the issuance of the first Construction Authorization and the final monthly payment shall be paid only when construction of the project is completed and occupancy of the project accepted by the Owner. If construction is authorized only for a part of the project, the fee paid shall be proportionate to the amount of work authorized by the Owner. 10 ARTICLE 5: TERMINATION AND TIME OF THE ESSENCE 5.1 If the Construction Manager is adjudged bankrupt or makes a general assignment for the benefit of creditors, or if a receiver is appointed on account of its insolvency, or if refuses or fails, except in cases for which an extension of time is provided, to supply enough properly skilled workmen or proper materials for the Services, or otherwise be guilty of a substantial violation of any provision of this Agreement as determined by the certificate of the Architect, the Owner may, without prejudice and reserving any other right or remedy the Owner may have, after giving the Construction Manager seven (7) days’ written notice, terminate the employment of the Construction Manager and take possession of the premises and all materials, tools, and appliances thereon and finish the Project in whatever manner the Owner may deem expedient. 5.2 It is mutually agreed between the parties hereby that time is of the essence of this contract, and in the event that the Substantial Completion Date is not achieved within the time stipulated herein, it is then further agreed that the City may deduct from such sums or compensation as may be due to the Construction Manager, the sum of $1,000.00 per day for each day that the work to be performed by the Construction Manager remains incomplete beyond the time limit specified herein, which sum of $1,000.00 per day shall only and solely represent damages which the City has sustained by reason of the failure of the Construction Manager to complete the work within the time stipulated, it being further agreed that the sum is not to be construed as a penalty but is only to be construed as liquidated damages for failure of the Construction Manager to complete and perform all work within the time period as specified in this contract. ARTICLE 6: INDEMNIFICATION 6.1The Construction Manager and his or its successors and assigns does hereby agree to assume the defense of any legal action which may be brought against the City as a result of the Construction Manager’s activities arising out of this contract and furthermore, in consideration of the terms, stipulations and conditions as contained herein, agrees to hold the city free and harmless from any and all claims for damages, costs of suits, judgments or decrees resulting from any claims made under this contract against the city or the contractor or the contractor’s sub-contractors, agents, servants or employees resulting from activities by the aforementioned contractor, sub-contractor, agent servants or employees. 6.2 Nothing contained herein shall be construed as a waiver of any immunity from or limitation of liability the City (Owner) may be entitled to under the doctrine of sovereign immunity or section 768.28, Florida Statutes. ARTICLE 7: TITLE TO THE PROJECT 7.1 The title of all work, completed portions of the Project and in the course of construction, and of all materials on account of which payment has been made shall be in the Owner. 11 ARTICLE 8: ASSIGNMENT 8.1 This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns, except that this Agreement may not be assigned by either party without the prior written consent of the other party. Any assignment made without such prior written consent shall not vest rights in the assignee. ARTICLE 9: ADDITIONAL PROVISIONS 9.1 This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, and the venue for any dispute under this Agreement shall be an appropriate court of competent jurisdiction in Pinellas County, Florida. 9.2 Any notice required to be given by the terms and provisions of this Agreement or by any law or governmental regulation, either by the Owner or Construction Manager, shall be in writing unless otherwise required by such law or regulation and shall be deemed to have been served and given when deposited in either Registered or Certified Mail in United States Branch Post Office, addressed to the party hereto to whom directed, at the address specified in the Specifications. 9.3 The language in this Agreement shall be construed according to its customary meaning within the Florida building industry. Whenever used, the singular shall include the plural, the plural the singular, and the use of any gender shall be applicable to all genders. 9.4 If any provision of the Contract Documents is invalid or unenforceable as against any person or party, the remainder of the Contract Documents and the applicability of such provision to other persons or parties shall not be affected thereby. 9.5 Nothing contained in this Agreement shall be construed to mean that the Construction Manager and Owner are joint venturers or partners. 9.6 Neither party will be liable for incidental, special, or consequential damages. 9.7 The City’s performance and obligation to pay under this Contract is contingent upon an annual appropriation by the Clearwater City Council. In the event the Clearwater City Council does not appropriate funds in a sufficient amount for the City to perform its obligations under this Contract, the City may terminate this Contract upon thirty (30) days written notice to the Contraction Manager. 12 IN WITNESS WHEREOF, the parties hereto have made and executed this Contract on the date and year first above written. (Corporate Seal) SKANSKA USA BUILDING, INC. By: ______________________________ Print Name: ____________________ Title: __________________________ WITNESS: By: ______________________________ Print Name: ____________________ Countersigned: CITY OF CLEARWATER ____________________________ ___________________________________ George N. Cretekos William B. Horne II Mayor City Manager Approved as to form: Attest: ____________________________ ___________________________________ Owen Kohler Rosemarie Call Assistant City Attorney City Clerk DREW ST PIERCE ST CLEVELAND ST N OSCEOLA AVE MEMORI ALCSWYS OSCEOLA AVE LAURA ST LOCATION MAP ²Prepared by:Engineering DepartmentGeographic Technology Division100 S. Myrtle Ave, Clearwater, FL 33756Ph: (727)562-4750, Fax: (727)526-4755www.MyClearwater.com JB CC N.T.S.286B 16-29s-15e11/27/2019Map Gen By:Reviewed By:S-T-R:Grid #:Date:Scale: Imagine Clearwater Boundary Document Path: C:\Users\james.benwell\City of Clearwater\Engineering Geographic Technology - Location Maps\ImagineClearwaterBoundary.mxd SECTION III i SECTION III GENERAL CONDITIONS Table of Contents: 1. DEFINITIONS ................................................................................................. 1 2. PRELIMINARY MATTERS .......................................................................... 5 2.1. DELIVERY OF BONDS AND CERTIFICATES OF INSURANCE ................................5 2.2. COPIES OF DOCUMENTS ................................................................................................5 2.3. COMMENCEMENT OF CONTRACT TIME/NOTICE TO PROCEED; STARTING THE PROJECT ....................................................................................................................5 2.4. BEFORE STARTING CONSTRUCTION..........................................................................5 2.5. PRECONSTRUCTION CONFERENCE ............................................................................6 2.6. PROGRESS MEETINGS ....................................................................................................6 3. CONTRACT DOCUMENTS, INTENT ........................................................ 6 3.1. INTENT ...............................................................................................................................6 3.2. REPORTING AND RESOLVING DISCREPANCIES ......................................................7 4. AVAILABILITY OF LANDS; SUBSURFACE AND PHYSICAL CONDITIONS; REFERENCE POINTS ....................................................... 7 4.1. AVAILABILITY OF LANDS .............................................................................................7 4.2. INVESTIGATIONS AND REPORTS ................................................................................7 4.3. PHYSICAL CONDITIONS, UNDERGROUND FACILITIES .........................................8 4.4. REFERENCE POINTS ........................................................................................................8 5. BONDS AND INSURANCE ........................................................................... 8 5.1. PERFORMANCE AND PAYMENT BOND/CONTRACT BOND ...................................8 5.2. INSURANCE REQUIREMENTS .......................................................................................9 5.2.1. COMMERCIAL GENERAL LIABILITY INSURANCE ...............................................9 5.2.2. COMMERCIAL AUTOMOBILE LIABILITY INSURANCE .......................................9 5.2.3. WORKERS’ COMPENSATION AND EMPLOYER’S LIABILITY INSURANCE ...10 5.2.4. PROFESSIONAL LIABILITY/MALPRACTICE/ERRORS OR OMISSIONS INSURANCE..................................................................................................................10 5.2.5. CONTRACTOR’S EQUIPMENT/INLAND MARINE/PROPERTY INSURANCE ...10 5.2.6. BUILDER’S RISK INSURANCE..................................................................................10 5.3. OTHER INSURANCE PROVISIONS ..............................................................................10 5.4. WAIVER OF RIGHTS ......................................................................................................11 6. CONTRACTORS RESPONSIBILITIES .................................................... 12 6.1. SUPERVISION AND SUPERINTENDENCE .................................................................12 6.2. LABOR, MATERIALS AND EQUIPMENT ...................................................................12 6.3. SUBSTITUTES AND "OR EQUAL" ITEMS ..................................................................13 6.4. SUBCONTRACTORS, SUPPLIERS AND OTHERS ......................................................14 SECTION III – General Conditions SECTION III ii 6.5. USE OF PREMISES ..........................................................................................................14 6.5.1. STAGING AREAS .........................................................................................................15 6.5.2. RESTORATION TIME LIMITS....................................................................................15 6.6. LICENSE AND PATENT FEES, ROYALTIES AND TAXES .......................................15 6.7. LAWS AND REGULATIONS ..........................................................................................16 6.8. PERMITS ...........................................................................................................................16 6.9. SAFETY AND PROTECTION .........................................................................................16 6.10. EMERGENCIES................................................................................................................17 6.11. DRAWINGS ......................................................................................................................18 6.11.1. SHOP DRAWINGS, SAMPLES, RFIs, AND SUBMITTAL REVIEW .......................18 6.11.2. AS-BUILT DRAWINGS ................................................................................................19 6.11.3. CAD STANDARDS .......................................................................................................21 6.11.4. DELIVERABLES ...........................................................................................................22 6.12. CONTRACTOR'S GENERAL WARRANTY AND GUARANTEE ...............................23 6.13. CONTINUING THE WORK ............................................................................................23 6.14. INDEMNIFICATION........................................................................................................23 6.15. CHANGES IN COMPANY CONTACT INFORMATION ..............................................24 6.16. PUBLIC RECORDS ..........................................................................................................24 7. OTHER WORK ............................................................................................. 25 7.1. RELATED WORK AT SITE ............................................................................................25 7.2. COORDINATION .............................................................................................................25 8. OWNERS RESPONSIBILITY ..................................................................... 25 9. OWNER REPRESENTATIVE’S STATUS DURING CONSTRUCTION .......................................................................................................................... 26 9.1. OWNERS REPRESENTATIVE .......................................................................................26 9.2. CLARIFICATIONS AND INTERPRETATIONS ............................................................26 9.3. REJECTING OF DEFECTIVE WORK ............................................................................26 9.4. SHOP DRAWINGS, CHANGE ORDERS, AND PAYMENTS ......................................27 9.5. DECISIONS ON DISPUTES ............................................................................................27 9.6. LIMITATIONS ON OWNER REPRESENTATIVE'S RESPONSIBILITIES .................28 10. CHANGES IN THE WORK ......................................................................... 28 11. CHANGES IN THE CONTRACT PRICE .................................................. 29 11.1. CHANGES IN THE CONTRACT PRICE ........................................................................29 11.2. ALLOWANCES AND FINAL CONTRACT PRICE ADJUSTMENT ...........................30 11.3. UNIT PRICE WORK ........................................................................................................31 12. CHANGES IN THE CONTRACT TIME ................................................... 31 13. TESTS AND INSPECTIONS, CORRECTION, REMOVAL OR ACCEPTANCE OF DEFECTIVE WORK ................................................. 32 13.1. TESTS AND INSPECTION ..............................................................................................32 SECTION III – General Conditions SECTION III iii 13.2. UNCOVERING THE WORK ...........................................................................................33 13.3. OWNER’S REPRESENTATIVE MAY STOP THE WORK ...........................................33 13.4. CORRECTION OR REMOVAL OF DEFECTIVE WORK.............................................33 13.5. WARRANTY/CORRECTION PERIOD ..........................................................................33 13.6. ACCEPTANCE OF DEFECTIVE WORK .......................................................................34 13.7. OWNER MAY CORRECT DEFECTIVE WORK ...........................................................34 14. PAYMENTS TO CONTRACTOR AND COMPLETION ........................ 35 14.1. APPLICATION FOR PROGRESS PAYMENT ...............................................................35 14.2. CONTRACTOR'S WARRANTY OF TITLE ...................................................................35 14.3. REVIEW OF APPLICATIONS FOR PROGRESS PAYMENTS ....................................36 14.4. PARTIAL UTILIZATION ................................................................................................37 14.5. FINAL INSPECTION .......................................................................................................37 14.6. FINAL APPLICATION FOR PAYMENT .......................................................................37 14.7. FINAL PAYMENT AND ACCEPTANCE .......................................................................38 14.8. WAIVER OF CLAIMS .....................................................................................................38 15. SUSPENSION OF WORK AND TERMINATION ................................... 38 15.1. OWNER MAY SUSPEND THE WORK ..........................................................................38 15.2. OWNER MAY TERMINATE ..........................................................................................39 15.3. CONTRACTOR MAY STOP WORK OR TERMINATE ...............................................40 16. DISPUTE RESOLUTION ............................................................................. 40 17. MISCELLANEOUS ....................................................................................... 41 17.1. SUBMITTAL AND DOCUMENT FORMS .....................................................................41 17.2. GIVING NOTICE ..............................................................................................................41 17.3. NOTICE OF CLAIM .........................................................................................................41 17.4. PROFESSIONAL FEES AND COURT COSTS INCLUDED .........................................41 17.5. ASSIGNMENT OF CONTRACT .....................................................................................41 17.6. RENEWAL OPTION ........................................................................................................41 17.7. ROLL-OFF CONTAINERS AND/OR DUMPSTERS .....................................................41 18. ORDER AND LOCATION OF THE WORK............................................. 42 19. MATERIAL USED ........................................................................................ 42 20. CONFLICT BETWEEN PLANS AND SPECIFICATIONS .................... 42 21. OWNER DIRECT PURCHASE (ODP) ...................................................... 42 21.1. SALES TAX SAVINGS ....................................................................................................42 21.2. TITLE AND OWNER RISK .............................................................................................42 21.3. CONTRACTOR’S RECEIPT OF MATERIALS ..............................................................43 21.4. ODP RECORDS, WARRANTIES AND INDEMNIFICATION .....................................43 22. RESIDENT NOTIFICATION OF START OF CONSTRUCTION ......... 44 SECTION III – General Conditions SECTION III iv 22.1. GENERAL .........................................................................................................................44 22.2. EXAMPLE .........................................................................................................................45 23. PROJECT INFORMATION SIGNS ........................................................... 45 23.1. SCOPE AND PURPOSE ...................................................................................................45 23.2. PROJECT SIGN, FIXED OR PORTABLE ......................................................................46 23.3. FIXED SIGN .....................................................................................................................46 23.4. PORTABLE SIGNS ..........................................................................................................46 23.5. SIGN COLORING.............................................................................................................46 23.6. SIGN PLACEMENT .........................................................................................................46 23.7. SIGN MAINTENANCE ....................................................................................................46 23.8. TYPICAL PROJECT SIGN ..............................................................................................47 24. AWARD OF CONTRACT, WORK SCHEDULE AND GUARANTEE . 47 25. SCRUTINIZED COMPANIES AND BUSINESS OPERATIONS WITH CUBA AND SYRIA CERTIFICATION FORM AND ISRAEL CERTIFICATION FORM ............................................................................ 48 SECTION III – General Conditions SECTION III Page 1 of 49 1. DEFINITIONS Addenda Written or graphic instruments issued prior to the opening of Bids which clarify, correct or change the Bidding Requirements or the contract documents. Agent Architect, engineer or other outside agency, consultant or person acting on behalf of the City. Agreement The written contract between Owner and Contractor covering the Work to be performed; other Contract Documents are attached to the Agreement and made a part thereof as provided therein. Application for Payment The form accepted by Engineer which is to be used by Contractor in requesting progress or final payments and which is to be accompanied by such supporting documentation as is required by the Contract Documents. Approve The word approve is defined to mean satisfactory review of the material, equipment or methods for general compliance with the design concepts and with the information given in the Contract Documents. It does not imply a responsibility on the part of the Engineer to verify in every detail conformance with the Drawings and Specifications. Bid The offer or proposal of the bidder submitted on the prescribed form setting forth the prices for the work to be performed. Bidding Documents The advertisement or invitation to Bid, instructions to bidders, the Bid form, and the proposed Contact Documents (including all Addenda issued prior to receipt of Bids). Bonds Performance and payment bonds and other instruments of security. Change Order A written order to Contractor signed by Owner and Contractor authorizing an addition, deletion or revision in the Work, or an adjustment in the Contract Price or the Contract Time issued on or after the effective date of the Agreement. City The City of Clearwater, Pinellas County, Florida. Construction Inspector A person who is the authorized representative of the Construction Manager and inspects City construction projects in order to insure the Contractor’s work complies with the intent of the Contract Documents. Contract Documents The Agreement, Addenda (which pertain to the Contract Documents), Contractor's Bid (including documentation accompanying the bid and any post-Bid documentation submitted prior to the execution of the Agreement) when attached as an exhibit to the SECTION III – General Conditions SECTION III Page 2 of 49 Agreement, the Bonds, Instructions to Bidders, these General Conditions, any Supplementary Conditions, the Specifications and the Drawings, any other exhibits identified in the Agreement, together with all Modifications issued after the execution of the Agreement. Contract Price The Contract price constitutes the total compensation (subject to authorized adjustments) payable by Owner to Contractor for performing the Work. Contract Time The number of days or the date stated in the Agreement for the completion of the Work. Contractor The Person with whom the Owner has entered into the Agreement. For the purposes of this contract, the person, firm or corporation with whom this contract or agreement has been made by the City of Clearwater or its duly authorized representative. Critical Path Method Construction Schedule—CPM A graphic format construction schedule that displays construction activities as they relate to one another for the purpose of identifying the most efficient way to perform the work in a timely manner. The critical path identifies which activity is critical to the execution of the schedule. Day A calendar day of twenty-four (24) hours measured from midnight to the next midnight. Defective An adjective which when modifying the word Work refers to Work that is unsatisfactory, faulty or deficient, or does not conform to the Contract Documents or does not meet the requirements of any inspection, reference standard, test or approval referred to in the Contract Documents, or has been damaged prior to Engineers recommendation of final payment. Drawings The drawings, which will be identified in Technical Specifications or the Agreement, which show the character and scope of the Work to be performed and which have been prepared or approved by Engineer and are referred to in the contract documents. Shop drawings are not Drawings as so defined. Engineer The duly appointed representative of the City Manager of the City of Clearwater. For the purposes of this contract, the City Engineer of the City of Clearwater, Pinellas County, Florida, or his authorized representative. For certain projects, the Engineer may serve as the Owner’s Representative during construction. Engineer's Consultant A Person having a contract with Engineer to furnish services as Engineer's independent professional associate or consultant with respect to the Project and who is identified as such in the Supplementary Conditions. F.D.O.T Specifications The Standard Specifications for Road and Bridge Construction as issued by the Florida Department of Transportation (latest English edition). SECTION III – General Conditions SECTION III Page 3 of 49 Furnish The words "furnish", "furnish and install", "install", and "provide" or words of similar meaning shall be interpreted, unless otherwise specifically stated, to mean "furnish and install complete in place and ready for service". Inspection The term "inspection" and the act of inspecting means examination of construction to ensure that it conforms to the design concept expressed in the Drawings and Specifications. These terms shall not be construed to mean supervision, superintending or overseeing. Laws and Regulations Any and all applicable laws, rules, regulations, ordinances, codes and orders of any kind of governmental bodies, agencies, authorities and courts having jurisdiction. Liens Liens, charges, security interests or encumbrances upon real property or personal property. Milestone A principal event specified in the contract Documents relating to an intermediate completion date or time prior to the final completion date. Notice to Proceed (NTP) A written notice given by the Owner to the Contractor fixing the date on which the Contract Time will commence to run and on which Contractor shall start to perform his obligations under the Contract Documents. Owner The City of Clearwater, Florida. For the purposes of this contract, the person who is the City’s authorized representative from the City’s Department with whom will be responsible for the maintenance and operation of the Work once the Work is completed. For certain projects, a designee of the Owner may serve as the Owner’s Representative during construction. Owner’s Representative Designee of the Owner with authority to act on behalf of the Owner during construction. Person A natural person, or a corporation, partnership, firm, organization, or other artificial entity. Project The total construction of which the Work to be provided under the Contract Documents may be the whole or a part as indicated elsewhere in the Contract Documents. Partial Utilization Use by Owner of a substantially completed part of the Work for the purpose for which is intended (or a related purpose) prior to Final Completion of all the Work. Representative of Contractor The Contractor shall assign a responsible person or persons, one of whom shall be at the construction site at all times that work is progressing. The names and positions of these persons shall be submitted to the City Engineer at the time of the pre-construction conference. This person or persons shall not be changed without written approval of City Engineer. SECTION III – General Conditions SECTION III Page 4 of 49 Request for Information (RFI) An official written request for clarification of the intent of the contract documents from the Contractor to the Engineer. Shop Drawing All drawings, diagrams, illustrations, schedules and other data which are specifically prepared by or for Contractor to illustrate some portion of the Work and all illustrations, brochures, standard schedules, performance charts, instructions, diagrams and other information prepared by a supplier and submitted by Contractor to illustrate material or equipment for some portion of the Work. Specifications Those portions of the Contract Documents consisting of written technical descriptions of materials, equipment, construction systems, standards and workmanship as applied to the Work and certain administrative details applicable thereto. Subcontractor A person having a direct contract with Contractor or with any other Subcontractor for the performance of a part of the Work at the site. Substantial Completion The Work (or a specified part thereof) which has progressed to the point where, in the opinion of Engineer, as evidenced by Engineer's definitive certificate of Substantial Completion, it is sufficiently complete, in accordance with the Contract documents, so that the Work (or specified part) can be utilized for the purposes for which it is intended; or if no such certificate is issued, when the Work is complete and ready for final payment as evidenced by the Engineer's recommendation of final payment. The terms "substantially complete" and "substantially completed" as applied to all or part of the Work refer to Substantial Completion thereof. Supplementary Conditions The part of the Contract which amends or supplements these General Conditions. Supplier A manufacturer, fabricator, supplier, distributor, material man or vendor having a direct contract with Contractor or with any Subcontractor to furnish materials or equipment to be incorporated in the Work by the Contractor. Surety Any person, firm or corporation which is bound with Contractor and which engages to be responsible for Contractor and his acceptable performance of the Work by a Bid, Performance or Payment Bond. Underground Facilities All pipelines, conduits, ducts, cables, wires manholes, vaults, tanks, tunnels or other such facilities or attachments, and any encasements containing such facilities which have been installed underground to furnish any of the following services or materials: electricity, gases, steam, liquid petroleum products, telephone or other communications, cable television, sewage and drainage removal or treatment, traffic or other control systems or water. Unit Price Work Work to be paid for on the basis of unit prices. SECTION III – General Conditions SECTION III Page 5 of 49 Work The entire completed construction or the various separately identifiable parts thereof required to be furnished under the Contract Documents. Work includes and is the result of performing or furnishing labor and incorporating materials and equipment into the construction, and performing or furnishing services and furnishing documents, all as required by the Contract Documents. Work Change Directive A written directive to Contractor, issued on or after the Effective Date of the Agreement and signed by the Engineer, ordering an addition, deletion, or revision in the Work, or responding to differing or unforeseen physical conditions under which the Work is to be performed or emergencies. Work Change Directive will not change the Contract Price or Contract Time but is evidence that the parties expect that the change directed or documented by a Work Change Directive will be incorporated in a subsequently issued Change Order following negotiations by the parties as to its effect, if any, on the Contract Price or Contract Times. 2. PRELIMINARY MATTERS 2.1. DELIVERY OF BONDS AND CERTIFICATES OF INSURANCE When Contractor delivers the executed Agreements to the Owner, Contractor shall also deliver to the Owner such Bonds and Certificates of Insurance as Contractor may be required to furnish by this contract. 2.2. COPIES OF DOCUMENTS Engineer shall furnish to Contractor one (1) copy of Contract Documents for execution. Additional copies will be furnished, upon request, at the cost of reproduction. 2.3. COMMENCEMENT OF CONTRACT TIME/NOTICE TO PROCEED; STARTING THE PROJECT The Contract Time will commence on the day indicated in the Notice to Proceed. Contractor shall start to perform the work on the date the Contract Time commences to run. No work shall be done at the site prior to the date that the Contract Time commences to run. Pursuant to Section 255.05(1)(b), Florida Statutes, the Notice to Proceed cannot be issued until Contractor provides City with a certified copy of the recorded bond issued by the Pinellas County Clerk of Court. 2.4. BEFORE STARTING CONSTRUCTION Before undertaking each part of the Work, Contractor shall carefully study and compare the Contract Documents and check and verify pertinent figures shown thereon and all applicable field measurements. Contractor shall promptly report in writing to Engineer any conflict, error or discrepancy which Contractor may discover; and shall obtain a written interpretation or clarification from Engineer before proceeding with any work effected thereby; however, Contractor shall not be liable to the Owner for failure to report any conflict, error or discrepancy in the Drawings or Specifications, unless Contractor had actual knowledge thereof or should reasonably have known thereof. SECTION III – General Conditions SECTION III Page 6 of 49 No verbal agreement or conversation with any officer, Agent or employee of the Owner or Engineer’s Consultant, either before or after the execution of this Contract, shall affect or modify any of the terms or obligations herein contained. Contractor shall not commence any work at any time without approved insurance required by these General Conditions. Failure to obtain this insurance will be the sole responsibility of the Contractor. 2.5. PRECONSTRUCTION CONFERENCE After Contract has been fully executed and before the start of the Work, the Owner’s Representative shall schedule a preconstruction conference to be attended by Contractor, Engineer, Owner and others as appropriate to establish a working understanding among the parties as to the Work and to discuss the schedule of the Work and general Contract procedures. The Contractor shall submit to the Owner’s Representative prior to the Notice to Proceed, a color Critical Path Method (CPM) Construction Schedule. This is to be a sequence of events including submittal review and procurement. Notice to Proceed is usually established at the preconstruction conference and such date can be inserted into the schedule at that time. The Contractor shall also submit a Submittal Schedule for review by the Engineer. This is to make sure that the list is complete, and this schedule shall be the basis of a Submittal Log. The Contractor shall submit to the Owner’s Representative prior to the Notice to Proceed, a completed Emergency Call List, a completed Authorized Signature List, and Verification of Illegal Discharge Construction Site Training. 2.6. PROGRESS MEETINGS The Contractor is required to attend Progress Meetings. These meetings will be scheduled on a weekly, bi-weekly, or monthly basis depending on the needs of the project. The Contractor shall bring to each meeting an updated submittal log, an updated request for information (RFI) log, a look-ahead schedule to cover the project activity from the current meeting to the next meeting, and all material test reports generated in the same time period. 3. CONTRACT DOCUMENTS, INTENT 3.1. INTENT The Contract Documents comprise the entire Agreement between Owner and the Contractor concerning the Work. They may be altered only by written agreement. The Contract Documents are complementary; what is called for by one is as binding as if called for by all. It is the intent of the Contract Documents to describe a functionally complete project (or part thereof) to be constructed in accordance with the Contract Documents. Any Work, materials or equipment which may reasonably be inferred from the Contract Documents or from prevailing custom or from trade usage as being required to produce the intended result will be furnished and performed whether or not specifically called for. When words or phrases, which have a well-known technical or construction industry or trade meaning, are used to describe Work, materials or equipment, such words or phrases shall be interpreted in accordance with that meaning. Clarifications and interpretations of the Contract Documents shall be issued by the Owner’s Representative. Reference to standards, specifications, manuals or codes of any technical society, organization or association, or to the code, Laws or Regulation of any governmental authority, whether such reference be specific or by implication, shall mean the latest standard specification, manual or code, or Laws or Regulations in effect at the time of opening of Bids except as may be otherwise SECTION III – General Conditions SECTION III Page 7 of 49 specifically stated in the Contract Documents. However, no provision of any referenced standard specification, manual or code, whether or not specially incorporated by reference in the responsibilities of Owner or Contractor as set forth in the Contract Documents, shall change the duties and responsibilities of Owner, Contractor, Engineer or Owner’s Representative, or any of their Agents or employees from those set forth in the Contract Documents. Clarifications and interpretations of the Contract shall be issued by the Owner’s Representative. Each and every provision of law and clause required by law to be inserted in these Contract documents shall be deemed to be inserted herein, and they shall be read and enforced as through it were included herein, and if through mistake or otherwise, any such provision is not inserted, or if not correctly inserted, then upon the application of either party, the Contract Documents shall forthwith be physically amended to make such insertion. 3.2. REPORTING AND RESOLVING DISCREPANCIES If, during the performance of the Work, Contractor discovers any conflict, error, ambiguity or discrepancy within the Contract Documents or between the Contract Documents and any provision of any such Law or Regulation applicable to the performance of the Work or of any such standard, specification, manual or code or of any instruction of any Supplier, Contractor shall report it to the Owner’s Representative in writing at once, and Contractor shall not proceed with the Work affected thereby (except in an emergency) until an amendment or supplement to Contract Documents has been issued by one of the methods provided in these General Specifications, provided however, that Contractor shall not be liable to Owner, or Owner’s Representative for failure to report any such conflict, error, ambiguity or discrepancy unless Contractor knew or reasonably should have known thereof. 4. AVAILABILITY OF LANDS; SUBSURFACE AND PHYSICAL CONDITIONS; REFERENCE POINTS 4.1. AVAILABILITY OF LANDS The Owner shall furnish, as indicated in the Contract Documents, the lands upon which the Work is to be Performed, rights-of-way, easements, rights of entry for access thereto, and such other lands which are designated for the use of contractor. The Owner shall identify any encumbrances or restrictions not of general application but specifically related to use of lands so furnished with which contractor will have to comply in performing the Work. Easements for permanent structures or permanent changes in existing facilities will be obtained and paid for by the Owner, unless otherwise provided in the Contract Documents. 4.2. INVESTIGATIONS AND REPORTS Reference is made to the Supplementary Conditions and Technical Specifications for identification of those reports of investigations and tests of subsurface and latent physical conditions at the site or otherwise affecting cost, progress or performance of the Work which have been relied upon by Engineer in preparation of the Drawings and Specifications. Such reports are not guaranteed as to accuracy or completeness and are not part of the Contract Documents. Contractor shall promptly notify the Owner’s Representative in writing of any subsurface or latent physical conditions at the site, or in an existing structure, differing materially from those indicated or referred to in the Contract Documents. Engineer will promptly review those conditions and advise if further investigation or tests are necessary. Owner or Engineer shall obtain the necessary additional SECTION III – General Conditions SECTION III Page 8 of 49 investigations and tests and furnish copies to the Engineer and Contractor. If Engineer finds that the results of such investigations or tests indicate that there are subsurface or latent physical conditions, which differ materially from those, indicated in the contract Documents, and which could not reasonably have been anticipated by Contractor, a work change, or Change Order will be issued incorporating the necessary revisions. 4.3. PHYSICAL CONDITIONS, UNDERGROUND FACILITIES The information and data shown or indicated in the Contract Documents with respect to existing Underground Facilities at or contiguous to the site is based on information and data furnished to Owner or Engineer by the owners of such Underground Facilities or by others. Unless otherwise expressly provided in the Contract Documents, Owner and Engineer shall not be responsible for the accuracy or completeness of any such information or data; and the cost of all the following will be included in the Contract Price and contractor shall have full responsibility for: (i) reviewing and checking all such information and data, (ii) locating all Underground Facilities shown or indicated in the Contract Documents, (iii) coordination of the Work with the owners of such Underground Facilities during construction, and (iv) the safety and protection of all such Underground Facilities and repairing any damage thereto resulting from the Work. The Contractor is required to call the Sunshine State One Call of Florida prior to any excavation per State regulations and to notify any utility owners who are not a member of the Sunshine State One Call of Florida prior to any excavation. The Sunshine State One Call of Florida is an agency for the protection and location of utilities prior to any excavation and contact number is available in local telephone directory. 4.4. REFERENCE POINTS Engineer shall provide engineering surveys to establish reference points for construction, which in Engineer's judgment are necessary to enable Contractor to proceed with the Work. Contractor shall be responsible for laying out the Work, unless otherwise noted in the Contract, shall protect and preserve the established reference points and shall make no changes or relocations without the prior written approval of the Owner and Engineer. Contractor shall report to Engineer whenever any reference point is lost or destroyed or requires relocation because of necessary changes in grades or locations and shall be responsible for the accurate replacement or relocation of such reference points by a surveyor licensed in the State of Florida. The Contractor is referred to the Technical Specifications for more specific information regarding the provision of construction surveys. If a City survey crew is assigned to the project and there is excessive stake replacement caused by negligence of Contractor's forces after initial line and grade have been set, as determined by the Engineer, the Contractor will be charged at the rate of $100.00 per hour. Time shall be computed for actual time on the project. All time shall be computed in one-hour increments with a minimum charge of one hour. 5. BONDS AND INSURANCE 5.1. PERFORMANCE AND PAYMENT BOND/CONTRACT BOND Contractor shall furnish a Performance and Payment Bond pursuant to Section 255.05, Florida Statutes in an amount equal to the Contract Price as security for the faithful performance and payment of all Contractor's obligations under the Contract Documents. This bond shall remain in effect at least one year after the date when final payment becomes due, unless a longer period of time is prescribed by laws and regulations or by the Contract Documents. Contractor shall also SECTION III – General Conditions SECTION III Page 9 of 49 furnish such other Bonds as are required by the Supplementary Conditions. All Bonds shall be in the form prescribed by the Contract Documents in Section V and shall be executed by such sureties as are named in the current list of "Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies" as published in Circular 570 (amended) by the Audit Staff, Bureau of Government Financial Operations, U.S. Treasury Department. All bonds signed by an agent must be accompanied by a certified copy of such agents’ authority to act. All bonds shall be deemed to contain all of the Conditions of Section 255.05, Florida Statutes, even if such language is not directly contained within the bond and the Surety shall be licensed and qualified to do business in the State of Florida. Owner reserves the right to reject any surety. If the Surety on any Bond furnished by the Contractor is declared bankrupt or becomes insolvent or its right to do business is terminated in any state where any part of the Project is located or it ceases to meet the requirements of these Contract Documents, the Contractor shall within five days after notice thereof substitute another Bond and surety, both of which must be acceptable to Owner. The Contractor may require its subcontractors to provide Performance and Payment Bonds as security for the faithful performance of all of their obligations under the lower tier agreements, or in the alternative, if approved by Owner in the GMP Proposal, the faithful performance by lower tier contractors may be secured by purchasing Subcontractor Default Insurance (“SDI”). 5.2. INSURANCE REQUIREMENTS The Contractor shall, at its own cost and expense, acquire and maintain (and cause any sub- contractors, representatives or agents to acquire and maintain) during the term with the City, sufficient insurance to adequately protect the respective interest of the parties. Coverage shall be obtained with a carrier having an AM Best Rating of A-VII or better. Specifically, the Contractor must carry the following minimum types and amounts of insurance on an occurrence basis or in the case of coverage that cannot be obtained on an occurrence basis, then coverage can be obtained on a claims-made basis with a minimum four (4) year tail following the termination or expiration of this Agreement: The following insurance limits may be achieved by a combination of primary and umbrella/excess liability policies. Contractor may provide all or part of the insurance required by itself and its subcontractors through a Contractor Controlled Insurance Program (“CCIP”) upon approval by the City through a GMP Proposal. 5.2.1. COMMERCIAL GENERAL LIABILITY INSURANCE Commercial General Liability Insurance coverage, including but not limited to, premises operations, products/completed operations, products liability, contractual liability, advertising injury, personal injury, death, and property damage in the minimum amount of $2,000,000 (two million dollars) per occurrence and $5,000,000 (five million dollars) general aggregate. 5.2.2. COMMERCIAL AUTOMOBILE LIABILITY INSURANCE Commercial Automobile Liability Insurance coverage for any owned, non-owned, hired or borrowed automobile is required in the minimum amount of $2,000,000 (two million dollars) combined single limit. SECTION III – General Conditions SECTION III Page 10 of 49 5.2.3. WORKERS’ COMPENSATION AND EMPLOYER’S LIABILITY INSURANCE Statutory Workers’ Compensation Insurance coverage in accordance with the laws of the State of Florida, and Employer’s Liability Insurance in the minimum amount of $100,000 (one hundred thousand dollars) each employee each accident, $100,000 (one hundred thousand dollars) each employee by disease and $500,000 (five hundred thousand dollars) aggregate by disease with benefits afforded under the laws of the State of Florida. Coverage should include Voluntary Compensation, Jones Act, and U.S. Longshoremen’s and Harbor Worker’s Act coverage where applicable. Coverage must be applicable to employees, contractors, subcontractors, and volunteers, if any. 5.2.4. PROFESSIONAL LIABILITY/MALPRACTICE/ERRORS OR OMISSIONS INSURANCE Professional Liability/Malpractice/Errors or Omissions Insurance coverage appropriate for the type of business engaged in by the Contractor with minimum limits of $2,000,000 (two million dollars) per occurrence. If a claims-made form of coverage is provided, the retroactive date of coverage shall be no later than the inception date of claims-made coverage, unless prior policy was extended indefinitely to cover prior acts. Coverage shall be extended beyond the policy year either by a supplemental extended reporting period (ERP) of as great a duration as available, and with no less coverage and with reinstated aggregate limits, or by requiring that any new policy provide a retroactive date no later than the inception date of claims-made coverage. 5.2.5. CONTRACTOR’S EQUIPMENT/INLAND MARINE/PROPERTY INSURANCE If Contractor is using its own property in connection with the performance of its obligations under this Agreement, then Contractor’s Equipment–Inland Marine Insurance and/or Property Insurance on an “All Risks” basis with replacement cost coverage for property and equipment in the care, custody and control of others is recommended. City is not responsible for Contractor’s (or any sub-contractors, representatives, or agents) equipment or property. 5.2.6. BUILDER’S RISK INSURANCE The City will provide at its expense, Builder’s Risk Insurance for the project to cover all risks of loss in the complete and full value of the project. Contractor agrees to cooperate in a timely manner with providing any information or documentation required for the application and by the carrier as the project proceeds. The City will be responsible for all deductibles. 5.3. OTHER INSURANCE PROVISIONS Upon approval of this Agreement by City Council, and then annually upon the anniversary date(s) of the insurance policy’s renewal date(s) for as long as this Agreement remains in effect, the Contractor will furnish the City with a Certificate of Insurance(s) (using appropriate ACORD certificate, SIGNED by the Issuer, and with applicable endorsements) evidencing all of the coverage set forth above and naming the City as an “Additional Insured.” In addition, when requested in writing from the City, Contractor will make copies of all applicable policies available for review by appointment with Contractor’s VP, Insurance and Surety. The address where such certificates shall be sent or delivered is as follows: SECTION III – General Conditions SECTION III Page 11 of 49 City of Clearwater Engineering Department Attn: Construction Office Specialist P.O. Box 4748 Clearwater, FL 33758-4748 1. The Description (of Operations/Locations/Vehicles) should specify Project Name and Project Number. 2. Contractor shall provide thirty (30) days written notice of any cancellation, non-renewal, termination, material change or reduction in coverage. 3. Contractor’s insurance as outlined above shall be primary and non-contributory coverage for Contractor’s negligence. 4. Contractor reserves the right to appoint legal counsel to provide for the Contractor’s defense, for any and all claims that may arise related to Agreement, work performed under this Agreement, or to Contractor’s design, equipment, or service. Contractor agrees that the City shall not be liable to reimburse Contractor for any legal fees or costs as a result of Contractor providing its defense as contemplated herein. The stipulated limits of coverage above shall not be construed as a limitation of any potential liability to the City, and the City’s failure to request evidence of this insurance shall not be construed as a waiver of Contractor’s (or sub-contractors, representatives, or agents) obligation to provide the insurance coverage specified. 5.4. WAIVER OF RIGHTS The Owner and Contractor intend that all policies purchased in accordance with Article on Insurance will protect the Owner, Contractor, Subcontractors, and Engineer. Owner is to be listed as additional insured in such policies and will provide primary coverage for all losses and damages caused by the perils covered thereby. All such policies shall contain provisions to the effect that in the event of payment of any loss or damage the insurers will have no rights of recovery against any of the insured or additional insured thereunder, the Owner and Contractor waive all rights against each other and their respective officers, directors, employees and agents for all losses and damages caused by, arising out of or resulting from any of the perils covered by such policies and any other property insurance applicable to the work; and, in addition, waive all such rights against Sub-contractors, Engineer, Engineer's Consultants and all other persons or entities identified in the Supplementary Conditions to be listed as insured or additional insured under such policies for losses and damages so caused. None of the above waivers shall extend to the rights that any party making such waiver may have to the proceeds of insurance otherwise payable under any policy so issued. In addition, the Owner waives all rights against Contractor, Subcontractors, Engineer, Engineer's Consultant and the officers, directors, employees and agents of any of them for: (i) loss due to business interruption, loss of use or other consequential loss extending beyond direct physical loss or damage to the Owner property or the Work caused by, arising out of or resulting from fire or other peril, whether or not insured by the Owner and; (ii) loss or damage to the completed Project or part thereof caused by, arising out of or resulting from fire or other insured peril covered by any property insurance maintained on the completed Project or part thereof by the Owner during partial utilization, after substantial completion or after final payment. If the waiver of subrogation applies to any separate contractors of Owner, Owner will include a reciprocal waiver of subrogation within all agreements with the separate contractors under contract with Owner. SECTION III – General Conditions SECTION III Page 12 of 49 6. CONTRACTORS RESPONSIBILITIES 6.1. SUPERVISION AND SUPERINTENDENCE Contractor shall supervise, inspect and direct the Work competently and efficiently, devoting such attention thereto and applying such skills and expertise as may be necessary to perform the Work in accordance with the Contract Documents. Contractor shall be solely responsible for the means, methods, techniques, sequences and procedures of construction. Contractor shall not be responsible for the negligence of others in the design or specification of a specific means, method, technique, sequence or procedure of construction which is shown or indicated in and expressly required by the Contract Documents. Contractor shall be responsible to see that the completed work complies accurately with the Contract Documents. Contractor shall keep on the work at all times during its progress a competent resident superintendent, who shall not be replaced without notice to the Owner’s Representative except under extraordinary circumstances. The superintendent will be Contractor's representative at the site and shall have authority to act on behalf of Contractor. All communications to the superintendent shall be as binding as if given to Contractor. The Contractor’s superintendent shall keep a mobile cell phone on his person, so he can be contacted whenever necessary. Contractor shall employ only competent persons to do the work and whenever the Owner’s Representative shall notify Contractor, in writing, that any person on the work appears to be incompetent, unfaithful, disorderly, disrespectful or otherwise unsatisfactory, such person shall be removed from the project and shall not again be employed on it except with the written consent of the Owner’s Representative. Contractor represents the City of Clearwater and shall conduct themselves in a professional manner to the public at all times. Contractor shall reimburse Owner for additional engineering and inspection costs incurred as a result of overtime work in excess of the regular working hours or on the Owner normally approved holidays. At such times when Inspector overtime is required, the Contractor shall sign an overtime slip documenting such hours and the Contractor shall be provided a copy for his records. At the end of the project and prior to payment of withheld retainage funds, the Contractor shall deliver to the Owner a check made out to the Owner of Clearwater for full reimbursement of all Inspector overtime hours. Withheld retainage shall not be released until the Owner has received this check. Minimum number of chargeable hours for inspection costs on weekends or holidays shall be four hours. The cost of overtime inspection per hour shall be $80.00 per hour. Contractor shall provide and maintain in a neat and sanitary condition, such sanitary accommodations for the use of Contractor's employees as may be necessary to comply with the requirements of Laws and Regulations and the Engineer. 6.2. LABOR, MATERIALS AND EQUIPMENT Contractor shall provide competent, suitably qualified personnel to survey, lay out and construct the work as required by the Contract Documents. Contractor shall at all times maintain good discipline and order at the site. Except as otherwise required for the safety or protection of persons or the work or property at the site or adjacent thereto, and except as otherwise indicated in the Contract Documents, all work at the site shall be performed during regular working hours. Contractor shall adhere to the Community Development Code, Section 3-1508 regarding noise restrictions from 6:00 p.m. to 7:00 a.m. any day and all day Sunday. Contractor will not permit SECTION III – General Conditions SECTION III Page 13 of 49 overtime work or the performance of work on Saturday, Sunday, or any legal holiday without Owner consent given after prior notice to Engineer. Unless otherwise specified in the General Requirements, Contractor shall furnish and assume full responsibility for all materials, equipment, labor, transportation, construction equipment and machinery, tools, appliances, fuel, power, light, heat, telephone, water, sanitary facilities, temporary facilities, and all other facilities and incidentals necessary for the furnishing, performance, testing, start-up and completion of the Work. All materials and equipment installed in the Work shall be of good quality and new, except as otherwise provided in the Contract Documents. If required by Engineer, Contractors shall furnish satisfactory evidence (including reports of required tests) as to the quality of materials and equipment. The Contractor shall provide suitable and secure storage for all materials to be used in the Work so that their quality shall not be impaired or injured. Materials that are improperly stored, may be rejected by the Engineer without testing. All materials and equipment shall be applied, installed, connected, erected, used, cleaned and conditioned in accordance with the instructions of the applicable manufacturer, fabricator, supplier, or distributor, except as otherwise provided in the Contract Documents. The City of Clearwater, at its sole discretion, reserves the right to purchase major equipment or materials to be incorporated into the Work under the Owner Direct Purchase (ODP) Option, per Section III, Article 21. In such event, the Contractor shall cooperate and assist the Owner of Clearwater, at no additional cost, to implement the ODP documents and procedures. 6.3. SUBSTITUTES AND "OR EQUAL" ITEMS Whenever an item of material or equipment is specified or described in the Contract Documents by using the name of a proprietary item or the name of a particular Supplier, the specification or description is intended to establish the type, function and quality required. Unless the specification or description contains or is followed by words reading that no like, equivalent or "or equal" item or no substitution is permitted, other items of material or equipment or material or equipment of other Suppliers may be accepted by Engineer. If in Engineer's sole discretion an item of material or equipment proposed by Contractor is functionally equal to that named and sufficiently similar so that no change in related Work will be required, it may be considered by Engineer for approval. If in the Engineer's sole discretion an item of material or equipment proposed by Contractor does not qualify as an "or equal" item, it may be considered as a proposed substitute item. Contractor shall submit sufficient information as required by the Engineer to allow the Engineer to determine that the item of material or equipment proposed is essentially equivalent to that named and is an acceptable substitute therefore. Request for review of proposed substitute and "or equal" will be not be accepted by Engineer from anyone other than Contractor. Request for substitute and "or equal" items by Contractor must be submitted in writing to Owner’s Representative and will contain all information as Engineer deems necessary to make a determination. Request for substitute shall identify why a substitute is submitted and include advantages to the Owner. All data provided by Contractor in support of any proposed substitute or "or equal" item will be at Contractor's expense. Engineer will be allowed a reasonable time to evaluate each proposal or submittal made per this paragraph. Engineer will be sole judge of acceptability. SECTION III – General Conditions SECTION III Page 14 of 49 6.4. SUBCONTRACTORS, SUPPLIERS AND OTHERS The Contractor shall deliver to the Owner’s Representative before or at the preconstruction conference a list of all Subcontractors, suppliers and other persons and organizations proposed by the Contractor for Work to be performed on the Project. The Contractor shall include with this list the qualifications and references for each Subcontractor, supplier or other person and organization for review and approval. Any changes to this list must be submitted to the Owner’s Representative for approval prior to the substitution of any Subcontractors, suppliers or other persons and organizations before performing any Work on the Project for the Contractor. Contractor shall be fully responsible to Owner and Engineer for all acts and omissions of the Subcontractors, Suppliers and other persons performing or furnishing any of the work under a direct or indirect contract with Contractor just as Contractor is responsible for Contractor's own acts and omissions. Nothing in the Contract Documents shall create for the benefit of any such Subcontractor, Supplier or other person any contractual relationship between Owner or Engineer and any Subcontractor, Supplier or other person, nor shall it create any obligation on the part of Owner or Engineer to pay or to see to the payment of any moneys due any such Subcontractor, Supplier or other person. Contractor shall be solely responsible for scheduling and coordinating the work of Subcontractors, Suppliers and other persons performing or furnishing any of the work under a direct or indirect contract with Contractor. Contractor shall require all Subcontractors, Suppliers and such other persons performing or furnishing any of the work to communicate with the Engineer through Contractor. The divisions and sections of the Specifications and the identifications of any Drawings shall not control Contractor in dividing the work among Subcontractors or Suppliers or delineating the work to be performed by any specific trade. All work performed for Contractor by a Subcontractor or Supplier will be pursuant to an appropriate agreement between Contractor and the Subcontractor or Supplier which specifically binds the Subcontractor or Supplier to the applicable terms and conditions of the Contract Documents for the benefit of Owner and Engineer. Contractor shall not pay or employ any Subcontractor, Supplier or other person or organization whether initially or as a substitute, against whom Owner or Engineer may have reasonable objection. Contractor shall not be required to employ any Subcontractor, Supplier or other person or organization to furnish or perform any of the work against whom Contractor has reasonable objection. Owner or Engineer will not undertake to settle any differences between Contractor and his Subcontractors or between Subcontractors. 6.5. USE OF PREMISES Contractor shall confine construction equipment, the storage of materials and equipment and the operations of works to the site and land areas identified in and permitted by the Contract Documents on other land areas permitted by Laws and Regulations, right-of-way, permits and easements, and shall not unreasonably encumber the premises with construction equipment or other materials or equipment. Contractor shall assume full responsibility for any damage to any such land or area, or to the owner or occupant thereof or of any adjacent land or areas, resulting from the performance of the Work. Should any claim be made by any such owner or occupant because of the performance of the Work, Contractor shall promptly settle with such other party by negotiation or otherwise resolve the claim by arbitration or other dispute resolution proceed in or SECTION III – General Conditions SECTION III Page 15 of 49 at law. Contractor shall, to the fullest extent permitted by Laws and Regulations, indemnify and hold harmless Owner, and their officials, directors, employees and agents (excluding any design professionals) from and against all claims, costs, losses and damages arising out of or resulting from any claim or action, legal or equitable, brought by any such owner or occupant against Owner, Engineer or any other party indemnified hereunder to the extent caused by or based upon Contractor's performance of the Work. During the progress of the Work, Contractor shall keep the premises free from accumulations of waste materials, rubbish and other debris resulting from the Work. At the completion of the Work or at intervals established by the Engineer, Contractor shall remove all waste materials, rubbish and debris from and about the premises as well as all tools, appliances, construction equipment and machinery and surplus materials. Contractor shall restore to original condition all property not designated for alteration by the Contract Documents. 6.5.1. STAGING AREAS The Contactor shall obtain and deliver to the City written permission for the use of all staging and storage areas outside of the Limits of Construction. Use of right of way within the limits of construction must be approved by the City. All applicable erosion control, tree barricade and restoration, including time limits, specifications, etc., must be followed. 6.5.2. RESTORATION TIME LIMITS The timely restoration of all impacted areas, especially right-of-ways, is very important to the Citizens of Clearwater therefore, these time limits are imposed: • Debris piles shall be removed within five (5) consecutive calendar days. • Concrete driveways and sidewalks shall be replaced within ten (10) consecutive calendar days of removal. Resident access shall be maintained at all times. • All arterial and collector roadways shall be restored ASAP. • Local streets and asphalt driveways shall be restored as soon as a sufficient quantity is generated, however, this is never to exceed fifteen (15) consecutive calendar days. Local and resident access shall be maintained at all times. • Any irrigation systems or components damaged or impacted by construction activities shall be repaired or replaced “in-kind” within forty-eight (48) hours to minimize the loss of turfgrass or landscape plantings, particularly during periods of drought. • Sod must be restored “in-kind” within fourteen (14) consecutive calendar days of a successful pipe pressure test, removal of concrete forms, backfill of excavations, replacement of driveways or sidewalks or another project specific milestone. It must be watered for a period of thirty (30) days after it is placed. Erosion control and dust control of denuded areas must be maintained at all times. If the project or a portion of it does not involve right-of ways, then a different schedule of sod restoration may be considered. 6.6. LICENSE AND PATENT FEES, ROYALTIES AND TAXES Contractor shall pay all license fees and royalties and assume all costs incident to the use in the performance of the work or the incorporation in the Work of any invention, design, process, product or device which is the subject of patent rights or copyrights held by others. If a particular invention, design, process, product or device is specified in the Contract Documents for use in the SECTION III – General Conditions SECTION III Page 16 of 49 performance of the work and if to the actual knowledge of Owner or Engineer its use is subject to patent rights or copyrights calling for the payment of any license fee or royalty to others, the existence of such rights shall be disclosed by Owner or Engineer in the Contract Documents. To the fullest extent permitted by Laws and Regulations, Contractor shall indemnify and hold harmless Owner, Engineer, Engineer's Consultants and the officers, directors, employees, agents and other consultants of each and any of them from and against all claims, costs, losses and damages arising out of or resulting from any infringement of patent rights or copyrights incident to the use in the performance of the Work or resulting from the incorporation in the Work of any invention, design, process, product or device not specified in the Contract Documents, and shall defend all such claims in connection with any alleged infringement of such rights. Contractor shall pay all sales, consumer, use and other taxes required to be paid by Contractor in accordance with the Laws and Regulations of the State of Florida and other governmental agencies, which are applicable during the performance of the work. 6.7. LAWS AND REGULATIONS Contractor shall give all notices and comply with all Laws and Regulations applicable to furnishing and performance of the Work. Except where otherwise expressly required by applicable Laws and Regulations, neither Owner nor Owner’s Representative shall be responsible for monitoring Contractor's compliance with any Laws or Regulations. If Contractor performs any work knowing or having reason to know that it is contrary to Laws or Regulations, Contractor shall bear all claims, costs, losses and damages caused by or arising out of such work: however, it shall not be Contractor's primary responsibility to make certain that the Specifications and Drawings are in accordance with Laws and Regulations, but this shall not relieve Contractor of Contractor's obligations to the Owner to report and resolve discrepancies as described above. When City projects include Federal or State funding, the requirements of Executive Order 11-02 shall be adhered to utilizing the Homeland Security E-Verify System to verify employment eligibility. 6.8. PERMITS Unless otherwise provided in the Supplementary Conditions, Contractor shall obtain and pay for all construction permits and licenses. The Owner shall assist Contractor, when necessary, in obtaining such permits and licenses. Contractor shall pay all governmental charges and inspection fees necessary for the prosecution of the Work, which are applicable at the time of opening of Bids. Contractor shall pay all charges of utility owners for connections to the work, and the Owner shall pay all charges of such utility owners for capital costs related thereto such as plant investment fees. Unless otherwise stated in the Contract Documents, Clearwater Building Permit Fees will be waived. 6.9. SAFETY AND PROTECTION Contractor shall be responsible for initiating, maintaining and supervising all safety precautions and programs in connection with the Work. Contractor shall take all necessary precautions for the safety of, and shall provide the necessary protection to prevent damage, injury or loss to: (i) all persons on the work site or who may be affected by the work, (ii) all the Work and materials and equipment to be incorporated therein, whether in storage on or off the site; and (iii) other property SECTION III – General Conditions SECTION III Page 17 of 49 at the site or adjacent thereto, including trees, shrubs, lawns, walks, pavements, roadways, structures, utilities and Underground Facilities not designated for removal, relocation or replacement in the course of construction. In the event of temporary suspension of the work, or during inclement weather, or whenever Owner’s Representative may direct; Contractor shall, and shall cause Subcontractors, to protect carefully the Work and materials against damage or injury from the weather. If, in the opinion of the Owner’s Representative, any portion of Work or materials shall have been damaged or injured by reason of failure on the part of the Contractor or any Subcontractors to so protect the Work, such Work and materials shall be removed and replaced at the expense of Contractor. The Contractor shall initiate and maintain an accident prevention program which shall include but shall not be limited to the establishment and supervision of programs for the education and training of employees in the recognition, avoidance and prevention of unsafe conditions and acts. Contractor shall provide first aid services and medical care to his employees. The Contractor shall develop and maintain an effective fire protection and prevention program and good housekeeping practices at the site of contract performance throughout all phases of construction, repair, alteration or demolition. Contractor shall require appropriate personal protective equipment in all operations where there is exposure to hazardous conditions. The Engineer may order that the work stop if a condition of immediate danger to the Owner’s employees, equipment or if property damage exists. This provision shall not shift responsibility or risk of loss for injuries of damage sustained from the Contractor to Owner, and the Contractor shall remain solely responsible for compliance with all safety requirements and for the safety of all persons and property at the site of Contract performance. The Contractor shall instruct his employees required to handle or use toxic materials or other harmful substances regarding their safe handling and use. The Contractor shall take the necessary precautions to protect pedestrians and motorists from harm, and to prevent disruptions of such traffic due to construction activity. Contractor shall comply with all applicable Laws and Regulations of any public body having jurisdiction for safety of persons or property and to protect them from damage, injury or loss; and shall erect and maintain all necessary safeguards for such safety and protection. Contractor shall notify owners of adjacent property and of Underground Facilities and utility owners when execution of the work may affect them, and shall cooperate with them in the protection, removal, relocation and replacement of their property. All damage, injury or loss to any property caused, directly or indirectly, in whole or part, by Contractor, any Subcontractor, Supplier or any other person or organization directly or indirectly employed by any of them to perform or furnish any of the work or anyone for whose acts any of them may be liable, shall be remedied by Contractor. Contractor's duties and responsibilities for safety and for protection of the Work shall continue until such time as all the Work is completed and Engineer has issued a notice to Owner and Contractor that the Work is acceptable. 6.10. EMERGENCIES In emergencies affecting the safety or protection of persons or the Work or property at the site or adjacent thereto, Contractor, with or without special instruction or authorization from Owner or the Owner’s Representative, is obligated to act to prevent damage, injury or loss. Contractor shall give Engineer prompt written notice if Contractor believes that any significant changes in the Work or variations from the Contract Documents have been caused thereby. If the Owner’s Representative determines that a change in the Contract Documents is required because of the action taken by Contractor in response to such an emergency, a Work Change Directive or Change Order will be issued to document the consequences of such action. SECTION III – General Conditions SECTION III Page 18 of 49 6.11. DRAWINGS 6.11.1. SHOP DRAWINGS, SAMPLES, RFIs, AND SUBMITTAL REVIEW Contractor shall submit Shop Drawings to Engineer for review and approval as called for in the Technical Specifications or required by the Engineer. The data shown on the Shop Drawings will be complete with respect to quantities, dimensions, specified performance and design criteria, materials and similar data to show Engineer the materials and equipment Contractor proposes to provide and to enable Engineer to review the information. Contractor shall also submit Samples to Engineer for review and approval. Before submitting each Shop Drawing or Sample, Contractor shall have determined and verified: (i) all field measurements, quantities, dimensions, specified performance criteria, installation requirements, materials, catalog numbers and similar information with respect thereto, (ii) all materials with respect to intended use, fabrication, shipping, handling, storage, assembly and installation pertaining to the performance of the Work, and (iii) all information relative to Contractor's sole responsibilities in respect to means, methods, techniques, sequences and procedures of construction and safety precautions and programs incident thereto. Contractor shall also have reviewed and coordinated each Shop Drawing or Sample with other Shop Drawings and Samples with the requirements of the Work and the Contract Documents. Each submittal will have a transmittal cover sheet identifying the shop drawing name, number, and technical specification reference; will bear a stamp or specific written indication that Contractor has satisfied Contractor's obligations under the Contract Documents with respect to Contractor's review and approval of that submittal. At the time of submission, Contractor shall give Engineer specific written notice of such variations, if any, that the Shop Drawing or Sample submitted may have from the requirements of the Contract Documents, such notice to be in a written communication separate from the submittal; and, in addition, shall cause a specific notation to be made on each Shop Drawing and Sample submitted to Engineer for review and approval of each such variation. The Contractor shall maintain a submittal log as mentioned in Article 2.5. The Engineer shall receive updated copies at each progress meeting, and the Engineer shall respond to each submittal within fourteen (14) consecutive calendar days. The Contractor shall maintain a request for information (RFI) log as mentioned in Article 2.5. The Engineer shall receive updated copies at each progress meeting, and the Engineer shall respond to each RFI within fourteen (14) consecutive calendar days. The untimely submission of Submittal or RFIs shall not be grounds for a delay claim from the Contractor. Engineer's review and approval of Shop Drawings and Samples will be only to determine if the items covered by the submittals will, after installation or incorporation in the Work, conform to the information given in the Contract Documents and be compatible with the design concept of the completed Project as a functioning whole as indicated the Contract Documents. Engineer's review and approval will not extend to means, methods, techniques, sequences or procedures of construction (except where a particular means method, technique, sequence or procedure of construction is specifically and expressly called for by the Contract Documents) or to safety precautions or programs incident thereto. The review and approval of a separate item as such will not indicate approval of the assembly in which the item functions. Contractor shall make corrections required by Engineer and shall return the required number of corrected copies of Shop Drawings and submit as required new Samples for review and approval. Contractor shall direct specific attention in writing to revisions other than the corrections called for by Engineer on previous submittals. SECTION III – General Conditions SECTION III Page 19 of 49 Engineer's review and approval of Shop Drawings or Samples shall not relieve Contractor from responsibility for any variation from the requirements of the Contract Documents unless Contractor has in writing called Engineer's attention to each such variation at the time of submission and Engineer has given written approval of each such variation by specific written notation thereof incorporated in or accompanying the Shop Drawing or Sample approval; nor will any approval by the Engineer relieve the Contractor from responsibility for complying with the requirements of paragraph above discussing field measurements by the Contractor. Contractor shall furnish required submittals with complete information and accuracy in order to achieve required approval of an item within two (2) submittals. Owner’s Representative reserves the right to backcharge Contractor, for Engineer’s costs for resubmittals that account for a number greater than twenty percent (20%) of the total number of first time submittals, per the approved initial submittal log. Owner’s Representative reserves the right to backcharge Contractor for all third submittals. The number of first-time submittals shall be equal to the number of submittals agreed to by Engineer and Contractor. All costs to Engineer involved with subsequent submittal of Shop Drawings, Samples or other items requiring approval will be backcharged to Contractor at the rate of 3.0 times direct technical labor cost by deducting such costs from payments due Contractor for Work completed. In the event that Contractor requests a substitution for a previously approved item, all of Engineer’s costs in the reviewing and approval of the substitution will be backcharged to Contractor, unless the need for such substitution is beyond the control of Contractor. 6.11.2. AS-BUILT DRAWINGS The Contractor shall keep and maintain one set of blueprints, As-Built Drawings, in good order and legible condition to be continuously marked-up at the job site. The Contractor shall mark and annotate neatly and clearly all project conditions, locations, configurations and any other changes or deviations which may vary from the details represented on the original Contract Plans, including revisions made necessary by Addenda, Shop Drawings, and Change Orders during the construction process. The Contractor shall record the horizontal and vertical locations, in the plan and profile, of all buried utilities that differ from the locations indicated or which were not indicated on the Contract Plans and buried (or concealed), construction and utility features which are revealed during the construction period. The As-Built Drawings shall be available for inspection by the Engineer, Engineer’s Consultant, and the Owner’s Representative at all times during the progress of the Project. The As-Built Drawings shall be reviewed by the Owner’s Representative, or his designee, for accuracy and compliance with the requirements of “As-Built Drawings” prior to submittal of the monthly pay requests. The pay requests shall be rejected if the marked-up redline prints do not conform to the “As-Built Drawings” requirements. As-Built Drawings shall be submitted to the Owner Inspector for approval upon completion of the project and prior to acceptance of final pay request. Final pay request shall not be processed until As-Built Drawings have been reviewed by the Engineer or the Engineer’s Consultant for accuracy and completeness. Prior to placing new potable water mains in service, the Contractor shall provide the Engineer intersection drawings, as specified for the water mains. The Owner’s acceptance of the “As-Built Drawings” does not relieve the Contractor of the sole responsibility for the accuracy and completeness of the As-Built Drawings. SECTION III – General Conditions SECTION III Page 20 of 49 6.11.2.1. General The Contractor shall prepare an “AS-BUILT SURVEY” per chapter 5J-17.052, Florida Administrative Code (see definition below), signed and sealed by a Florida registered land surveyor. The contractor will deliver to the Owner two hard copies of signed and sealed As-Built Drawings and an AutoCAD file. 5J-17.050 Definition: (10)(a) As-Built Survey: a survey performed to obtain horizontal and/or vertical dimensional data so that constructed improvements may be located and delineated: also known as Record Survey. This survey shall be clearly titled “As-Built Survey” and shall be signed and sealed by a Florida registered land surveyor. The survey must be delivered to the Owner of Clearwater Construction Division upon substantial completion of the project. If this condition is not met, the Owner will procure the services of a Professional Surveyor and Mapper registered in the State of Florida and will back charge the contractor a fee of $1,800 per day or any portion thereof to provide the Owner with the required As-Built Survey. 6.11.2.2. Sanitary and Storm Sewer Piping Systems 1. Manholes and inlets shall be located by survey coordinates (northing, easting and elevation) based on the approved horizontal and vertical datum or utilize the stationing supplied on the construction plans. New and replaced service connections shall be dimensioned to the nearest downstream manhole. All manholes, cleanouts and catch basin invert and rim elevations, manhole and catch basin dimensions, pipe sizes, and pipe material shall also be noted on the plan view and also on the profile if one exists. The terminal ends of all subdrains, inverts of all pipe in structures, and the flow line of inlets shall also be noted on the plan view and also on the profile if one exists. 2. Pipe materials and areas of special construction shall be noted. 6.11.2.3. Pressure Pipe construction (Water, Reclaimed Water, Forcemain) All pipes shall be located by survey coordinates (northing, easting and elevation) based on the approved horizontal and vertical datum or utilize the stationing supplied on the construction plans. Coordinates shall be at all pipe bends, tees, valves, reducers, and deflections. Also, all new and replaced service connections for potable and reclaimed water will be located as described above. Additionally, there must be survey coordinates no further than 100 feet apart on linear type construction and shall denote top of pipe elevation at those points. 6.11.2.4. Electrical and Control Wiring The as-built drawings shall include all changes to the original Contract Plans. The as-built drawings shall also include the size, color, and number of wires and conduit. For projects where this information is too voluminous to be contained on the blueline prints, the Contractor shall prepare supplemental drawings, on same size sheets as the blueline prints, showing the additional conduit runs, 1-line diagrams, ladder diagrams, and other information. The wiring schematic diagrams shall show termination location and wiring identification at each point on the ladder diagram. SECTION III – General Conditions SECTION III Page 21 of 49 6.11.2.5. Horizontal and Vertical Control The As-Built survey shall be based on the original datum used for the construction design plans or if required by the Owner the datum shall be referenced to the North American Datum of 1983/90 (horizontal) and the North American Vertical Datum of 1988. The unit of measurement shall be the United States Foot. Any deviation or use of any other datum, (horizontal and or vertical), must be approved by the Owner of Clearwater Engineering Department. 6.11.2.6. Standards The As-Built survey shall meet the Minimum Technical Standards per Chapter 5J-17 and the Clearwater CAD STANDARDS set forth below. In addition to locating all improvements that pertain to the as-built survey it is the requirement of the Owner to have minimum location points at every change in direction and no more than 100 feet apart on all pressure pipes. 6.11.2.7. Other The As-Built drawings shall reflect any differences from the original Contract Plans, in the same level of detail and units of dimensions as the Plans. 6.11.3. CAD STANDARDS 6.11.3.1. Layer Naming 6.11.3.1.1. Prefixes and Suffixes DI prefix denotes digitized or scanned entities EP prefix denotes existing points - field collected EX prefix denotes existing entities - line work and symbols PR prefix denotes proposed entities - line work and symbols FU prefix denotes future entities (proposed but not part of this contract) - line work and symbols TX suffix denotes text – use for all text, no matter the prefix 6.11.3.1.2. Layer Naming Definitions: GAS gas lines and appurtenances ELEC power lines and appurtenances PHONE telephone lines and appurtenances CABLE cable TV lines and appurtenances BOC curbs WALK sidewalk WATER water lines and appurtenances, sprinklers STORM storm lines and appurtenances TREES trees, bushes, planters SECTION III – General Conditions SECTION III Page 22 of 49 SANITARY sanitary lines and appurtenances FENCE all fences BLDG buildings, sheds, finished floor elevation DRIVE driveways EOP edge of pavement without curbs TRAFFIC signal poles, control boxes TOPBANK top of bank TOESLOPE toe of slope TOPBERM top of berm TOEBERM toe of berm SEAWALL seawall CONCSLAB concrete slabs WALL walls, except seawall SHORE shoreline, water elevation CL centerline of road CLD centerline of ditch CLS centerline of swale CORNER property corners, monumentation BENCH benchmark, temporary benchmarks Other layers may be created as required, using above format. 6.11.3.2. Layer Properties All layers will use standard AutoCAD linetypes, bylayer. All layers will use standard AutoCAD colors, bylayer. All text will use standard AutoCAD fonts. 6.11.3.3. Text Styles Text style for EX layers will use the simplex font, oblique angle of 0°, and a text height of .008 times the plot scale. Text style for PR and FU layers will use the simplex font, oblique angle of 22.5°, and a text height of .010 times the plot scale. 6.11.4. DELIVERABLES The as-built survey shall be produced on bond material, 24" x 36" at a scale of 1"=20’ unless approved otherwise. The consultant shall deliver two hard copies and one digital copy of all drawings. Requested file formats are: Autodesk DWG and Adobe PDF files. SECTION III – General Conditions SECTION III Page 23 of 49 Please address any questions regarding format to Mr. Tom Mahony, at (727) 562-4762 or e-mail address Thomas.Mahony@myClearwater.com. 6.12. CONTRACTOR'S GENERAL WARRANTY AND GUARANTEE Contractor warrants and guarantees to Owner, Engineer and Engineer's Consultants that all Work will be in accordance with the Contract Documents and will not be defective. Contractor's warranty and guarantee hereunder includes defects or damage caused by abuse, vandalism, modification or operation by persons other than Contractor, Subcontractors or Suppliers. Until the acceptance of the Work by the Owner, the Work shall be under the charge and care of the Contractor, and he shall take every necessary precaution against injury or damage to any part thereof by action of the elements, or from any other cause whatsoever, arising from the execution or non-execution of the Work. The Contractor shall rebuild, repair and make good, at his own expense, all injuries or damages to any portion of the Work occasioned by any cause before its completion and final acceptance by the Owner. In addition, “the Contractor shall remedy any defects in the work at his own expense and pay for any damage to other work resulting therefrom which appear within a period of one year from the date of final acceptance”. Contractor's warranty and guarantee hereunder excludes improper maintenance and operation by Owner's employees and normal wear and tear under normal usage for any portion of the Work, which has been partially accepted by the Owner for operation prior to final acceptance by the Owner. Contractor's obligation to perform and complete the Work in accordance with the Contract Documents shall be absolute. None of the following will constitute an acceptance of Work that is not in accordance with the Contract Documents or a release of Contractor's obligation to perform the Work in accordance with the Contract Documents: (i) observations by Owner’s Representative, (ii) recommendation of any progress or final payment by Owner’s Representative, (iii) the issuance of a certificate of Substantial Completion or any payment by the Owner to contractor under the Contract Documents, (iv) use or occupancy of the Work or any part thereof by Owner, (v) any acceptance by Owner or any failure to do so, (vi) any review and approval of a Shop Drawing or Sample submittal or the issuance of a notice of Acceptance by the Engineer. 6.13. CONTINUING THE WORK Contractor shall carry on the work and adhere to the progress schedule during all disputes or disagreements with the Owner. No work shall be delayed or postponed pending resolution of any disputes or disagreements, except as the Owner or Contractor may otherwise agree in writing. 6.14. INDEMNIFICATION To the fullest extent permitted by law, Contractor agrees to defend, indemnify, and hold the City, its officers, agents (excluding any design professionals), and employees, harmless from and against any and all liabilities, demands, claims, suits, losses, damages, causes of action, fines or judgments, including costs, attorneys’, witnesses’, and expert witnesses’ fees, and expenses incident thereto, relating to, arising out of, or resulting from: (i) the services provided by Contractor personnel under this Agreement; (ii) any negligent acts, errors, mistakes or omissions by Contractor or Contractor personnel; and (iii) Contractor or Contractor personnel’s failure to comply with or fulfill the obligations established by this Agreement. SECTION III – General Conditions SECTION III Page 24 of 49 Contractor will update the City during the course of the litigation to timely notify the City of any issues that may involve the independent negligence of the City that is not covered by this indemnification. The City assumes no liability for actions of Contractor and will not indemnify or hold Contractor or any third party harmless for claims based on this Agreement or use of Contractor-provided supplies or services. Notwithstanding anything contained herein to the contrary, this indemnification provision shall not be construed as a waiver of any immunity to which Owner is entitled or the extent of any limitation of liability pursuant to § 768.28, Florida Statutes. Furthermore, this provision is not intended to nor shall be interpreted as limiting or in any way affecting any defense Owner may have under § 768.28, Florida Statutes or as consent to be sued by third parties. 6.15. CHANGES IN COMPANY CONTACT INFORMATION Contractor shall notify Owner by US mail addressed to the City Engineer of any changes in company contact information. This includes contact phone, address, project manager, email addresses, etc. 6.16. PUBLIC RECORDS The ENGINEER will be required to comply with Section 119.0701, Florida Statutes (2014), specifically to: a) Keep and maintain public records required by the city of Clearwater (hereinafter “public agency”) to perform the service being provided by the contractor hereunder. b) Upon request from the public agency’s custodian of public records, provide the public agency with a copy of the requested records or allow the records to be inspected or copied within a reasonable time at a cost that does not exceed the cost provided for in Chapter 119, Florida Statutes, as many be amended from time to time, or as otherwise provided by law. c) Ensure that public records that are exempt or confidential and exempt from public records disclosure requirements are not disclosed except as authorized by law for the duration of the contract term and following completion of the contract if the contractor does not transfer the records to the public agency. d) Upon completion of the contract, transfer, at no cost, to the public agency all public records in possession of the contractor or keep and maintain public records required by the public agency to perform the service. If the contractor transfers all public records to the public agency upon completion of the contract, the contractor shall destroy any public records that are exempt or confidential and exempt from public records disclosure requirements. If the contractor keeps and maintains public records upon completion of the contract, the contractor shall meet all applicable requirements for the retaining public records. All records stored electronically must be provided to the public agency, upon request from the public agency’s custodian of public records in a format that is compatible with the information technology systems of the public agency. e) A request to inspect or copy public records relating to a public agency’s contract for services must be made directly to the public agency. If the public agency does not possess the requested records, the public agency shall immediately notify the contractor of the request and the contractor must provide the records to the public agency or allow the records to be inspected or copied within a reasonable time. SECTION III – General Conditions SECTION III Page 25 of 49 f) The Contractor hereby acknowledges and agrees that if the contractor does not comply with the public agency’s request for records, the public agency shall enforce the contract provisions in accordance with the contract. g) A Contractor who fails to provide the public records to the public agency within a reasonable time may be subject to penalties under Section 119.10, Florida Statutes. h) If a civil action is filed against a contractor to compel production of public records relating to a public agency’s contract for services, the court shall assess and award against the contractor the reasonable costs of enforcement, including reasonable attorney fees, if: 1. The court determines that the contractor unlawfully refused to comply with the public records request within a reasonable time; and 2. At least 8 business days before filing the action, the plaintiff provided written notice of the public request, including a statement that the contractor has not complied with the request, to the public agency and to the contractor. i) A notice complies with subparagraph (h)2. if it is sent to the public agency’s custodian of public records and to the contractor at the contractor’s address listed on its contract with the public agency or to the contractor’s registered agent. Global Express Guaranteed, or certified mail, with postage or shipping paid by the sender and with evidence of delivery, which may be in an electronic format. j) A contractor who complies with a public records request within 8 business days after the notice is sent is not liable for the reasonable costs of enforcement. 7. OTHER WORK 7.1. RELATED WORK AT SITE The City reserves the right to have its own forces enter the construction site at any time and perform work as necessary in order to perform infrastructure repair or maintenance, whether related to the project or not. The Contractor will allow complete access to all utility owners for these purposes. The City may have its own forces perform new work related to the project, however, this work will be identified in the Contract Scope of Work and coordination will be such that this activity is denoted in the Contractor’s CPM Schedule so as not to cause any delays or interference with the Contractor’s work or schedule. 7.2. COORDINATION If the Owner contracts with others for the performance of other work on the Project at the site, the following will be set forth in the Scope of Work: (i) the person who will have authority and responsibility for coordination of the activities among the various prime contractors will be identified; (ii) the specific matters to be covered by such authority and responsibility will be itemized; and (iii) the extent of such authority and responsibilities will be provided. Unless otherwise provided in the Supplementary Conditions, the Owner shall have sole authority and responsibility in respect of such coordination. 8. OWNERS RESPONSIBILITY Except as otherwise provided in these General Conditions, the Owner shall issue all communications from the Owner to the Contractor through Owner’s Representative. SECTION III – General Conditions SECTION III Page 26 of 49 The Owner shall furnish the data required of the Owner under the Contract Documents promptly and shall make payments to Contractor promptly when they are due as provided in these General Conditions. The Owner is obligated to execute Change Orders as indicated in the Article on Changes In The Work. The Owner’s responsibility in respect of certain inspections, tests, and approvals is set forth in the Article on Tests and Inspections. In connection with the Owner’s right to stop work or suspend work, see the Article on Engineer may Stop the Work. The Article on Suspension of Work and Termination deals with the Owner’s right to terminate services of Contractor under certain circumstances. Owner shall not supervise, direct or have control or authority over, nor be responsible for, Contractor's means, methods, techniques, sequences or procedures of construction or the safety precautions and programs incident thereto, or for any failure of Contractor to comply with Laws and Regulations applicable to the furnishing or performance of the Work. The Owner will not be responsible for Contractor’s failure to perform or furnish the Work in accordance with the Contract Documents. 9. OWNER REPRESENTATIVE’S STATUS DURING CONSTRUCTION 9.1. OWNERS REPRESENTATIVE Dependent of the project type, the Owner’s Representative during the construction period will either be the Construction Manager, the Engineer, or a designee of the Project’s Owner. The duties, responsibilities and the limitations of authority of Owner's Representative during construction are set forth in the Contract Documents and shall not be extended without written consent of Owner and Engineer. 9.2. CLARIFICATIONS AND INTERPRETATIONS Engineer will issue with reasonable promptness such written clarifications or interpretations of the requirements of the Contract Documents regarding design issues only, in the form of Submittal responses, RFI responses, Drawings or otherwise, as Engineer may determine necessary, which shall be consistent with the intent of and reasonably inferable from Contract Documents. All other clarifications and interpretations of the Contract Documents shall be issued form the Owner’s Representative. Such written clarifications and interpretations will be binding on the Owner and Contractor. If Contractor believes that a written clarification or interpretation justifies an adjustment in the Contract Price or the Contract Time and the parties are unable to agree to the amount or extent thereof, if any, Contractor may make a written claim therefore as provided in the Articles for Change of Work and Change of Contract Time. 9.3. REJECTING OF DEFECTIVE WORK The Owner's Representative or the Engineer will have authority to disapprove or reject Work which Owner's Representative or the Engineer believes to be defective, or that Owner's Representative or the Engineer believes will not produce a completed Project that conforms to the Contract Documents or that will prejudice the integrity of the design concept of the completed SECTION III – General Conditions SECTION III Page 27 of 49 Project as a functioning whole as indicated by the Contract Documents. The Owner's Representative or the Engineer will also have authority to require special inspection or testing of the Work whether or not the Work is fabricated, installed or completed. 9.4. SHOP DRAWINGS, CHANGE ORDERS, AND PAYMENTS In connection with Engineer's authority as to Shop Drawings and Samples, see articles on Shop Drawings and Samples. In connection with Owner's Representative authority as to Change Orders, see the articles on Changes of Work, Contract Price and Contract Time. In connection with Owner's Representative authority as to Applications for Payment, see the articles on Payments to Contractor and Completion. 9.5. DECISIONS ON DISPUTES The Owner's Representative will be the initial interpreter of the requirements of the Contract Documents and judge of the acceptability of the work thereunder. Claims, disputes and other matters relating to the acceptability of the work or the interpretation of the requirements of the Contract Documents pertaining to the performance and furnishing of the work and Claims under the Articles for Changes of Work, Changes of Contract Time and Changes of Contract Price will be referred initially to Owner's Representative in writing with a request for a formal decision in accordance with this paragraph. Written notice of each such claim, dispute or other matter will be delivered by the claimant to Owner's Representative and the other party to the Agreement promptly, but in no event later than thirty (30) days, after the start of the occurrence or event giving rise thereto, and written supporting data will be submitted to Owner's Representative and the other party within sixty (60) days after the start of such occurrence or event unless Owner's Representative allows an additional period of time for the submission of additional or more accurate data in support of such claim, dispute or other matter. The opposing party shall submit any response to Owner's Representative and the claimant within thirty (30) days after receipt of the claimant's last submittal, unless Owner's Representative allows additional time. Owner's Representative will render a formal decision in writing within thirty (30) days after receipt of the opposing party's submittal, if any, in accordance with this paragraph. Owner Representative’s written decision on such claim, dispute or other matter will be final and binding upon the Owner and Contractor unless (i) an appeal from Owner Representative's decision is taken within thirty (30) days of the Owner Representative’s decision, or the appeal time which may be stated in a Dispute Resolution Agreement between Owner and Contractor for the settlement of disputes or (ii) if no such Dispute Resolution Agreement has been entered into, a written notice of intention to appeal from Owner Representative’s written decision is delivered by the Owner or Contractor to the other and to Owner's Representative within thirty (30) days after the date of such decision and a formal proceeding is instituted by the appealing party in a forum of competent jurisdiction to exercise such rights or remedies as the appealing party may have with respect to such claim, dispute or other matter in accordance with applicable Laws and Regulations within sixty (60) days of the date of such decision, unless otherwise agreed in writing by the Owner and Contractor. When functioning as interpreter and judge, Owner's Representative will not show partiality to the Owner or Contractor and will not be liable in connection with any interpretation or decision rendered in good faith in such capacity. The rendering of a decision by Owner's Representative with respect to any such claim, dispute or other matter will be a condition precedent to any exercise by the Owner or Contractor of such rights or remedies as either may otherwise have under the Contract Documents or by Laws or Regulations in respect of any such claim, dispute or other matter pursuant the Article on Dispute Resolution. SECTION III – General Conditions SECTION III Page 28 of 49 9.6. LIMITATIONS ON OWNER REPRESENTATIVE'S RESPONSIBILITIES Neither Owner Representative's authority or responsibility under this paragraph or under any other provision of the Contract Documents nor any decision made by Owner's Representative in good faith either to exercise or not exercise such authority or responsibility or the undertaking, exercise or performance of any authority or responsibility by Owner's Representative shall create, impose or give rise to any duty owed by Owner's Representative to Contractor, any Subcontractor, any Supplier, any other person or organization or to any surety for or employee or agent of any of them. Owner's Representative will not supervise, direct, control or have authority over or be responsible for Contractor's means, methods, techniques, sequences or procedures of construction, or the safety precautions and programs incident thereto, or for any failure of Contractor to comply with Laws and Regulations applicable to the furnishing or performance of the work. Owner's Representative will not be responsible for Contractor's failure to perform or furnish the work in accordance with the Contract Documents. Owner's Representative will not be responsible for the acts or omissions of Contractor or of any Subcontractor, any Supplier, or of any other person or organization performing or furnishing any of the work. Owner Representative’s review of the final Application for Payment and accompanying documentation and all maintenance and operating instructions, schedules, guarantees, bonds and certificates of inspection, tests and approvals and other documentation required to be delivered by the Contractor will only be to determine generally that their content complies with the requirements of the Contract Documents and, in the case of certificates of inspections, tests and approvals that the results certified indicate compliance with the Contract Documents. The limitations upon authority and responsibility set forth in this paragraph shall also apply to Owner Representative’s CEI, the Engineer's Consultants, and assistants. 10. CHANGES IN THE WORK Without invalidating the Agreement and without notice to any surety, the Owner may, at any time or from time to time, order additions, deletions or revisions in the Work. Such additions, deletions or revisions will be authorized by a Written Amendment, a Change Order, or a Work Change Directive. Upon receipt of any such document, Contractor shall promptly proceed with the Work involved which will be performed under the applicable conditions of the Contract Documents (except as may otherwise be specifically provided). If the Owner and Contractor are unable to agree as to the extent, if any, of an adjustment in the Contract Price or an adjustment of the Contract Time that should be allowed as a result of a Work Change Directive, a claim may be made therefore as provided in these General Conditions. Contractor shall not be entitled to an increase in the Contract Price or an extension of the Contract Time with respect to any Work performed that is not required by the Contract Documents as amended, modified and supplemented as provided in these General Conditions except in the case of an emergency as provided or in the case of uncovering work as provided in article for Uncovering Work. The Owner and Contractor shall execute appropriate Change Orders or Written Amendments recommended by Owner’s Representative covering: SECTION III – General Conditions SECTION III Page 29 of 49 • changes in the work which are (i) ordered by the Owner (ii) required because of acceptance of defective work under the article for Acceptance of Defective Work or correcting defective Work under the article for Owner May Correct Defective Work or (iii) agreed to by the parties; • changes in the Contract Price or Contract Time which are agreed to by the parties; and • changes in the Contract Price or Contract Time which embody the substance of any written decision rendered by Owner’s Representative pursuant to the article for Decisions on Disputes; • provided that, in lieu of executing any such Change Order, an appeal may be taken from any such decision in accordance with the provisions of the Contract Documents and applicable Laws and Regulations, but during any such appeal, Contractor shall carry on the Work and adhere to the progress schedule as provided in the article for Continuing the Work. If notice of any change affecting the general scope of the work or the provisions of the Contract Documents (including, but not limited to, Contract Price or Contract Time) is required by the provisions of any Bond to be given to a surety, the giving of any such notice will be Contractor's responsibility, and the amount of each applicable Bond will be adjusted accordingly. 11. CHANGES IN THE CONTRACT PRICE 11.1. CHANGES IN THE CONTRACT PRICE The Contract Price constitutes the total compensation (subject to authorized adjustments) payable to Contractor for performing the Work. All duties, responsibilities and obligations assigned to or undertaken by Contractor shall be at Contractor's expense without change in the Contract Price. The Contract Price may only be adjusted by a Change Order or by a Written Amendment. Any claim for an adjustment in the Contract Price shall be based on a written notice of claim stating the general nature of the claim, to be delivered by the party making the claim to the other party and to Owner’s Representative or promptly (but in no event later than thirty days) after the start of the occurrence or event giving rise to the claim. Notice of the amount of the claim with supporting data shall be delivered within sixty (60) days after the start of such occurrence or event, unless Owner’s Representative allows additional time for claimant to submit additional or more accurate data in support of the claim, and shall be accompanied by claimant's written statement that the claimed adjustment covers all known amounts to which the claimant is entitled as a result of said occurrence or event. No claim for an adjustment in the Contract Price will be valid if not submitted in accordance with this paragraph. The value of any Work covered by a Change Order or of any claim for an adjustment in the Contract Price will be determined as follows: (i) where the Work involved is covered by unit prices contained in the Contract Documents, by application of such unit prices to the quantities of the items involved (ii) where the Work involved is not covered by unit prices contained in the Contract Documents, by a mutually agreed lump sum (which may include an allowance for overhead and profit), (iii) where the Work is not covered by unit prices contained in the Contract Documents and agreement is reached to establish unit prices for the Work. Where the work involved is not covered by unit prices contained in the Contract Documents and where the Owner’s Representative, the Owner, the Engineer, the Engineer's Consultant, and Contractor cannot mutually agree on a lump sum price, the City of Clearwater shall pay for directed changes in the Work, on “COST REIMBURSEMENT” basis. The Contractor shall apply for SECTION III – General Conditions SECTION III Page 30 of 49 compensation, detailing Contractors forces, materials, equipment, subcontractors, and other items of direct costs required for the directed work. The application for Cost Reimbursement shall be limited to the following items: 1. Labor, including foremen, for those hours associated with the direct work (actual payroll cost, including wages, fringe benefits, labor insurance and labor taxes established by law). Expressly excluded from this item are all costs associated with negotiating the subject change. 2. Materials associated with the change, including sales tax. The costs of materials shall be substantiated through vendors’ invoices. 3. Rental or equivalent rental costs of equipment, including necessary transportation costs if specifically used for the Work. The rental rates shall not exceed the current rental rates prevailing in the locality or as defined in the rental Rate Blue Book for Construction Equipment (a.k.a. DataQuest Blue Book). The rental rate is defined as the full-unadjusted base rental rate for the appropriate item of construction equipment and shall cover the costs of all fuel, supplies, repairs, insurance, and other costs associated with supplying the equipment for work ordered. Contractor-owned equipment will be paid for the duration of time required to complete the work. Utilize lowest cost combination of hourly, daily, weekly, or monthly rates. Do not exceed estimated operating costs given in Blue Book. Operating costs will not be allowed for equipment on stand-by. 4. Additional costs for Bonds, Insurance if required by the City of Clearwater. The following fixed fees shall be added to the costs of the directed work performed by the Contractor or Subcontractor. A. A fixed fee of fifteen percent (15%) shall be added to the costs of Item 1 above. If work is performed by a subcontractor, the Contractor’s fee shall not exceed five percent (5%), and the subcontractor’s fee shall not exceed ten percent (10%). B. A fixed fee of ten percent (10%) shall be added to the costs of Item 2 above. C. No markup shall be added to the costs of Items 3 and 4. The fixed fees shall be considered the full compensation for all cost of general supervision, overhead, profit, and other general expense. 11.2. ALLOWANCES AND FINAL CONTRACT PRICE ADJUSTMENT It is understood that Contractor has included in the Contract Price all allowances so named in the Contract Documents and shall cause the Work so covered to be furnished and performed for such sums as may be acceptable to Owner and Engineer. Contractor agrees that: (i) the allowances include the cost to Contractor (less any applicable trade discounts) of materials and equipment required by the allowances to be delivered at the Site, and all applicable taxes; and (ii) Contractor's costs for unloading and handling on the site, labor, installation costs, overhead, profit and other expenses contemplated for the allowances have been included in the Contract Price and not in the allowances and no demand for additional payment on account of any of the foregoing will be valid. Prior to final payment, an appropriate Change Order will be issued as recommended by Owner’s Representative to reflect actual amounts due Contractor on account of Work covered by SECTION III – General Conditions SECTION III Page 31 of 49 allowances and all the Work actually performed by the Contractor, and the Contract Price shall be correspondingly adjusted. 11.3. UNIT PRICE WORK Where the Contract Documents provide that all or part of the Work is to be Unit Price Work, initially the Contract Price will be deemed to include for all Unit Price Work an amount equal to the sum of the established unit price for each separately identified item of unit price work times the estimated quantity of each item as indicated in the Agreement. The estimated quantities of items of Unit Price Work are not guaranteed and are solely for the purpose of comparison of Bids and determining an initial Contract Price. Determinations of the actual quantities and classifications of Unit Price Work performed by Contractor will be made by Owner’s Representative. Each unit price will be deemed to include an amount considered by Contractor to be adequate to cover Contractor's overhead and profit for each separately identified item. The Owner or Contractor may make a claim for an adjustment in the Contract Price if: (i) the quantity of any item of Unit Price Work performed by Contractor differs materially and significantly from the estimated quantity of such item indicated in the Contract Documents; and (ii) there is no corresponding adjustment with respect to any other item of Work; and (iii) if Contractor believes that Contractor is entitled to an increase in Contract Price as a result of having incurred additional expense or the Owner believes that the Owner is entitled to a decrease in Contract Price and the parties are unable to agree as to the amount of any such increase or decrease. On unit price contracts, Owner endeavors to provide adequate unit quantities to satisfactorily complete the construction of the project. It is expected that in the normal course of project construction and completion that not all unit quantities will be used in their entirety and that a finalizing change order which adjusts contract unit quantities to those unit quantities actually used in the construction of the project will result in a net decrease from the original Contract Price. Such reasonable deduction of final Contract Price should be anticipated by the Contractor in his original bid. 12. CHANGES IN THE CONTRACT TIME The Contract Time (or Milestones) may only be changed by a Change Order or a Written Amendment. Any claim for an adjustment of the Contract Time (or Milestones) shall be based on written notice delivered by the party making the claim to the other party and to Owner’s Representative promptly, but in no event later than thirty (30) days, after the occurrence of the event giving rise to the claim and stating the general nature of the claim. Notice of the extent of the claim with supporting data shall be delivered within sixty (60) days after such occurrence, unless Owner’s Representative allows an additional period of time to ascertain more accurate data in support of the claim, and shall be accompanied by the claimant's written statement that the adjustment claimed is the entire adjustment to which the claimant has reason to believe it is entitled as a result of the occurrence of said event. All claims for adjustment in the Contract Time (or Milestones) shall be determined by Owner’s Representative. No claim for an adjustment in the Contract Time (or Milestones) will be valid if not submitted in accordance with the requirements of this paragraph. All time limits stated in the Contract Documents are of the essence of the Agreement. Where Contractor is prevented from completing any part of the work within the Contract Time (or Milestones) due to delay beyond the control of Contractor, the Contract Time (or Milestones) may be extended in an amount equal to the time lost due to such delay if a claim is made therefore as provided in the article for Changes in the SECTION III – General Conditions SECTION III Page 32 of 49 Work. Delays beyond the control of Contractor shall include, but not be limited to, acts by the Owner, acts of utility owners or other contractors performing other work as contemplated by the article for Other Work, fires, floods, epidemics, abnormal weather conditions or acts of God. Delays attributable to and within the control of a Subcontractor or Supplier shall be deemed to be delays within the control of Contractor. Where Contractor is prevented from completing any part of the Work within the Contract Times (or Milestones) due to delay beyond the control of both the Owner and Contractor, an extension of the Contract Time (or Milestones) in an amount equal to the time lost due to such delay shall be Contractor's sole and exclusive remedy for such delay. In no event shall the Owner be liable to Contractor, any Subcontractor, any Supplier, any other person, or to any surety for or employee or agent of any of them, for damages arising out of or resulting from (i) delays caused by or within the control of Contractor, or (ii) delays beyond the control of both parties including but not limited to fires, floods, epidemics, abnormal weather conditions, acts of God or acts by utility owners or other contractors performing other work as contemplated by paragraph for Other Work. 13. TESTS AND INSPECTIONS, CORRECTION, REMOVAL OR ACCEPTANCE OF DEFECTIVE WORK 13.1. TESTS AND INSPECTION Contractor shall give Owner’s Representative and Engineer timely notice of readiness of the Work for all required inspections, tests or approvals, and shall cooperate with inspection and testing personnel to facilitate required inspections or tests. Contractor shall employ and pay for the services of an independent testing laboratory to perform all inspections, tests, or approvals required by the Contract Documents. The costs for these inspections, tests or approvals shall be borne by the Contractor except as otherwise provided in the Contract Documents. If Laws or Regulations of any public body having jurisdiction require any Work (or part thereof) specifically to be inspected, tested or approved by an employee or other representative of such public body including all Owner Building Departments and Owner Utility Departments, Contractor shall assume full responsibility for arranging and obtaining such inspections, tests or approvals, pay all costs in connection therewith, and furnish Owner’s Representative the required certificates of inspection or approval. Unless otherwise stated in the Contract Documents, Owner permit and impact fees will be waived. Contractor shall also be responsible for arranging and obtaining and shall pay all costs in connection with any inspections, tests or approvals required for Owner's and Engineer's acceptance of materials or equipment to be incorporated in the Work, or of materials, mix designs, or equipment submitted for approval prior to Contractor's purchase thereof for incorporation of the Work. If any Work (or the work of others) that is to be inspected tested or approved is covered by Contractor without written concurrence of Owner’s Representative, it must, if requested by Owner’s Representative, be uncovered for observation. Uncovering Work as provided in this paragraph shall be at Contractor's expense unless Contractor has given Owner’s Representative and Engineer timely notice of Contractor's intention to cover the same and Owner’s Representative has not acted with reasonable promptness in response to such notice. SECTION III – General Conditions SECTION III Page 33 of 49 13.2. UNCOVERING THE WORK If any Work is covered contrary to the written request of Owner’s Representative, it must, if requested by Owner’s Representative, be uncovered for Owner Representative’s observation and replaced at Contractor's expense. If Owner’s Representative considers it necessary or advisable that covered Work be observed by Owner’s Representative or inspected or tested by others, Contractor, at Owner Representative’s request, shall uncover, expose or otherwise make available for observation, inspection or testing as Engineer or Owner’s Representative may require, that portion of the Work in question, furnishing all necessary labor, material and equipment. If it is found that such Work is defective, Contractor shall pay all claims, costs, losses and damages caused by, arising out of or resulting from such uncovering, exposure, observation, inspection and testing and of satisfactory replacement or reconstruction (including but not limited to all costs of repair or replacement of work of others); and the Owner shall be entitled to an appropriate decrease in the Contract Price for the costs of the investigation, and, if the parties are unable to agree as to the amount thereof, may make a claim therefore as provided in the article for Change in Contract Price. If, however, such Work is not found to be defective, Contractor shall be allowed an increase in the Contract Price or an extension of the Contract Time (or Milestones), or both, directly attributable to such uncovering, exposure, observation, inspection, testing, replacement and reconstruction; and, if the parties are unable to agree as to the amount or extent thereof, Contractor may make a claim therefore as provided the article for Change in Contract Price and Change of Contract Time. 13.3. OWNER’S REPRESENTATIVE MAY STOP THE WORK If the Work is defective, or Contractor fails to supply sufficient skilled workers or suitable materials or equipment, or fails to furnish or perform the Work in such a way that the completed Work will conform to the Contract Documents, Engineer or Owner’s Representative may order Contractor to stop the Work, or any portion thereof, until the cause for such order has been eliminated; however, this right of Owner’s Representative to stop the Work shall not give rise to any duty on the part of Owner’s Representative or Owner to exercise this right for the benefit of Contractor or any surety or other party. If the Owner’s Representative stops Work under this paragraph, Contractor shall be entitled to no extension of Contract Time or increase in Contract Price. 13.4. CORRECTION OR REMOVAL OF DEFECTIVE WORK If required by Engineer or Owner’s Representative, Contractor shall promptly, as directed, either correct all defective Work, whether or not fabricated, installed or completed, or, if the Work has been rejected by Engineer or Owner’s Representative, remove it from the site and replace it with Work that is not defective. Contractor shall pay all claims, costs, losses and damages caused by or resulting from such correction or removal (including but not limited to all costs of repair or replacement of work of others). 13.5. WARRANTY/CORRECTION PERIOD If within one year after the date of Substantial Completion or such longer period of time as may be prescribed by Laws or Regulations or by the terms of any applicable special guarantee required by the Contract Documents or by any specific provision of the Contract Documents, any Work is found to be defective, Contractor shall promptly, without cost to the Owner and in accordance with the Owner’s written instructions; (i) correct such defective Work, or, if it has been rejected by the SECTION III – General Conditions SECTION III Page 34 of 49 Owner, remove it from the site and replace it with Work that is not defective and (ii) satisfactorily correct or remove and replace any damage to other Work or the work of others resulting therefrom. If Contractor does not promptly comply with the terms of such instructions, or in an emergency where delay would cause serious risk of loss or damage, the Owner may have the defective Work corrected or the rejected. Work removed and replaced, and all claims, costs, losses and damages caused by or resulting from such removal and replacement (including but not limited to all costs of repair or replacement of work of others) will be paid by Contractor. In special circumstances where a particular item of equipment is placed in continuous service before Final Completion of all the Work, the correction period for that item may start to run from an earlier date if specifically, and expressly so provided in the Specifications or by Written Amendment. Where defective Work (and damage to other Work resulting therefrom) has been corrected, removed or replaced under this paragraph the correction period hereunder with respect to such Work will be extended for an additional period of one year after such correction or removal and replacement has been satisfactorily completed. 13.6. ACCEPTANCE OF DEFECTIVE WORK If, instead of requiring correction or removal and replacement of defective Work, the Owner prefers to accept it, the Owner may do so. Contractor shall pay all claims, costs, losses and damages attributable to the Owner’s evaluation of and determination to accept such defective Work such costs to be approved by Owner’s Representative as to reasonableness. If any such acceptance occurs prior to Owner Representative’s recommendation of final payment, a Change Order will be issued incorporating the necessary revisions in the Contract Documents with respect to the Work; and the Owner shall be entitled to an appropriate decrease in the Contract Price, and, if the parties are unable to agree as to the amount thereof, the Owner may make a claim therefore as provided in article for Change of Contract Price. If the acceptance occurs after the Owner Representative’s recommendation for final payment an appropriate amount will be paid by Contractor to the Owner. 13.7. OWNER MAY CORRECT DEFECTIVE WORK If Contractor fails within a reasonable time after written notice from Owner’s Representative to correct defective Work or to remove and replace rejected Work as required by Owner’s Representative in accordance with the article for Correction and Removal of Defective Work or if Contractor fails to perform the Work in accordance with the Contract Documents, or if Contractor fails to comply with any other provision of the Contract Documents, the Owner may, after seven days' written notice to Contractor, correct and remedy any such deficiency. In exercising the rights and remedies under this paragraph the Owner shall proceed expeditiously. In connection with such corrective and remedial action, the Owner may exclude Contractor from all or part of the site, take possession of all or part of the Work, and suspend Contractor's services related thereto, and incorporate in the Work all materials and equipment stored at the site or for which the Owner has paid Contractor but which are stored elsewhere. Contractor shall allow Owner, Owner’s Representatives, Agents and employees, the Owner’s other contractors, and Owner’s Representative, Engineer, and Engineer's Consultants access to the site to enable the Owner to exercise the rights and remedies under this paragraph. All claims, costs, losses and damages incurred or sustained by the Owner in exercising such rights and remedies will be charged against Contractor and a Change Order will be issued incorporating the necessary revisions in the Contract SECTION III – General Conditions SECTION III Page 35 of 49 Documents with respect to the Work; and the Owner shall be entitled to an appropriate decrease in the Contract Price, and, if the parties are unable to agree as to the amount thereof, the Owner may make a claim therefore as provided in the article for Change of Contract Price. Such claims, costs, losses and damages will include but not be limited to all costs of repair or replacement of work of others destroyed or damaged by correction, removal or replacement of Contractor's defective Work. Contractor shall not be allowed an extension of the Contract Time (or Milestones) because of any delay in the performance of the Work attributable to the exercise by the Owner of the Owner’s rights and remedies hereunder. 14. PAYMENTS TO CONTRACTOR AND COMPLETION Requests for payment shall be processed in accordance with F.S. 218.735 and as described herein. Progress payments on account of Unit Price Work will be based on the number of units completed. 14.1. APPLICATION FOR PROGRESS PAYMENT Contractor shall submit (not more often than once a month) to Owner’s Representative for review an Application for Payment filled out and signed by Contractor covering the Work completed once each month and accompanied by such supporting documentation as is required by the Owner’s Representative and the Contract Documents. Unless otherwise stated in the Contract Documents or pre-approved by Owner, payment will not be made for materials and equipment not incorporated in the Work. Payment will only be made for that portion of the Work, which is fully installed including all materials, labor and equipment. A retainage of not less than five (5%) of the amount of each Application for Payment for the total of all Work, including as-built survey and Inspector overtime reimbursement, completed to date will be held until final completion and acceptance of the Work covered in the Contract Documents. No progress payment shall be construed to be acceptance of any portion of the Work under contract. The Contractor shall review with the Engineer or the Construction Inspector all quantities and work for which payment is being applied for and reach agreement prior to submittal of an Official Pay Request. The Engineer or the Construction Inspector will verify that the on-site marked up as-built drawings are up to date with the work and are in compliance with the Contract Documents. In addition to all other payment provisions set out in this contract, the Owner’s Representative may require the Contractor to produce for Owner, within fifteen (15) days of the approval of any progress payment, evidence and/or payment affidavit that all subcontractors and suppliers have been paid any sum or sums then due. A failure on the part of the contractor to provide the report as required herein shall result in further progress or partial payments being withheld until the report is provided. 14.2. CONTRACTOR'S WARRANTY OF TITLE Contractor warrants and guarantees that title to all Work, materials and equipment covered by any Application for Payment, whether incorporated in the Project or not, will pass to the Owner no later than the time of payment, free and clear of liens. No materials or supplies for the Work shall be purchased by Contractor or Subcontractor subject to any chattel mortgage or under a conditional sale contact or other agreement by which an interest is retained by the seller. Contractor warrants that he has good title to all materials and supplies used by him in the Work, free from all liens, claims or encumbrances. Contractor shall indemnify and save the Owner harmless from all claims growing out of the lawful demands of Subcontractors, laborers, workmen, mechanics, materialmen, and furnishers of machinery and parts thereof, equipment, power tools, and all SECTION III – General Conditions SECTION III Page 36 of 49 supplies incurred in the furtherance of the performance of this Contract. Contractor shall at the Owner’s request, furnish satisfactory evidence that all obligations of nature hereinabove designated have been paid, discharged, or waived. If Contractor fails to do so, then the Owner may, after having served written notice on said Contractor either pay unpaid bills, of which the Owner has written notice, or withhold from the Contractor’s unpaid compensation a sum of money deemed reasonably sufficient to pay any and all such lawful claims until satisfactory evidence is furnished that all liabilities have been fully discharged, whereupon payment to Contractor shall be resumed in accordance with the terms of this Contract, but in no event shall the provisions of this sentence be construed to impose any obligations upon the Owner to the Contractor or the Surety. In paying any unpaid bills of the Contractor, the Owner shall be deemed the agent of Contractor and any payment so made by the Owner shall be considered as payment made under the Contract by the Owner to Contractor, and the Owner shall not be liable to Contractor for any such payment made in good faith. 14.3. REVIEW OF APPLICATIONS FOR PROGRESS PAYMENTS The Owner’s Representative will within twenty (20) business days after receipt authorize and process payment by the Owner a properly submitted and documented Application for payment, unless the application requires review by an Agent. If the Application for payment requires review and approval by an Agent, properly submitted and documented Applications for payment will be paid by the Owner within twenty-five (25) business days. If an Application for payment is rejected, notice shall be given within twenty (20) business days of receipt indicating the reasons for refusing payment. The reasons for rejecting an Application will be submitted in writing, specifying deficiencies and identifying actions that would make the Application proper. In the latter case, Contractor may make the necessary corrections and resubmit the Application. The Owner’s Representative or Agent may refuse to recommend the whole or any part of any payment to Owner. Owner’s Representative or Agent may also refuse to recommend any such payment, or, because of subsequently discovered evidence or the results of subsequent inspections or test, nullify any such payment previously recommended, to such extent as may be necessary in Owner Representative's or Agent’s opinion to protect the Owner from loss because: (i) the Work is defective, or completed Work has been damaged requiring correction or replacement, (ii) the Contract Price has been reduced by amendment or Change Order, (iii) the Owner has been required to correct defective Work or complete Work, or (iv) Owner’s Representative or Agent has actual knowledge of the occurrence of any of the events enumerated in the article on Suspension of Work and Termination. The Owner may refuse to make payment of the full amount recommended by the Owner’s Representative or Agent because: (i) claims have been made against the Owner on account of Contractor's performance or furnishing of the Work, (ii) Liens have been filed in connection with the Work, except where Contractor has delivered a specific Bond satisfactory to the Owner to secure the satisfaction and discharge of such Liens, (iii) there are other items entitling the Owner to a set-off against the amount recommended, or (iv) the Owner has actual knowledge of any of the events described in this paragraph. The Owner shall give Contractor notice of refusal to pay in accordance with the time constraints of this section with a copy to the Owner’s Representative or Agent, stating the reasons for such actions, and Owner shall promptly pay Contractor the amount so withheld, or any adjustment thereto agreed to by the Owner and Contractor, when Contractor corrects to the Owner’s satisfaction the reasons for such action. SECTION III – General Conditions SECTION III Page 37 of 49 14.4. PARTIAL UTILIZATION Use by the Owner at the Owner’s option of any substantially completed part of the Work which (i) has specifically been identified in the Contract Documents, or (ii) Owner, Engineer, Owner’s Representative, and Contractor agree constitutes a separately functioning and usable part of the Work that can be used by the Owner for its intended purpose without significant interference with Contractor's performance of the remainder of the Work, may be accomplished prior to Final Completion of all the Work subject to the following: The Owner at any time may request Contractor in writing to permit the Owner to use any such part of the Work which the Owner believes to be ready for its intended use and substantially complete. If Contractor agrees that such part of the Work is substantially complete, Contractor will certify to Owner, Owner’s Representative, and Engineer that such part of the Work is substantially complete and request Owner’s Representative to issue a certificate of Substantial Completion for that part of the Work. Contractor at any time may notify Owner, Owner’s Representative, and Engineer in writing that Contractor considers any such part of the Work ready for its intended use and substantially complete and request Owner’s Representative to issue a certificate of Substantial Completion for that part of the Work. Within a reasonable time after either such request, Owner, Contractor, Owner’s Representative, and Engineer shall make an inspection of that part of the Work to determine its status of completion. If Engineer does not consider that part of the Work to be substantially complete, Engineer will notify Owner, Owner’s Representative, and Contractor in writing giving the reasons therefore. If Engineer considers that part of the Work to be substantially complete, the provisions of the articles for Substantial Completion and Partial Utilization will apply with respect to certification of Substantial Completion of that part of the Work and the division of responsibility in respect thereof and access thereto. 14.5. FINAL INSPECTION Upon written notice from Contractor that the entire Work or an agreed portion thereof is complete, Owner’s Representative will make a final inspection with Engineer, Owner and Contractor and will within thirty (30) days notify Contractor in writing of particulars in which this inspection reveals that the Work is incomplete or defective. The Owner’s Representative will produce a final punch list, deliver it to the Contractor within five (5) days of completion and assign a date for this work to be completed not less than thirty (30) days from delivery of the list. Failure to include any corrective work or pending items does not alter the responsibility of the contractor to complete all the construction services purchased pursuant to the contract. Contractor shall immediately take such measures as are necessary to complete such Work or remedy such deficiencies. 14.6. FINAL APPLICATION FOR PAYMENT After Contractor has completed all such corrections to the satisfaction of Owner’s Representative and has delivered in accordance with the Contract Documents all maintenance and operating instructions, As-built/Record Drawings, schedules, guarantees, Bonds, certificates or other evidence of insurance required by the paragraph for Bonds and Insurance, certificates of inspection, Inspector overtime reimbursement as required in the Contract Documents and other documents, Contractor may make application for final payment following the procedure for progress payments. The final Application for Payment shall be accompanied (except as previously delivered) by: (i) all documentation called for in the Contract Documents, including but not limited to the evidence of insurance required by paragraph for Bonds and Insurance, and (ii) executed SECTION III – General Conditions SECTION III Page 38 of 49 consent of the surety to final payment using the form contained in Section V of the Contract Documents. Prior to application for final payment, Contractor shall clean and remove from the premises all surplus and discarded materials, rubbish, and temporary structures, and shall restore in an acceptable manner all property, both public and private, which has been damaged during the prosecution of the Work and shall leave the Work in a neat and presentable condition. 14.7. FINAL PAYMENT AND ACCEPTANCE If through no fault of Contractor, final completion of the Work is significantly delayed and if Owner’s Representative so confirms, the Owner shall, upon receipt of Contractor's final Application for payment and recommendation of Owner’s Representative, and without terminating the Agreement, make payment of the balance due for that portion of the Work fully completed and accepted. If the remaining balance to be held by the Owner for Work not fully completed or corrected is less than the retainage stipulated in the Agreement, and if Bonds have been furnished as required in paragraph for Bonds and Insurance, the written consent of the surety to the payment of the balance due for that portion of the Work fully completed and accepted shall be submitted by Contractor to Owner’s Representative with the Application for such payment. Such payment shall be made under the terms and conditions governing final payment, except that such payment shall not constitute a waiver of claims. If on the basis of Owner Representative’s observation of the Work during construction and final inspection, and Owner Representative’s review of the final Application for Payment and accompanying documentation, all as required by the Contract Documents, Owner’s Representative is satisfied that the Work has been completed and Contractor's other obligations under the Contract Documents have been fulfilled, Owner’s Representative will indicate in writing his recommendation of payment and present the Application to Owner for payment. Thereupon, Owner’s Representative will give written notice to Owner and Contractor that the Work is acceptable subject to the provisions of this article. Otherwise, Owner’s Representative will return the Application to Contractor, indicating in writing the reasons for refusing to recommend final payment, in which case Contractor shall make the necessary corrections and resubmit the Application. If the Application and accompanying documentation are appropriate as to form and substance, the Owner shall, within twenty (20) days after receipt thereof pay contractor the amount recommended by Owner’s Representative. 14.8. WAIVER OF CLAIMS The making and acceptance of final payment will constitute: a waiver of all claims by the Owner against Contractor, except claims arising from unsettled Liens, from defective Work appearing after final inspection, from failure to comply with the Contract Documents or the terms of any special guarantees specified therein, or from Contractor's continuing obligations under the Contract Documents; and a waiver of all claims by Contractor against the Owner other than those previously made in writing and still unsettled. 15. SUSPENSION OF WORK AND TERMINATION 15.1. OWNER MAY SUSPEND THE WORK At any time and without cause, Owner’s Representative may suspend the Work or any portion thereof for a period of not more than ninety (90) days by notice in writing to Contractor, which SECTION III – General Conditions SECTION III Page 39 of 49 will fix the date on which Work will be resumed. Contractor shall resume the Work on the date so fixed. Contractor shall be allowed an adjustment in the Contract Price or an extension of the Contract Times, or both, directly attributable to any such suspension if Contractor makes an approved claim therefore as provided in the articles for Change of Contract Price and Change of Contract Time. 15.2. OWNER MAY TERMINATE Upon the occurrence of any one or more of the following events; if Contractor persistently fails to perform the work in accordance with the Contract Documents (including, but not limited to, failure to supply sufficient skilled workers or suitable materials or equipment or failure to adhere to the progress schedule as adjusted from time to time); if Contractor disregards Laws and Regulations of any public body having jurisdiction; if Contractor disregards the authority of Owner’s Representative; if Contractor otherwise violates in any substantial way any provisions of the Contract Documents; or if the Work to be done under this Contract is abandoned, or if this Contract or any part thereof is sublet, without the previous written consent of the Owner, or if the Contract or any claim thereunder is assigned by Contractor otherwise than as herein specified, or at any time Owner’s Representative certifies in writing to the Owner that the rate of progress of the Work or any part thereof is unsatisfactory or that the work or any part thereof is unnecessarily or unreasonably delayed. The Owner may, after giving Contractor (and the surety, if any), seven days' written notice and, to the extent permitted by Laws and Regulations, terminate the services of Contractor, exclude Contractor from the site and take possession of the Work and of all Contractor's tools, appliances, construction equipment and machinery at the site and use the same to the full extent they could be used by Contractor (without liability to Contractor for trespass or conversion), incorporate in the Work all materials and equipment stored at the site or for which the Owner has paid Contractor but which are stored elsewhere, and finish the Work as the Owner may deem expedient. In such case Contractor shall not be entitled to receive any further payment until the Work is finished. If the unpaid balance of the Contract Price exceeds all claims, costs, losses and damages sustained by the Owner arising out of or resulting from completing the Work such excess will be paid to Contractor. If such claims, costs, losses and damages exceed such unpaid balance, Contractor shall pay the difference to the Owner. Such claims, costs, losses and damages incurred by the Owner will be reviewed by Owner’s Representative as to their reasonableness and when so approved by Owner’s Representative incorporated in a Change Order, provided that when exercising any rights or remedies under this paragraph the Owner shall not be required to obtain the lowest price for the Work performed. Where Contractor's services have been so terminated by the Owner, the termination will not affect any rights or remedies of the Owner against Contractor then existing or which may thereafter accrue. Any retention or payment of moneys due Contractor by the Owner will not release Contractor from liability. Upon seven (7) days' written notice to Contractor and Owner’s Representative, the Owner may, without cause and without prejudice to any other right or remedy of the Owner, elect to terminate the Agreement. In such case, Contractor shall be paid (without duplication of any items): SECTION III – General Conditions SECTION III Page 40 of 49 for completed and acceptable Work executed in accordance with the Contract Documents prior to the effective date of termination, including fair and reasonable sums for overhead and profit on such Work; for expenses sustained prior to the effective date of termination in performing services and furnishing labor, materials or equipment as required by the Contract Documents in connection with uncompleted Work, plus fair and reasonable sums for overhead and profit on such expenses; for all claims, costs, losses and damages incurred in settlement of terminated contracts with Subcontractors, Suppliers and others; and for reasonable expenses directly attributable to termination. Contractor shall not be paid on account of loss of anticipated profits or revenue or other economic loss arising out of or resulting from such termination. 15.3. CONTRACTOR MAY STOP WORK OR TERMINATE If, through no act or fault of Contractor, the Work is suspended for a period of more than ninety (90) days by the Owner or under an order of court or other public authority, or the Owner’s Representative fails to act on any Application for Payment within thirty (30) days after it is submitted or the Owner fails for thirty (30) days to pay Contractor any sum finally determined to be due, then Contractor may, upon seven (7) days' written notice to the Owner and Owner’s Representative, and provided the Owner or Owner’s Representative does not remedy such suspension or failure within that time, terminate the Agreement and recover from the Owner payment on the same terms as provided in the article for the Owner May Terminate. However, if the Work is suspended under an order of court through no fault of Owner, the Contractor shall not be entitled to payment except as the Court may direct. In lieu of terminating the Agreement and without prejudice to any other right or remedy, if Owner’s Representative has failed to act on an Application for Payment within thirty (30) days after it is submitted, or the Owner has failed for thirty (30) days to pay Contractor any sum finally determined to be due, Contractor may upon seven (7) days’ written notice to the Owner and Owner’s Representative stop the Work until payment of all such amounts due Contractor. The provisions of this article are not intended to preclude Contractor from making claim under paragraphs for Change of Contract Price or Change of Contract Time or otherwise for expenses or damage directly attributable to Contractor's stopping Work as permitted by this article. 16. DISPUTE RESOLUTION If and to the extent that the Owner and Contractor have agreed on the method and procedure for resolving disputes between them that may arise under this Agreement, such dispute resolution method and procedure will proceed. If no such agreement on the method and procedure for resolving such disputes has been reached, subject to the provisions of the article for Decisions on Disputes, the Owner and Contractor may exercise such rights or remedies as either may otherwise have under the Contract Documents or by Laws or Regulations in respect of any dispute provided, however, that nothing herein shall require a dispute to be submitted to binding arbitration. SECTION III – General Conditions SECTION III Page 41 of 49 17. MISCELLANEOUS 17.1. SUBMITTAL AND DOCUMENT FORMS The form of all submittals, notices, change orders, pay applications, logs, schedules and other documents permitted or required to be used or transmitted under the Contract Documents shall be determined by the Owner’s Representative subject to the approval of Owner. 17.2. GIVING NOTICE Whenever any provision of the Contract Documents requires the giving of written notice, notice will be deemed to have been validly given if delivered in person to the individual or to a member of the firm or to an officer of the corporation for whom it is intended, or if delivered or sent by registered or certified mail, postage prepaid, to the last business address known to the giver of the notice. 17.3. NOTICE OF CLAIM Should the Owner or Contractor suffer injury or damage to person or property because of any error, omission or any act of the other party or of any of the other party's officers, employees or agents or others for whose acts the other party is legally liable, claim will be made in writing to the other party within a reasonable time of the first observance of such injury or damage. The provisions of this paragraph shall not be construed as a substitute for or a waiver of the provisions of any applicable statute of limitations or repose. 17.4. PROFESSIONAL FEES AND COURT COSTS INCLUDED Whenever reference is made to "claims, costs, losses and damages," the phrase shall include in each case, but not be limited to, all fees and charges of engineers, architects, attorneys and other professionals and all court or other dispute resolution costs. 17.5. ASSIGNMENT OF CONTRACT The Contractor shall not assign this contract or any part thereof or any rights thereunder without the approval of Owner, nor without the consent of surety unless the surety has waived its rights to notice of assignment. 17.6. RENEWAL OPTION Annual Contracts issued through the Engineering Department may be renewed for up to three (3) years, upon mutual consent of both the Owner and the Contractor/Vendor. All terms, conditions and unit prices shall remain constant unless otherwise specified in the contract specifications or in the Invitation to bid. Renewals shall be made at the sole discretion of the Owner and must be agreed to in writing by both parties. All renewals are contingent upon the availability of funds, and the satisfactory performance of the Contractor as determined by the Construction Department. 17.7. ROLL-OFF CONTAINERS AND/OR DUMPSTERS All City construction projects shall utilize City of Clearwater Solid Waste roll-off containers and/or dumpsters for their disposal and hauling needs. For availability or pricing contact William SECTION III – General Conditions SECTION III Page 42 of 49 Buzzell, at the City of Clearwater, Solid Waste Department, by phone: (727) 562-4929 or email: William.Buzzell@myClearwater.com. 18. ORDER AND LOCATION OF THE WORK The City reserves the right to accept and use any portion of the work whenever it is considered to the public interest to do so. The Engineer shall have the power to direct on what line or street the Contractor shall work and order thereof. 19. MATERIAL USED All material incorporated into the final work shall be new material unless otherwise approved by the Engineer. If requested by the Engineer, the Contractor shall furnish purchase receipts of all materials. 20. CONFLICT BETWEEN PLANS AND SPECIFICATIONS The various Contract Documents shall be given precedence, in case of conflict, error or discrepancy, as follows: Modifications, Contract Agreement, Addenda, Supplementary General Conditions, General Conditions, Supplementary Technical Specifications and Technical Specifications. In a series of Modifications or Addenda the latest will govern. In the case of an inconsistency between Drawings and Specifications or within either Document not clarified by addendum, the better quality, more stringent or greater quantity of Work shall be provided in accordance with the Engineer/Architect’s interpretation. 21. OWNER DIRECT PURCHASE (ODP) 21.1. SALES TAX SAVINGS The Owner reserves the right to purchase certain portions of the materials or equipment for the Project directly in order to save applicable sales tax in compliance with Florida Law since owner is exempt from the payment of sales tax. The contract price includes Florida sales and other applicable taxes for materials, supplies, and equipment which will be a part of the Contractor's Work. Owner-purchasing of construction materials or equipment, if selected, will be administered on a deductive Change Order basis. The contract price shall be reduced by the actual cost of the materials or equipment purchased by owner plus the normally applicable sales tax, even if the actual cost is in excess of the cost for the materials or equipment as-bid by the Contractor. For purposes of calculating engineering fees, contractor fees, architects’ fees, and any other amounts that are based on the contract amount, however, the original, as-bid contract amount shall be used. Direct purchase shall be considered for single items or materials that exceed $10,000 in value and/or items identified in Section V, Bidders Proposal. The Contractor shall provide the Owner an ODP Summary of all intended suppliers, vendors, equipment and materials for consideration as ODP materials or equipment (refer to ODP Instructions in Contract Appendix). 21.2. TITLE AND OWNER RISK Owner will issue Purchase Orders and provide a copy of Owner’s Florida Consumer Certification of Tax Exemption and Certificate of Entitlement directly to the Vendor for ODP materials or SECTION III – General Conditions SECTION III Page 43 of 49 equipment. Invoices for ODP materials or equipment shall be issued to the Owner, and a copy sent to the Contractor. Notwithstanding the transfer of ODP materials or equipment by the Owner to the Contractor's possession, the Owner shall retain legal and equitable title to any and all ODP materials or equipment; therefore, the owner assumes the risk of damage or loss at the time of purchase or delivery of items, unless material is damaged as the result of negligence by the Contractor. 21.3. CONTRACTOR’S RECEIPT OF MATERIALS The Contractor shall be fully responsible for all matters relating to the receipt of materials or equipment furnished to the Owner including, but not limited to, verifying correct quantities, verifying documents of orders in a timely manner, coordinating purchases, providing and obtaining all warranties and guarantees required by the Contract Documents, and inspection and acceptance of the goods at the time of delivery. The Owner shall coordinate with Contractor and Vendor delivery schedules, sequence of delivery, loading orientation, and other arrangements normally required by the Contractor for the particular materials or equipment furnished. The Contractor shall provide all services required for the unloading and handling of materials or equipment. The Contractor agrees to indemnify and hold harmless the Owner from any and all claims of whatever nature resulting from non-payment of goods to suppliers arising from the action of the Contractor. As ODP materials or equipment are delivered to the job site, the Contractor shall visually inspect all shipments from the suppliers and approve the vendor's invoice for items delivered. The Contractor shall assure that each delivery of ODP materials or equipment is accompanied by documentation adequate to identify the Purchase Order against which the purchase is made. This documentation may consist of a delivery ticket and/or an invoice from the supplier conforming to the Purchase Order together with such additional information as the Owner may require. The Contractor will then forward an electronic copy of the invoice and supporting documentation to the Owner for payment within fourteen (14) calendar days of receipt of said goods or materials. Such payment shall be directly from public funds, from Owner to Vendor. The Contractor shall insure that ODP materials or equipment conform to the Specifications and determine prior to acceptance of goods at time of delivery if such materials or equipment are patently defective, and whether such materials or equipment are identical to the materials or equipment ordered and match the description on the bill of lading. If the Contractor discovers defective or non-conformities in ODP materials or equipment upon such visual inspection, the Contractor shall not utilize such nonconforming or defective materials or equipment in the Contractor's Work and instead shall properly notify the Owner of the defective or nonconforming condition so that repair or replacement of those materials or equipment can occur without undue delay or interruption to the Project. If the Contractor fails to perform such inspection and otherwise incorporates into the Contractor's Work such defective or nonconforming ODP materials or equipment, the condition of which it either knew or should have known by performance of an inspection, Contractor shall be responsible for all damages to the Owner, resulting from Contractor's incorporation of such materials or equipment into the Project, including liquidated damages. 21.4. ODP RECORDS, WARRANTIES AND INDEMNIFICATION The Contractor shall maintain records of all ODP materials or equipment it incorporates into Contractor's Work from the stock of ODP materials or equipment in its possession. The Contractor shall account monthly to the Owner for any ODP materials or equipment delivered into the SECTION III – General Conditions SECTION III Page 44 of 49 Contractor's possession, indicating portions of all such materials or equipment which have been incorporated in the Contractor's Work. The Contractor shall be responsible for obtaining and managing all warranties and guarantees for all materials, equipment and products as required by the Contract Documents. All repair, maintenance, or damage-repair calls shall be forwarded to the Contractor for resolution with the appropriate supplier, vendor, or subcontractor. The Owner shall indemnify and hold Contractor harmless from any sales tax (and interest and penalties incurred in connection therewith) in the event there is a final determination that purchases made by Owner, which Owner treats as being exempt from sales tax, are subject to sales tax. "Final determination" shall mean an assessment by the Department of Revenue that is no longer subject to protest, or a determination of a court having jurisdiction over such matters that is final and not subject to appeal. Contractor agrees to promptly notify owner of any audit, assessment, proposed assessment or notice of deficiency issued with regard to the Project and relating to ODP materials or equipment. ODP Purchase Orders must be closed out prior to closing out the contract/Contractor Purchase Order. If material costs needed for project exceed the ODP Purchase Order amount, the ODP Purchase Order will not be increased. Amounts in excess of the ODP Purchase Order will be paid for by the Contractor. 22. RESIDENT NOTIFICATION OF START OF CONSTRUCTION 22.1. GENERAL The Contractor shall notify all residents along the construction route or within a 500-foot radius, unless stated otherwise in the Contract Documents, with a printed door hanger notice indicating the following information about the proposed construction work and the Contractor performing the work: City seal or logo; the scheduled date for the start of construction; the type of construction; general sequence and scheduling of construction events; possibility of water service disruption and/or colored water due to construction efforts; Contractor’s name, the Superintendent’s name, Contractor address and telephone number; Contractor’s company logo (optional); requirement for residents to remove landscaping and/or other private appurtenances which are in conflict with the proposed construction; and other language as appropriate to the scope of Contract work. Sample door hanger including proposed language shall be approved by the City prior to the start of construction. Notification shall be printed on brightly colored and durable card stock and shall be a minimum of 4-¼ by 11 inches in size. Notification (door hanger) shall be posted to residences and businesses directly affected by the Contractor’s activities no later than seven (7) days prior to the start of construction activity. Directly affected by the Contractor’s activities shall mean all Contractor operations including staging areas, equipment and material storage, principal access routes across private property, etc. Contractor cannot start without proper seven (7) day notice period to residents. Contractor is required to maintain sufficient staff to answer citizen inquiries during normal business hours and to maintain appropriate message recording equipment to receive citizen inquires after business hours. Resident notification by the Contractor is a non-specific pay item to be included in the bid items provided in the contract proposal. SECTION III – General Conditions SECTION III Page 45 of 49 22.2. EXAMPLE NOTICE OF CONSTRUCTION TODAY’S DATE: ____/____/____ PLEASE EXCUSE US FOR ANY INCONVENIENCE We are the construction contractor performing the (state project name) for the City of Clearwater in your area. The work will be performed in the public right-of-way adjacent to your property. This notice is placed a minimum of seven (7) days in advance of construction to notify property owners of the pending start of construction. (Brief description of the construction process to be expected by the property owners) The construction process may necessitate the removal of certain items from the right-of-way. Typical items such as sprinklers, grass, and postal approved mailboxes will be replaced by the contractor within a reasonably short period of time. The replacement of driveways and sidewalks will be made using standard asphalt or concrete materials. The property owner is responsible for the expense and coordination to replace driveways and sidewalks which have customized colors, textures and/or materials. Small trees, shrubs, landscaping materials, unauthorized mailboxes or structures within the right-of-way which must be removed due to the construction process will not be replaced. The property owner is responsible to relocate any such items which the property owner wishes to save prior to the start of construction. Vehicles parked on the streets or within the right- of-way may be required to be placed elsewhere. We are available to answer any questions you may have regarding the construction process or any particular item that must be relocated. Please contact our Construction Manager ______________________ at (727) ____________. We will be more than happy to assist you. Construction is anticipated to begin on: ______________________. Company Name Company Address Contractor Phone Number 23. PROJECT INFORMATION SIGNS 23.1. SCOPE AND PURPOSE The Owner desires to inform the general public on the Owner's use and expenditure of public funding for general capital improvement and maintenance projects. To help accomplish this purpose, the Contractor is required to prepare and display public project information signs during the full course of the contract period. These signs will be displayed at all location(s) of active work. Payment to Contractor for the preparation, installation and management of project sign(s) shall be SECTION III – General Conditions SECTION III Page 46 of 49 included in the cost of the work. The number of and type of signs will be stated in SECTION IV, SCOPE OF WORK. 23.2. PROJECT SIGN, FIXED OR PORTABLE Sign type shall be "fixed" on stationary projects and "portable" on projects which have extended locations or various locations. The particular wording to be used on the signs will be determined after contract award has been approved. Contractor will be provided the wording to be used on sign at the preconstruction conference. 23.3. FIXED SIGN Fixed sign shall be 4-foot by 6-foot (4’x6’) in size and painted on a sheet of exterior grade plywood of the same size and a minimum thickness of 1/2-inches. Sign shall be attached to a minimum of two (2) 4-inch by 4-inch (4”x4”) below grade pressure treated (P.T.) wooden posts and braced as necessary for high winds. Posts shall be long enough to provide secure anchoring in the ground. Bottom of sign must be a minimum of 24-inches above the ground. Alternate mounting system or attachment to fencing or other fixed structure can be considered for approval. Sign shall be painted white on both sides with exterior rated paint. 23.4. PORTABLE SIGNS Portable sign shall be a minimum of 24-inches by 30-inches (24”x30”) in size and will be attached to a standard sized portable traffic barricade. Sign material shall be aluminum, 0.080-inches or thicker, background of white reflective sheeting, and shall be silkscreen or vinyl lettering. Portable sign shall be two signs located and attached to each side of the traffic barricade. 23.5. SIGN COLORING Background shall be white. Project Descriptive Name shall be in blue lettering. All other lettering shall be black. Basic lettering on sign shall be in all capital letters, of size proportional to the sign itself. Each sign shall depict the City’s logo. The Project Manager/City Representative shall provide the appropriate electronic logo file(s) to the Contractor. 23.6. SIGN PLACEMENT Signs shall be placed where they are readily visible by the general public which pass by the project site. Signs are not to be placed where they may become a hazard or impediment to either pedestrian or vehicular traffic. For construction projects outside of the Owner’s right-of-way, the signs will be placed on the project site. For projects constructed inside of the Owner's right-of-way, the signs will be placed in the right-of-way. Portable signs are to be moved to the locations of active work on the project. Multiple portable signs will be necessary where work is ongoing in several locations at the same time. Fixed signs are to be placed at the start of construction and will remain in place until the request for final payment. 23.7. SIGN MAINTENANCE The Contractor is responsible for preparation, installation, movement, maintenance, replacement, removal and disposal of all project signs during the full course of the contract period. The Contractor will place and secure portable signs from dislocation by wind or other actions. Signs are to be cleaned as necessary to maintain legibility and immediately replaced if defaced. SECTION III – General Conditions SECTION III Page 47 of 49 23.8. TYPICAL PROJECT SIGN 24. AWARD OF CONTRACT, WORK SCHEDULE AND GUARANTEE It will be required that the work will commence not later than five (5) calendar days after the Engineer gives written Notice to Proceed (NTP), which notice shall be given as outlined in Article 2 of these General Conditions. It is further required that all work within this contract be completed within the indicated number of consecutive calendar days as determined in Section IV, Scope of Work. Contract Time to commence at start date noted on the Notice to Proceed. If the Contractor fails to complete the work within the stipulated time, the City will retain the amount stated in the Contract, per calendar day, for each day that the contract remains incomplete. The work shall be discontinued on Saturdays, Sundays, and approved Holidays. If it becomes necessary for the Contractor to perform work on Saturdays, Sundays, and approved City of Clearwater Employee Holidays, that in the opinion of the Engineer, will require the presence of Inspectors, the Contractor shall pay the City of SECTION III – General Conditions SECTION III Page 48 of 49 Clearwater, Florida, the amount of Four Hundred Eighty Dollars ($480.00) per each eight-hour (8) day for each Inspector given such assignment. The Contractor shall remedy any defects in the work at his own expense and pay for any damage to other work resulting therefrom which appear within a period of one (1) year from the date of final acceptance. 25. SCRUTINIZED COMPANIES AND BUSINESS OPERATIONS WITH CUBA AND SYRIA CERTIFICATION FORM AND ISRAEL CERTIFICATION FORM Pursuant to Section 287.135, Florida Statutes, any vendor, company, individual, principal, subsidiary, affiliate, or owner on the Scrutinized Companies with Activities in Sudan List, the Scrutinized Companies with Activities in the Iran Petroleum Energy Sector List, or is engaged in business operations in Cuba or Syria, is ineligible for, and may not bid on, submit a proposal for, or enter into or renew a contract with the City of Clearwater for goods or services for an amount equal to or greater than one million ($1,000,000.00) dollars. Any vendor, company, individual, principal, subsidiary, affiliate, or owner on the Scrutinized Companies that Boycott Israel List, or is engaged in a boycott of Israel, is ineligible for, and may not bid on, submit a proposal for, or enter into or renew a contract with the City of Clearwater for goods or services for ANY amount. Each entity submitting a bid, proposal, or response to a solicitation must certify to the City of Clearwater that it is not on the aforementioned lists, or engaged in business operations in Cuba or Syria, or engaged in a boycott of Israel at the time of submitting a bid, proposal or response, in accordance with Section 287.135, Florida Statutes. Business Operations means, for purposes specifically related to Cuba or Syria, engaging in commerce in any form in Cuba or Syria, including, but not limited to, acquiring, developing, maintaining, owning, selling, possessing, leasing or operating equipment, facilities, personnel, products, services, personal property, real property, military equipment, or any other apparatus of business or commerce. Boycott Israel or boycott of Israel means refusing to deal, terminating business activities, or taking other actions to limit commercial relations with Israel, or persons or entities doing business in Israel or in Israeli- controlled territories, in a discriminatory manner. A statement by a company that it is participating in a boycott of Israel, or that it has initiated a boycott in response to a request for a boycott of Israel or in compliance with, or in furtherance of, calls for a boycott of Israel, may be considered as evidence that a company is participating in a boycott of Israel. The certification forms (the Certification) are attached hereto, and must be submitted, along with all other relevant contract documents, at the time of submitting a bid, proposal, or response. Failure to provide the Certification may deem the entity’s submittal non-responsive. If the City of Clearwater determines that an entity has submitted a false certification form, been placed on the Scrutinized Companies with Activities in Sudan List or the Scrutinized Companies with Activities in the Iran Petroleum Energy Sector List or the Scrutinized Companies that Boycott Israel List, or engaged in business operations in Cuba or Syria, or engaged in a boycott of Israel, then the contract may be terminated at the option of the City of Clearwater. Other than the submission of a false certification, the City of Clearwater, on a case-by-case basis and in its sole discretion, may allow a company to bid on, submit a proposal for, or enter into or renew a contract for goods or services, if the conditions set forth in Section 287.135, Florida Statutes, apply. The City retains the right to pursue civil penalties and any other applicable rights and remedies as provided by law for the false submission of the attached certification forms. SECTION III – General Conditions SECTION III Page 49 of 49 See Section V of the Contract for Certification Forms to be executed and submitted with the Bid/Proposal Form. 1 RFQ #52-19 – Standard Terms and Conditions S.1 INDEPENDENT CONTRACTOR. It is expressly understood that the relationship of Contractor to the City will be that of an independent contractor. Contractor and all persons employed by Contractor, either directly or indirectly, are Contractor’s employees, not City employees. Accordingly, Contractor and Contractor’s employees are not entitled to any benefits provided to City employees including, but not limited to, health benefits, enrollment in a retirement system, paid time off or other rights afforded City employees. Contractor employees will not be regarded as City employees or agents for any purpose, including the payment of unemployment or workers’ compensation. If any Contractor employees or subcontractors assert a claim for wages or other employment benefits against the City, Contractor will defend, indemnify and hold harmless the City from all such claims. S.2 SUBCONTRACTING. Contractor may not subcontract work under this Agreement without the express written permission of the City. If Contractor has received authorization to subcontract work, it is agreed that all subcontractors performing work under the Agreement must comply with its provisions. Further, all agreements between Contractor and its subcontractors must provide that the terms and conditions of this Agreement be incorporated therein. S.3 ASSIGNMENT. This Agreement may not be assigned either in whole or in part without first receiving the City’s written consent. Any attempted assignment, either in whole or in part, without such consent will be null and void and in such event the City will have the right at its option to terminate the Agreement. No granting of consent to any assignment will relieve Contractor from any of its obligations and liabilities under the Agreement. S.4 SUCCESSORS AND ASSIGNS, BINDING EFFECT. This Agreement will be binding upon and inure to the benefit of the parties and their respective permitted successors and assigns. S.5 NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the exclusive benefit of the parties. Nothing set forth in this Agreement is intended to create, or will create, any benefits, rights, or responsibilities in any third parties. S.6 NON- EXCLUSIVITY. The City, in its sole discretion, reserves the right to request the materials or services set forth herein from other sources when deemed necessary and appropriate. No exclusive rights are encompassed through this Agreement. S.7 AMENDMENTS. There will be no oral changes to this Agreement. This Agreement can only be modified in a writing signed by both parties. No charge for extra work or material will be allowed unless approved in writing, in advance, by the City and Contractor. S.8 TIME OF THE ESSENCE. Time is of the essence to the performance of the parties’ obligations under this Agreement. S.9 COMPLIANCE WITH APPLICABLE LAWS. a. General. Contractor must procure all permits and licenses, and pay all charges and fees necessary and incidental to the lawful conduct of business. Contractor must stay fully informed of existing and future federal, state, and local laws, ordinances, and regulations that in any manner affect the fulfillment of this Agreement and must comply with the same at its own expense. Contractor bears full responsibility for training, safety, and providing necessary equipment for all Contractor personnel to achieve throughout the term of the Agreement. Upon request, Contractor will demonstrate to the City's satisfaction any programs, procedures, and other activities used to ensure compliance. b. Drug-Free Workplace. Contractor is hereby advised that the City has adopted a policy establishing a drug-free workplace for itself and those doing business with the City to ensure the safety and health of all persons working on City contracts and projects. Contractor will require a drug-free workplace for all Contractor personnel working under this Agreement. Specifically, all Contractor personnel who are working under this Agreement must be notified in writing by Contractor that they are prohibited from the manufacture, distribution, dispensation, possession, or unlawful use of a controlled substance in the workplace. 2 Contractor agrees to prohibit the use of intoxicating substances by all Contractor personnel, and will ensure that Contractor personnel do not use or possess illegal drugs while in the course of performing their duties. c. Federal and State Immigration Laws. Contractor agrees to comply with the Immigration Reform and Control Act of 1986 (IRCA) in performance under this Agreement and to permit the City and its agents to inspect applicable personnel records to verify such compliance as permitted by law. Contractor will ensure and keep appropriate records to demonstrate that all Contractor personnel have a legal right to live and work in the United States. (i) As applicable to Contractor, under this provision, Contractor hereby warrants to the City that Contractor and each of its subcontractors will comply with, and are contractually obligated to comply with, all federal immigration laws and regulations that relate to their employees (hereinafter “Contractor Immigration Warranty”). (ii) A breach of the Contractor Immigration Warranty will constitute as a material breach of this Agreement and will subject Contractor to penalties up to and including termination of this Agreement at the sole discretion of the City. (iii) The City retains the legal right to inspect the papers of all Contractor personnel who provide services under this Agreement to ensure that Contractor or its subcontractors are complying with the Contractor Immigration Warranty. Contractor agrees to assist the City in regard to any such inspections. (iv) The City may, at its sole discretion, conduct random verification of the employment records of Contractor and any subcontractor to ensure compliance with the Contractor Immigration Warranty. Contractor agrees to assist the City in regard to any random verification performed. (v) Neither Contractor nor any subcontractor will be deemed to have materially breached the Contractor Immigration Warranty if Contractor or subcontractor establishes that it has complied with the employment verification provisions prescribed by Sections 274A and 274B of the Federal Immigration and Nationality Act. d. Nondiscrimination. Contractor represents and warrants that it does not discriminate against any employee or applicant for employment or person to whom it provides services because of race, color, religion, sex, national origin, or disability, and represents and warrants that it complies with all applicable federal, state, and local laws and executive orders regarding employment. Contractor and Contractor’s personnel will comply with applicable provisions of Title VII of the U.S. Civil Rights Act of 1964, as amended, Section 504 of the Federal Rehabilitation Act, the Americans with Disabilities Act (42 U.S.C. § 12101 et seq.), and applicable rules in performance under this Agreement. S.10 SALES/USE TAX, OTHER TAXES. a. Contractor is responsible for the payment of all taxes including federal, state, and local taxes related to or arising out of Contractor’s services under this Agreement, including by way of illustration but not limitation, federal and state income tax, Social Security tax, unemployment insurance taxes, and any other taxes or business license fees as required. If any taxing authority should deem Contractor or Contractor employees an employee of the City, or should otherwise claim the City is liable for the payment of taxes that are Contractor’s responsibility under this Agreement, Contractor will indemnify the City for any tax liability, interest, and penalties imposed upon the City. b. The City is exempt from paying state and local sales/use taxes and certain federal excise taxes and will furnish an exemption certificate upon request. S.11 AMOUNTS DUE THE CITY. Contractor must be current and remain current in all obligations due to the City during the performance of services under the Agreement. Payments to Contractor may be offset by any delinquent amounts due the City or fees and charges owed to the City. 3 S.12 OPENNESS OF PROCUREMENT PROCESS. Written competitive proposals, replies, oral presentations, meetings where vendors answer questions, other submissions, correspondence, and all records made thereof, as well as negotiations or meetings where negotiation strategies are discussed, conducted pursuant to this RFP, shall be handled in compliance with Chapters 119 and 286, Florida Statutes. Proposals or replies received by the City pursuant to this RFP are exempt from public disclosure until such time that the City provides notice of an intended decision or until 30 days after opening the proposals, whichever is earlier. If the City rejects all proposals or replies pursuant to this RFP and provides notice of its intent to reissue the RFP, then the rejected proposals or replies remain exempt from public disclosure until such time that the City provides notice of an intended decision concerning the reissued RFP or until the City withdraws the reissued RFP. A proposal or reply shall not be exempt from public disclosure longer than 12 months after the initial City notice rejecting all proposals or replies. Oral presentations, meetings where vendors answer questions, or meetings convened by City staff to discuss negotiation strategies, if any, shall be closed to the public (and other proposers) in compliance with Chapter 286 Florida Statutes. A complete recording shall be made of such closed meeting. The recording of, and any records presented at, the exempt meeting shall be available to the public when the City provides notice of an intended decision or until 30 days after opening proposals or final replies, whichever occurs first. If the City rejects all proposals or replies pursuant to this RFP and provides notice of its intent to reissue the RFP, then the recording and any records presented at the exempt meeting remain exempt from public disclosure until such time that the City provides notice of an intended decision concerning the reissued RFP or until the City withdraws the reissued RFP. A recording and any records presented at an exempt meeting shall not be exempt from public disclosure longer than 12 months after the initial City notice rejecting all proposals or replies. S.13 AUDITS AND RECORDS. Contractor must preserve the records related to this Agreement for five (5) years after completion of the Agreement. The City or its authorized agent reserves the right to inspect any records related to the performance of work specified herein. In addition, the City may inspect any and all payroll, billing or other relevant records kept by Contractor in relation to the Agreement. Contractor will permit such inspections and audits during normal business hours and upon reasonable notice by the City. The audit of records may occur at Contractor’s place of business or at City offices, as determined by the City. However, to the extent that any lump sums, billable rates, fixed percentages, or multipliers are negotiated and established in advance within the Contract Documents, they will be auditable only to confirm their proper application and not their composition. S.14 BACKGROUND CHECK. The City may conduct criminal, driver history, and all other requested background checks of Contractor personnel who would perform services under the Agreement or who will have access to the City’s information, data, or facilities in accordance with the City’s current background check policies. Any officer, employee, or agent that fails the background check must be replaced immediately for any reasonable cause not prohibited by law. S.15 SECURITY CLEARANCE AND REMOVAL OF CONTRACTOR PERSONNEL. The City will have final authority, based on security reasons: (i) to determine when security clearance of Contractor personnel is required; (ii) to determine the nature of the security clearance, up to and including fingerprinting Contractor personnel; and (iii) to determine whether or not any individual or entity may provide services under this Agreement. If the City objects to any Contractor personnel for any reasonable cause not prohibited by law, then Contractor will, upon notice from the City, remove any such individual from performance of services under this Agreement. S.16 DEFAULT. a. A party will be in default if that party: (i) Is or becomes insolvent or is a party to any voluntary bankruptcy or receivership proceeding, makes an assignment for a creditor, or there is any similar action that affects Contractor’s capability to perform under the Agreement; 4 (ii) Is the subject of a petition for involuntary bankruptcy not removed within sixty (60) calendar days; (iii) Conducts business in an unethical manner or in an illegal manner; or (iv) Fails to carry out any term, promise, or condition of the Agreement. b. Contractor will be in default of this Agreement if Contractor is debarred from participating in City procurements and solicitations in accordance with Section 27 of the City’s Purchasing and Procedures Manual. c. Notice and Opportunity to Cure. In the event a party is in default then the other party may, at its option and at any time, provide written notice to the defaulting party of the default. The defaulting party will have thirty (30) days from receipt of the notice to cure the default; the thirty (30) day cure period may be extended by mutual agreement of the parties, but no cure period may exceed ninety (90) days. A default notice will be deemed to be sufficient if it is reasonably calculated to provide notice of the nature and extent of such default. Failure of the non-defaulting party to provide notice of the default does not waive any rights under the Agreement. d. Anticipatory Repudiation. Whenever the City in good faith has reason to question Contractor’s intent or ability to perform, the City may demand that Contractor give a written assurance of its intent and ability to perform. In the event that the demand is made and no written assurance is given within five (5) calendar days, the City may treat this failure as an anticipatory repudiation of the Agreement. S.17 REMEDIES. The remedies set forth in this Agreement are not exclusive. Election of one remedy will not preclude the use of other remedies. In the event of default: I. The non-defaulting party may terminate the Agreement, and the termination will be effective immediately or at such other date as specified by the terminating party. II. The City may purchase the services required under the Agreement from the open market, complete required work itself, or have it completed at the expense of Contractor. If the cost of obtaining substitute services exceeds the contract price, the City may recover the excess cost by: (i) requiring immediate reimbursement to the City; (ii) deduction from an unpaid balance due to Contractor; (iii) collection against the proposal and/or performance security, if any; (iv) collection against liquidated damages (if applicable); or (v) a combination of the aforementioned remedies or other remedies as provided by law. Costs includes any and all, fees, and expenses incurred in obtaining substitute services and expended in obtaining reimbursement, including, but not limited to, administrative expenses, attorneys’ fees, and costs. III. The non-defaulting party will have all other rights granted under this Agreement and all rights at law or in equity that may be available to it. IV. Neither party will be liable for incidental, special, or consequential damages. S.18 CONTINUATION DURING DISPUTES. Contractor agrees that during any dispute between the parties, Contractor will continue to perform its obligations until the dispute is settled, instructed to cease performance by the City, enjoined or prohibited by judicial action, or otherwise required or obligated to cease performance by other provisions in this Agreement. S.19 TERMINATION FOR CONVENIENCE. The City reserves the right to terminate this Agreement in part or in whole upon thirty (30) calendar days’ written notice. S.20 TERMINATION FOR CONFLICT OF INTEREST F.S. Section 112. Pursuant to F.S. Section 112, the City may cancel this Agreement without penalty or further obligation, if any person significantly involved in initiating, securing, drafting, or creating the Agreement for the City becomes an employee or agent of Contractor. S.21 TERMINATION FOR NON-APPROPRIATION AND MODIFICATION FOR BUDGETARY CONSTRAINT. The City is a governmental agency which relies upon the appropriation of funds by its governing body to satisfy its obligations. If the City reasonably determines that it does not 5 have funds to meet its obligations under this Agreement, the City will have the right to terminate the Agreement without penalty on the last day of the fiscal period for which funds were legally available. In the event of such termination, the City agrees to provide written notice of its intent to terminate thirty (30) calendar days prior to the stated termination date. S.22 PAYMENT TO CONTRACTOR UPON TERMINATION. Upon termination of this Agreement, Contractor will be entitled only to payment for those services performed up to the date of termination, and any authorized expenses already incurred up to such date of termination. The City will make final payment within thirty (30) calendar days after the City has both completed its appraisal of the materials and services provided and received Contractor’s properly prepared final invoice. S.23 NON-WAIVER OF RIGHTS. There will be no waiver of any provision of this agreement unless approved in writing and signed by the waiving party. Failure or delay to exercise any rights or remedies provided herein or by law or in equity, or the acceptance of, or payment for, any services hereunder, will not release the other party of any of the warranties or other obligations of the Agreement and will not be deemed a waiver of any such rights or remedies. S.24 INDEMNIFICATION/LIABILITY. a. To the fullest extent permitted by law, Contractor agrees to defend, indemnify, and hold the City, its officers, agents, and employees, harmless from and against any and all liabilities, demands, claims, suits, losses, damages, causes of action, fines or judgments, including costs, attorneys’, witnesses’, and expert witnesses’ fees, and expenses incident thereto, relating to, arising out of, or resulting from: (i) the services provided by Contractor personnel under this Agreement; (ii) any negligent acts, errors, mistakes or omissions by Contractor or Contractor personnel; and (iii) Contractor or Contractor personnel’s failure to comply with or fulfill the obligations established by this Agreement. b. Contractor will update the City during the course of the litigation to timely notify the City of any issues that may involve the independent negligence of the City that is not covered by this indemnification. c. The City assumes no liability for actions of Contractor and will not indemnify or hold Contractor or any third party harmless for claims based on this Agreement or use of Contractor-provided supplies or services. S.25 WARRANTY. Contractor warrants that the services and materials will conform to the requirements of the Agreement. Additionally, Contractor warrants that all services will be performed in a good, workman-like and professional manner. The City’s acceptance of service or materials provided by Contractor will not relieve Contractor from its obligations under this warranty. If any materials or services are of a substandard or unsatisfactory manner as determined by the City, Contractor, at no additional charge to the City, will provide materials or redo such services until in accordance with this Agreement and to the City’s reasonable satisfaction. Unless otherwise agreed, Contractor warrants that materials will be new, unused, of most current manufacture and not discontinued, will be free of defects in materials and workmanship, will be provided in accordance with manufacturer's standard warranty for at least one (1) year unless otherwise specified, and will perform in accordance with manufacturer's published specifications. S.26 THE CITY’S RIGHT TO RECOVER AGAINST THIRD PARTIES. Contractor will do nothing to prejudice the City’s right to recover against third parties for any loss, destruction, or damage to City property, and will at the City’s request and expense, furnish to the City reasonable assistance and cooperation, including assistance in the prosecution or defense of suit and the execution of instruments of assignment in favor of the City in obtaining recovery. S.27 NO GUARANTEE OF WORK. Contractor acknowledges and agrees that it is not entitled to deliver any specific amount of materials or services or any materials or services at all under this Agreement and acknowledges and agrees that the materials or services will be requested by the City on an as needed basis at the sole discretion of the City. Any document referencing quantities or performance frequencies represent the City's best estimate of current requirements, but will not bind the City to purchase, accept, or pay for materials or services which exceed its actual needs. 6 S.28 OWNERSHIP. All deliverables, services, and information provided by Contractor or the City pursuant to this Agreement (whether electronically or manually generated) including without limitation, reports, test plans, and survey results, graphics, and technical tables, originally prepared in the performance of this Agreement, are the property of the City and will not be used or released by Contractor or any other person except with prior written permission by the City. S.29 USE OF NAME. Contractor will not use the name of the City of Clearwater in any advertising or publicity without obtaining the prior written consent of the City. S.30 PROHIBITED ACTS. Pursuant to Constitution Article II Section 8, a current or former public officer or employee within the last two (2) years shall not represent another organization before the City on any matter for which the officer or employee was directly concerned and personally participated in during their service or employment or over which they had a substantial or material administrative discretion. S.31 FOB DESTINATION FREIGHT PREPAID AND ALLOWED. All deliveries will be FOB destination freight prepaid and allowed unless otherwise agreed. S.32 RISK OF LOSS. Contractor agrees to bear all risks of loss, injury, or destruction of goods or equipment incidental to providing these services and such loss, injury, or destruction will not release Contractor from any obligation hereunder. S.33 SAFEGUARDING CITY PROPERTY. Contractor will be responsible for any damage to City real property or damage or loss of City personal property when such property is the responsibility of or in the custody of Contractor or its employees. S.34 WARRANTY OF RIGHTS. Contractor warrants it has title to, or the right to allow the City to use, the materials and services being provided and that the City may use same without suit, trouble or hindrance from Contractor or third parties. S.35 PROPRIETARY RIGHTS INDEMNIFICATION. Without limiting the foregoing, Contractor will without limitation, at its expense defend the City against all claims asserted by any person that anything provided by Contractor infringes a patent, copyright, trade secret or other intellectual property right and must, without limitation, pay the costs, damages and attorneys' fees awarded against the City in any such action, or pay any settlement of such action or claim. Each party agrees to notify the other promptly of any matters to which this provision may apply and to cooperate with each other in connection with such defense or settlement. If a preliminary or final judgment is obtained against the City’s use or operation of the items provided by Contractor hereunder or any part thereof by reason of any alleged infringement, Contractor will, at its expense and without limitation, either: (a) modify the item so that it becomes non-infringing; (b) procure for the City the right to continue to use the item; (c) substitute for the infringing item other item(s) having at least equivalent capability; or (d) refund to the City an amount equal to the price paid, less reasonable usage, from the time of installation acceptance through cessation of use, which amount will be calculated on a useful life not less than five (5) years, plus any additional costs the City may incur to acquire substitute supplies or services. S.36 CONTRACT ADMINISTRATION. The contract will be administered by the Purchasing Department and/or an authorized representative from the using department. All questions regarding the contract will be referred to the Purchasing Department for resolution. Supplements may be written to the contract for the addition or deletion of services. S.37 FORCE MAJEURE. Failure by either party to perform its duties and obligations will be excused by unforeseeable circumstances beyond its reasonable control, including acts of nature, acts of the public enemy, riots, fire, explosion, legislation, and governmental regulation. The party whose performance is so affected will within five (5) calendar days of the unforeseeable circumstance notify the other party of all pertinent facts and identify the force majeure event. The party whose performance is so affected must also take all reasonable steps, promptly and diligently, to prevent such causes if it is feasible to do so, or to minimize or eliminate the effect thereof. The delivery or performance date will be extended for a period equal to the time lost by reason of delay, plus such additional time as may be reasonably necessary to overcome the effect of the delay, provided however, under no circumstances will delays caused by a force majeure extend beyond one 7 hundred-twenty (120) calendar days from the scheduled delivery or completion date of a task unless agreed upon by the parties. S.38 COOPERATIVE USE OF CONTRACT. The City has entered into various cooperative purchasing agreements with other Florida government agencies, including the Tampa Bay Area Purchasing Cooperative. Under the Cooperative Purchasing Agreement, any contract may be extended for use by other municipalities, school districts and government agencies with the approval of Contractor. Any such usage by other entities must be in accordance with the statutes, codes, ordinances, charter and/or procurement rules and regulations of the respective government agency. Orders placed by other agencies and payment thereof will be the sole responsibility of that agency. The City is not responsible for any disputes arising out of transactions made by others. S.39 FUEL CHARGES AND PRICE INCREASES. No fuel surcharges will be accepted. No price increases will be accepted without proper request by Contractor and response by the City’s Purchasing Division. S.40 NOTICES. All notices to be given pursuant to this Agreement must be delivered to the parties at their respective addresses. Notices may be (i) personally delivered; (ii) sent via certified or registered mail, postage prepaid; (iii) sent via overnight courier; or (iv) sent via facsimile. If provided by personal delivery, receipt will be deemed effective upon delivery. If sent via certified or registered mail, receipt will be deemed effective three (3) calendar days after being deposited in the United States mail. If sent via overnight courier or facsimile, receipt will be deemed effective two (2) calendar days after the sending thereof. S.41 GOVERNING LAW, VENUE. This Agreement is governed by the laws of the State of Florida. The exclusive venue selected for any proceeding or suit in law or equity arising from or incident to this Agreement will be Pinellas County, Florida. S.42 INTEGRATION CLAUSE. This Agreement, including all attachments and exhibits hereto, supersede all prior oral or written agreements, if any, between the parties and constitutes the entire agreement between the parties with respect to the work to be performed. S.43 PROVISIONS REQUIRED BY LAW. Any provision required by law to be in this Agreement is a part of this Agreement as if fully stated in it. S.44 SEVERABILITY. If any provision of this Agreement is declared void or unenforceable, such provision will be severed from this Agreement, which will otherwise remain in full force and effect. The parties will negotiate diligently in good faith for such amendment(s) of this Agreement as may be necessary to achieve the original intent of this Agreement, notwithstanding such invalidity or unenforceability. S.45 SURVIVING PROVISIONS. Notwithstanding any completion, termination, or other expiration of this Agreement, all provisions which, by the terms of reasonable interpretation thereof, set forth rights and obligations that extend beyond completion, termination, or other expiration of this Agreement, will survive and remain in full force and effect. Except as specifically provided in this Agreement, completion, termination, or other expiration of this Agreement will not release any party from any liability or obligation arising prior to the date of termination. S.46 POLLUTION INSURANCE. The Contractor agrees to maintain Contractor’s Pollution Legal Liability with minimum limits of $5,000,000 (five million dollars). For policies written on a “Claims- Made” basis the Contractor agrees to maintain a retroactive date prior to or equal to the effective date of this contract. In the event the policy is canceled, non-renewed, switched to occurrence form, or any other event which triggers the right to purchase a Supplemental Extended Reporting Period (SERP) during the life of this contract the Contractor agrees to purchase the SERP with a minimum reporting period of not less than two years. Purchase of the SERP shall not relieve the Contractor of the obligation to provide replacement coverage. Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: Bid #01-20 Agenda Date: 12/19/2019 Status: Consent AgendaVersion: 1 File Type: Action ItemIn Control: Planning & Development Agenda Number: 7.11 SUBJECT/RECOMMENDATION: Authorize award of Invitation to Bid 01-20, Code Inspection and Plan Review Services to Quorum Services of Tampa, FL, Joe Payne Inc., of Tampa, FL and NOVA Engineering and Environmental, LLC of Tampa, FL for an annual not-to-exceed amount of $500,000.00, effective January 1, 2020 through December 31, 2020, with the option for two one-year term extensions, and authorize the appropriate officials to execute same. (consent) SUMMARY: In order to maintain the Planning and Development Department’s customer service standards for inspections and plans review, at times it is necessary to supplement staffing levels with outside contractors who have state licensed personnel. To that end, Invitation to Bid (ITB) #01-20 was issued in October 2019 for inspection and plan review services. Five bids were received and evaluated for the services provided and respective costs. The Planning & Development Department proposes to utilize Quorum Services as the primary contractor and Joe Payne and NOVA Engineering & Environmental as secondary contractors . Each company provides unique specialties which may be required for various projects throughout the city. The Planning and Development Department requests the flexibility to allocate the annual not-to-exceed amount between these contractors. APPROPRIATION CODE AND AMOUNT: Funds are available in Development Services cost code 0101430-530300, contractual services, to fund the current year of this contract. Funding for future years will be included in the department’s budget request. USE OF RESERVE FUNDS: N/A Page 1 City of Clearwater Printed on 12/19/2019 Item No. TYPE OF LOCATE TICKET UnitBureau Veritas North AmericaJoe Payne IncNova Engineering & EnvironmentalQuorum ServicesUniversal Engineering Sciences Inc1 Cost per INSPECTION performed EA $125.00 $60.00 $55.00 $49.00 $85.002APer Hour cost forPLAN REVIEW SERVICESPerHour $95.00 $75.00 $105.00 $60.00 $110.00284 4 4$190.00 $600.00 $420.00 $240.00 $440.00 Minimum charge forPLAN REVIEW SERVICES(Line 2A hourly rate times minimum hrs)2BMin Hrs per ServiceCITY OF CLEARWATERITB #01-20 Code Inspections & Plan Review ServicesDUE DATE: November 7, 2019; 10:00 AMBID TABULATIONPage 1 of 1 v. 11.2018 Purchasing Office 100 S Myrtle Ave 33756-5520 PO Box 4748 33758-4748 Clearwater FL 727-562-4633 INVITATION TO BID #01-20 CODE INSPECTION AND PLAN REVIEW SERVICES October 8, 2019 NOTICE IS HEREBY GIVEN that sealed bids will be received by the City of Clearwater (City) until 10:00 A.M., Local Time, November 7, 2019 to provide Code Inspections and Plan Review Services. Brief Description: The City of Clearwater’s Planning and Development Department is requesting sealed bids from qualified and experienced firms to provide Code Inspections and Plan Review Services. Bids must be in accordance with the provisions, specifications and instructions set forth herein and will be received by Purchasing until the above noted time, when they will be publicly acknowledged and accepted. Bid packets, any attachments and addenda are available for download at www.myclearwater.com/bid . Please read the entire solicitation package and submit the bid in accordance with the instructions. This document (less this invitation and the instructions) and any required response documents, attachments, and submissions will constitute the bid. General, Process or Technical Questions concerning this solicitation should be directed, IN WRITING, to the following Sr. Procurement Analyst: Lori Vogel, CPPB Sr. Procurement Analyst lori.vogel@myclearwater.com This Invitation to Bid is issued by: Alyce Benge, CPPO, C.P.M. Purchasing Manager Alyce.Benge@myclearwater.com INSTRUCTIONS Inspection and Plan Review Services 2 ITB #01-20 i.1 VENDOR QUESTIONS: All questions regarding the contents of this solicitation, and solicitation process (including requests for ADA accommodations), shall be directed solely to the Purchasing Manager. Questions should be submitted in writing via letter, fax or email. Questions received less than seven (7) calendar days prior to the due date and time may be answered at the discretion of the City. i.2 ADDENDA/CLARIFICATIONS: Any changes to the specifications will be in the form of an addendum. Addenda are posted on the City website and e-mailed to those who register on the City website when downloading solicitations no less than seven (7) days prior to the Due Date. Vendors are cautioned to check the Purchasing Website for addenda and clarifications prior to submitting their bid. The City cannot be held responsible if a vendor fails to receive any addenda issued. The City shall not be responsible for any oral changes to these specifications made by any employees or officer of the City. Failure to acknowledge receipt of an addendum may result in disqualification of a bid. i.3 VENDOR CONFERENCE / SITE VISIT: Yes No Mandatory Attendance: Yes No i.4 DUE DATE & TIME FOR SUBMISSION AND OPENING: Date: November 7, 2019 Time: 10:00 A.M. (Local Time) The City will open all bids properly and timely submitted and will record the names and other information specified by law and rule. All bids become the property of the City and will not be returned except in the case of a late submission. Respondent names, as read at the bid opening, will be posted on the City website. Once a notice of intent to award is posted or 30 days from day of opening elapses, whichever occurs earlier, bids are available for inspection by contacting Purchasing. i.5 BID FIRM TIME: 90 days from Opening Bid shall remain firm and unaltered after opening for the number of days shown above. The City may accept the bid, subject to successful contract negotiations, at any time during this time. i.6 BID SECURITY: Yes No If so designated above, a bid security in the amount specified must be submitted with the bid. The security may be submitted in any one of the following forms: an executed surety bond issued by a firm licensed and registered to transact such business with the State of Florida; cash; certified check, or cashier's check payable to the City of Clearwater (personal or company checks are not acceptable); certificate of deposit or any other form of deposit issued by a financial institution and acceptable to the City. Such bid security shall be forfeited to the City of Clearwater should the bidder selected fail to execute a contract when requested. PERFORMANCE SECURITY: Yes No If required herein, the Contractor, simultaneously with the execution of the Contract, will be required to furnish a performance security. The security may be submitted in one-year increments and in any one of the following forms: an executed surety bond issued by a firm licensed and registered to transact such business with the State of Florida; cash; certified check, cashier's check or money order payable to the City of Clearwater (personal and company checks are not acceptable); certificate of deposit or any other form of deposit issued by a financial institution and acceptable to the City. If the Contractor fails or refuses to fully comply with the terms and conditions of the contract, the City shall have the right to use all or such part of said security as may be necessary to reimburse the City for loss sustained by reason of such breach. The balance of said security, if any, will be returned to Contractor upon the expiration or termination of the contract. INSTRUCTIONS Inspection and Plan Review Services 3 ITB #01-20 i.6 SUBMIT BIDS TO: Use label at the end of this solicitation package City of Clearwater Attn: Purchasing 100 S Myrtle Ave, 3rd Fl, Clearwater FL 33756-5520 or PO Box 4748, Clearwater FL 33758-4748 Bids will be received at this address. Bidders may mail or hand-deliver bids. E-mail or fax submissions will not be accepted. No responsibility will attach to the City of Clearwater, its employees or agents for premature opening of a bid that is not properly addressed and identified. i.7 LATE BIDS. The bidder assumes responsibility for having the bid delivered on time at the place specified. All bids received after the date and time specified shall not be considered and will be returned unopened to the bidder. The bidder assumes the risk of any delay in the mail or in handling of the mail by employees of the City of Clearwater, or any private courier, regardless whether sent by mail or by means of personal delivery. You must allow adequate time to accommodate all registration and security screenings at the delivery site. A valid photo I.D. may be required. It shall not be sufficient to show that you mailed or commenced delivery before the due date and time. All times are Clearwater, Florida local times. The bidder agrees to accept the time stamp in the City Purchasing Office as the official time. i.8 COMMENCEMENT OF WORK. If bidder begins any billable work prior to the City’s final approval and execution of the contract, bidder does so at its own risk. i.9 RESPONSIBILITY TO READ AND UNDERSTAND. Failure to read, examine and understand the solicitation will not excuse any failure to comply with the requirements of the solicitation or any resulting contract, nor shall such failure be a basis for claiming additional compensation. If a vendor suspects an error, omission or discrepancy in this solicitation, the vendor must immediately and in any case not later than seven (7) business days in advance of the due date notify the contact on page one (1). The City is not responsible for and will not pay any costs associated with the preparation and submission of the bid. Bidders are cautioned to verify their bids before submission, as amendments to or withdrawal of bids submitted after time specified for opening of bids may not be considered. The City will not be responsible for any bidder errors or omissions. i.10 FORM AND CONTENT OF BIDS. Unless otherwise instructed or allowed, bids shall be submitted on the forms provided. An original and the designated number of copies of each bid are required. Bids, including modifications, must be submitted in ink, typed, or printed form and signed by an authorized representative. Please line through and initial rather than erase changes. If the bid is not properly signed or if any changes are not initialed, it may be considered non-responsive. In the event of a disparity between the unit price and the extended price, the unit price shall prevail unless obviously in error, as determined by the City. The City may require that an electronic copy of the bid be submitted. The bid must provide all information requested and must address all points. The City does not encourage exceptions. The City is not required to grant exceptions and depending on the exception, the City may reject the bid. i.11 SPECIFICATIONS. Technical specifications define the minimum acceptable standard. When the specification calls for “Brand Name or Equal,” the brand name product is acceptable. Alternates will be considered upon demonstrating the other product meets stated specifications and is equivalent to the brand product in terms of quality, performance and desired characteristics. Minor differences that do not affect the suitability of the supply or service for the City’s needs may be accepted. Burden of proof that the product meets the minimum standards or is equal to the brand name, product, is on the bidder. The City reserves the right to reject bids that the City deems unacceptable. i.12 MODIFICATION / WITHDRAWAL OF BID. Written requests to modify or withdraw the bid received by the City prior to the scheduled opening time will be accepted and will be corrected after opening. INSTRUCTIONS Inspection and Plan Review Services 4 ITB #01-20 No oral requests will be allowed. Requests must be addressed and labeled in the same manner as the bid and marked as a MODIFICATION or WITHDRAWAL of the bid. Requests for withdrawal after the bid opening will only be granted upon proof of undue hardship and may result in the forfeiture of any bid security. Any withdrawal after the bid opening shall be allowed solely at the City’s discretion. i.13 DEBARMENT DISCLOSURE. If the vendor submitting this bid has been debarred, suspended, or otherwise lawfully precluded from participating in any public procurement activity, including being disapproved as a subcontractor with any federal, state, or local government, or if any such preclusion from participation from any public procurement activity is currently pending, the bidder shall include a letter with its bid identifying the name and address of the governmental unit, the effective date of this suspension or debarment, the duration of the suspension or debarment, and the relevant circumstances relating the suspension or debarment. i.14 RESERVATIONS. The City reserves the right to reject any or all bids or any part thereof; to rebid the solicitation; to reject non-responsive or non-responsible bids; to reject unbalanced bids; to reject bids where the terms, prices, and/or awards are conditioned upon another event; to reject individual bids for failure to meet any requirement; to award by item, part or portion of an item, group of items, or total; to make multiple awards; to waive minor irregularities, defects, omissions, technicalities or form errors in any bid. The City may seek clarification of the bid from bidder at any time, and failure to respond is cause for rejection. Submission of a bid confers on bidder no right to an award or to a subsequent contract. The City is charged by its Charter to make an award that is in the best interest of the City. All decisions on compliance, evaluation, terms and conditions shall be made solely at the City’s discretion and made to favor the City. No binding contract will exist between the bidder and the City until the City executes a written contract or purchase order. i.15 OFFICIAL SOLICITATION DOCUMENT. Changes to the solicitation document made by a bidder may not be acknowledged or accepted by the City. Award or execution of a contract does not constitute acceptance of a changed term, condition or specification unless specifically acknowledged and agreed to by the City. The copy maintained and published by the City shall be the official solicitation document. i.16 COPYING OF BIDS. Bidder hereby grants the City permission to copy all parts of its bid, including without limitation any documents and/or materials copyrighted by the bidder. The City’s right to copy shall be for internal use in evaluating the proposal. i.17 CONTRACTOR ETHICS. It is the policy of the City to promote courtesy, fairness, impartiality, integrity, service, professionalism, economy, and government by law in the Procurement process. The responsibility for implementing this policy rests with each individual who participates in the Procurement process, including Respondents and Contractors. To achieve the purpose of this Article, it is essential that Respondents and Contractors doing business with the City also observe the ethical standards prescribed herein. It shall be a breach of ethical standards to: a. Exert any effort to influence any City employee or agent to breach the standards of ethical conduct. b. Intentionally invoice any amount greater than provided in Contract or to invoice for Materials or Services not provided. c. Intentionally offer or provide sub-standard Materials or Services or to intentionally not comply with any term, condition, specification or other requirement of a City Contract. i.18 GIFTS. The City will accept no gifts, gratuities or advertising products from bidders or prospective bidders and affiliates. The City may request product samples from vendors for product evaluation. i.19 PROTESTS AND APPEALS. If a Respondent believes there is a mistake, impropriety, or defect in the solicitation, believes the City improperly rejected its proposal, and/or believes the selected proposal is not in the City’s best interests, the Respondent may submit a written protest. All protests and appeals are governed by the City of Clearwater Purchasing Policy and Procedures. If any INSTRUCTIONS Inspection and Plan Review Services 5 ITB #01-20 discrepancy exists between this Section and the Purchasing Policy, the language of the Purchasing Policy controls. Protests based upon alleged mistake, impropriety, or defect in a solicitation that is apparent before the bid opening must be filed with the Procurement Officer no later than five (5) business days before Bid Opening. Protests that only become apparent after the Bid Opening must be filed within ten (10) business days of the alleged violation of the applicable purchasing ordinance. The complete protest procedure can be obtained by contacting Purchasing. ADDRESS PROTESTS TO: Alyce Benge, CPPO, C.P.M. Purchasing Manager 100 S Myrtle Ave, 3rd Fl Clearwater FL 33756-5520 or PO Box 4748 Clearwater FL 33758-4748 INSTRUCTIONS – EVALUATION Inspection and Plan Review Services 6 ITB #01-20 i.20 EVALUATION PROCESS. Bids will be reviewed by Purchasing and representative(s) of the respective department(s). The City staff may or may not initiate discussions with bidders for clarification purposes. Clarification is not an opportunity to change the bid. Bidders shall not initiate discussions with any City employee or official. i.21 PRESENTATIONS/INTERVIEWS. The bidder must provide a formal presentation/interview upon request. i.22 CRITERIA FOR EVALUATION AND AWARD. The City evaluates three (3) categories of information: responsiveness, responsibility, and price. All bids must meet the following responsiveness and responsibility criteria to be considered further. a) Responsiveness. The City will determine whether the bid complies with the instructions for submitting bids including completeness of bid which encompasses the inclusion of all required attachments and submissions. The City must reject any bids that are submitted late. Failure to meet other requirements may result in rejection. b) Responsibility. The City will determine whether the bidder is one with whom it can or should do business. Factors that the City may evaluate to determine "responsibility" include, but are not limited to: excessively high or low priced bids, past performance, references (including those found outside the bid), compliance with applicable laws-including tax laws, bidder's record of performance and integrity - e.g. has the bidder been delinquent or unfaithful to any contract with the City, whether the bidder is qualified legally to contract with the City, financial stability and the perceived ability to perform completely as specified. A bidder must at all times have financial resources sufficient, in the opinion of the City, to ensure performance of the contract and must provide proof upon request. City staff may also use Dun & Bradstreet and/or any generally available industry information. The City reserves the right to inspect and review bidder’s facilities, equipment and personnel and those of any identified subcontractors. The City will determine whether any failure to supply information, or the quality of the information, will result in rejection. c) Price. We will then evaluate the bids that have met the requirements above. i.23 COST JUSTIFICATION. In the event only one response is received, the City may require that the bidder submit a cost proposal in sufficient detail for the City to perform a cost/price analysis to determine if the bid price is fair and reasonable. i.24 CONTRACT NEGOTIATIONS AND ACCEPTANCE. Bidder must be prepared for the City to accept the bid as submitted. If bidder fails to sign all documents necessary to successfully execute the final contract within a reasonable time as specified, or negotiations do not result in an acceptable agreement, the City may reject bid or revoke the award, and may begin negotiations with another bidder. Final contract terms must be approved or signed by the appropriately authorized City official(s). No binding contract will exist between the bidder and the City until the City executes a written contract or purchase order. i.25 NOTICE OF INTENT TO AWARD. Notices of the City’s intent to award a Contract are posted to Purchasing’s website. It is the bidder’s responsibility to check the City of Clearwater’s website at www.myclearwater.com/bid to view relevant bid information and notices. i.26 BID TIMELINE. Dates are tentative and subject to change. Release ITB: 10/08/19 Advertise Tampa Bay Times: 10/09/19 Bids due: 11/07/19 Review bids: 11/7/19-11/13/19 Award recommendation: 11/14/19 Council authorization: 12/05/19 Contract begins: January 2020 STANDARD TERMS AND CONDITIONS Inspection and Plan Review Services 7 ITB #01-20 S.1 DEFINITIONS. Uses of the following terms are interchangeable as referenced: “vendor, contractor, supplier, proposer, company, parties, persons”, “purchase order, PO, contract, agreement”, “city, Clearwater, agency, requestor, parties”, “bid, proposal, response, quote”. S.2 INDEPENDENT CONTRACTOR. It is expressly understood that the relationship of Contractor to the City will be that of an independent contractor. Contractor and all persons employed by Contractor, either directly or indirectly, are Contractor’s employees, not City employees. Accordingly, Contractor and Contractor’s employees are not entitled to any benefits provided to City employees including, but not limited to, health benefits, enrollment in a retirement system, paid time off or other rights afforded City employees. Contractor employees will not be regarded as City employees or agents for any purpose, including the payment of unemployment or workers’ compensation. If any Contractor employees or subcontractors assert a claim for wages or other employment benefits against the City, Contractor will defend, indemnify and hold harmless the City from all such claims. S.3 SUBCONTRACTING. Contractor may not subcontract work under this Agreement without the express written permission of the City. If Contractor has received authorization to subcontract work, it is agreed that all subcontractors performing work under the Agreement must comply with its provisions. Further, all agreements between Contractor and its subcontractors must provide that the terms and conditions of this Agreement be incorporated therein. S.4 ASSIGNMENT. This Agreement may not be assigned either in whole or in part without first receiving the City’s written consent. Any attempted assignment, either in whole or in part, without such consent will be null and void and in such event the City will have the right at its option to terminate the Agreement. No granting of consent to any assignment will relieve Contractor from any of its obligations and liabilities under the Agreement. S.5 SUCCESSORS AND ASSIGNS, BINDING EFFECT. This Agreement will be binding upon and inure to the benefit of the parties and their respective permitted successors and assigns. S.6 NO THIRD-PARTY BENEFICIARIES. This Agreement is intended for the exclusive benefit of the parties. Nothing set forth in this Agreement is intended to create, or will create, any benefits, rights, or responsibilities in any third parties. S.7 NON- EXCLUSIVITY. The City, in its sole discretion, reserves the right to request the materials or services set forth herein from other sources when deemed necessary and appropriate. No exclusive rights are encompassed through this Agreement. S.8 AMENDMENTS. There will be no oral changes to this Agreement. This Agreement can only be modified in a writing signed by both parties. No charge for extra work or material will be allowed unless approved in writing, in advance, by the City and Contractor. S.9 TIME OF THE ESSENCE. Time is of the essence to the performance of the parties’ obligations under this Agreement. S.10 COMPLIANCE WITH APPLICABLE LAWS. a. General. Contractor must procure all permits and licenses and pay all charges and fees necessary and incidental to the lawful conduct of business. Contractor must stay fully informed of existing and future federal, state, and local laws, ordinances, and regulations that in any manner affect the fulfillment of this Agreement and must comply with the same at its own expense. Contractor bears full responsibility for training, safety, and providing necessary equipment for all Contractor personnel to achieve throughout the term of the Agreement. Upon request, Contractor will demonstrate to the City's satisfaction any programs, procedures, and other activities used to ensure compliance. b. Drug-Free Workplace. Contractor is hereby advised that the City has adopted a policy establishing a drug-free workplace for itself and those doing business with the City to ensure the safety and health of all persons working on City contracts and projects. Contractor will require a drug-free workplace for all Contractor personnel working under this Agreement. Specifically, all Contractor personnel who are working under this Agreement must be notified STANDARD TERMS AND CONDITIONS Inspection and Plan Review Services 8 ITB #01-20 in writing by Contractor that they are prohibited from the manufacture, distribution, dispensation, possession, or unlawful use of a controlled substance in the workplace. Contractor agrees to prohibit the use of intoxicating substances by all Contractor personnel and will ensure that Contractor personnel do not use or possess illegal drugs while in the course of performing their duties. c. Federal and State Immigration Laws. Contractor agrees to comply with the Immigration Reform and Control Act of 1986 (IRCA) in performance under this Agreement and to permit the City and its agents to inspect applicable personnel records to verify such compliance as permitted by law. Contractor will ensure and keep appropriate records to demonstrate that all Contractor personnel have a legal right to live and work in the United States. (i) As applicable to Contractor, under this provision, Contractor hereby warrants to the City that Contractor and each of its subcontractors will comply with, and are contractually obligated to comply with, all federal immigration laws and regulations that relate to their employees (hereinafter “Contractor Immigration Warranty”). (ii) A breach of the Contractor Immigration Warranty will constitute as a material breach of this Agreement and will subject Contractor to penalties up to and including termination of this Agreement at the sole discretion of the City. (iii) The City retains the legal right to inspect the papers of all Contractor personnel who provide services under this Agreement to ensure that Contractor or its subcontractors are complying with the Contractor Immigration Warranty. Contractor agrees to assist the City in regard to any such inspections. (iv) The City may, at its sole discretion, conduct random verification of the employment records of Contractor and any subcontractor to ensure compliance with the Contractor Immigration Warranty. Contractor agrees to assist the City in regard to any random verification performed. (v) Neither Contractor nor any subcontractor will be deemed to have materially breached the Contractor Immigration Warranty if Contractor or subcontractor establishes that it has complied with the employment verification provisions prescribed by Sections 274A and 274B of the Federal Immigration and Nationality Act. d. Nondiscrimination. Contractor represents and warrants that it does not discriminate against any employee or applicant for employment or person to whom it provides services because of race, color, religion, sex, national origin, or disability, and represents and warrants that it complies with all applicable federal, state, and local laws and executive orders regarding employment. Contractor and Contractor’s personnel will comply with applicable provisions of Title VII of the U.S. Civil Rights Act of 1964, as amended, Section 504 of the Federal Rehabilitation Act, the Americans with Disabilities Act (42 U.S.C. § 12101 et seq.), and applicable rules in performance under this Agreement. S.11 SALES/USE TAX, OTHER TAXES. Contractor is responsible for the payment of all taxes including federal, state, and local taxes related to or arising out of Contractor’s services under this Agreement, including by way of illustration but not limitation, federal and state income tax, Social Security tax, unemployment insurance taxes, and any other taxes or business license fees as required. If any taxing authority should deem Contractor or Contractor employees an employee of the City, or should otherwise claim the City is liable for the payment of taxes that are Contractor’s responsibility under this Agreement, Contractor will indemnify the City for any tax liability, interest, and penalties imposed upon the City. The City is exempt from paying state and local sales/use taxes and certain federal excise taxes and will furnish an exemption certificate upon request. S.12 AMOUNTS DUE THE CITY. Contractor must be current and remain current in all obligations due to the City during the performance of services under the Agreement. Payments to Contractor may be offset by any delinquent amounts due the City or fees and charges owed to the City. STANDARD TERMS AND CONDITIONS Inspection and Plan Review Services 9 ITB #01-20 S.13 OPENNESS OF PROCUREMENT PROCESS. Written competitive proposals, replies, oral presentations, meetings where vendors answer questions, other submissions, correspondence, and all records made thereof, as well as negotiations or meetings where negotiation strategies are discussed, conducted pursuant to this Invitation to Bid (ITB), shall be handled in compliance with Chapters 119 and 286, Florida Statutes. Proposals or replies received by the City pursuant to this ITB are exempt from public disclosure until such time that the City provides notice of an intended decision or until 30 days after opening the proposals, whichever is earlier. If the City rejects all proposals or replies pursuant to this ITB and provides notice of its intent to reissue the ITB, then the rejected proposals or replies remain exempt from public disclosure until such time that the City provides notice of an intended decision concerning the reissued ITB or until the City withdraws the reissued ITB. A proposal or reply shall not be exempt from public disclosure longer than 12 months after the initial City notice rejecting all proposals or replies. Oral presentations, meetings where vendors answer questions, or meetings convened by City staff to discuss negotiation strategies, if any, shall be closed to the public (and other proposers) in compliance with Chapter 286 Florida Statutes. A complete recording shall be made of such closed meeting. The recording of, and any records presented at, the exempt meeting shall be available to the public when the City provides notice of an intended decision or until 30 days after opening proposals or final replies, whichever occurs first. If the City rejects all proposals or replies pursuant to this ITB and provides notice of its intent to reissue the ITB, then the recording and any records presented at the exempt meeting remain exempt from public disclosure until such time that the City provides notice of an intended decision concerning the reissued ITB or until the City withdraws the reissued ITB. A recording and any records presented at an exempt meeting shall not be exempt from public disclosure longer than 12 months after the initial City notice rejecting all proposals or replies. In addition to all other contract requirements as provided by law, the contractor executing this agreement agrees to comply with public records law. IF THE CONTRACTOR HAS QUESTIONS REGARDING THE APPLICATION OF CHAPTER 119, FLORIDA STATUTES, TO THE CONTRACTOR’S DUTY TO PROVIDE PUBLIC RECORDS RELATING TO THIS CONTRACT, CONTACT THE CUSTODIAN OF PUBLIC RECORDS, Rosemarie Call, phone: 727-562-4092 or Rosemarie.Call@myclearwater.com, 600 Cleveland Street, Suite 600, Clearwater, FL 33755. The contractor’s agreement to comply with public records law applies specifically to: a) Keep and maintain public records required by the City of Clearwater (hereinafter “public agency”) to perform the service being provided by the contractor hereunder. b) Upon request from the public agency’s custodian of public records, provide the public agency with a copy of the requested records or allow the records to be inspected or copied within a reasonable time at a cost that does not exceed the cost provided for in Chapter 119, Florida Statutes, as may be amended from time to time, or as otherwise provided by law. c) Ensure that the public records that are exempt or confidential and exempt from public records disclosure requirements are not disclosed except as authorized by law for the duration of the contract term and following completion of the contract if the contractor does not transfer the records to the public agency. d) Upon completion of the contract, transfer, at no cost, to the public agency all public records in possession of the contractor or keep and maintain public records required by the public agency to perform the service. If the contractor transfers all public records to the public agency upon completion of the contract, the contractor shall destroy any duplicate public records that are exempt or confidential and exempt from public records disclosure requirements. If the STANDARD TERMS AND CONDITIONS Inspection and Plan Review Services 10 ITB #01-20 contractor keeps and maintains public records upon completion of the contract, the contractor shall meet all applicable requirements for retaining public records. All records stored electronically must be provided to the public agency, upon request from the public agency’s custodian of public records, in a format that is compatible with the information technology systems of the public agency. e) A request to inspect or copy public records relating to a public agency’s contract for services must be made directly to the public agency. If the public agency does not possess the requested records, the public agency shall immediately notify the contractor of the request and the contractor must provide the records to the public agency or allow the records to be inspected or copied within a reasonable time. f) The contractor hereby acknowledges and agrees that if the contractor does not comply with the public agency’s request for records, the public agency shall enforce the contract provisions in accordance with the contract. g) A contractor who fails to provide the public records to the public agency within a reasonable time may be subject to penalties under Section 119.10, Florida Statutes. h) If a civil action is filed against a contractor to compel production of public records relating to a public agency’s contract for services, the court shall assess and award against the contractor the reasonable costs of enforcement, including reasonable attorney fees, if: 1. The court determines that the contractor unlawfully refused to comply with the public records request within a reasonable time; and 2. At least eight (8) business days before filing the action, the plaintiff provided written notice of the public records request, including a statement that the contractor has not complied with the request, to the public agency and to the contractor. i) A notice complies with subparagraph (h)2. if it is sent to the public agency’s custodian of public records and to the contractor at the contractor’s address listed on its contract with the public agency or to the contractor’s registered agent. Such notices must be sent by common carrier delivery service or by registered, Global Express Guaranteed, or certified mail, with postage or shipping paid by the sender and with evidence of delivery, which may be in an electronic format. A contractor who complies with a public records request within 8 business days after the notice is sent is not liable for the reasonable costs of enforcement. S.14 AUDITS AND RECORDS. Contractor must preserve the records related to this Agreement for five (5) years after completion of the Agreement. The City or its authorized agent reserves the right to inspect any records related to the performance of work specified herein. In addition, the City may inspect any and all payroll, billing or other relevant records kept by Contractor in relation to the Agreement. Contractor will permit such inspections and audits during normal business hours and upon reasonable notice by the City. The audit of records may occur at Contractor’s place of business or at City offices, as determined by the City. S.15 BACKGROUND CHECK. The City may conduct criminal, driver history, and all other requested background checks of Contractor personnel who would perform services under the Agreement or who will have access to the City’s information, data, or facilities in accordance with the City’s current background check policies. Any officer, employee, or agent that fails the background check must be replaced immediately for any reasonable cause not prohibited by law. STANDARD TERMS AND CONDITIONS Inspection and Plan Review Services 11 ITB #01-20 S.16 SECURITY CLEARANCE AND REMOVAL OF CONTRACTOR PERSONNEL. The City will have final authority, based on security reasons: (i) to determine when security clearance of Contractor personnel is required; (ii) to determine the nature of the security clearance, up to and including fingerprinting Contractor personnel; and (iii) to determine whether or not any individual or entity may provide services under this Agreement. If the City objects to any Contractor personnel for any reasonable cause not prohibited by law, then Contractor will, upon notice from the City, remove any such individual from performance of services under this Agreement. S.17 DEFAULT. a. A party will be in default if that party: (i) is or becomes insolvent or is a party to any voluntary bankruptcy or receivership proceeding, makes an assignment for a creditor, or there is any similar action that affects Contractor’s capability to perform under the Agreement; (ii) is the subject of a petition for involuntary bankruptcy not removed within sixty (60) calendar days; (iii) conducts business in an unethical manner or in an illegal manner; or (iv) fails to carry out any term, promise, or condition of the Agreement. b. Contractor will be in default of this Agreement if Contractor is debarred from participating in City procurements and solicitations in accordance with the City’s Purchasing Policy and Procedures Manual. c. Notice and Opportunity to Cure. In the event a party is in default then the other party may, at its option and at any time, provide written notice to the defaulting party of the default. The defaulting party will have thirty (30) days from receipt of the notice to cure the default; the thirty (30) day cure period may be extended by mutual agreement of the parties, but no cure period may exceed ninety (90) days. A default notice will be deemed to be sufficient if it is reasonably calculated to provide notice of the nature and extent of such default. Failure of the non-defaulting party to provide notice of the default does not waive any rights under the Agreement. d. Anticipatory Repudiation. Whenever the City in good faith has reason to question Contractor’s intent or ability to perform, the City may demand that Contractor give a written assurance of its intent and ability to perform. In the event that the demand is made and no written assurance is given within five (5) calendar days, the City may treat this failure as an anticipatory repudiation of the Agreement. S.18 REMEDIES. The remedies set forth in this Agreement are not exclusive. Election of one remedy will not preclude the use of other remedies. In the event of default: a. The non-defaulting party may terminate the Agreement, and the termination will be effective immediately or at such other date as specified by the terminating party. b. The City may purchase the services required under the Agreement from the open market, complete required work itself, or have it completed at the expense of Contractor. If the cost of obtaining substitute services exceeds the contract price, the City may recover the excess cost by: (i) requiring immediate reimbursement to the City; (ii) deduction from an unpaid balance due to Contractor; (iii) collection against the proposal and/or performance security, if any; (iv) collection against liquidated damages (if applicable); or (v) a combination of the aforementioned remedies or other remedies as provided by law. Costs includes any and all, fees, and expenses incurred in obtaining substitute services and expended in obtaining reimbursement, including, but not limited to, administrative expenses, attorneys’ fees, and costs. c. The non-defaulting party will have all other rights granted under this Agreement and all rights at law or in equity that may be available to it. d. Neither party will be liable for incidental, special, or consequential damages. S.19 CONTINUATION DURING DISPUTES. Contractor agrees that during any dispute between the parties, Contractor will continue to perform its obligations until the dispute is settled, instructed to cease performance by the City, enjoined or prohibited by judicial action, or otherwise required or obligated to cease performance by other provisions in this Agreement. STANDARD TERMS AND CONDITIONS Inspection and Plan Review Services 12 ITB #01-20 S.20 TERMINATION FOR CONVENIENCE. The City reserves the right to terminate this Agreement in part or in whole upon thirty (30) calendar days’ written notice. S.21 TERMINATION FOR CONFLICT OF INTEREST Florida Statutes Section 112. Pursuant to F.S. Section 112, the City may cancel this Agreement after its execution, without penalty or further obligation, if any person significantly involved in initiating, securing, drafting, or creating the Agreement for the City becomes an employee or agent of Contractor. S.22 TERMINATION FOR NON-APPROPRIATION AND MODIFICATION FOR BUDGETARY CONSTRAINT. The City is a governmental agency which relies upon the appropriation of funds by its governing body to satisfy its obligations. If the City reasonably determines that it does not have funds to meet its obligations under this Agreement, the City will have the right to terminate the Agreement without penalty on the last day of the fiscal period for which funds were legally available. In the event of such termination, the City agrees to provide written notice of its intent to terminate thirty (30) calendar days prior to the stated termination date. S.23 PAYMENT TO CONTRACTOR UPON TERMINATION. Upon termination of this Agreement, Contractor will be entitled only to payment for those services performed up to the date of termination, and any authorized expenses already incurred up to such date of termination. The City will make final payment within thirty (30) calendar days after the City has both completed its appraisal of the materials and services provided and received Contractor’s properly prepared final invoice. S.24 NON-WAIVER OF RIGHTS. There will be no waiver of any provision of this agreement unless approved in writing and signed by the waiving party. Failure or delay to exercise any rights or remedies provided herein or by law or in equity, or the acceptance of, or payment for, any services hereunder, will not release the other party of any of the warranties or other obligations of the Agreement and will not be deemed a waiver of any such rights or remedies. S.25 INDEMNIFICATION/LIABILITY. a. To the fullest extent permitted by law, Contractor agrees to defend, indemnify, and hold the City, its officers, agents, and employees, harmless from and against any and all liabilities, demands, claims, suits, losses, damages, causes of action, fines or judgments, including costs, attorneys’, witnesses’, and expert witnesses’ fees, and expenses incident thereto, relating to, arising out of, or resulting from: (i) the services provided by Contractor personnel under this Agreement; (ii) any negligent acts, errors, mistakes or omissions by Contractor or Contractor personnel; and (iii) Contractor or Contractor personnel’s failure to comply with or fulfill the obligations established by this Agreement. b. Contractor will update the City during the course of the litigation to timely notify the City of any issues that may involve the independent negligence of the City that is not covered by this indemnification. c. The City assumes no liability for actions of Contractor and will not indemnify or hold Contractor or any third party harmless for claims based on this Agreement or use of Contractor-provided supplies or services. S.26 WARRANTY. Contractor warrants that the services and materials will conform to the requirements of the Agreement. Additionally, Contractor warrants that all services will be performed in a good, workman-like and professional manner. The City’s acceptance of service or materials provided by Contractor will not relieve Contractor from its obligations under this warranty. If any materials or services are of a substandard or unsatisfactory manner as determined by the City, Contractor, at no additional charge to the City, will provide materials or redo such services until in accordance with this Agreement and to the City’s reasonable satisfaction. Unless otherwise agreed, Contractor warrants that materials will be new, unused, of most current manufacture and not discontinued, will be free of defects in materials and workmanship, will be provided in accordance with manufacturer's standard warranty for at least one (1) year unless otherwise specified, and will perform in accordance with manufacturer's published specifications. STANDARD TERMS AND CONDITIONS Inspection and Plan Review Services 13 ITB #01-20 S.27 THE CITY’S RIGHT TO RECOVER AGAINST THIRD PARTIES. Contractor will do nothing to prejudice the City’s right to recover against third parties for any loss, destruction, or damage to City property, and will at the City’s request and expense, furnish to the City reasonable assistance and cooperation, including assistance in the prosecution or defense of suit and the execution of instruments of assignment in favor of the City in obtaining recovery. S.28 NO GUARANTEE OF WORK. Contractor acknowledges and agrees that it is not entitled to deliver any specific amount of materials or services or any materials or services at all under this Agreement and acknowledges and agrees that the materials or services will be requested by the City on an as needed basis at the sole discretion of the City. Any document referencing quantities or performance frequencies represent the City's best estimate of current requirements, but will not bind the City to purchase, accept, or pay for materials or services which exceed its actual needs. S.29 OWNERSHIP. All deliverables, services, and information provided by Contractor or the City pursuant to this Agreement (whether electronically or manually generated) including without limitation, reports, test plans, and survey results, graphics, and technical tables, originally prepared in the performance of this Agreement, are the property of the City and will not be used or released by Contractor or any other person except with prior written permission by the City. S.30 USE OF NAME. Contractor will not use the name of the City of Clearwater in any advertising or publicity without obtaining the prior written consent of the City. S.31 PROHIBITED ACTS. Pursuant to Florida Constitution Article II Section 8, a current or former public officer or employee within the last two (2) years shall not represent another organization before the City on any matter for which the officer or employee was directly concerned and personally participated in during their service or employment or over which they had a substantial or material administrative discretion. S.32 FOB DESTINATION FREIGHT PREPAID AND ALLOWED. All deliveries will be FOB destination freight prepaid and allowed unless otherwise agreed. S.33 RISK OF LOSS. Contractor agrees to bear all risks of loss, injury, or destruction of goods or equipment incidental to providing these services and such loss, injury, or destruction will not release Contractor from any obligation hereunder. S.34 SAFEGUARDING CITY PROPERTY. Contractor will be responsible for any damage to City real property or damage or loss of City personal property when such property is the responsibility of or in the custody of Contractor or its employees. S.35 WARRANTY OF RIGHTS. Contractor warrants it has title to, or the right to allow the City to use, the materials and services being provided and that the City may use same without suit, trouble or hindrance from Contractor or third parties. S.36 PROPRIETARY RIGHTS INDEMNIFICATION. Without limiting the foregoing, Contractor will without limitation, at its expense defend the City against all claims asserted by any person that anything provided by Contractor infringes a patent, copyright, trade secret or other intellectual property right and must, without limitation, pay the costs, damages and attorneys' fees awarded against the City in any such action, or pay any settlement of such action or claim. Each party agrees to notify the other promptly of any matters to which this provision may apply and to cooperate with each other in connection with such defense or settlement. If a preliminary or final judgment is obtained against the City’s use or operation of the items provided by Contractor hereunder or any part thereof by reason of any alleged infringement, Contractor will, at its expense and without limitation, either: (a) modify the item so that it becomes non-infringing; (b) procure for the City the right to continue to use the item; (c) substitute for the infringing item other item(s) having at least equivalent capability; or (d) refund to the City an amount equal to the price paid, less reasonable usage, from the time of installation acceptance through cessation of use, which amount will be calculated on a useful life not less than five (5) years, plus any additional costs the City may incur to acquire substitute supplies or services. S.37 CONTRACT ADMINISTRATION. The contract will be administered by the Purchasing Administrator and/or an authorized representative from the using department. All questions STANDARD TERMS AND CONDITIONS Inspection and Plan Review Services 14 ITB #01-20 regarding the contract will be referred to the administrator for resolution. Supplements may be written to the contract for the addition or deletion of services. Payment will be negotiated and determined by the contract administrator(s). S.38 FORCE MAJEURE. Failure by either party to perform its duties and obligations will be excused by unforeseeable circumstances beyond its reasonable control, including acts of nature, acts of the public enemy, riots, fire, explosion, legislation, and governmental regulation. The party whose performance is so affected will within five (5) calendar days of the unforeseeable circumstance notify the other party of all pertinent facts and identify the force majeure event. The party whose performance is so affected must also take all reasonable steps, promptly and diligently, to prevent such causes if it is feasible to do so, or to minimize or eliminate the effect thereof. The delivery or performance date will be extended for a period equal to the time lost by reason of delay, plus such additional time as may be reasonably necessary to overcome the effect of the delay, provided however, under no circumstances will delays caused by a force majeure extend beyond one hundred-twenty (120) calendar days from the scheduled delivery or completion date of a task unless agreed upon by the parties. S.39 COOPERATIVE USE OF CONTRACT. The City has entered into various cooperative purchasing agreements with other Florida government agencies, including the Tampa Bay Area Purchasing Cooperative. Under a Cooperative Purchasing Agreement, any contract may be extended for use by other municipalities, school districts and government agencies in the State of Florida with the approval of Contractor. Any such usage by other entities must be in accordance with the statutes, codes, ordinances, charter and/or procurement rules and regulations of the respective government agency. Orders placed by other agencies and payment thereof will be the sole responsibility of that agency. The City is not responsible for any disputes arising out of transactions made by others. S.40 FUEL CHARGES AND PRICE INCREASES. No fuel surcharges will be accepted. No price increases will be accepted without proper request by Contractor and response by the City’s Purchasing Division. S.41 NOTICES. All notices to be given pursuant to this Agreement must be delivered to the parties at their respective addresses. Notices may be (i) personally delivered; (ii) sent via certified or registered mail, postage prepaid; (iii) sent via overnight courier; or (iv) sent via facsimile. If provided by personal delivery, receipt will be deemed effective upon delivery. If sent via certified or registered mail, receipt will be deemed effective three (3) calendar days after being deposited in the United States mail. If sent via overnight courier or facsimile, receipt will be deemed effective two (2) calendar days after the sending thereof. S.42 GOVERNING LAW, VENUE. This Agreement is governed by the laws of the State of Florida. The exclusive venue selected for any proceeding or suit in law or equity arising from or incident to this Agreement will be Pinellas County, Florida. S.43 INTEGRATION CLAUSE. This Agreement, including all attachments and exhibits hereto, supersede all prior oral or written agreements, if any, between the parties and constitutes the entire agreement between the parties with respect to the work to be performed. S.44 PROVISIONS REQUIRED BY LAW. Any provision required by law to be in this Agreement is a part of this Agreement as if fully stated in it. STANDARD TERMS AND CONDITIONS Inspection and Plan Review Services 15 ITB #01-20 S.45 SEVERABILITY. If any provision of this Agreement is declared void or unenforceable, such provision will be severed from this Agreement, which will otherwise remain in full force and effect. The parties will negotiate diligently in good faith for such amendment(s) of this Agreement as may be necessary to achieve the original intent of this Agreement, notwithstanding such invalidity or unenforceability. S.46 SURVIVING PROVISIONS. Notwithstanding any completion, termination, or other expiration of this Agreement, all provisions which, by the terms of reasonable interpretation thereof, set forth rights and obligations that extend beyond completion, termination, or other expiration of this Agreement, will survive and remain in full force and effect. Except as specifically provided in this Agreement, completion, termination, or other expiration of this Agreement will not release any party from any liability or obligation arising prior to the date of termination. DETAILED SPECIFICATIONS Inspection and Plan Review Services 16 ITB #01-20 1. INTRODUCTION. The City of Clearwater (City) is located on the West Coast of Florida in the Tampa Bay region. It is the third largest city in the region with an estimated population of 110,000 residents. The City of Clearwater is a major tourist destination – Clearwater Beach was recently rated #1 U.S. Beach by TripAdvisor, previously named “Florida’s Best Beach Town 2013” by USA Today, and was on the “Top Ten List of Best Beaches from Maine to Hawaii”. The City of Clearwater is home to the Philadelphia Phillies Spring Training and Clearwater Threshers Minor League Baseball and hosts several sports tournaments through the year that attract visitors from across the country. Clearwater is home for Winter the Dolphin and the Clearwater Marine Aquarium. Winter’s story has made it all the way to Hollywood in the motion pictures “Dolphin Tale” and “Dolphin Tale 2”, both filmed here in Clearwater. 2. SCOPE OF SERVICES. In an effort to be responsive and maintain good service to our citizens, the City of Clearwater’s Planning and Development Department requests sealed bids from qualified and experienced firms for building, electrical, mechanical, plumbing and/or site inspection and plan review services. The resulting award will ensure compliance in accordance with the requirements of Florida Statutes 468, Part XII, Florida Building Codes, and other pertinent regulations, rules, or directives set forth by city ordinances, state and federal laws. FOR INSPECTION SERVICES: requests received by the City until midnight will be responded to the next business day. A list of assigned inspections is provided to each inspector by 8:00 a.m. each day. In the past twelve (12) months, approximately 4,400 of 22,000 inspections were performed by contractors for the City. FOR PLAN REVIEW SERVICES: The Planning and Development Department performs approximately 11,000 plan reviews annually. Assignment to contract plan reviewers will be made to allow the Department to meet established plan review timeframe goals. Plan reviews will be scheduled with contractor; the review time agreed upon based on complexity of project. In the past twelve (12) months, less than 69 of the 11,000 plan reviews were performed by contractors for the City. Plan review could be either at our offices or at the contractor’s office, as arranged at the time, based on need. 3. RESPONSIBILITIES. 3a. Plan review and inspection shall include, but not limited to, building, mechanical (HVAC), plumbing, structural, electrical and site, as well as providing all administrative documentation as required by the City of Clearwater. 3b. Inspector(s) must be available daily, Monday through Friday, for morning assignments as well as random inspections that may be requested during the day. 3c. Inspector will schedule and complete inspections of buildings and other structures in the process of commercial and residential construction, alteration, or demolition and removal. 3d. Inspect permitted construction within the City’s limits, for compliance with City codes and ordinances and permitted plans and specifications. If not in compliance, contractor shall provide viable alternatives to bring building into compliance and to clarify the intent of codes and ordinances. 3e. Receive and investigate alleged complaints of working without permits, code violations, etc., by citizens. 3f. Maintain records of plan reviews, inspection and investigations. Log daily plan reviews and inspections results in the City’s Accela database by inspector in City’s office. Familiarity with Accela is preferred but not required. 3g. Review plans for code compliance. DETAILED SPECIFICATIONS Inspection and Plan Review Services 17 ITB #01-20 3h. Contact contractors, architect, engineers, and citizens about construction projects, code questions, and other concerns. 3i. For residential, inspector(s) shall contact homeowners via telephone to advise time of arrival for inspection; for commercial inspection requestors may be contacted but is not required. 3j. Reviewer(s) must be available to perform re-reviews within five (5) working days of receipt of response comments. 3.k The contractor must recuse themselves from inspecting buildings where any member of the contracted vendors firm has prepared or reviewed any plans, drawings, or other design services for that project. 4. EQUIPMENT. All inspectors shall provide, at their own cost, inspection vehicle in good operating condition, cellular telephone, safety shoes, hardhats, and other safety related equipment, and code books. The City shall provide identification for security purposes to be used for City-related tasks. 5. MINIMUM QUALIFICATIONS OF PERSONNEL. 5a. Plan Examiners and Inspectors must be properly licensed as required by the State of Florida Department of Business and Professional Regulation and Florida Statute 468, Part XII. Copies of all applicable licenses MUST be submitted with bid. 5b. Personnel shall maintain their Plans Examiner’s and Inspector’s Certifications with the State of Florida. 5c. Personnel shall continually provide their best efforts to efficiently and effectively perform duties and responsibilities as assigned in a proper and professional manner, uphold the City of Clearwater’s regulations and policies, and abide by ethical standards appropriate to their position. 5d. Personnel must be able to communicate both verbally and in writing and work effectively with city staff, contractors and others in the construction trade. 5e. All Personnel shall possess a valid Florida driver’s license and be able to operate a motor vehicle; make clear visual observations; hear/see alarms on construction sites and on equipment; climb stairs, ladders and scaffolding; walk a construction site, on roofs, on steel Rebar rods, and over construction materials; step in and out of trenches, and crawl through small spaces. 6. INSURANCE REQUIREMENTS. The Vendor shall, at its own cost and expense, acquire and maintain (and cause any subcontractors, representatives or agents to acquire and maintain) during the term with the City, sufficient insurance to adequately protect the respective interest of the parties. Coverage shall be obtained with a carrier having an AM Best Rating of A-VII or better. In addition, the City has the right to review the Contractor’s deductible or self-insured retention and to require that it be reduced or eliminated. Specifically the Vendor must carry the following minimum types and amounts of insurance on an occurrence basis or in the case of coverage that cannot be obtained on an occurrence basis, then coverage can be obtained on a claims-made basis with a minimum three (3) year tail following the termination or expiration of this Agreement: a. Commercial General Liability Insurance coverage, including but not limited to, premises operations, products/completed operations, products liability, contractual liability, advertising DETAILED SPECIFICATIONS Inspection and Plan Review Services 18 ITB #01-20 injury, personal injury, death, and property damage in the minimum amount of $1,000,000 (one million dollars) per occurrence and $2,000,000 (two million dollars) general aggregate. b. Commercial Automobile Liability Insurance coverage for any owned, non-owned, hired or borrowed automobile is required in the minimum amount of $1,000,000 (one million dollars) combined single limit. c. Professional Liability/Malpractice/Errors or Omissions Insurance coverage appropriate for the type of business engaged in by the Respondent with minimum limits of $2,000,000 (two million dollars) per occurrence. If a claim made form of coverage is provided, the retroactive date of coverage shall be no later than the inception date of claims made coverage, unless the prior policy was extended indefinitely to cover prior acts. Coverage shall be extended beyond the policy year either by a supplemental extended reporting period (SERP) of as great a duration as available, and with no less coverage and with reinstated aggregate limits, or by requiring that any new policy provide a retroactive date no later than the inception date of claims made coverage. d. Unless waived by the State of Florida and proof of waiver is provided to the City, statutory Workers’ Compensation Insurance coverage in accordance with the laws of the State of Florida, and Employer’s Liability Insurance in the minimum amount of $500,000 (five hundred thousand dollars) each employee each accident, $500,000 (five hundred thousand dollars) each employee by disease, and $500,000 (five hundred thousand dollars) disease policy limit. Coverage should include Voluntary Compensation, Jones Act, and U.S. Longshoremen’s and Harbor Worker’s Act coverage where applicable. Coverage must be applicable to employees, contractors, subcontractors, and volunteers, if any. The above insurance limits may be achieved by a combination of primary and umbrella/excess liability policies. Other Insurance Provisions. a. Prior to the execution of this Agreement, and then annually upon the anniversary date(s) of the insurance policy’s renewal date(s) for as long as this Agreement remains in effect, the Vendor will furnish the City with a Certificate of Insurance(s) (using appropriate ACORD certificate, SIGNED by the Issuer, and with applicable endorsements) evidencing all of the coverage set forth above and naming the City as an “Additional Insured” on the Commercial General Liability Insurance and Auto Liability policies. In addition when requested in writing from the City, Vendor will provide the City with certified copies of all applicable policies. The address where such certificates and certified policies shall be sent or delivered is as follows: City of Clearwater Attn: Purchasing Department, ITB #01-20 P.O. Box 4748 Clearwater, FL 33758-4748 b. Vendor shall provide thirty (30) days written notice of any cancellation, non-renewal, termination, material change or reduction in coverage. c. Vendor’s insurance as outlined above shall be primary and non-contributory coverage for Vendor’s negligence. d. Vendor reserves the right to appoint legal counsel to provide for the Vendor’s defense, for any and all claims that may arise related to Agreement, work performed under this Agreement, or to Vendor’s design, equipment, or service. Vendor agrees that the City shall not be liable to reimburse Vendor for any legal fees or costs as a result of Vendor providing its defense as DETAILED SPECIFICATIONS Inspection and Plan Review Services 19 ITB #01-20 contemplated herein. The stipulated limits of coverage above shall not be construed as a limitation of any potential liability to the City, and City’s failure to request evidence of this insurance shall not be construed as a waiver of Vendor’s (or any contractors’, subcontractors’, representatives’ or agents’) obligation to provide the insurance coverage specified. MILESTONES Inspection and Plan Review Services 20 ITB #01-20 1. BEGINNING AND END DATE OF INITIAL TERM. January 1, 2020 through December 31, 2020 If the commencement of performance is delayed because the City does not execute the contract on the start date, the City may adjust the start date, end date and milestones to reflect the delayed execution. 2. EXTENSION. The City reserves the right to extend the term of this contract, provided however, that the City shall give written notice of its intentions to extend this contract no later than thirty (30) days prior to the expiration date of the contract. 3. RENEWAL. At the end of the initial term of this contract, the City may initiate renewal(s) as provided. The decision to renew a contract rests solely with the City. The City will give written notice of its intention to renew the contract no later than thirty (30) days prior to the expiration. Two (2), one (1) year renewals possible at the City’s option. 4. PRICES. All pricing shall be firm for the initial term of one (1) year; except where otherwise provided by the specifications, and include all transportation, insurance and warranty costs. The City shall not be invoiced at prices higher than those stated in any contract resulting from this bid. The Contractor certifies that the prices offered are no higher than the lowest price the Contractor charges other buyers for similar quantities under similar conditions. The Contractor further agrees that any reductions in the price of the goods or services covered by this bid and occurring after award will apply to the undelivered balance. The Contractor shall promptly notify the City of such price reductions. During the sixty (60) day period prior to each annual anniversary of the contract effective date, the Contractor may submit a written request that the City increase the prices for an amount for no more than the twelve month change in the Consumer Price Index for All Urban Customers (CPI-U), US City Average, All Items, Not Seasonally Adjusted as published by the U.S. Department of Labor, Bureau of Labor Statistics (http://www.bls.gov/cpi/home.htm). The City shall review the request for adjustment and respond in writing; such response and approval shall not be unreasonably withheld. At the end of the initial term, pricing may be adjusted for amounts other than inflation based on mutual agreement of the parties after review of appropriate documentation. Renewal prices shall be firm for at least one year and may be adjusted thereafter as outlined in the previous paragraph. No fuel surcharges will be accepted. BID SUBMISSION Inspection and Plan Review Services 21 ITB #01-20 1. BID SUBMISSION. Submit one (1) signed original bid, one (1) copy and one (1) electronic copy of the bid in a sealed container. 2. BIDDER RESPONSE CHECKLIST. This checklist is provided for your convenience. It is not necessary to return a copy of this solicitation’s Instructions, Terms and Conditions, or Detailed Specifications with your bid response. Only submit the requested forms and any other requested or descriptive literature. Original and proper number of copies with electronic format (if requested) Bid container properly labeled Bid pricing form Exceptions/Additional Materials/Addenda form Vendor Information form Offer Certification form Scrutinized Companies form(s) as required Copies of applicable license(s). Bids without copies will be deemed non-responsive. W-9 Form to be provided by Bidder (http://www.irs.gov/pub/irs-pdf/fw9.pdf) BID PRICING Inspection and Plan Review Services 22 ITB #01-20 Pursuant to the contract specifications enumerated and described in this solicitation, we agree to furnish Code Inspections and Plan Review Services to the City of Clearwater at the price(s) stated below. Item No. Description Unit Price 1 Cost per INSPECTION performed Each $ 2A Per Hour cost for PLAN REVIEW SERVICES Per Hour $ 2B Minimum charge for PLAN REVIEW SERVICES [line 2A hourly rate times minimum hour(s)] Minimum hour(s) per service _______ $ DELIVERY REQUIREMENTS FOB: Destination, Freight Prepaid and Allowed Freight Costs: Unit prices should include all freight and transportation charges PAYMENT TERMS Select one choice of payment terms: Net 30, City of Clearwater’s standard payment terms 2%15, Net 30 _____%10, Net 30 (identify discount not less than 3%) Procurement card (Bank of America Visa card): o Credit processing fees apply o Invoices under $2,500 paid by department Vendor: _________________________________________ Date: _______________________________ EXCEPTIONS/ADDITIONAL MATERIALS/ADDENDA Inspection and Plan Review Services 23 ITB #01-20 Bidders shall indicate any and all exceptions taken to the provisions or specifications in this solicitation document. Exceptions that surface elsewhere and that do not also appear under this section shall be considered invalid and void and of no contractual significance. Exceptions (mark one): Note – Any material exceptions taken to the City’s Standard Terms and Conditions will render a Bid Non-responsive. No exceptions Exceptions taken (describe--attach additional pages if needed) Additional Materials submitted (mark one): No additional materials have been included with this bid Additional Materials attached (describe--attach additional pages if needed) Addenda Bidders are responsible for verifying receipt of any addenda issued by checking the City’s website at http://www.myclearwater.com/business/bid-information/ prior to the bid opening. Failure to acknowledge any addenda issued may result in a response being deemed non-responsive. Acknowledgement of Receipt of Addenda (initial for each addenda received, if applicable): Addenda Number Initial to acknowledge receipt Vendor Name ____ Date: ____ VENDOR INFORMATION Inspection and Plan Review Services 24 ITB #01-20 Company Legal/Corporate Name: Doing Business As (if different than above): Address: City: State: Zip: - Phone: Fax: E-Mail Address: Website: DUNS # Remit to Address (if different than above): Order from Address (if different from above): Address: Address: City: State: Zip: City: State: Zip: Contact for Questions about this bid: Name: Fax: Phone: E-Mail Address: Day-to-Day Project Contact (if awarded): Name: Fax: Phone: E-Mail Address: Certified Small Business Certifying Agency: Certified Minority, Woman or Disadvantaged Business Enterprise Certifying Agency: SCRUTINIZED COMPANIES Inspection and Plan Review Services 25 ITB #01-20 SCRUTINIZED COMPANIES THAT BOYCOTT ISRAEL LIST CERTIFICATION FORM THIS FORM MUST BE COMPLETED AND SUBMITTED WITH THE BID/PROPOSAL. FAILURE TO SUBMIT THIS FORM AS REQUIRED MAY DEEM YOUR SUBMITTAL NONRESPONSIVE. The affiant, by virtue of the signature below, certifies that: 1. The vendor, company, individual, principal, subsidiary, affiliate, or owner is aware of the requirements of section 287.135, Florida Statutes, regarding companies on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel; and 2. The vendor, company, individual, principal, subsidiary, affiliate, or owner is eligible to participate in this solicitation and is not listed on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel; and 3. “Boycott Israel” or “boycott of Israel” means refusing to deal, terminating business activities, or taking other actions to limit commercial relations with Israel, or persons or entities doing business in Israel or in Israeli-controlled territories, in a discriminatory manner. A statement by a company that it is participating in a boycott of Israel, or that it has initiated a boycott in response to a request for a boycott of Israel or in compliance with, or in furtherance of, calls for a boycott of Israel, may be considered as evidence that a company is participating in a boycott of Israel; and 4. If awarded the Contract (or Agreement), the vendor, company, individual, principal, subsidiary, affiliate, or owner will immediately notify the City of Clearwater in writing, no later than five (5) calendar days after any of its principals are placed on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel. __________________________________________ Authorized Signature __________________________________________ Printed Name __________________________________________ Title __________________________________________ Name of Entity/Corporation STATE OF _____________________ COUNTY OF ___________________ The foregoing instrument was acknowledged before me on this ______ day of _____________________, 20____, by _________________________________ (name of person whose signature is being notarized) as the ________________________ (title) of ________________________________________ (name of corporation/entity), personally known to me as described herein _____________________, or produced a _________________________ (type of identification) as identification, and who did/did not take an oath. ____________________________________ Notary Public ____________________________________ Printed Name My Commission Expires: __________________ NOTARY SEAL ABOVE OFFER CERTIFICATION Inspection and Plan Review Services 26 ITB #01-20 By signing and submitting this Bid, the Vendor certifies that: a) It is under no legal prohibition on contracting with the City of Clearwater. b) It has read, understands, and is in compliance with the specifications, terms and conditions stated herein, as well as its attachments, and any referenced documents. c) It has no known, undisclosed conflicts of interest. d) The prices offered were independently developed without consultation or collusion with any of the other respondents or potential respondents or any other anti-competitive practices. e) No offer of gifts, payments or other consideration were made to any City employee, officer, elected official, or consultant who has or may have had a role in the procurement process for the services and or goods/materials covered by this contract. f) It understands the City of Clearwater may copy all parts of this response, including without limitation any documents and/or materials copyrighted by the respondent, for internal use in evaluating respondent’s offer, or in response to a public records request under Florida’s public records law (F.S. 119) or other applicable law, subpoena, or other judicial process; provided that Clearwater agrees not to change or delete any copyright or proprietary notices. g) Respondent hereby warrants to the City that the respondent and each of its subcontractors (“Subcontractors”) will comply with, and are contractually obligated to comply with, all Federal Immigration laws and regulations that relate to their employees. h) Respondent certifies that they are not in violation of section 6(j) of the Federal Export Administration Act and not debarred by any Federal or public agency. i) It will provide the materials or services specified in compliance with all Federal, State, and Local Statutes and Rules if awarded by the City. j) It is current in all obligations due to the City. k) It will accept such terms and conditions in a resulting contract if awarded by the City. l) The signatory is an officer or duly authorized agent of the respondent with full power and authority to submit binding offers for the goods or services as specified herein. ACCEPTED AND AGREED TO: Company Name: Signature: Printed Name: Title: Date: MAILING LABEL CUT ALONG THE LINE AND AFFIX TO THE FRONT OF YOUR BID CONTAINER Inspection and Plan Review Services 27 ITB #01-20 --------------------------------------------------------------------------------- For US Mail ------------------------------------------------------------------------------ SEALED BID Submitted by: Company Name: Address: City, State, Zip: ITB #01-20, Code Inspection and Plan Review Services Due Date: November 7, 2019, at 10:00 A.M. City of Clearwater Attn: Purchasing PO Box 4748 Clearwater FL 33758-4748 --------------------------------------------------------------------------------- For US Mail ------------------------------------------------------------------------------ ---------------------------------------------- For Hand Deliveries, FEDEX, UPS or Other Courier Services ------------------------------------------------ SEALED BID Submitted by: Company Name: Address: City, State, Zip: ITB #01-20, Code Inspection and Plan Review Services Due Date: November 7, 2019, at 10:00 A.M. ---------------------------------------------- For Hand Deliveries, FEDEX, UPS or Other Courier Services ------------------------------------------------ City of Clearwater Attn: Purchasing 100 S Myrtle Ave 3rd Fl Clearwater FL 33756-5520 Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7216 Agenda Date: 12/19/2019 Status: Consent AgendaVersion: 1 File Type: Action ItemIn Control: Information Technology Agenda Number: 7.12 SUBJECT/RECOMMENDATION: Authorize the piggyback of Florida State Contract 4323000-NASPO-16-ACS-SVAR, Software Value Added Reseller (SVAR) Services, to CDW-G, of Vernon Hills, IL, in the amount of $460,581, pursuant to Clearwater Code of Ordinances Section 2.564(1)(d) Exceptions to Bid - Other Government Entities’ Bids and authorize lease purchase under the City's Master Lease Purchase Agreement or internal financing via an interfund loan from the Capital Improvement Fund, whichever is deemed to be in the City's best interests and authorize the appropriate officials to execute same. (consent) SUMMARY: Authorization is requested to piggyback NASPO Software contract number 4323000-NASPO-16-ACS-SVAR for Software Value Added Reseller CDW-G, pursuant to Clearwater Code of Ordinances Section 2.564 (1)(d) Exceptions to Bid - Other Government Entities’ Bids, for the utilization of Commvault hardware and software backup solutions in the amount of $369,081. This authorization upgrades our current backup solution with Commvault. New features include additional solid-state devices to diversify backup destinations, dedicated storage solutions for public safety records, and hyper-converged architecture for simplified administration. The CDW-G pricing includes 5 discrete devices and hardware and software support services, implementation and deployment. In addition to the software purchase, an additional $91,500 is being requested for Fiscal Year (FY) 2021 and FY22 software and hardware maintenance services as follows: FY 20: $369,081 Appliance and software purchase, implementation and maintenance FY 21: $45,000 Software maintenance FY 22: $46,500 Software maintenance APPROPRIATION CODE AND AMOUNT: Funds are available in capital improvement projects 355-L1908 and 355-M2007 fund this purchase in FY-20. Future maintenance (FY21 and FY22) will be budgeted in the Information Technology operating budget, code 5559864-530300, contractual service. Page 1 City of Clearwater Printed on 12/19/2019 File Number: ID#19-7216 Page 2 City of Clearwater Printed on 12/19/2019 Page 1 of 2 QUOTE CONFIRMATION DEAR SABRINA CHUTE, Thank you for considering CDWG for your computing needs. The details of your quote are below. Click here to convert your quote to an order. QUOTE #QUOTE DATE QUOTE REFERENCE CUSTOMER #GRAND TOTAL LBTQ407 11/22/2019 COMMVAULT 0590071 $369,081.00 QUOTE DETAILS ITEM QTY CDW#UNIT PRICE EXT. PRICE COMMVAULT 72TB RAW CAP HCI LIC 3 4855494 $69,000.00 $207,000.00 Mfg. Part#: CN-CV-E-1372-31 PLEASE SET A 12/20/2019 EXPIRATIONDATE ON THIS QUOTE Contract: Florida NVP Software 43230000-NASPO-16-ACS-SVAR (ADSPO16-130652) Commvault Appliance Fibre Channel HBA Card 3 4912251 $2,999.00 $8,997.00 Mfg. Part#: CN-CVS-FCC PLEASE SET A 12/20/2019 EXPIRATION Contract: Florida NVP Software 43230000-NASPO-16- ACS-SVAR (ADSPO16-130652) \OMMVAULT 48TB RAW CAP HYPER CONV 2 4859508 $51,999.00 $103,998.00 2 4912251 $2,999.00 $5,998.00 Mfg. Part#: CN-CV-E-1348-31 PLEASE SET A 12/20/2019 EXPIRATIONDATE ON THIS QUOTEElectronic distribution - NO MEDIA Contract: Florida NVP Software 43230000-NASPO-16-ACS-SVAR (ADSPO16-130652) Commvault Appliance Fibre Channel HBA Card Mfg. Part#: CN-CVS-FCC PLEASE SET A 12/20/2019 EXPIRATIONDATE ON THIS QUOTE Contract: Florida NVP Software 43230000-NASPO-16-ACS-SVAR (ADSPO16-130652) CommVault Data Protection Advanced - license - 1 TB capacity 6 5181657 $3,965.00 $23,790.00 Mfg. Part#: CV-BR-FT UNSPSC: 43233415 PLEASE SET A 12/20/2019 EXPIRATIONDATE ON THIS QUOTE Contract: Florida NVP Software 43230000-NASPO-16-ACS-SVAR (ADSPO16-130652) CommVault Data Protection Advanced - license - 1 TB capacity 4 5181657 $0.00 $0.00 Mfg. Part#: CV-BR-FT UNSPSC: 43233415 4tb Capacity Add-On for free during promo which exp on 12/20/19Contract: Florida NVP Software 43230000-NASPO-16-ACS-SVAR (ADSPO16-130652) COMMVAULT SMALL TIER QUICKSTART T+M 1 5759901 $14,999.00 $14,999.00 Mfg. Part#: PS-QS-SMALL Page 2 of 2 QUOTE DETAILS (CONT.) Commvault Small Tier QuickStart is a packaged Time and Materials implementation and configurationservice to be delivered over 5contiguous days. PLEASE SET A 12/20/2019 EXPIRATION DATE ON THIS QUOTEContract: Florida NVP Software 43230000-NASPO-16- ACS-SVAR (ADSPO16-130652) COMMVAULT SUPP & MAINTENANCE SUB 1 3977512 $4,299.00 $4,299.00 Mfg. Part#: S-PREM-18 Notification of software updates,product fixes and relatedenhancements. hour access to theCommVault Technical AssistanceCenter (including holidays). Quarterly reports.PLEASE SET A 12/20/2019 EXPIRATIONDATE ON THIS QUOTE Contract: Florida NVP Software 43230000-NASPO-16-ACS-SVAR (ADSPO16-130652) PURCHASER BILLING INFO SUBTOTAL $369,081.00 Billing Address:CITY OF CLEARWATERFINANCE DEPT PO BOX 4748CLEARWATER, FL 33758-4748Phone: (727) 562-4630 Payment Terms: Net 30 Days-Govt State/Local SHIPPING $0.00 SALES TAX $0.00 GRAND TOTAL $369,081.00 DELIVER TO Please remit payments to: Shipping Address:CITY OF CLEARWATERINFORMATION SERVICES100S MYRTLE AVE CLEARWATER, FL 33756Phone: (727) 562-4630 Shipping Method: DROP SHIP-GROUND CDW Government75 Remittance DriveSuite 1515 Chicago, IL 60675-1515 Need Assistance? CDWG SALES CONTACT INFORMATION Ryan Torres |(877) 500-3403 |ryantor@cdwg.com This quote is subject to CDW’s Terms and Conditions of Sales and Service Projects athttp://www.cdwg.com/content/terms-conditions/product-sales.aspxFor more information, contact a CDW account manager ' 2019 CDWG LLC, 200 N. Milwaukee Avenue, Vernon Hills, IL 60061 | 800.808.4239 1 | Page Software Value-Added Reseller (SVAR) Services MASTER PRICE AGREEMENT with CDW Government LLC Contract No. ADSPO16-130652 State of Arizona Lead State Effective: April 8, 2016 to April 7, 2018 2 | Page Master Agreement Table of Contents State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services Table of Contents EXECUTED OFFER AND ACCEPTANCE FORM......................................................................................................... 2 TABLE OF CONTENTS ................................................................................................................................................. 3 SECTION 1: NASPO ValuePoint Solicitation ADSPO16-00005829 – GENERAL INCFORMATION ......................... 4 SECTION 2: SCOPE OF WORK ................................................................................................................................... 7 SECTION 3: NASPO ValuePoint Master Agreement Terms and Conditions ......................................................... 22 SECTION 4: Lead State (State of Arizona) Terms and Conditions ........................................................................ 37 State of Arizona Special Terms and Conditions ....................................................................................... 37 State of Arizona Uniform Terms and Conditions ...................................................................................... 50 Master Agreement Section 1: General Information State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 1.1 Purpose The State of Arizona, State Procurement Office, is requesting proposals for Software Value-Added Reseller (SVAR) services in furtherance of the NASPO ValuePoint Cooperation Purchasing Program (NASPO ValuePoint). The purpose of this Request for Proposal (RFP) is to establish Master Agreements with qualified Offerors so that NASPO ValuePoint Cooperative Members may acquire Commercial off the Shelf Software (COTS) and related services from Software Value-Added Resellers. The objective of this RFP is to obtain best value, and in some cases achieve more favorable pricing, than is obtainable by an individual state or local government entity because of the collective volume of potential purchases by numerous state and local government entities. The Master Agreement(s) resulting from this procurement may be used by state governments (including departments, agencies, institutions), institutions of higher education, political subdivisions (i.e., colleges, school districts, counties, cities, etc.), the District of Colombia, territories of the United States, and other eligible entities subject to approval of the individuals state procurement director and compliance with local statutory and regulatory provisions, as explained in section 3 of the NASPO ValuePoint Master Agreement Terms and Conditions. The initial term of the Master Agreement shall be two (2) years with renewal provisions as outlined in Section 3 of the NASPO ValuePoint Master Terms and Conditions (Section 4). 1.2 Lead State, Solicitation Number and Lead State Contract Administrator (LSCA) The State of Arizona, State Procurement Office (SPO) is the Lead State and issuing office for this document and all subsequent addenda relating to it. This solicitation (RFP) is a competitive process, in accordance with the Arizona Procurement Code available at https://spo.az.gov/ . The Arizona Procurement Code is a compilation in one place of Arizona Revised Statutes (ARS) 41-2501 et seq. and administrative rules and regulations A.A.C R2-7-1010 et.seq. The Solicitation #ADSPO16-00005829 must be referred to on all proposals, correspondence, and documentation relating to this RFP. The Lead State Contract Administrator (LSCA) identified below is the single point of contact during this procurement process. Offerors and interested persons shall direct to the Lead State Contract Administrator all questions concerning the procurement process, technical requirements of this RFP, contractual requirements, requests for brand approval, change, clarification, protests, the award process, and any other questions that may arise related to this solicitation and the resulting Master Agreement. The Lead State Contract Administrator (LSCA) designated by the State of Arizona, State Procurement Office is: Charlotte Righetti, CPPB, CTNS State Procurement Manager State of Arizona, State Procurement Office 100 N. 15th Avenue, Suite 201 Phoenix, Arizona 85007 Phone: (602)542.9127 1.3 NASPO ValuePoint Background Information NASPO ValuePoint (formerly known as WSCA-NASPO) is a cooperative purchasing program of all 50 states, the District of Columbia and the territories of the United States. The Program is facilitated by the NASPO Cooperative Purchasing Organization LLC, a nonprofit subsidiary of the National Association of State Procurement Officials (NASPO), doing business as NASPO ValuePoint. NASPO is a non-profit association dedicated to strengthening the procurement community through education, research, and communication. It is made up of the directors of the central purchasing offices in each Master Agreement Section 1: General Information State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 5 | Page of the 50 states, the District of Columbia and the territories of the United States. NASPO ValuePoint facilitates administration of the cooperative group contracting consortium of state chief procurement officials for the benefit of state departments, institutions, agencies, and political subdivisions and other eligible entities (i.e., colleges, school districts, counties, cities, some nonprofit organizations, etc.) for all states, the District of Columbia, and territories of the United States. For more information consult the following websites: www.naspovaluepoint.org and www.naspo.org . 1.4 Participating States In addition to the Lead State conducting this solicitation, the Participating States listed below have requested to be named in this RFP as potential Users of the resulting Master Agreement. Other entities may become Participating Entities after award of the Master Agreement. State specific terms and conditions will govern each state’s Participating Addendum that will govern each state’s Participating Addendum. A listing of the Participating States can be found in Exhibit I. 1.5 Definitions – all capitalized terms in this document have the meaning as defined in AAC R2-7-101. Any capitalized term not defined in AAC R2-7-101 has the meaning defined below. "Appliance" means a separate and discrete hardware device with integrated software (firmware), specifically designed to provide a specific computing resource. For the purposes of this solicitation only an “Appliance” which is the sole means of obtaining the Software product is allowable. “Attachment” means any item the Solicitation requires an Offeror to submit as part of the Offer. “Best and Final Offer (BAFO)” means a revision to an Offer submitted after negotiations are completed that contains the Offeror’s most favorable terms for price, service, and products to be delivered. “Commercial Off the Shelf” (“COTS”) for the purposes of this solicitation means non-developmental software which has been created for specific uses and is available to the general public in the commercial marketplace. COTS products are designed to be implemented easily into existing systems without the need for customization. “End-User License Agreement (EULA)” is a legal contract between the manufacturer (publisher) and the end User of an application that details how the software can and cannot be used. “eProcurement (Electronic Procurement)” means conducting all or some of the procurement function over the Internet. Point, click, buy and ship Internet technology is replacing paper-based procurement and supply management business processes. Elements of eProcurement also include Invitation for Bids, Request for Proposals, and Request for Quotations. “Excluded Software Publishers” means a Software Publisher who is unwilling to do business with a Reseller. “Exhibit” means any document or object labeled as an Exhibit in the Solicitation or placed in the Exhibits section of the Solicitation. Master Agreement Section 1: General Information State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 6 | Page “Lead State Contract Administrator” (“LSCA”) means the Procurement Officer for the Master Agreement. “Master Agreement” (“MPA”) means the contractual agreement executed between the winning (awarded) contractor (s) and the Lead State conducting the procurement on behalf of NASPO ValuePoint. “Non-perpetual license” or Subscription License” is a temporary license that provides the right to use a particular licensed product until the end of the license-agreement term. “Participating State Contract Administrator” (“PSCA”) means the Procurement Officer for the Participating State. “Perpetual license” means a license which is everlasting and valid if the software is being used in accordance with the license-agreement requirements. “Person” means any corporation, business, individual, union, committee, club, or other organization or group of individuals “Publisher” means a software manufacturer (e.g., Microsoft) “Reseller” means a Software Value-Added Reseller who is awarded under this solicitation, and who has a fully-executed (MPA and PA-s) contract. “Reseller Cost” means the price that the Reseller pays the Publisher or Distributor to purchase software on behalf of the Participating State. Reseller Cost should not include any administrative or other mark-up costs. “Software” means the computer program, including media and associated documentation. “Software Licensing” means allowing an individual or group to use a piece of software. “Software Maintenance and Support” means any software upgrades, annual updates, patches and fixes needed to improve functionality and keep the software in working order. “Solicitation Amendment” means a change to the Solicitation issued by the Procurement Officer. “Volume License Agreements (VLAs)” means an agreement with a Software Publisher wherein the Participating State’s total expected purchasing over a period of time is considered in establishing the discount level. Master Agreement Section 2: Scope of Work State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 7 | Page 2.1 Software Value-Added Reseller (‘Reseller’ – “SVAR”) 2.1.1 Software Value-Added Reseller (‘Reseller’ – “SVAR”) shall be a large account reseller authorized to sell products direct from Key Software Publishers or authorized Distributors. 2.1.2 SVAR shall do the following: 2.1.2.1 Provide Commercial Off-the-Shelf-Software (COTS). 2.1.2.2 Honor existing Volume or Enterprise license agreements. 2.1.2.3 Offer maintenance and support packages on licenses already owned by the Participating State and other Purchasing Entities. 2.1.2.4 Advise the LSCA, each PSCA, and other Purchasing Entities of SVAR’s channel partner status with Key Software Publishers. 2.1.2.5 Retain or enhance reseller certifications with software publishers - At a minimum, maintain Reseller certification levels held at time of award. If Reseller’s certification or reseller status is withdrawn or reduced, Reseller is required to immediately notify, in writing, the Lead State Contract Administrator (LSCA), each PSCA and other Purchasing Entities explaining: The change; The impact on their costs to obtain the product; Limitations on the products or services they may provide; and, The reasons for the change. Failure to provide the required notification, regarding significant negative changes in their reseller status, may be grounds for suspension or cancellation of the MPA and PA’s. 2.1.2.6 Provide Pre-Sale Advisement - There shall be no charge for these services: 2.1.2.6.1 Advise the Purchasing Entity in making strategic software application decisions by providing evaluation copies, product comparisons, needs analysis, product information and application recommendations. 2.1.2.6.2 Act as liaison between the Purchasing Entity and individual publishers in identifying best approaches and cost savings opportunities for the Purchasing Entity. 2.1.1.6.3 Examples of such advice would be: In selecting appropriate software; In explaining Volume License Agreements with complicated rules; In determining the most cost-effective buying strategies; In ensuring that Participating States and other Purchasing Entities are in compliance with licensing requirements; and, In finding software options to meet a specific need, for example, a flow-charting package. 2.1.2.7 Reseller shall negotiate to reduce Reseller Cost, to pass on savings to the Participating State and other Purchasing Entitites. Master Agreement Section 2: Scope of Work State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 8 | Page 2.1.2.8 Provide assistance in explaining and developing Volume License and Enterprise Agreements. 2.1.2.9 Provide Software Installation Assistance. 2.1.2.9.1 Provide, at no additional cost, assistance or advice in basic installation or implementation of COTS product. 2.1.2.8.2 If the Purchasing Entity encounters difficulty in downloading or installing the software, the Reseller must provide assistance within eight (8) business hours of being informed of the problem. 2.1.2.10 Provide Software De-Installation Assistance. 2.1.2.11 Provide Tracking, Management, Usage Monitoring and Reporting of Licenses 2.1.2.11.1 Reseller shall have in place a product license inventory and asset management system, which will include an accurate inventory record of product licenses purchased under this Contract. 2.1.2.11.2 Reseller must also have the capability tracking maintenance renewal and other significant due dates. 2.1.2.11.3 At a minimum, this system shall be able to provide this information by Participating State and Purchasing Entity. 2.1.2.11.4 Reseller shall work with Participating State, other Purchasing Entities, publishers, previous and subsequent contract software resellers, and hardware computer contractors to ensure the most comprehensive record of licenses is created, maintained, and the information transferrable. 2.1.2.11.5 States may choose to award multiple PA’s under this Agreement. Details on how licenses are to be tracked and managed under multiple awards will be determined by that awarding State. 2.1.2.11.6 As may be required by a Participating State, or other Purchasing Entity, Reseller shall work with NASPO ValuePoint computing equipment contractors, or a Participating State’s comparable computer hardware contractor, to see that any software acquired under those contracts can be tracked through this contract. 2.1.2.12 Notify Participating State and Purchasing Entities of publisher publicly announced changes pertinent to User licensing. 2.1.3 SVAR shall Develop and Maintain Website 2.1.3.1 For Participating States, Reseller shall develop and support a website specific to that State, with content approved from the LSCA or PSCA as appropriate based on content. 2.1.3.1.1 This web site information shall be available through the Internet without the use of additional software or licenses. Master Agreement Section 2: Scope of Work State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 9 | Page 2.1.3.1.2 Website should be User friendly to allow for quick and easy access and use. 2.1.3.1.3 Website shall be available 24 x 7, except for scheduled maintenance. 2.1.3.1.4 Website shall be ADA compliant. 2.1.3.1.5 No costs or expenses associated with providing this information shall be charged to the States. 2.1.3.1.6 Universal Resource Locator (URL) for the website must be supplied to the PSCA and the LSCA within sixty (60) days of the execution of the PA. 2.1.3.1.7 The website will include contract information, product information/catalog, the capability to generate online reports, and other pertinent information as may be reasonably requested by States, such as copies of VLAs. 2.1.3.1.8 Publisher Notifications and Other Industry Information. In the event that a publisher publicly announces changes that are pertinent to User licensing, the Reseller shall assist Users by posting the information on the state websites. 2.1.3.1.9 Reseller shall provide, at no additional cost, training on how to use their website and how to use this contract in obtaining quotes and placing orders. Online training should be available on the website, but supplementary electronic (e.g. Webinars, emails), telephone or on-site training should be provided, as needed, during standard working hours. 2.1.3.2 Contract and General Information. The website shall provide contract and ordering information to include, at a minimum: 2.1.3.2.1 The contract number(s) (MPA and PA); 2.1.3.3.2 The Reseller primary contact and contacts to whom incidents are to be escalated: Name(s and titles Areas of responsibility for each contact name; Phone number(s); and, Email address(es). 2.1.3.3.3 Information on use of website, 2.1.3.3.4 Quote and ordering information; and, 2.1.3.3.5 Notifications regarding publishers and products, such as pending key product changes or upgrades. 2.1.3.3 Online Catalog 2.1.3.3.1 Reseller shall provide COTS software, and software maintenance of new or existing licensed software, under this contract. Information on approved products, customized by Participating State, will be available through an online catalog and through Reseller’s representatives either through email or telephone inquiry during the standard working hours of the Participating State. The online catalog shall provide an expansive list Master Agreement Section 2: Scope of Work State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 10 | Page of products allowed per the contracts, particularly those products of itemized publishers. 2.1.3.3.2 The website shall provide contract and ordering information to include, at a minimum: publishers, product names, standard product pricing, and product descriptions (photos optional or links to access product literature). Regardless of the number and types of links to the Reseller’s electronic catalog, the Reseller shall ensure that all eligible agencies purchasing under one PA are accessing the same current base version of the product catalog. Online information shall include purchases of Volume or Enterprise License Agreement software as well as individual COTS software licenses. 2.1.3.3.3 Online catalog shall be restricted to just software. Non-authorized products or groups of products shall not be on the website. Reseller shall not use this proposed website to cross sell or cross advertise other products and or services the Reseller may be able to offer. 2.1.3.4 Product Searching Capability. At a minimum, the online catalog should be searchable by Purchasing Entity and their VLAs, Software Publisher, Product name, OEM product number, and software description (e.g., GIS, Security). The online category can be modified as Users’ needs dictate, such as including products obtained through a distributor (non-itemized publisher products) that are frequently purchased. 2.1.3.5 Online Product Quotes. Product price displayed online is a ‘not-to-exceed’ product price quote based on contract rate and real time Reseller Cost. For high dollar purchases, or quantity purchases, Purchasing Entity should request a quote by contacting Reseller representative off-line. The online pricing should allow for overrides when a quote with a negotiated better price has been offered and is being placed online. Website should have capability to track all quotes by Purchasing Entity and be easily accessible for viewing by quote number. Website shall include a shopping cart feature that allows Purchasing Entities to provide shipping instructions. Purchasing Entities can place orders on the web either via credit card or purchase order. Specifics regarding an individual state’s requirements for placing an order may be included in that State’s Participating Addendum (PA). 2.1.3.6 User Differentiation. Catalog should be designed so as to provide a means to identify the Participating State (state agency or other eligible Purchasing Entity). This method used must not require any administrative tasks on the part of the LSCA for the MPA, the PSCA for the individual PSCA. Website should allow Users to develop personal lists and profiles, including an option to securely store and maintain procurement card information. Catalog should have the capability of being used as a ‘Punch Out’ to an individual state’s electronic purchasing system. 2.1.3.7 Online Reports. Website shall have capability to provide order history, as well as order status and order tracking. 2.1.3.8 Other. Other information may be added to the website as may be required by State (such as copies of volume license agreements) or enhancements that may be proposed by Reseller and approved by State. Master Agreement Section 2: Scope of Work State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 11 | Page 2.2 COTS Products 2.2.1 Software which requires little or no services IN SCOPE Offerings OUT OF SCOPE Offerings LICENSING TYPE COTS Individual Licensing Volume Licensing Enterprise Licensing Custom/Customized LICENSING PERIOD Perpetual Subscription none Delivery Shrink-Wrap Download none HOSTING as part of delivery & use. On Premise Off Premise Managed Service Managed Services means the proactive management of an IT (Information Technology) asset or object, by a third party typically known as a MSP, on behalf of a customer mspalliance.com/definition-of- managed-services/ 2.2.1.1 Most Current Version - Purchase orders shall be deemed to reference a manufacturer’s most recent release model or version of the product at the time of the order, unless the Purchasing Entity specifically requests in writing an earlier model or version and the Reseller is willing to provide such model or version. 2.2.1.2 Licenses and Maintenance Agreements 2.2.1.2.1 Volume License Agreements (VLA) and Enterprise License Agreements (ELA) The Reseller will honor existing Participating State’s VLA’s or ELA’s with publishers and include those licenses as part of the Reseller’s license tracking service. Following an executed PA with a Participating State, and if so required by the Participating State, the Purchasing Entity and/or an individual publisher, the Reseller will identify itself to software publishers as Reseller for that Participating State or Purchasing Entity. If so required by the Publisher and Participating State, Reseller will execute a change of channel partner agreement with the Publisher. Resellers will sell additional seats consistent with Purchasing Entities’ Enterprise or Volume Agreements. Reseller will work with Participating State, Purchasing Entity(ies) and Publishers as needed to establish new VLAs or ELAs. The Reseller will work with the Publisher and Participating State as necessary to ensure the Participating State receives timely and pertinent license information, such as: license or agreement renewals, or opportunities based on actual volume. Reseller will work directly with Purchasing Entity(ies) in establishing, signing and maintaining enrollment agreements. If Reseller is sole SVAR contractor in a State, Reseller will aggregate all enrollments together for Master Agreement Section 2: Scope of Work State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 12 | Page Master Agreement reporting purposes. If a PSCA elects to have multiple SVAR contractors, Reseller’s responsibilities will be delineated in that State’s PA. Resellers shall monitor and be able to report on the current levels of software ordered towards any of the Participating State’s VLA required sales levels to ensure the Participating State does not fall short and thereby incur Publisher penalties. The Reseller shall be responsible for providing license usage information to the Publishers, if such information is required by the Publishers, in a timely manner (e.g., for ‘true up’ assessments) 2.2.1.2.2 Individual Software Licenses. Purchasing Entities can purchase individual COTS licenses, such as perpetual and non-perpetual licenses, through the Reseller. 2.2.1.3 Software Maintenance and Support Agreements. Purchasing Entities can purchase maintenance agreements, including upgrade protection, through the Reseller. Resellers will sell software maintenance agreements, even if the software was not purchased under this agreement, such as on-going support for a User’s existing perpetual license. As requested, Reseller will explain what product support or services are included in a publisher’s maintenance agreement. 2.2.1.3.1 Software Maintenance and Support. Reseller to provide needed services to support maintenance products such maintenance agreements, software upgrades, annual updates, patches and fixes needed to improve functionality and keep the software in working order. Such services may include providing recommendations on most cost-effective or appropriate long-term maintenance plan. Reseller will provide such support, not only to maintenance packages purchases under this agreement, but in support of any existing and current agreements. 2.2.1.3.2 Software Updates. 2.2.1.3.2.1 Users are eligible to receive, from the Publisher, all new releases and updates of the software, at no additional charge, while under a maintenance agreement. A “Release” means any collection of enhancements or updates which the Publisher generally makes available to its installed base of customers of such programs. The Reseller shall assist the Purchasing Entity to obtain such releases or updates for their Users from the Publisher. 2.2.1.3.2.2 Should a User not want to receive the next upgrade, the User shall so notify the respective Publisher. 2.2.1.3.3 License Confirmations For licenses ordered under the contract by Purchasing Entity(ies), Reseller shall be able to provide: Master Agreement Section 2: Scope of Work State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 13 | Page (i) Certified Licensing Confirmation Certificates for all software licenses; (ii) Reseller’s certified license confirmation certificates in the name of such Licensee; or, (iii) Written confirmation from the Reseller or Publisher accepting the Eligible Participating State’s contract or purchase order as proof of license. The form of “Proof of License” provided must be acceptable proof to the Publisher, and in the format requested by the Purchasing Entity. The Proof of License shall be provided as an electronic file and/or a hardcopy document, as required by the Purchasing Entity. Reseller will retain an electronic file of Participating State’s Proof of Licenses and provide copies to the Participating State as requested. 2.2.1.3.4 Transitioning License Tracking Information at Contract Termination The license information data acquired and retained by Reseller will be stored as sortable data fields so the license information can be transferred to the Participating State upon contract termination. Reseller will work with States and Participating Entities, or their designees, to ensure that the license information data has been successfully transferred in a usable format. 2.2.1.4 Leases Lease purchase and term leases are allowable only for Purchasing States whose rules and regulations permit leasing of software. Individual Purchasing Entities may enter into a lease agreement for the products covered in this Master Agreement, if they have the legal authority to enter into these types of agreements without going through a competitive process. No lease agreements will be reviewed or evaluated as part of this RFP evaluation process. 2.2.1.5 Software Publishers, Categories. The identified software product needs under this solicitation have been divided into three tiers: Key Itemized Publishers, Other Itemized Publishers, and Non-Itemized Publishers. See descriptions and chart which follow. As indicated, it is most desirable for Reseller to have a direct reseller agreement with the itemized software publishers. If a direct reseller agreement is not already in place between itemized software publishers and the Reseller, the Reseller is expected to enter into a direct reseller agreement and submit a rate for that itemized publisher that is better than the rate for a Non-Itemized Publisher. Over the life of this contract, product needs or volumes may change and new publishers may be added by amendment to the itemized publishers’ lists. 2.2.1.5.1 Itemized Highest Volume Publishers (Highest Volume, Itemized Lines). The products of the publishers in this category represent the highest tier of sales volume identified for this solicitation, of those publishers who sell through resellers. This category is the one most likely to include a Participating State’s enterprise or high volume agreements with a publisher. Resellers shall be certified direct resellers for publishers in this Master Agreement Section 2: Scope of Work State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 14 | Page category. The preferred pricing that a Reseller receives based on their reseller certification status, in conjunction with the anticipated considerable volume of purchases through these Contracts, is the expected foundation for a very competitive base Reseller Cost, with further reductions of Reseller Cost as they are achieved through ongoing Reseller negotiations. A percentage rate above or below Reseller Cost is to be provided for each itemized publisher. Specific requirements may be required for some publishers in this category in an individual State’s PA. 2.2.1.5.2 Other Itemized Publishers (High Volume, Itemized Lines). The products of the publishers in this category represent a high level of sales volume as identified for this solicitation. This category may include a Participating State’s high volume agreements or VLAs with a publisher. It is desirable for Resellers to be certified direct resellers for publishers in this category. A percentage rate above or below Reseller Cost is to be provided for each itemized publisher 2.2.1.5.3 Non-Itemized Publishers (all other distributed software purchases). This category is defined to include all other distributed computer software not specifically itemized. Enterprise or Volume Licensing Agreements are not anticipated in this category. New or existing software products can be added to this category at any time during the term of the Contract without the written consent of the LSCA and may be itemized in the online catalog, if volume justifies the addition. There should be one percentage rate above or below Reseller cost covering all products in this category KEY ITEMIZED PUBLISHERS Certification as Direct Reseller. OTHER ITEMIZED PUBLISHERS Certification as direct reseller desirable. If not certified, the percentage rate should be no greater than Non-Itemized rate NON-ITEMIZED PUBLISHER One ‘not to exceed’ rate ADOBE AI SQUARED CITRIX AIRWATCH MOBILE DEVICE MANAGEMENT VMWARE MICROSOFT ALLIANCE ENTERPRISES NOVELL APPLE SYMANTEC ATTACHMATE – MICROFOCUS VMWARE AUTODESK AUTONOMY – HP BAKBONE – DELL BARRACUDA BOMGAR REMOTE SOFTWARE CA TECHNOLOGIES CISCO COMPUTRONIX USA Master Agreement Section 2: Scope of Work State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 15 | Page COMPUWARE COREL DOUBLETAKE EMC ENCHOICE ESET ESRI FREEDOM SCIENTIFIC GUARDIAN EDGE – SYMANTEC GW MICRO IBM ICM CONVERSIONS INFOR INTERMEDIX EMSYSTEMS HP HUMANWARE INFORMATION BUILDERS KRONOS SOFTWARE LANDESK LASERFISCHE LIQUIDWARE STATUSPHERE MICROFOCUS INC MINJET MPS MQSOFTWARE – BMC SOFTWARE NCIRCLE NETOP NUANCE ORACLE OSAM PASSPORT PATCHLINK PROOFPOINT RSA SECURITY REFERENCIA SYSTEMS SAP AMERICA SAS SOLUTIONS SOFTWARE SOPHOS SPLUNK SOFTWARE STASEEKER NETWORK INFRASTRUCTURE MONITORING STELLENT – ORACLE Master Agreement Section 2: Scope of Work State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 16 | Page SUNGUARD SYBASE TECHSMITH TREND MICRO TRUSTWARE ULTRABAC VORMETRIC WEBSENSE 2.2.1.6 Software Publishers, General Representation. 2.2.1.6.1 Excluded Software Publishers. The Reseller must agree that there are no software publishers with whom they will refuse to do business if the Software Publisher is willing to do business with them. Resellers shall advise the LSCA or designee of any Excluded Software Publishers and provide explanations for the non-representation. 2.2.1.6.2 Expanded Representation. The Reseller is expected to continue to work towards reseller certifications with publishers not currently represented, particularly with those publishers whose sales volume merit classification into the itemized publisher lines. Similarly, Reseller is expected to continue to work towards a higher certification level with current publishers 2.2.1.7 Price Quote, General. Pricing is submitted in the MPA as a percentage of Reseller Cost. Individual PA’s will use the MPA pricing as a base and may negotiate an adjusted rate. Any negotiated PA rates, exclusive of taxes or any individual state’s administrative fee, shall not exceed the MPA rates. As requested by Purchasing Entity, for example on a high volume single order, Reseller shall negotiate to reduce Reseller Cost, to pass on savings to the Participating State. Firm individual order quotes shall be provided to Purchasing Entity prior to order submittal. 2.2.1.7.1 Telephone or Email Quote Support. Reseller shall accept requests for quotes by telephone, fax, email, or online. Reseller shall accept collect telephone calls and/or provide and maintain a toll-free number for eligible agency use. Reseller shall provide an email address for receipt of requests for price quotes. Reseller shall provide written quotes by fax, email or online as requested by the Participating State. 2.2.1.7.2 Quoted Delivery Method. The quote must clearly indicate the method of delivery, whether via media, download, or 3.3 Services below. 2.2.1.7.3 Timely Quotes. Reseller agrees to work with publishers and distributors to obtain quotes and deliver software in a timely fashion. Expected response should be within twenty-four (24) hours but no more than three (3) business days. If, after three (3) business days, the Reseller has been unable to obtain the quote or assurances that Master Agreement Section 2: Scope of Work State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 17 | Page they can obtain the software, the Reseller shall contact the Participating State or other Purchasing Entity with a status report. The Reseller and the Participating State/Purchasing Entity will mutually agree as to whether the Reseller shall continue to pursue a quote and within what timeframe, or whether the Reseller will provide the Participating State/Purchasing Entity with a written statement that the Reseller cannot supply the software. If the Reseller has been unable to obtain a quote within ten (10) days of the request for quote, the Reseller shall provide a written statement (email is sufficient) to Participating State/Purchasing Entity, and the LSCA as may be required under the PA, that the Reseller cannot supply the software, and the reason why. 2.2.1.7.4 Guaranteed 30 Day Quote. Reseller is required to honor all quotes for thirty (30) calendar days. If it is known that a price adjustment will occur during the thirty (30) calendar days following the quote, the Reseller may provide two quotes, based upon the date that the order is received. 2.2.1.7.5 Sales Promotion. The Reseller may conduct sales promotions involving specific products or groups of products for specified time periods. If electing to exercise this provision, the Reseller shall submit a formal request for approval to the LSCA. The request should include: the product or product groups, the promotional price as compared to the standard price and the Master Agreement price for the product or product groups, and the start and end dates of the sales promotion. LSCA’s approval shall be in the form of an amendment to the MPA. Upon approval, the Reseller shall provide conspicuous notice of the promotion to all Participating Entities. 2.2.1.7.6 A Participating State or other Participating Entity may allow the Contractor to charge a credit card fee in their Participating Addendum. 2.2.1.8 Product Delivery and Returns 2.2.1.8.1 Media. The Reseller shall work with Participating State or other Purchasing Entity to provide media via any method available and as requested by the Participating State including, but not limited to: original Publisher media, CD copies of master media duplicated by the Reseller, electronic downloads, etc. In cases where original publisher’s media is not available, the Reseller shall provide CD’s copied from master disks of the software purchased under any volume or enterprise license agreement. 2.2.1.8.2 Delivery Period. Reseller to provide delivery no longer than ten (10) business days after receipt of a valid order unless conditions arise that are outside the control of the Reseller. If delivery cannot be within this time frame, Reseller is to notify Purchasing Entity of delay and anticipated Master Agreement Section 2: Scope of Work State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 18 | Page ship date. If this delayed delivery is unacceptable to Purchasing Entity, the order can be cancelled without penalty. 2.2.1.8.3 Product Returns. Unopened software can be returned with no restocking fee up to 30 days from date of receipt, if allowed by the software publisher. If the software publisher has a shorter timeframe for returns or requires a restocking fee, this must be stated on the quote. If that information is not provided to the Participating State by the Reseller, Reseller is responsible for the restocking fee. If delivered software is defective, or if the incorrect product was delivered, the Reseller must agree to accept returns. If delivered software is defective, the Reseller is responsible for return shipping and packaging costs and for restocking charges if applicable. The Reseller must agree that any defective or incorrectly delivered media will be replaced by overnight delivery at the Reseller’s expense if requested by the Participating State or Purchasing Entity. If overnight delivery is not requested, all replacement products must be received by the Participating State or Purchasing Entity within seven (7) days of initial notification. 2.2.1.8.4 Shipping Charges. Items covered under this contract are FOB Destination and shipping charges are not to be included on any invoice unless the Purchasing Entity has ordered expedited shipment. For expedited shipment, Purchasing Entity would submit their order including related shipping charges, which may not exceed the cost of delivery by the carrier. 2.3 Services IN SCOPE OUT OF SCOPE SOFTWARE & LICENSING TYPE COTS Volume Licensing Custom/Customized LICENSING PERIOD Perpetual Subscription Not Applicable Delivery Shrink-Wrap Download Not Applicable Hosting as part of delivery & use On-Premise Off-Premise Managed Services SERVICES Basic Installation, Training and Maintenance Means that activity which does not require Consulting, Configuration, Engineering, Design or any other type of service specific to a Purchasing Entity requiring description of tasks and deliverables and agreement by the parties (Statement of Work). Consulting, configuration, engineering, design, etc., any type of service specific to a Purchasing Entity requiring description of tasks and deliverables and agreement by the parties 2.3.1 In Scope Services: Basic Installation, Maintenance packages and Training (3.4) are considered to be within the Scope of this Solicitation. This Master Agreement is intended for the acquisition of distributed, commercial off the shelf software Master Agreement Section 2: Scope of Work State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 19 | Page 2.3.2 (RESERVED) 2.3.3 A Participating State may include a statement in their Participating Addendum allowing state employees to purchase software licenses. 2.3.4 Individual Participating Addendums may further limit the Scope of this Solicitation. 2.3.5 This Master Agreement is not intended for the purchase of custom software applications. 2.4 Training. 2.4.1 Training shall be available in the form of tutorials for basic installation and web-based training for software operation, basic phone support. 2.4.2 Provision of information on how to access a Software Publisher’s “Help Desk” (either telecom or web-based) for basic use questions. 2.5 Customer Service and Representation. 2.5.1 Dedicated Representation and Timely Response. Reseller shall provide a dedicated representative for each Participating State. Such representative will become familiar with the State and its cooperative partners, provide a single point as needed for quote assistance, offer software recommendations, track and report on renewal deadlines, and serve as a contact point for the LSCA. Reseller must commit to returning phone calls or responding to emails within two (2) business days. 2.5.2 Problem Escalation. The Reseller must provide an incident escalation path for each State, showing on that State’s website, the name, contact information, and role of individuals to whom problems should be escalated if the problems are not resolved by primary assigned contacts. 2.5.3 Product purchasing trends. The Reseller will speak with LSCA and sourcing team quarterly to review usage and discuss possible revisions of the categorization of publishers based upon actual sales volume or other changes. 2.5.4 Contract Reviews. 2.5.4.1 Reseller is expected to conduct quarterly reviews of all sales volumes and report sales figures and savings from Publisher’s list price, by Publisher and by PA, as well as observed trends or purchasing patterns, and to present the information to the LSCA. 2.5.4.2 At the discretion of the individual participating states, an equivalent review, limited to that state, will be presented to the PSCA. 2.5.4.3 All awardees under this contract shall meet once a year with the LSCA and Sourcing Team to review usage and discuss possible revisions of the categorization of publishers based upon actual sales volume, and to discuss any service concerns, industry trends, and the effectiveness of the contract. 2.5.4.3.1 Reseller is expected to conduct a customer satisfaction survey and an audit prior to this discussion and be prepared to discuss the results, and Master Agreement Section 2: Scope of Work State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 20 | Page provide reports, at this review. At a minimum, the audit will report address quoting and billing accuracy, and any Reseller Cost that exceeds a Publisher’s List price for that item. 2.5.4.3.2 Based on historical sales volume information, Reseller should be prepared to discuss potential cost savings opportunities which could be passed through to Participating States. 2.5.4.3.2 In a renewal year, the annual review will take place prior to contract extensions. 2.6. Interactions with Software Publishers 2.6.1 Best Interests of Participating State. Reseller would represent the best interests of the Participating State and other Participating Entities in negotiating or otherwise working with Publishers for such items as: maximizing cost savings with best use of volume or enterprise license agreements, better pricing on individual volume buys, taking advantage of publishers’ specials, promotions, coupons or other savings opportunities. 2.6.2 Liaison with Publisher. A State may establish, in their individual PA, a requirement for Reseller to arrange with the software publisher or software publisher’s designee for implementation, customization, training, support, maintenance and other software related services. The provision of said services must be under a separate agreement between the Participating State and the applicable parties. 2.7 Reporting 2.7.1 Standard Reports Individual participating states may require their own standard reports, such as report on savings. Reseller shall provide these reports at the intervals, and in the format, as reasonably requested by the States. Reseller shall advise of standard reports which they can provide, and work with participating states on additional standard reports. 2.7.2 Online Reports The SVAR shall be able to provide online, real time, reporting capabilities using website established for the state. These reports may include Back Order or Current Order Status reports. In addition, the system shall be able to provide the ability for the User agency to create custom reports. The requesting Participating State shall be able to select specific fields and create a necessary report for their specific needs. Data Fields shall include, but not be limited to, purchasing entity, Purchase Order Number, Order date, Invoice date, Publisher, Publisher Part Number, Software Reseller’s Part Number, Description, Quantity Shipped, Unit actual price, Extended Price, Sales Tax and order total. Reports shall be able to be shown online as well as emailed to the requesting Participating State, if requested. Examples of Reseller’s standard and online reports shall be submitted with the offer. 2.7.3 Custom Reports Master Agreement Section 2: Scope of Work State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 21 | Page Participating State and SVAR may mutually agree to include terms and conditions and pricing for the development and provision of customized reports as an optional service in a Participating Addendum. 2.8 Other Value-Added Services SVAR may propose other Value-Added Services, e.g., key escrow, in their response. Such services from an awarded Offeror, if consistent with this Statement of Work, recommended by the Evaluation Team, and accepted by the PSCA, would be added to the final awarded contract. Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 1. Master Agreement Order of Precedence a. Any Order placed under this Master Agreement shall consist of the following documents: (1) A Participating State’s Participating Addendum (“PA”); (2) NASPO ValuePoint Master Agreement Terms & Conditions; (3) A Purchase Order issued against the Master Agreement; (4) The Statement of Work; (5) The Solicitation; and (6) Contractor’s response to the Solicitation, as revised (if permitted) and accepted by the Lead State. b. These documents shall be read to be consistent and complementary. Any conflict among these documents shall be resolved by giving priority to these documents in the order listed above. Contractor terms and conditions that apply to this Master Agreement are only those that are expressly accepted by the Lead State and must be in writing and attached to this Master Agreement as an Exhibit or Attachment. 2. Definitions Acceptance is defined by the applicable commercial code, except Acceptance of a Product fo which acceptance testing is not required shall not occur before the completion of delivery in accordance with the Order, installation, if required, and a reasonable time for inspection of the Product. Contractor means the person or entity delivering Products or performing services under the terms and conditions set forth in this Master Agreement. Embedded Software means one or more software applications which permanently reside on a computing device. Intellectual Property means any and all patents, copyrights, service marks, trademarks, trade secrets, trade names, patentable inventions, or other similar proprietary rights, in tangible or intangible form, and all rights, title, and interest therein. Lead State means the State centrally administering any resulting Master Agreement(s). Master Agreement means the underlying agreement executed by and between the Lead State, acting on behalf of the NASPO ValuePoint program, and the Contractor, as now or hereafter amended. NASPO ValuePoint is the NASPO Cooperative Purchasing Organization LLC, doing business as NASPO ValuePoint, a 501(c)(3) limited liability company that is a subsidiary organization the National Association of State Procurement Officials (NASPO), the sole member of NASPO ValuePoint. NASPO ValuePoint facilitates administration of the NASPO cooperative group contracting consortium of state chief procurement officials for the benefit of state departments, institutions, agencies, and political subdivisions and other eligible entities (i.e., colleges, school districts, counties, cities, some nonprofit organizations, etc.) for all states and the District of Columbia. NASPO ValuePoint is identified in the Master Agreement as the recipient of reports and may perform contract administration functions relating to collecting and receiving reports as well as other contract administration functions as assigned by the Lead State. Master Agreement Section 3: NASPO ValuePoint Master Agreement Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 23 | Page Order or Purchase Order means any purchase order, sales order, contract or other document used by a Purchasing Entity to order the Products. Participating Addendum means a bilateral agreement executed by a Contractor and a Participating State incorporating this Master Agreement and any other additional Participating State specific language or other requirements, e.g. ordering procedures specific to the Participating State, other terms and conditions. Participating State means a state, or other legal entity, properly authorized to enter into a Participating Addendum. Participating State means a state, the District of Columbia, or one of the territories of the United States that is listed in the Request for Proposal as intending to participate. A Participating State is not required to participate through execution of a Participating Addendum. Upon execution of the Participating Addendum, a Participating State becomes a Participating State. Product means any equipment, software (including embedded software), documentation, service or other deliverable supplied or created by the Contractor pursuant to this Master Agreement. The term Products, supplies and services, and products and services are used interchangeably in these terms and conditions. Purchasing Entity means a state, city, county, district, other political subdivision of a State, and a nonprofit organization under the laws of some states if authorized by a Participating Addendum, who issues a Purchase Order against the Master Agreement and becomes financially committed to the purchase. 3. Term of the Master Agreement The initial term of this Master Agreement is for two (2) years. This Master Agreement may be extended beyond the original contract period for successive periods with a maximum aggregate, including all extensions, not to exceed five (5) years at the Lead State’s discretion and by mutual agreement and upon review of requirements of Participating Entities, current market conditions, and Contractor performance. 4. Amendments The terms of this Master Agreement shall not be waived, altered, modified, supplemented or amended in any manner whatsoever without prior written approval of the Lead State. 5. Assignment/Subcontracts a. Contractor shall not assign, sell, transfer, subcontract or sublet rights, or delegate responsibilities under this Master Agreement, in whole or in part, without the prior written approval of the Lead State. b. The Lead State reserves the right to assign any rights or duties, including written assignment of contract administration duties to NASPO Cooperative Purchasing Organization LLC, doing business as NASPO ValuePoint. 6. Price and Rate Guarantee Period All prices and rates must be guaranteed for the initial term of the Master Agreement. Following the initial Master Agreement period, any request for price or rate adjustment must be for an equal guarantee period, and must be made at least ninety (90) days prior to the effective date. Requests for price or rate adjustment must include sufficient documentation supporting the request. Any adjustment or amendment to the Master Agreement shall not be effective unless approved by the Lead State. No retroactive adjustments to prices or Master Agreement Section 3: NASPO ValuePoint Master Agreement Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 24 | Page rates will be allowed. 7. Cancellation Unless otherwise stated, this Master Agreement may be canceled by either party upon 60 days written notice prior to the effective date of the cancellation. Further, any Participating State may cancel its participation upon 30 days written notice, unless otherwise limited or stated in the Participating Addendum. Cancellation may be in whole or in part. Any cancellation under this provision shall not affect the rights and obligations attending orders outstanding at the time of cancellation, including any right of and Purchasing Entity to indemnification by the Contractor, rights of payment for Products delivered and accepted, and rights attending any warranty or default in performance in association with any Order. Cancellation of the Master Agreement due to Contractor default may be immediate. 8. Confidentiality, Non-Disclosure, and Injunctive Relief Provisions governing confidentiality of information during performance of orders for the State of Arizona are governed by The State of Arizona Special Terms and Conditions. Except where a Participating Addendum prescribes otherwise, this section governs confidentiality and disclosure of information of other Purchasing Entities. a. Confidentiality. Contractor acknowledges that it and its employees or agents may, in the course of providing a Product under this Master Agreement, be exposed to or acquire information that is confidential to Purchasing Entity’s or Purchasing Entity’s clients. Any and all information of any form that is marked as confidential or would by its nature be deemed confidential obtained by Contractor or its employees or agents in the performance of this Master Agreement, including, but not necessarily limited to (1) any Purchasing Entity’s records, (2) personnel records, and (3) information concerning individuals, is confidential information of Purchasing Entity (“Confidential Information”). Any reports or other documents or items (including software) that result from the use of the Confidential Information by Contractor shall be treated in the same manner as the Confidential Information. Confidential Information does not include information that (1) is or becomes (other than by disclosure by Contractor) publicly known; (2) is furnished by Purchasing Entity to others without restrictions similar to those imposed by this Master Agreement; (3) is rightfully in Contractor’s possession without the obligation of nondisclosure prior to the time of its disclosure under this Master Agreement; (4) is obtained from a source other than Purchasing Entity without the obligation of confidentiality, (5) is disclosed with the written consent of Purchasing Entity or; (6) is independently developed by employees, agents or subcontractors of Contractor who can be shown to have had no access to the Confidential Information. b. Non-Disclosure. Contractor shall hold Confidential Information in confidence, using at least the industry standard of confidentiality, and shall not copy, reproduce, sell, assign, license, market, transfer or otherwise dispose of, give, or disclose Confidential Information to third parties or use Confidential Information for any purposes whatsoever other than what is necessary to the performance of Orders placed under this Master Agreement. Contractor shall advise each of its employees and agents of their obligations to keep Confidential Information confidential. Contractor shall use commercially reasonable efforts to assist Purchasing Entity in identifying and preventing any unauthorized use or disclosure of any Confidential Information. Without limiting the generality of the foregoing, Contractor shall advise Purchasing Entity, applicable Participating State, and the Lead State immediately if Contractor learns or has reason to believe that any person who has had access to Confidential Information has violated or intends to violate the terms of this Master Agreement, and Contractor shall at its expense cooperate with Purchasing Entity in seeking injunctive or other equitable relief in the name of Purchasing Entity or Contractor against any such person. Except as directed by Purchasing Entity, Contractor will not at any time during or after the term of this Master Agreement disclose, directly or Master Agreement Section 3: NASPO ValuePoint Master Agreement Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 25 | Page indirectly, any Confidential Information to any person, except in accordance with this Master Agreement, and that upon termination of this Master Agreement or at Purchasing Entity’s request, Contractor shall turn over to Purchasing Entity all documents, papers, and other matter in Contractor's possession that embody Confidential Information. Notwithstanding the foregoing, Contractor may keep one copy of such Confidential Information necessary for quality assurance, audits and evidence of the performance of this Master Agreement. c. Injunctive Relief. Contractor acknowledges that breach of this section, including disclosure of any Confidential Information, will cause irreparable injury to Purchasing Entity that is inadequately compensable in damages. Accordingly, Purchasing Entity may seek and obtain injunctive relief against the breach or threatened breach of the foregoing undertakings, in addition to any other legal remedies that may be available. Contractor acknowledges and agrees that the covenants contained herein are necessary for the protection of the legitimate business interests of Purchasing Entity and are reasonable in scope and content. d. Purchasing Entity Law. These provisions shall be applicable only to extent they are not in conflict with the applicable public disclosure laws of any Purchasing Entity. 9. Right to Publish Throughout the duration of this Master Agreement, Contractor must secure from the Lead State prior approval for the release of any information that pertains to the potential work or activities covered by the Master Agreement. The Contractor shall not make any representations of NASPO ValuePoint’s opinion or position as to the quality or effectiveness of the services that are the subject of this Master Agreement without prior written consent. Failure to adhere to this requirement may result in termination of the Master Agreement for cause. 10. Defaults and Remedies a. The occurrence of any of the following events shall be an event of default under this Master Agreement: (1) Nonperformance of contractual requirements; or (2) A material breach of any term or condition of this Master Agreement; or (3) Any certification, representation or warranty by Contractor in response to the solicitation or in this Master Agreement that proves to be untrue or materially misleading; or (4) Institution of proceedings under any bankruptcy, insolvency, reorganization or similar law, by or against Contractor, or the appointment of a receiver or similar officer for Contractor or any of its property, which is not vacated or fully stayed within thirty (30) calendar days after the institution or occurrence thereof; or (5) Any default specified in another section of this Master Agreement. b. Upon the occurrence of an event of default, Lead State shall issue a written notice of default, identifying the nature of the default, and providing a period of 15 calendar days in which Contractor shall have an opportunity to cure the default. The Lead State shall not be required to provide advance written notice or a cure period and may immediately terminate this Master Agreement in whole or in part if the Lead State, in its sole discretion, determines that it is reasonably necessary to preserve public safety or prevent immediate public crisis. Time allowed for cure shall not diminish or eliminate Contractor’s liability for damages, including liquidated damages to the extent provided for under this Master Agreement. c. If Contractor is afforded an opportunity to cure and fails to cure the default within the period specified in the written notice of default, Contractor shall be in breach of its obligations under this Master Agreement and Lead State shall have the right to exercise any or all of the following remedies: Master Agreement Section 3: NASPO ValuePoint Master Agreement Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 26 | Page (1) Exercise any remedy provided by law; and (2) Terminate this Master Agreement and any related Contracts or portions thereof; and (3) Impose liquidated damages as provided in this Master Agreement; and (4) Suspend Contractor from being able to respond to future bid solicitations; and (5) Suspend Contractor’s performance; and (6) Withhold payment until the default is remedied. d. Unless otherwise specified in the Participating Addendum, in the event of a default under a Participating Addendum, a Participating State shall provide a written notice of default as described in this section and have all of the rights and remedies under this paragraph regarding its participation in the Master Agreement, in addition to those set forth in its Participating Addendum. Unless otherwise specified in a Purchase Order, a Purchasing Entity shall provide written notice of default as described in this section and have all of the rights and remedies under this paragraph and any applicable Participating Addendum with respect to an Order placed by the Purchasing Entity. Nothing in these Master Agreement Terms and Conditions shall be construed to limit the rights and remedies available to a Purchasing Entity under the applicable commercial code. 11. Shipping and Delivery. Section 3.2.1.8 of the solicitation prescribes requirements for product delivery and return. 12. Changes in Contractor Representation The Contractor must notify the Lead State of changes in the Contractor’s key administrative personnel, in writing within 10 calendar days of the change. The Lead State reserves the right to approve changes in key personnel, as identified in the Contractor’s proposal. The Contractor agrees to propose replacement key personnel having substantially equal or better education, training, and experience as was possessed by the key person proposed and evaluated in the Contractor’s proposal. 13. Force Majeure Neither party to this Master Agreement shall be held responsible for delay or default caused by “force majeure,” as that term is defined in and under conditions specified in section 6.4 of the State of Arizona Uniform Terms and Conditions. 14. Indemnification a. Section 5.1X1.1 of the State of Arizona Special Terms and Conditions governs indemnification of the State of Arizona. With respect to other entities, the Contractor shall defend, indemnify and hold harmless NASPO, NASPO Cooperative Purchasing Organization LLC (doing business as NASPO ValuePoint), the Lead State, Participating Entities, and Purchasing Entities, along with their officers, agents, and employees as well as any person or entity for which they may be liable, from and against claims, damages or causes of action including reasonable attorneys’ fees and related costs for any death, injury, or damage to property arising from act(s), error(s), or omission(s) of the Contractor, its employees or subcontractors or volunteers, at any tier, relating to the performance under the Master Agreement. b. Indemnification – Intellectual Property. Section 6.3 of the State of Arizona Uniform Terms and Conditions governs indemnification of the State for intellectual property infringement claims. With respect to other entities the Contractor shall defend, indemnify and hold harmless NASPO, NASPO Cooperative Purchasing Master Agreement Section 3: NASPO ValuePoint Master Agreement Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 27 | Page Organization LLC (doing business as NASPO ValuePoint), Participating Entities, Purchasing Entities, along with their officers, agents, and employees as well as any person or entity for which they may be liable ("Indemnified Party"), from and against claims, damages or causes of action including reasonable attorneys’ fees and related costs arising out of the claim that the Product or its use, infringes Intellectual Property rights ("Intellectual Property Claim"). (1) The Contractor’s obligations under this section shall not extend to any combination of the Product with any other product, system or method, unless the Product, system or method is: (a) provided by the Contractor or the Contractor’s subsidiaries or affiliates; (b) specified by the Contractor to work with the Product; or (c) reasonably required, in order to use the Product in its intended manner, and the infringement could not have been avoided by substituting another reasonably available product, system or method capable of performing the same function; or (d) It would be reasonably expected to use the Product in combination with such product, system or method. (2) The Indemnified Party shall notify the Contractor within a reasonable time after receiving notice of an Intellectual Property Claim. Even if the Indemnified Party fails to provide reasonable notice, the Contractor shall not be relieved from its obligations unless the Contractor can demonstrate that it was prejudiced in defending the Intellectual Property Claim resulting in increased expenses or loss to the Contractor. If the Contractor promptly and reasonably investigates and defends any Intellectual Property Claim, it shall have control over the defense and settlement of it. However, the Indemnified Party must consent in writing for any money damages or obligations for which it may be responsible. The Indemnified Party shall furnish, at the Contractor’s reasonable request and expense, information and assistance necessary for such defense. If the Contractor fails to vigorously pursue the defense or settlement of the Intellectual Property Claim, the Indemnified Party may assume the defense or settlement of it and the Contractor shall be liable for all costs and expenses, including reasonable attorneys’ fees and related costs, incurred by the Indemnified Party in the pursuit of the Intellectual Property Claim. Unless otherwise agreed in writing, this section is not subject to any limitations of liability in this Master Agreement or in any other document executed in conjunction with this Master Agreement. 15. Independent Contractor The Contractor shall be an independent contractor. Contractor shall have no authorization, express or implied, to bind the Lead State, Participating States, other Participating Entities, or Purchasing Entities to any agreements, settlements, liability or understanding whatsoever, and agrees not to hold itself out as agent except as expressly set forth herein or as expressly agreed in any Participating Addendum. 16. Individual Customers Except to the extent modified by a Participating Addendum, each Purchasing Entity shall follow the terms and conditions of the Master Agreement and applicable Participating Addendum and will have the same rights and responsibilities for their purchases as the Lead State has in the Master Agreement, including but not limited to, any indemnity or right to recover any costs as such right is defined in the Master Agreement and applicable Participating Addendum for their purchases. Each Purchasing Entity will be responsible for its own charges, fees, and liabilities. The Contractor will apply the charges and invoice each Purchasing Entity individually. Master Agreement Section 3: NASPO ValuePoint Master Agreement Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 28 | Page 17. Insurance a. The insurance requirements of the State of Arizona are specified in section 5.1 X 1.2 of the State of Arizona Special Terms and Conditions. For performance in other states, unless otherwise agreed in a Participating Addendum, Contractor shall, during the term of this Master Agreement, maintain in full force and effect, the insurance described in this section. Contractor shall acquire such insurance from an insurance carrier or carriers licensed to conduct business in each Participating State’s state and having a rating of A-, Class VII or better, in the most recently published edition of Best’s Reports. Failure to buy and maintain the required insurance may result in this Master Agreement’s termination or, at a Participating State’s option, result in termination of its Participating Addendum. b. Coverage shall be written on an occurrence basis. The minimum acceptable limits shall be as indicated below, with no deductible for each of the following categories: 1) Commercial General Liability (CGL) – Occurrence Form Policy shall include bodily injury, property damage, and broad form contractual liability coverage. General Aggregate $2,000,000 Products – Completed Operations Aggregate $1,000,000 Personal and Advertising Injury $1,000,000 Damage to Rented Premises $50,0000 Each Occurrence $1,000,000 2) Business Automobile Liability Bodily injury and Property Damage for any owned, hired, and/or non-owned automobiles used in the performance of this Contract. Combined Single Limit (CSL) $1,000,000 3) Technology Errors & Omissions Insurance Each Claim $2,000,000 Annual Aggregate $2,000,000 Such insurance shall cover any, and all errors, omissions, or negligent acts in the delivery of products, services, and/or licensed programs under this contract. Coverage shall include or shall not exclude services, and/or licensed programs under this contract. Coverage shall include or shall not exclude settlement and/or defense of claims involving intellectual property, including but not limited to patent or copyright infringement. In the event that Tech E&O insurance required by this Contact is written on a claims-made basis, Contractor warrants that any retroactive date under the policy shall precede the effective date of this Contract and, either continuous coverage will be maintained or an extended discovery period will be exercised for a period of two (2) years, beginning at the time work under this contract is completed. c. Contractor shall pay premiums on all insurance policies. Such policies shall also reference this Master Agreement and shall have a condition that they not be revoked by the insurer until thirty (30) calendar days Master Agreement Section 3: NASPO ValuePoint Master Agreement Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 29 | Page after notice of intended revocation thereof shall have been given to Purchasing Entity and Participating State by the Contractor. d. Prior to commencement of performance, Contractor shall provide to the Lead State a written endorsement to the Contractor’s general liability insurance policy or other documentary evidence acceptable to the Lead State that (1) names the Participating States identified in the Request for Proposal as additional insureds, (2) provides that no material alteration, cancellation, non-renewal, or expiration of the coverage contained in such policy shall have effect unless the named Participating State has been given at least thirty (30) days prior written notice, and (3) provides that the Contractor’s liability insurance policy shall be primary, with any liability insurance of any Participating State as secondary and noncontributory. Unless otherwise agreed in any Participating Addendum, the Participating State’s rights and Contractor’s obligations are the same as those specified in the first sentence of this subsection. Before performance of any Purchase Order issued after execution of a Participating Addendum authorizing it, the Contractor shall provide to a Purchasing Entity or Participating State who requests it the same information described in this subsection. e. Contractor shall furnish to the Lead State, Participating State, and, on request, the Purchasing Entity copies of certificates of all required insurance within thirty (30) calendar days of the execution of this Master Agreement, the execution of a Participating Addendum, or the Purchase Order’s effective date and prior to performing any work. The insurance certificate shall provide the following information: the name and address of the insured; name, address, telephone number and signature of the authorized agent; name of the insurance company (authorized to operate in all states); a description of coverage in detailed standard terminology (including policy period, policy number, limits of liability, exclusions and endorsements); and an acknowledgment of the requirement for notice of cancellation. Copies of renewal certificates of all required insurance shall be furnished within thirty (30) days after any renewal date. These certificates of insurance must expressly indicate compliance with each and every insurance requirement specified in this section. Failure to provide evidence of coverage may, at sole option of the Lead State, or any Participating State, result in this Master Agreement’s termination or the termination of any Participating Addendum. f. Coverage and limits shall not limit Contractor’s liability and obligations under this Master Agreement, any Participating Addendum, or any Purchase Order. 18. Laws and Regulations Any and all Products offered and furnished shall comply with solicitation section 5.10, Compliance with Applicable Laws. 19. License of Pre-Existing Intellectual Property Any rights to intellectual property shall be as prescribed in the Lead State’s solicitation and resulting contract, and Purchasing Entities shall have the same rights as the Lead State under those provisions. 20. No Waiver of Sovereign Immunity In no event shall this Master Agreement, any Participating Addendum or any contract or any Purchase Order issued thereunder, or any act of a Lead State, a Participating State, or a Purchasing Entity be a waiver of any form of defense or immunity, whether sovereign immunity, governmental immunity, immunity based on the Eleventh Amendment to the Constitution of the United States or otherwise, from any claim or from the jurisdiction of any court. This section applies to a claim brought against the Participating State only to the extent Congress Master Agreement Section 3: NASPO ValuePoint Master Agreement Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 30 | Page has appropriately abrogated the Participating State’s sovereign immunity and is not consent by the Participating State to be sued in federal court. This section is also not a waiver by the Participating State of any form of immunity, including but not limited to sovereign immunity and immunity based on the Eleventh Amendment to the Constitution of the United States. 21. Ordering a. Master Agreement order and purchase order numbers shall be clearly shown on all acknowledgments, shipping labels, packing slips, invoices, and on all correspondence. b. The resulting Master Agreements permit Purchasing Entities to define project-specific requirements and informally compete the requirement among companies having a Master Agreement on an “as needed” basis. This procedure may also be used when requirements are aggregated or other firm commitments may be made to achieve reductions in pricing. This procedure may be modified in Participating Addenda and adapted to Purchasing Entity rules and policies. The Purchasing Entity may in its sole discretion determine which Master Agreement Contractors should be solicited for a quote. The Purchasing Agency may select the quote that it considers most advantageous, cost and other factors considered. c. Each Purchasing Entity will identify and utilize its own appropriate purchasing procedure and documentation. Contractor is expected to become familiar with the Purchasing Entities’ rules, policies, and procedures regarding the ordering of supplies and/or services contemplated by this Master Agreement. d. Contractor shall not begin work without a valid Purchase Order or other appropriate commitment document compliance with the law of the Purchasing Entity. e. Orders may be placed consistent with the terms of this Master Agreement during the term of the Master Agreement. f. All Orders pursuant to this Master Agreement, at a minimum, shall include: (1) The services or supplies being delivered; (2) The place and requested time of delivery; (3) A billing address; (4) The name, phone number, and address of the Purchasing Entity representative; (5) The price per hour or other pricing elements consistent with this Master Agreement and the contractor’s proposal; (6) A ceiling amount of the order for services being ordered; and (7) The Master Agreement identifier. g. All communications concerning administration of Orders placed shall be furnished solely to the authorized purchasing agent within the Purchasing Entity’s purchasing office, or to such other individual identified in writing in the Order. h. Orders must be placed pursuant to this Master Agreement prior to the termination date thereof, but may have a delivery date or performance period up to 120 days past the then-current termination date of this Master Agreement. Contractor is reminded that financial obligations of Purchasing Entities payable after the current applicable fiscal year are contingent upon agency funds for that purpose being appropriated, budgeted, and otherwise made available. i. Notwithstanding the expiration or termination of this Master Agreement, Contractor agrees to perform in accordance with the terms of any Orders then outstanding at the time of such expiration or termination. Contractor shall not honor any Orders placed after the expiration or termination of this Master Agreement, or Master Agreement Section 3: NASPO ValuePoint Master Agreement Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 31 | Page otherwise inconsistent with its terms. Orders from any separate indefinite quantity, task orders, or other form of indefinite delivery order arrangement priced against this Master Agreement may not be placed after the expiration or termination of this Master Agreement, notwithstanding the term of any such indefinite delivery order agreement. 22. Participants a. Contractor may not deliver Products under this Master Agreement until a Participating Addendum acceptable to the Participating State and Contractor is executed. The NASPO ValuePoint Master Agreement Terms and Conditions are applicable to any Order by a Participating State (and other Purchasing Entities covered by their Participating Addendum), except to the extent altered, modified, supplemented or amended by a Participating Addendum. By way of illustration and not limitation, this authority may apply to unique delivery and invoicing requirements, confidentiality requirements, defaults on Orders, governing law and venue relating to Orders by a Participating State, indemnification, and insurance requirements. Statutory or constitutional requirements relating to availability of funds may require specific language in some Participating Addenda in order to comply with applicable law. The expectation is that these alterations, modifications, supplements, or amendments will be addressed in the Participating Addendum or, with the consent of the Purchasing Entity and Contractor, may be included in the ordering document (e.g. purchase order or contract) used by the Purchasing Entity to place the Order. b. Use of specific NASPO ValuePoint cooperative Master Agreements by state agencies, political subdivisions and other Participating Entities (including cooperatives) authorized by individual state’s statutes to use state contracts are subject to the approval of the respective State Chief Procurement Official. Issues of interpretation and eligibility for participation are solely within the authority of the respective State Chief Procurement Official. c. Obligations under this Master Agreement are limited to those Participating Entities who have signed a Participating Addendum and Purchasing Entities within the scope of those Participating Addenda. Financial obligations of Participating States are limited to the orders placed by the departments or other state agencies and institutions having available funds. Participating States incur no financial obligations on behalf of political subdivisions. Contractor shall email a fully executed PDF copy of each Participating Addendum to PA@wsca-naspo.org to support documentation of participation and posting in appropriate data bases. d. NASPO Cooperative Purchasing Organization LLC, doing business as NASPO ValuePoint, is not a party to the Master Agreement. It is a nonprofit cooperative purchasing organization assisting states in administering the NASPO cooperative purchasing program for state government departments, institutions, agencies and political subdivisions (e.g., colleges, school districts, counties, cities, etc.) for all 50 states, the District of Columbia and the territories of the United States. e. State Participating Addenda or other Participating Addenda shall not be construed to amend the terms of this Master Agreement between the Lead State and Contractor. f. Participating Entities who are not states may under some circumstances sign their own Participating Addendum, subject to the approval of participation by the Chief Procurement Official of the state where the Participating State is located. g. Resale. “Resale” means any transfer of software for compensation or assignment of services for compensation. Subject to any specific conditions included in the solicitation or Contractor’s proposal as accepted by the Lead State, or as explicitly permitted in a Participating Addendum, Purchasing Entities may not resell Products (the definition of which includes software and services that are deliverables). Absent any Master Agreement Section 3: NASPO ValuePoint Master Agreement Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 32 | Page such condition or explicit permission, this limitation does not prohibit: payments by employees of a Purchasing Entity for Products; sales of Products to the general public as surplus property; and fees associated with inventory transactions with other governmental or nonprofit entities under cooperative agreements and consistent with a Purchasing Entity’s laws and regulations. Any sale or transfer permitted by this subsection must be consistent with license rights granted for use of intellectual property. 23. Payment Payment for completion of a contract order is normally made within 30 days following the date the entire order is delivered or the date a correct invoice is received, whichever is later. After 45 days the Contractor may assess overdue account charges up to a maximum rate of one percent per month on the outstanding balance. Payments will be remitted by mail. Payments may be made via a State or political subdivision “Purchasing Card” with no additional charge. Any prompt payment terms proposed by contractor shall be extended to all Purchasing Entities. 24. Public Information. This Master Agreement and all related documents are subject to disclosure pursuant to the Purchasing Entity’s public information laws. 25. Records Administration and Audit. a. The Contractor shall maintain books, records, documents, and other evidence pertaining to this Master Agreement and orders placed by Purchasing Entities under it to the extent and in such detail as shall adequately reflect performance and administration of payments and fees. Contractor shall permit the Lead State, a Participating State, a Purchasing Entity, the federal government (including its grant awarding entities and the U.S. Comptroller General), and any other duly authorized agent of a governmental agency, to audit, inspect, examine, copy and/or transcribe Contractor's books, documents, papers and records directly pertinent to this Master Agreement or orders placed by a Purchasing Entity under it for the purpose of making audits, examinations, excerpts, and transcriptions. This right shall survive for a period of five (5) years following termination of this Agreement or final payment for any order placed by a Purchasing Entity against this Agreement, whichever is later, to assure compliance with the terms hereof or to evaluate performance hereunder. b. Without limiting any other remedy available to any governmental entity, the Contractor shall reimburse the applicable Lead State, Participating State, or Purchasing Entity for any overpayments inconsistent with the terms of the Master Agreement or orders or underpayment of fees found as a result of the examination of the Contractor’s records. c. The rights and obligations herein right exist in addition to any quality assurance obligation in the Master Agreement requiring the Contractor to self-audit contract obligations and that permits the Lead State to review compliance with those obligations. 26. Administrative Fees a. The Contractor shall pay to NASPO ValuePoint, or its assignee, a NASPO ValuePoint Administrative Fee of one-quarter of one percent (0.25% or 0.0025) no later than 60 days following the end of each calendar quarter. The NASPO ValuePoint Administrative Fee shall be submitted quarterly and is based on all sales of products and services under the Master Agreement (less any charges for taxes or shipping). The NASPO ValuePoint Master Agreement Section 3: NASPO ValuePoint Master Agreement Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 33 | Page Administrative Fee is not negotiable. This fee is to be included as part of the pricing submitted with proposal. b. Additionally, some states, such as the State of Arizona, may require an additional fee be paid directly to the state only on purchases made by Purchasing Entities within that state. For all such requests, the fee level, payment method and schedule for such reports and payments will be incorporated into the Participating Addendum that is made a part of the Master Agreement. The Contractor may adjust the Master Agreement pricing accordingly for purchases made by Purchasing Entities within the jurisdiction of the state. All such agreements shall not affect the NASPO ValuePoint Administrative Fee percentage or the prices paid by the Purchasing Entities outside the jurisdiction of the state requesting the additional fee. The NASPO ValuePoint Administrative Fee in subsection 26a shall be based on the gross amount of all sales (less any charges for taxes or shipping) at the adjusted prices (if any) in Participating Addenda. 27. NASPO ValuePoint Summary and Detailed Usage Reports In addition to other reports that may be required by this solicitation, the Contractor shall provide the following NASPO ValuePoint reports. a. Summary Sales Data. The Contractor shall submit quarterly sales reports directly to NASPO ValuePoint using the NASPO ValuePoint Quarterly Sales/Administrative Fee Reporting Tool found at http://www.naspo.org/WNCPO/Calculator.aspx. Any/all sales made under the contract shall be reported as cumulative totals by state. Even if Contractor experiences zero sales during a calendar quarter, a report is still required. Reports shall be due no later than 30 day following the end of the calendar quarter (as specified in the reporting tool). b. Detailed Sales Data. Contractor shall also report detailed sales data by: (1) state; (2) entity/customer type, e.g. local government, higher education, K12, non-profit; (3) Purchasing Entity name; (4) Purchasing Entity bill-to and ship-to locations; (4) Purchasing Entity and Contractor Purchase Order identifier/number(s); (5) Purchase Order Type (e.g. sales order, credit, return, upgrade, determined by industry practices); (6) Purchase Order date; (7) Ship Date; (8) and line item description, including product number if used. The report shall be submitted in any form required by the solicitation. Reports are due on a quarterly basis and must be received by the Lead State and NASPO ValuePoint Cooperative Development Team no later than thirty (30) days after the end of the reporting period. Reports shall be delivered to the Lead State and to the NASPO ValuePoint Cooperative Development Team electronically through a designated portal, email, CD-Rom, flash drive or other method as determined by the Lead State and NASPO ValuePoint. Detailed sales data reports shall include sales information for all sales under Participating Addenda executed under this Master Agreement. The format for the detailed sales data report is in shown in EXHIBIT III_Cooperative Contract Sales Reporting Data Requirements and Data Format. c. Reportable sales for the summary sales data report and detailed sales data report includes sales to employees for personal use where authorized by the solicitation and the Participating Addendum. Report data for employees should be limited to ONLY the state and entity they are participating under the authority of (state and agency, city, county, school district, etc.) and the amount of sales. No personal identification numbers, e.g. names, addresses, social security numbers or any other numerical identifier, may be submitted with any report. d. Contractor shall provide the NASPO ValuePoint Cooperative Development Coordinator with an executive summary each quarter that includes, at a minimum, a list of states with an active Participating Addendum, states that Contractor is in negotiations with and any PA roll out or implementation activities and issues. NASPO ValuePoint Cooperative Development Coordinator and Contractor will determine the format and content of the executive summary. The executive summary is due 30 days after the conclusion of each Master Agreement Section 3: NASPO ValuePoint Master Agreement Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 34 | Page calendar quarter. e. Timely submission of these reports is a material requirement of the Master Agreement. The recipient of the reports shall have exclusive ownership of the media containing the reports. The Lead State and NASPO ValuePoint shall have a perpetual, irrevocable, non-exclusive, royalty free, transferable right to display, modify, copy, and otherwise use reports, data and information provided under this section. 28. Standard of Performance and Acceptance. Determination of the acceptability of services shall be made by the sole judgement of the Purchasing Entity. Acceptance shall be in writing, verbal acceptance will not be allowed. Services shall be completed in accordance with the Scope of Work, agreed to and accepted schedules, plans, and agreed to performance standards. Acceptance shall be one hundred percent (100%) functionality, which will be determined by the Purchasing Entity. Acceptance criteria shall include, but not be limited to conformity to the scope of work, quality of workmanship, and successfully performing all required Tasks. Nonconformance to a stated acceptance and performance criteria of both services and or products, as required, shall result in a delay for payment. The warranty period will begin upon Acceptance. 29. Warranty The Contractor warrants for a period of 90 days from the date of Acceptance in accordance with the provisions of section 7 of the State of Arizona Uniform Terms and Conditions and section 5.1 N. of the State of Arizona Special Terms and Conditions, with rights of the State available to other Purchasing Entities. Upon breach of the warranty, the Contractor will repair or replace (at no charge to the Purchasing Entity) the Product whose nonconformance is discovered and made known to the Contractor. If the repaired and/or replaced Product proves to be inadequate, or fails of its essential purpose, the Contractor will refund the full amount of any payments that have been made. The rights and remedies of the parties under this warranty are in addition to any other rights and remedies of the parties provided by law or equity, including, without limitation, actual damages, and, as applicable and awarded under the law, to a prevailing party, reasonable attorneys’ fees and costs. 30. (RESERVED) 31. Title of Product Upon Acceptance by the Purchasing Entity, Contractor shall convey to Purchasing Entity title to Product consisting of tangible media free and clear of all liens, encumbrances, or other security interests. 32. Waiver of Breach Failure of the Lead State, Participating State, or Purchasing Entity to declare a default or enforce any rights and remedies shall not operate as a waiver under this Master Agreement or Participating Addendum. Any waiver by the Lead State, Participating State, or Purchasing Entity must be in writing. Waiver by the Lead State or Participating State of any default, right or remedy under this Master Agreement or Participating Addendum, or by Purchasing Entity with respect to any Purchase Order, or breach of any terms or requirements of this Master Agreement, a Participating Addendum, or Purchase Order shall not be construed or operate as a waiver of any subsequent default or breach of such term or requirement, or of any other term or requirement under this Master Agreement, Participating Addendum, or Purchase Order. Master Agreement Section 3: NASPO ValuePoint Master Agreement Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 35 | Page 33. Assignment of Antitrust Rights Contractor irrevocably assigns to a Participating State any claim for relief or cause of action which the Contractor now has or which may accrue to the Contractor in the future by reason of any violation of state or federal antitrust laws (15 U.S.C. § 1-15 or a Participating State’s state antitrust provisions), as now in effect and as may be amended from time to time, in connection with any goods or services provided to the Contractor for the purpose of carrying out the Contractor's obligations under this Master Agreement or Participating Addendum, including, at a Participating State's option, the right to control any such litigation on such claim for relief or cause of action. 34. Debarment The Contractor certifies that neither it nor its principals are presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction (contract) by any governmental department or agency. This certification represents a recurring certification made at the time any Order is placed under this Master Agreement. If the Contractor cannot certify this statement, attach a written explanation for review by the Lead State. 35. Governing Law and Venue a. The procurement, evaluation, and award of the Master Agreement shall be governed by and construed in accordance with the laws of the Lead State sponsoring and administering the procurement. The construction and effect of the Master Agreement after award shall be governed by the law of the state serving as Lead State (in most cases also the Lead State). The construction and effect of any Participating Addendum or Order against the Master Agreement shall be governed by and construed in accordance with the laws of the Participating State’s or Purchasing Entity’s State. b. Unless otherwise specified in the RFP, the venue for any protest, claim, dispute or action relating to the procurement, evaluation, and award is in the Lead State. Venue for any claim, dispute or action concerning the terms of the Master Agreement shall be in the state serving as Lead State. Venue for any claim, dispute, or action concerning any Order placed against the Master Agreement or the effect of a Participating Addendum shall be in the Purchasing Entity’s State. c. If a claim is brought in a federal forum, then it must be brought and adjudicated solely and exclusively within the United States District Court for (in decreasing order of priority): the Lead State for claims relating to the procurement, evaluation, award, or contract performance or administration if the Lead State is a party; the Participating State if a named party; the Participating State state if a named party; or the Purchasing Entity state if a named party. 36. NASPO ValuePoint eMarket Center In July 2011, NASPO ValuePoint entered into a multi-year agreement with SciQuest, Inc. whereby SciQuest will provide certain electronic catalog hosting and management services to enable eligible NASPO ValuePoint’s customers to access a central online website to view and/or shop the goods and services available from existing NASPO ValuePoint Cooperative Contracts. The central online website is referred to as the NASPO ValuePoint eMarket Center. The Contractor will have visibility in the eMarket Center through Ordering Instructions. These Ordering Instructions are available at no cost to the Contractor and provided customers information regarding the Contractors website and ordering information. Master Agreement Section 3: NASPO ValuePoint Master Agreement Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 36 | Page At a minimum, the Contractor agrees to the following timeline: NASPO ValuePoint eMarket Center Site Admin shall provide a written request to the Contractor to begin Ordering Instruction process. The Contractor shall have thirty (30) days from receipt of written request to work with NASPO ValuePoint to provide any unique information and ordering instructions that the Contractor would like the customer to have. 37. Contract Provisions for Orders Utilizing Federal Funds. Pursuant to Appendix II to 2 Code of Federal Regulations (CFR) Part 200, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards, Orders funded with federal funds may have additional contractual requirements or certifications that must be satisfied at the time the Order is placed or upon delivery. These federal requirements may be proposed by Participating Entities in Participating Addenda and Purchasing Entities for incorporation in Orders placed under this master agreement. 38. State Government Support No support, facility space, materials, special access, personnel or other obligations on behalf of the states or other Participating Entity, other than payment, are required under the Master Agreement. Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 5.1 State of Arizona Special Terms and Conditions A. Purpose Pursuant to provisions of the Arizona Procurement Code, A.R.S. 41-2501 Et Seq., the State of Arizona intends to establish a Contract (Participating Addendum, PA) for the materials or services as listed herein in service to the State. B. Term of Contract The term of any resultant Contract shall commence on date of execution and shall be for an initial period of two (2) years, unless terminated, canceled or extended as otherwise provided herein. C. Contract Extensions The Contract term is for period stated in Item B. subject to additional successive periods with a maximum aggregate including all extensions not to exceed five (5) years. D. Contract Type – Fixed Price E. Eligible Agencies (STATEWIDE) This Contract shall be for the use of all State of Arizona departments, agencies, commissions and boards. In addition, eligible State Purchasing Cooperative members may participate at their discretion. In order to participate in this contract, a cooperative member shall have entered into a Cooperative Purchasing Agreement with the Department of Administration, State Procurement Office as required by Arizona Revised Statues § 41-2632. Membership in the State Purchasing Cooperative is available to all Arizona political subdivisions including cities, counties, school districts, and special districts. Membership is also available to all non- profit organizations, as well as State governments, the US Federal Government and Tribal Nations. Non-profit organizations are defined in A.R.S. § 41-2631(4) as any nonprofit corporation as designated by the internal revenue service under section 501(c)(3) through 501(c)(6). F. Licenses The Contractor shall maintain in current status, all federal, state and local licenses and permits required for the operation of the business conducted by the Contractor. G. Volume of Work The State does not guarantee a specific amount of work either for the life of the Contract or on an annual basis. Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 38 | Page H. Key Personnel It is essential that the Contractor provide adequate experienced personnel, capable of and devoted to the successful accomplishment of work to be performed under this Contract. The Contractor must agree to assign specific individuals to the key positions if required. 1. The Contractor agrees that, once assigned to work under this Contract, key personnel shall not be removed or replaced without written notice to the State. 2. Key personnel who are not available for work under this Contract for a continuous period exceeding thirty (30) calendar days, or are expected to devote substantially less effort to the work than initially anticipated, the Contractor shall immediately notify the State, and shall, subject to the concurrence of the State, replace such personnel with personnel of substantially equal ability and qualifications. I. Changes The State may at any time make changes within the general scope of this Contract. The Contractor shall respond to the Change Order with a proposal. If any such change causes an adjustment in the cost of, or the time required for the performance of any part of the work under this Contract, whether changed or not changed by the Change Order, the Procurement Officer shall modify the Contract in writing via a bilateral Contract Amendment. J. Price Adjustment Any price adjustment shall be within the confines of the awarded contract, or as negotiated in service to this Contract. Any negotiated price adjustments for this Contract shall be documented via a bilateral Contract Amendment. K. Payment Procedures The State will not make payments to any Entity, Group or individual other than the Contractor with the Federal Employer Identification (FEI) Number identified in the Contract. Contractor invoices requesting payment to any Entity, Group or individual other than the contractually specified Contractor shall be returned to the Contractor for correction. The Contractor shall review and insure that the invoices for services provided show the correct Contractor name prior to sending them for payment. If the Contractor Name and FEI Number change, the Contractor must complete an “Assignment and Agreement” form transferring contract rights and responsibilities to the new Contractor. The State must indicate consent on the form. A written Contract Amendment must be signed by both parties and a new W-9 form must be submitted by the new Contractor and entered into the system prior to any payments being made to the new Contractor. L. Information Disclosure The Contractor shall establish and maintain procedures and controls that are acceptable to the State for the purpose of assuring that no information contained in its records or obtained from the state or from others in carrying out its functions under the contract shall be used or disclosed by it, its agents, officers, or employees, except as required to efficiently perform duties under the Contract. Persons requesting such information should be referred to the State. The Contractor also agrees that any information pertaining to individual persons shall not be divulged other than to employees or officers of Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 39 | Page the Contractor as needed for the performance of duties under the Contract, unless otherwise agreed to in writing by the State. M. Employees of the Contractor All employees of the Contractor employed in the performance of work under the Contract shall be considered employees of the Contractor at all times, and not employees of the State. The Contractor shall comply with the Social Security Act, Workman’s Compensation laws and Unemployment laws of the State of Arizona and all State, local and Federal legislation relevant to the Contractor’s business. N. Warranty All services supplied under this Contract shall be fully guaranteed by the Contractor for a minimum period of ninety (90) days from the date of acceptance by the State. Any defects of design, workmanship, or delivered materials, that would result in non-compliance shall be fully corrected by the Contractor without cost to the State. O. Compliance with Applicable Laws The Materials and services supplied under this Contract shall comply with all applicable Federal, state and local laws, and the Contractor shall maintain all applicable licenses and permit requirements. Contractor represents and warrants to the State that Contractor has the skill and knowledge possessed by members of its trade or profession and Contractor will apply that skill and knowledge with care and diligence so Contactor and Contractor's employees and any authorized subcontractors shall perform the Services described in this Contract in accordance with the Statement of Work. Contractor represents and warrants that the Materials provided through this Contract and Statement of Work shall be free of viruses, backdoors, worms, spyware, malware and other malicious code that will hamper performance of the Materials, collect unlawful personally identifiable information on Users or prevent the Materials from performing as required under the terms and conditions of this Contract. P. Non-Exclusive Contract Any Contract resulting from this solicitation shall be awarded with the understanding and agreement that it is for the sole convenience of the State of Arizona. The State reserves the right to obtain like goods or services from another source when necessary, or when determined to be in the best interest of the State. Q. Administrative Fee/Usage Reports 1. In accordance with ARS § 41-2633 the Department of Administration, State Procurement Office includes an Administrative Fee, in the majority of its Statewide contracts – multiple agency, multiple government, cooperative contracts. The Administrative Fee is used by the State to defray the additional costs associated with soliciting, awarding and administering statewide contracts. In addition to the State agencies, boards and commissions, statewide contracts are available to members of the State Purchasing Cooperative including cities, counties, school districts, special districts, other state governments, agencies of the federal government, tribal nations, schools, medical institutions, and nonprofit organizations. The Administrative Fee is the responsibility of the contractor. The Administrative Fee is a part of the contractor’s unit prices and is not to be charged directly to the customer in the form of a Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 40 | Page separate line item. In accordance with Section 26 of the NASPO ValuePoint Master Agreement Terms and Conditions, the 0.25% NASPO ValuePoint Administrative fee shall be incorporated into the Offerors base price. Other states, including the State of Arizona, may negotiate additional Administrative Fees in their Participating Addenda following award of a Master Agreement. Further, Statewide contracts maintain one set of pricing for all customers and not separate prices for State agency customers and State Purchasing Cooperative customers. 2. State of Arizona Fee Amount: Unless defined differently within the contract, the Statewide Contracts Administrative Fee shall be one percent (1.0%) of quarterly sales receipts under an active Statewide contract, transacted by only the members of the State Purchasing Cooperative, minus any taxes or regulatory fees, minus any returns or credits, and minus any shipping charges not already included in the unit prices. The Administrative Fee percentage is only applicable to amounts actually received by the contractor during the quarter and is not applicable to amounts ordered by customers but not yet paid for. The administrative fee is not paid on transactions with state agency customers. 3. Method of Assessment At the completion of each quarter, the contractor reviews all sales under their contract in preparation for submission of their Usage Report. The contractor identifies all sales receipts transacted by members of the State Purchasing Cooperative and assesses one percent (1.0%) of this amount in their Usage Report. An updated list of State Purchasing Cooperative members may be found at: https://spo.az.gov/state-purchasing-cooperative . At its option, the State may expand or narrow the applicability of this fee. The State shall provide thirty (30) written notice prior to exercising or changing this option. The contractor shall summarize all sales, along with all assessed Administrative Fee amounts within their Usage Report, including total amounts for the following: Total sales receipts from State agencies, boards and commissions; Total sales receipts from members of the State Purchasing Cooperative; and Total Administrative Fee amount based on one percent (1.0%) of the sales receipts from members of the State Purchasing Cooperative. 4. Submission of Reports and Fees. Within thirty (30) days following the end of the quarter, the contractor submits their Usage Report and if applicable, a check in the amount of one percent (1%) of their sales receipts from members of the State Purchasing Cooperative, to the Department of Administration, State Procurement Office. Contractors are required to use the State’s current report templates unless you have authorization from your contract officer to use a different format. You need to complete Form 799, which is a cover letter that gives the totals of your transactions; and Form 801, which is an Excel spreadsheet that details your transactions. Sales to state agencies and the cooperative members are to be totaled separately. The most current forms can be downloaded at https://spo.az.gov/statewide-contracts-administrative-fee. 4.1 The submission schedule for Administrative Fees and Usage reports shall be as follows: FY Q1, July through September Due October 31 FY Q2, October through December Due January 31 FY Q3, January through March Due by April 30 FY Q4, April through June Due by July 31 Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 41 | Page 4.2 Usage Reports and any questions are to be submitted by email to the state's designated usage report email address: usage@azdoa.gov 4.3 Administrative Fees shall be made out to the “State Procurement Office” and mailed to: Department of Administration General Services Division ATTN: “Statewide Contracts Administrative Fee” 100 N. 15th Avenue, Suite 202 Phoenix, AZ 85007 5. The Administrative Fee shall be a part of the Contractor’s unit prices and is not to be charged directly to the customer in the form of a separate line item. Statewide contracts shall not have separate prices for State Agency customers and State Purchasing Cooperative customers. 6. Contractor's failure to remit administrative fees in a timely manner consistent with the contract’s requirements may result in the State exercising any recourse available under the contract or as provided for by law. R. Acceptance Determination of the acceptability of services shall be made by the sole judgment of the State. Acceptance shall be in writing, verbal acceptance will not be allowed. Services shall be completed in accordance with the Scope of Work, agreed to and accepted schedules, plans, and agreed to performance standards. Acceptance shall be one hundred percent (100%) functionality, which will be determined by the State. Acceptance criteria shall include, but not be limited to conformity to the scope of work, quality of workmanship and successfully performing all required Tasks. Nonconformance to any of the stated acceptance and performance criteria of both services and or products as required shall result in a delay for payment. Payment shall not be made until nonconformance to the criteria is corrected as determined by the State. T. Performance Contractor agrees that, from and after the date that the applicable services commence, its performance of the Scope of Services will meet or exceed industry best practices subject to the limitations and in accordance with the provisions set forth in this Contract. If the Services provided pursuant to this Contract are changed, modified or enhanced (whether by Change Order or through the provision of new Services), The State and the Contractor will review the current performance experience and will in good faith determine whether such experience should be adjusted and whether additional services should be implemented or whether services be removed. The following requirements shall also apply: 1. Failure to Perform If Contractor fails to complete any deliverable, then Contractor shall: 1.1 Promptly perform a root-cause analysis to identify the cause of such failure; 1.2 Use commercially reasonable efforts to correct such failure and to begin meeting the requirements as promptly as practicable; 1.3 Provide the State with a report detailing the cause of, and procedure for correcting, such Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 42 | Page failure; and 1.4 If appropriate under the circumstances, take action to avoid such failure in the future. 2. Root-Cause Analysis In the event of the Contractor's failure to perform required services or meet agreed upon service levels or other Contractor service standards as required by the State under this Contract, the Contractor shall perform an analysis of the cause of the service level problem and implement remediation steps as appropriate. The State shall have the right to review the analysis and approve the remediation steps prior to or subsequent to their implementation, as deemed appropriate by the State, if the remediation steps impact State assets or operational processes. U. Compensation Should the Contractor fail to provide all required services or deliver work products, as agreed upon by State and the Contractor, the State shall be entitled to invoke applicable remedies, including but not limited to, withholding payment to the Contractor and declaring the Contractor in material breach of the Contract. If the Contractor is in any manner in default of any obligation or the Contractor’s work or performance is determined by the State to be defective, sub-standard, or if audit exceptions are identified, the State may, in addition to other available remedies, either adjust the amount of payment or withhold payment until satisfactory resolution of the default, defect, exception or sub-standard performance. The Contractor shall reimburse the State on demand, or the State may deduct from future payments, any amounts paid for work products or performance which are determined to be an audit exception, defective or sub-standard performance. The Contractor shall correct its mistakes or errors without additional cost to the State. The State shall be the sole determiner as to defective or sub-standard performance. The Contractor shall fulfill their contractual requirements including the Deliverables identified in the Statement of Work and fulfill the roles and responsibilities described in the Statement of Work for a firm fixed price, inclusive of travel and travel-related expenses. The fixed amount shall be inclusive of any fees for the use of any third party products or services required for use in the performance of this Contract V. Contractor Performance Reports Program management shall document Contractor performance, both exemplary and needing improvements where corrective action is needed or desired. Copies of corrective action reports will be forwarded to the Procurement Office for review and any necessary follow-up. The Procurement Office may contact the Contractor upon receipt of the report and may request corrective action. The Procurement Office shall discuss the Contractor’s suggested corrective action plan with the Procurement Specialist for approval of the plan. W. Offshore Performance of Work Prohibited Due to security and identity protection concerns, direct services under this contract shall be performed within the borders of the United States. Any services that are described in the specifications or scope of work that directly serve the State of Arizona or its clients and may involve access to secure or sensitive data or personal client data or development or modification of software for the State shall be performed within the borders of the United States. Unless specifically stated otherwise in the specifications, this definition does not apply to indirect or “overhead” services, redundant back-up Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 43 | Page services or services that are incidental to the performance of the contract. This provision applies to work performed by subcontractors at all tiers. X. Indemnification and Insurance 1.1 Indemnification Clause To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold harmless the State of Arizona, and its departments, agencies, boards, commissions, universities, and any jurisdiction or agency issuing permits for any work included in the project, and their respective directors, officers, officials, agents and employees (hereinafter referred to as "Indemnitee") from and against any and all claims, actions, liabilities, costs, losses, or expenses, (including reasonable attorney's fees), (hereinafter collectively referred to as "Claims") arising out of actual or alleged bodily injury or personal injury of any person (including death) or loss or damage to tangible or intangible property caused, or alleged to be caused, in whole or in part, by the negligent or willful acts or omissions of Contractor or any of Contractor's directors, officers, agents, employees, volunteers or subcontractors. This indemnity includes any claim or amount arising or recovered under the Workers' Compensation Law or arising out of the failure of Contractor to conform to any federal, state or local law, statute, ordinance, rule, regulation or court decree. It is the specific intention of the parties that the Indemnitee shall, in all instances, except for Claims arising solely from the negligent or willful acts or omissions of the Indemnitee, be indemnified by Contractor from and against any and all Claims. It is agreed that Contractor will be responsible for primary loss investigation, defense and judgment costs where this indemnification is applicable. This indemnification will survive the termination of the above listed contract with the Contractor. This indemnity shall not apply if the contractor or sub-contractor(s) is/are an agency, board, commission or university of the State of Arizona. 1.2 Insurance Requirements 1.2.1 Contractor and subcontractors shall procure and maintain, until all of their obligations have been discharged, including any warranty periods under this Contract, insurance against claims for injury to persons or damage to property arising from, or in connection with, the performance of the work hereunder by the Contractor, its agents, representatives, employees or subcontractors. 1.2.2 The Insurance Requirements herein are minimum requirements for this Contract and in no way limit the indemnity covenants contained in this Contract. The State of Arizona in no way warrants that the minimum limits contained herein are sufficient to protect the Contractor from liabilities that arise out of the performance of the work under this Contract by the Contractor, its agents, representatives, employees or subcontractors, and the Contractor is free to purchase additional insurance. 1.3 Minimum Scope and Limits of Insurance Contractor shall provide coverage with limits of liability not less than those stated below. Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 44 | Page 1.3.1 Commercial General Liability (CGL) – Occurrence Form Policy shall include bodily injury, property damage, and broad form contractual liability coverage. General Aggregate $2,000,000 Products – Completed Operations Aggregate $1,000,000 Personal and Advertising Injury $1,000,000 Damage to Rented Premises $50,000 Each Occurrence $1,000,000 a. The policy shall be endorsed, as required by this written agreement, to include the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees as additional insureds with respect to liability arising out of the activities performed by or on behalf of the Contractor. b. Policy shall contain a waiver of subrogation endorsement, as required by this written agreement, in favor of the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor. 1.3.2 Business Automobile Liability Bodily Injury and Property Damage for any owned, hired, and/or non-owned automobiles used in the performance of this Contract. Combined Single Limit (CSL) $1,000,000 Policy shall be endorsed, as required by this written agreement, to include the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees as additional insureds with respect to liability arising out of the activities performed by, or on behalf of, the Contractor involving automobiles owned, hired and/or non-owned by the Contractor. c. Policy shall contain a waiver of subrogation endorsement as required by this written agreement in favor of the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor. 1.3.3 Workers’ Compensation and Employers' Liability Workers' Compensation Statutory Employers' Liability Each Accident $1,000,000 Disease – Each Employee $1,000,000 Disease – Policy Limit $1,000,000 d. Policy shall contain a waiver of subrogation endorsement, as required by this written agreement, in favor of the State of Arizona, and its departments, agencies, boards, Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 45 | Page commissions, universities, officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor. e. This requirement shall not apply to each Contractor or subcontractor that is exempt under A.R.S. § 23-901, and when such Contractor or subcontractor executes the appropriate waiver form (Sole Proprietor or Independent Contractor). 1.3.4 Technology Errors & Omissions Insurance Each Claim $2,000,000 Annual Aggregate $2,000,000 f. Such insurance shall cover any, and all errors, omissions, or negligent acts in the delivery of products, services, and/or licensed programs under this contract. g. Coverage shall include or shall not exclude settlement and/or defense of claims involving intellectual property, including but not limited to patent or copyright infringement. h. In the event that the Tech E&O insurance required by this Contract is written on a claims-made basis, Contractor warrants that any retroactive date under the policy shall precede the effective date of this Contract and, either continuous coverage will be maintained or an extended discovery period will be exercised for a period of two (2) years, beginning at the time work under this Contract is completed. 1.3.5 Media Liability Coverage Each Claim $2,000,000 Annual Aggregate $2,000,000 i. Such insurance shall cover any and all errors and omissions or negligent acts in the production of content, including but not limited to plagiarism, defamation, libel, slander, false advertising, invasion of privacy, and infringement of copyright, title, slogan, trademark, service mark and trade dress. j. In the event that the Media Liability insurance required by this Contract is written on a claims-made basis, Contractor warrants that any retroactive date under the policy shall precede the effective date of this Contract and, either continuous coverage will be maintained, or an extended discovery period will be exercised for a period of two (2) years beginning at the time work under this Contract is completed. 1.4 Additional Insurance Requirements The policies shall include, or be endorsed to include, as required by this written agreement, the following provisions: 1.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance afforded the Contractor shall be primary and that any insurance carried by the Department, its agents, Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 46 | Page officials, employees or the State of Arizona shall be excess and not contributory insurance, as provided by A.R.S. § 41-621 (E). 1.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability assumed under the indemnification provisions of this Contract. 1.5 Notice of Cancellation Applicable to all insurance policies required within the Insurance Requirements of this Contract, Contractor’s insurance shall not be permitted to expire, be suspended, be canceled, or be materially changed for any reason without thirty (30) days prior written notice to the State of Arizona. Within two (2) business days of receipt, Contractor must provide notice to the State of Arizona if they receive notice of a policy that has been or will be suspended, canceled, materially changed for any reason, has expired, or will be expiring. Such notice shall be sent directly to the Department and shall be mailed, emailed, hand delivered or sent by facsimile transmission to (State Representative’s Name, Address & Fax Number). 1.6 Acceptability of Insurers Contractor’s insurance shall be placed with companies licensed in the State of Arizona or hold approved non-admitted status on the Arizona Department of Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M. Best” rating of not less than A- VII. The State of Arizona in no way warrants that the above-required minimum insurer rating is sufficient to protect the Contractor from potential insurer insolvency. 1.7 Verification of Coverage Contractor shall furnish the State of Arizona with certificates of insurance (valid ACORD form or equivalent approved by the State of Arizona) as required by this Contract. An authorized representative of the insurer shall sign the certificates. 1.7.1 All certificates and endorsements, as required by this written agreement, are to be received and approved by the State of Arizona before work commences. Each insurance policy required by this Contract must be in effect at, or prior to, commencement of work under this Contract. Failure to maintain the insurance policies as required by this Contract, or to provide evidence of renewal, is a material breach of contract. 1.7.2 All certificates required by this Contract shall be sent directly to the Department. The State of Arizona project/contract number and project description shall be noted on the certificate of insurance. The State of Arizona reserves the right to require complete copies of all insurance policies required by this Contract at any time. 1.8 Subcontractors Contractor’s certificate(s) shall include all subcontractors as insureds under its policies or Contractor shall be responsible for ensuring and/or verifying that all subcontractors have valid and collectable insurance as evidenced by the certificates of insurance and endorsements for each subcontractor. All coverages for subcontractors shall be subject to the minimum Insurance Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 47 | Page Requirements identified above. The Department reserves the right to require, at any time throughout the life of this contract, proof from the Contractor that its subcontractors have the required coverage. 1.9 Approval and Modifications The Contracting Agency, in consultation with State Risk, reserves the right to review or make modifications to the insurance limits, required coverages, or endorsements throughout the life of this contract, as deemed necessary. Such action will not require a formal Contract amendment but may be made by administrative action. 1.10 Exceptions In the event the Contractor or subcontractor(s) is/are a public entity, then the Insurance Requirements shall not apply. Such public entity shall provide a certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of Arizona agency, board, commission, or university, none of the above shall apply. Y. Data Privacy and Security Contractor shall treat all information obtained through performance of the contract, as confidential or sensitive information consistent with State and federal law and State Policy. Contractor or its agents shall not use any data obtained in the performance of the contract in any manner except as necessary for the proper discharge of its obligations and protection of its rights related to this agreement. Contractor shall establish and maintain procedures and controls acceptable to the State for the purpose of assuring that data in its or its agents’ possession is not mishandled, misused, released, disclosed, or used in an inappropriate manner in performance of the contract. This includes data contained in Contractor’s records obtained from the State or others, necessary for contract performance. Contractor and its agents shall take all reasonable steps and precautions to safeguard this information and data and shall not divulge the information or data to parties other than those needed for the performance of duties under the contract. Z. Data Privacy/Security Incident Management Contractor and its agents shall cooperate and collaborate with appropriate State personnel to identify and respond to an information security or data privacy incident, including a security breach. 1. Threat of Security Breach Contractor(s) agrees to notify the State Chief Information Officer (CIO), the State Chief Information Security Officer (CISO) and other key personnel as identified by the State of any perceived threats placing the supported infrastructure and/or applications in danger of breach of security. The speed of notice shall be at least commensurate with the level of threat, as perceived by the Contractor(s). The State agrees to provide contact information for the State CIO, CISO and key personnel to the Contractor(s). 2. Discovery of Security Breach Contractor agrees to immediately notify the State CIO, the CISO and key personnel as identified by the State of a discovered breach of security. The State agrees to provide contact information Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 48 | Page for the State CIO, the CISO and key personnel. AA. Security Requirements for Contractor Personnel Each individual proposed to provide services through this contract agrees to security clearance and background check procedures, including fingerprinting, as defined by the Arizona Department of Administration in accordance with Arizona Revised Statutes §41-710. The results of the individual’s background check procedures must meet all HIPAA and law enforcement requirements. Contractor is responsible for all costs to obtain security clearance for their consultants providing services through this contract. Contractor personnel, agents or sub-contractors that have administrative access to the State’s networks may be subject to any additional security requirements of the State as may be required for the performance of the contract. The Contractor, its agents and sub-contractors shall provide documentation to the State confirming compliance with all such additional security requirements for performance of the contract. Additional security requirements include but are not limited to the following: 1. Identity and Address Verification – that verifies the individual is who he or she claims to be including verification of the candidate’s present and previous addresses; 2. UNAX/confidentiality Training; 3. HIPAA Privacy and Security Training; and 4. Information Security Training. BB. Access Constraints and Requirements Contractor access to State facilities and resources shall be properly authorized by State personnel, based on business need and will be restricted to least possible privilege. Upon approval of access privileges, the Contractor shall maintain strict adherence to all policies, standards, and procedures. Policies / Standards, ADOA/ASET Policies / Procedures, and Arizona Revised Statues (A.R.S.) §28-447, §28-449, §38-421, §13-2408, §13-2316, §41-770. Failure of the Contractor, its agents or subcontractors to comply with policies, standards, and procedures including any person who commits an unlawful breach or harmful access (physical or virtual) will be subject to prosecution under all applicable state and / or federal laws. Any and all recovery or reconstruction costs or other liabilities associated with an unlawful breach or harmful access shall be paid by the Contractor. CC. Health Insurance Portability and Accountability Act of 1996 The Contractor warrants that it is familiar with the requirements of HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH Act) of 2009, and accompanying regulations and will comply with all applicable HIPAA requirements in the course of this Contract. Contractor warrants that it will cooperate with the State in the course of performance of the Contract so that both the State and the Contractor will be in compliance with HIPAA, including cooperation and coordination with the Arizona Strategic Enterprise Technology (ASET) Group, Statewide Information Security and Privacy Office (SISPO), Chief Privacy Officer and HIPAA Coordinator and other compliance officials required by HIPAA and its regulations. Contractor will sign any documents that are reasonably necessary to keep the State and Contractor in compliance with Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 49 | Page HIPAA, including but not limited to, business associate agreements. If requested, the Contractor agrees to sign a “Pledge to Protect Confidential Information” and to abide by the statements addressing the creation, use and disclosure of confidential information, including information designated as protected health information and all other confidential or sensitive information as defined in policy. In addition, if requested, Contractor agrees to attend or participate in job related HIPAA training that is: (1) intended to make the Contractor proficient in HIPAA for purposes of performing the services required and (2) presented by a HIPAA Privacy Officer or other person or program knowledgeable and experienced in HIPAA and who has been approved by the ASET/SISPO Chief Privacy Officer and HIPAA Coordinator. Suggested References: https://www.cms.gov/Regulations-and-Guidance/HIPAA-Administrative- Simplification/HIPAAGenInfo/downloads/hipaalaw.pdf http://www.hhs.gov/ocr/privacy/hipaa/understanding/ DD. Compliance Requirements for A.R.S. § 41-4401, Government Procurement: E-Verify Requirement 1. The Contractor warrants compliance with all Federal immigration laws and regulations relating to employees and warrants its compliance with Section A.R.S. § 23-214, Subsection A. (That subsection reads: “After December 31, 2007, every employer, after hiring an employee, shall verify the employment eligibility of the employee through the E-Verify program.) 2. A breach of a warranty regarding compliance with immigration laws and regulations shall be deemed a material breach of the Contract and the Contractor may be subject to penalties up to and including termination of the Contract. 3. Failure to comply with a State audit process to randomly verify the employment records of Contractors and subcontractors shall be deemed a material breach of the Contract and the Contractor may be subject to penalties up to and including termination of the Contract. 4. The State Agency retains the legal right to inspect the papers of any employee who works on the Contract to ensure that the Contractor or subcontractor is complying with the warranty under paragraph One (1). 5.2 State of Arizona Uniform Terms and Conditions 1. Definition of Terms As used in this Solicitation and any resulting Contract, the terms listed below are defined as follows: 1.1. “Attachment” means any item the Solicitation requires the Offeror to submit as part of the Offer. 1.2. “Contract” means the combination of the Solicitation, including the Uniform and Special Instructions to Offerors, the Uniform and Special Terms and Conditions, and the Specifications and Statement or Scope of Work; the Offer and any Best and Final Offers; and any Solicitation Amendments or Contract Amendments. Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 50 | Page 1.3. "Contract Amendment" means a written document signed by the Procurement Officer that is issued for the purpose of making changes in the Contract. 1.4. “Contractor” means any person who has a Contract with the State. 1.5. “Days” means calendar days unless otherwise specified. 1.6. “Exhibit” means any item labeled as an Exhibit in the Solicitation or placed in the Exhibits section of the Solicitation. 1.7. “Gratuity” means a payment, loan, subscription, advance, deposit of money, services, or anything of more than nominal value, present or promised, unless consideration of substantially equal or greater value is received. 1.8. “Materials” means all property, including equipment, supplies, printing, insurance and leases of property but does not include land, a permanent interest in land or real property or leasing space. 1.9. “Procurement Officer” means the person, or his or her designee, duly authorized by the State to enter into and administer Contracts and make written determinations with respect to the Contract. 1.10. “Services” means the furnishing of labor, time or effort by a contractor or subcontractor which does not involve the delivery of a specific end product other than required reports and performance, but does not include employment agreements or collective bargaining agreements. 1.11. “Subcontract” means any Contract, express or implied, between the Contractor and another party or between a subcontractor and another party delegating or assigning, in whole or in part, the making or furnishing of any material or any service required for the performance of the Contract. 1.12. “State” means the State of Arizona and Department or Agency of the State that executes the Contract. 1.13. “State Fiscal Year” means the period beginning with July 1 and ending June 30. 2. Contract Interpretation 2.1. Arizona Law. The Arizona law applies to this Contract including, where applicable, the Uniform Commercial Code as adopted by the State of Arizona and the Arizona Procurement Code, Arizona Revised Statutes (A.R.S.) Title 41, Chapter 23, and its implementing rules, Arizona Administrative Code (A.A.C.) Title 2, Chapter 7. 2.2. Implied Contract Terms. Each provision of law and any terms required by law to be in this Contract are a part of this Contract as if fully stated in it. 2.3. Contract Order of Precedence. In the event of a conflict in the provisions of the Contract, as accepted by the State and as they may be amended, the following shall prevail in the order set forth below: 2.3.1. Special Terms and Conditions; 2.3.2. Uniform Terms and Conditions; 2.3.3. Statement or Scope of Work; Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 51 | Page 2.3.4. Specifications; 2.3.5. Attachments; 2.3.6. Exhibits; 2.3.7. Documents referenced or included in the Solicitation. 2.4. Relationship of Parties. The Contractor under this Contract is an independent Contractor. Neither party to this Contract shall be deemed to be the employee or agent of the other party to the Contract. 2.5. Severability. The provisions of this Contract are severable. Any term or condition deemed illegal or invalid shall not affect any other term or condition of the Contract. 2.6. No Parole Evidence. This Contract is intended by the parties as a final and complete expression of their agreement. No course of prior dealings between the parties and no usage of the trade shall supplement or explain any terms used in this document and no other understanding either oral or in writing shall be binding. 2.7. No Waiver. Either party’s failure to insist on strict performance of any term or condition of the Contract shall not be deemed a waiver of that term or condition even if the party accepting or acquiescing in the nonconforming performance knows of the nature of the performance and fails to object to it. 3. Contract Administration and Operation 3.1. Records. Under A.R.S. § 35-214 and § 35-215, the Contractor shall retain and shall contractually require each subcontractor to retain all data and other “records” relating to the acquisition and performance of the Contract for a period of five years after the completion of the Contract. All records shall be subject to inspection and audit by the State at reasonable times. Upon request, the Contractor shall produce a legible copy of any or all such records. 3.2. Non-Discrimination. The Contractor shall comply with State Executive Order No. 2009-09 and all other applicable Federal and State laws, rules and regulations, including the Americans with Disabilities Act. 3.3. Audit. Pursuant to ARS § 35-214, at any time during the term of this Contract and five (5) years thereafter, the Contractor’s or any subcontractor’s books and records shall be subject to audit by the State and, where applicable, the Federal Government, to the extent that the books and records relate to the performance of the Contract or Subcontract. 3.4. Facilities Inspection and Materials Testing. The Contractor agrees to permit access to its facilities, subcontractor facilities and the Contractor’s processes or services, at reasonable times for inspection of the facilities or materials covered under this Contract. The State shall also have the right to test, at its own cost, the materials to be supplied under this Contract. Neither inspection of the Contractor’s facilities nor materials testing shall constitute final acceptance of the materials or services. If the State determines non-compliance of the materials, the Contractor shall be responsible for the payment of all costs incurred by the State for testing and inspection. 3.5. Notices. Notices to the Contractor required by this Contract shall be made by the State to the person indicated on the Offer and Acceptance form submitted by the Contractor unless Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 52 | Page otherwise stated in the Contract. Notices to the State required by the Contract shall be made by the Contractor to the Solicitation Contact Person indicated on the Solicitation cover sheet, unless otherwise stated in the Contract. An authorized Procurement Officer and an authorized Contractor representative may change their respective person to whom notice shall be given by written notice to the other and an amendment to the Contract shall not be necessary. 3.6. Advertising, Publishing and Promotion of Contract. The Contractor shall not use, advertise or promote information for commercial benefit concerning this Contract without the prior written approval of the Procurement Officer. 3.7. Property of the State. Any materials, including reports, computer programs and other deliverables, created under this Contract are the sole property of the State. The Contractor is not entitled to a patent or copyright on those materials and may not transfer the patent or copyright to anyone else. The Contractor shall not use or release these materials without the prior written consent of the State. 3.8. Ownership of Intellectual Property. Any and all intellectual property, including but not limited to copyright, invention, trademark, trade name, service mark, and/or trade secrets created or conceived pursuant to or as a result of this contract and any related subcontract (“Intellectual Property”), shall be work made for hire and the State shall be considered the creator of such Intellectual Property. The agency, department, division, board or commission of the State of Arizona requesting the issuance of this contract shall own (for and on behalf of the State) the entire right, title and interest to the Intellectual Property throughout the world. Contractor shall notify the State, within thirty (30) days, of the creation of any Intellectual Property by it or its subcontractor(s). Contractor, on behalf of itself and any subcontractor(s), agrees to execute any and all document(s) necessary to assure ownership of the Intellectual Property vests in the State and shall take no affirmative actions that might have the effect of vesting all or part of the Intellectual Property in any entity other than the State. The Intellectual Property shall not be disclosed by contractor or its subcontractor(s) to any entity not the State without the express written authorization of the agency, department, division, board or commission of the State of Arizona requesting the issuance of this contract. 3.9. Federal Immigration and Nationality Act. The contractor shall comply with all federal, state and local immigration laws and regulations relating to the immigration status of their employees during the term of the contract. Further, the contractor shall flow down this requirement to all subcontractors utilized during the term of the contract. The State shall retain the right to perform random audits of contractor and subcontractor records or to inspect papers of any employee thereof to ensure compliance. Should the State determine that the contractor and/or any subcontractors be found noncompliant, the State may pursue all remedies allowed by law, including, but not limited to; suspension of work, termination of the contract for default and suspension and/or debarment of the contractor. 3.10 E-Verify Requirements. In accordance with A.R.S. § 41-4401, Contractor warrants compliance with all Federal immigration laws and regulations relating to employees and warrants its compliance with Section A.R.S. § 23-214, Subsection A. 3.11 Offshore Performance of Work Prohibited. Any services that are described in the specifications or scope of work that directly serve the State of Arizona or its clients and involve access to secure or sensitive data or personal client data shall be performed within the defined territories of the United States. Unless specifically Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 53 | Page stated otherwise in the specifications, this paragraph does not apply to indirect or 'overhead' services, redundant back-up services or services that are incidental to the performance of the contract. This provision applies to work performed by subcontractors at all tiers. 4. Costs and Payments 4.1. Payments. Payments shall comply with the requirements of A.R.S. Titles 35 and 41, Net 30 days. Upon receipt and acceptance of goods or services, the Contractor shall submit a complete and accurate invoice for payment from the State within thirty (30) days. 4.2. Delivery. Unless stated otherwise in the Contract, all prices shall be F.O.B. Destination and shall include all freight delivery and unloading at the destination. 4.3. Applicable Taxes. 4.3.1. Payment of Taxes. The Contractor shall be responsible for paying all applicable taxes. 4.3.2. State and Local Transaction Privilege Taxes. The State of Arizona is subject to all applicable state and local transaction privilege taxes. Transaction privilege taxes apply to the sale and are the responsibility of the seller to remit. Failure to collect such taxes from the buyer does not relieve the seller from its obligation to remit taxes. 4.3.3. Tax Indemnification. Contractor and all subcontractors shall pay all Federal, state and local taxes applicable to its operation and any persons employed by the Contractor. Contractor shall, and require all subcontractors to hold the State harmless from any responsibility for taxes, damages and interest, if applicable, contributions required under Federal, and/or state and local laws and regulations and any other costs including transaction privilege taxes, unemployment compensation insurance, Social Security and Worker’s Compensation. 4.3.4. IRS W9 Form. In order to receive payment the Contractor shall have a current I.R.S. W9 Form on file with the State of Arizona, unless not required by law. 4.4. Availability of Funds for the Next State fiscal year. Funds may not presently be available for performance under this Contract beyond the current state fiscal year. No legal liability on the part of the State for any payment may arise under this Contract beyond the current state fiscal year until funds are made available for performance of this Contract. 4.5. Availability of Funds for the current State fiscal year. Should the State Legislature enter back into session and reduce the appropriations or for any reason and these goods or services are not funded, the State may take any of the following actions: 4.5.1. Accept a decrease in price offered by the contractor; 4.5.2. Cancel the Contract; or 4.5.3. Cancel the contract and re-solicit the requirements. 5. Contract Changes 5.1. Amendments. This Contract is issued under the authority of the Procurement Officer who signed this Contract. The Contract may be modified only through a Contract Amendment within the scope of the Contract. Changes to the Contract, including the addition of work or materials, the revision of payment terms, or the substitution of work or materials, directed by a person who is Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 54 | Page not specifically authorized by the procurement officer in writing or made unilaterally by the Contractor are violations of the Contract and of applicable law. Such changes, including unauthorized written Contract Amendments shall be void and without effect, and the Contractor shall not be entitled to any claim under this Contract based on those changes. 5.2. Subcontracts. The Contractor shall not enter into any Subcontract under this Contract for the performance of this contract without the advance written approval of the Procurement Officer. The Contractor shall clearly list any proposed subcontractors and the subcontractor’s proposed responsibilities. The Subcontract shall incorporate by reference the terms and conditions of this Contract. 5.3. Assignment and Delegation. The Contractor shall not assign any right nor delegate any duty under this Contract without the prior written approval of the Procurement Officer. The State shall not unreasonably withhold approval. 6. Risk and Liability 6.1. Risk of Loss: The Contractor shall bear all loss of conforming material covered under this Contract until received by authorized personnel at the location designated in the purchase order or Contract. Mere receipt does not constitute final acceptance. The risk of loss for nonconforming materials shall remain with the Contractor regardless of receipt. 6.2. Indemnification 6.2.1. Contractor/Vendor Indemnification (Not Public Agency) The parties to this contract agree that the State of Arizona, its departments, agencies, boards and commissions shall be indemnified and held harmless by the contractor for the vicarious liability of the State as a result of entering into this contract. However, the parties further agree that the State of Arizona, its departments, agencies, boards and commissions shall be responsible for its own negligence. Each party to this contract is responsible for its own negligence. 6.2.2. Public Agency Language Only Each party (as 'indemnitor') agrees to indemnify, defend, and hold harmless the other party (as 'indemnitee') from and against any and all claims, losses, liability, costs, or expenses (including reasonable attorney's fees) (hereinafter collectively referred to as 'claims') arising out of bodily injury of any person (including death) or property damage but only to the extent that such claims which result in vicarious/derivative liability to the indemnitee, are caused by the act, omission, negligence, misconduct, or other fault of the indemnitor, its officers, officials, agents, employees, or volunteers." 6.3. Indemnification - Patent and Copyright. The Contractor shall indemnify and hold harmless the State against any liability, including costs and expenses, for infringement of any patent, trademark or copyright arising out of Contract performance or use by the State of materials furnished or work performed under this Contract. The State shall reasonably notify the Contractor of any claim for which it may be liable under this paragraph. If the contractor is insured pursuant to A.R.S. § 41-621 and § 35-154, this section shall not apply. 6.4. Force Majeure. 6.4.1 Except for payment of sums due, neither party shall be liable to the other nor deemed in Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 55 | Page default under this Contract if and to the extent that such party’s performance of this Contract is prevented by reason of force majeure. The term “force majeure” means an occurrence that is beyond the control of the party affected and occurs without its fault or negligence. Without limiting the foregoing, force majeure includes acts of God; acts of the public enemy; war; riots; strikes; mobilization; labor disputes; civil disorders; fire; flood; lockouts; injunctions-intervention-acts; or failures or refusals to act by government authority; and other similar occurrences beyond the control of the party declaring force majeure which such party is unable to prevent by exercising reasonable diligence. 6.4.2. Force Majeure shall not include the following occurrences: 6.4.2.1. Late delivery of equipment or materials caused by congestion at a manufacturer’s plant or elsewhere, or an oversold condition of the market; 6.4.2.2. Late performance by a subcontractor unless the delay arises out of a force majeure occurrence in accordance with this force majeure term and condition; or 6.4.2.3. Inability of either the Contractor or any subcontractor to acquire or maintain any required insurance, bonds, licenses or permits. 6.4.3. If either party is delayed at any time in the progress of the work by force majeure, the delayed party shall notify the other party in writing of such delay, as soon as is practicable and no later than the following working day, of the commencement thereof and shall specify the causes of such delay in such notice. Such notice shall be delivered or mailed certified-return receipt and shall make a specific reference to this article, thereby invoking its provisions. The delayed party shall cause such delay to cease as soon as practicable and shall notify the other party in writing when it has done so. The time of completion shall be extended by Contract Amendment for a period of time equal to the time that results or effects of such delay prevent the delayed party from performing in accordance with this Contract. 6.4.4. Any delay or failure in performance by either party hereto shall not constitute default hereunder or give rise to any claim for damages or loss of anticipated profits if, and to the extent that such delay or failure is caused by force majeure. 6.5. Third Party Antitrust Violations. The Contractor assigns to the State any claim for overcharges resulting from antitrust violations to the extent that those violations concern materials or services supplied by third parties to the Contractor, toward fulfillment of this Contract. 7. Warranties 7.1. Liens. The Contractor warrants that the materials supplied under this Contract are free of liens and shall remain free of liens. 7.2. Quality. Unless otherwise modified elsewhere in these terms and conditions, the Contractor warrants that, for one year after acceptance by the State of the materials, they shall be: 7.2.1. Of a quality to pass without objection in the trade under the Contract description; 7.2.2. Fit for the intended purposes for which the materials are used; 7.2.3. Within the variations permitted by the Contract and are of even kind, quantity, and quality within each unit and among all units; Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 56 | Page 7.2.4. Adequately contained, packaged and marked as the Contract may require; and 7.2.5. Conform to the written promises or affirmations of fact made by the Contractor. 7.3. Fitness. The Contractor warrants that any material supplied to the State shall fully conform to all requirements of the Contract and all representations of the Contractor, and shall be fit for all purposes and uses required by the Contract. 7.4. Inspection/Testing. The warranties set forth in subparagraphs 7.1 through 7.3 of this paragraph are not affected by inspection or testing of or payment for the materials by the State. 7.5. Compliance With Applicable Laws. The materials and services supplied under this Contract shall comply with all applicable Federal, state and local laws, and the Contractor shall maintain all applicable license and permit requirements. 7.6. Survival of Rights and Obligations after Contract Expiration or Termination. 7.6.1. Contractor's Representations and Warranties. All representations and warranties made by the Contractor under this Contract shall survive the expiration or termination hereof. In addition, the parties hereto acknowledge that pursuant to A.R.S. § 12-510, except as provided in A.R.S. § 12-529, the State is not subject to or barred by any limitations of actions prescribed in A.R.S., Title 12, Chapter 5. 7.6.2. Purchase Orders. The Contractor shall, in accordance with all terms and conditions of the Contract, fully perform and shall be obligated to comply with all purchase orders received by the Contractor prior to the expiration or termination hereof, unless otherwise directed in writing by the Procurement Officer, including, without limitation, all purchase orders received prior to but not fully performed and satisfied at the expiration or termination of this Contract. 8. State's Contractual Remedies 8.1. Right to Assurance. If the State in good faith has reason to believe that the Contractor does not intend to, or is unable to perform or continue performing under this Contract, the Procurement Officer may demand in writing that the Contractor give a written assurance of intent to perform. Failure by the Contractor to provide written assurance within the number of Days specified in the demand may, at the State’s option, be the basis for terminating the Contract under the Uniform Terms and Conditions or other rights and remedies available by law or provided by the contract. 8.2. Stop Work Order. 8.2.1. The State may, at any time, by written order to the Contractor, require the Contractor to stop all or any part, of the work called for by this Contract for period(s) of days indicated by the State after the order is delivered to the Contractor. The order shall be specifically identified as a stop work order issued under this clause. Upon receipt of the order, the Contractor shall immediately comply with its terms and take all reasonable steps to minimize the incurrence of costs allocable to the work covered by the order during the period of work stoppage. 8.2.2. If a stop work order issued under this clause is canceled or the period of the order or any extension expires, the Contractor shall resume work. The Procurement Officer shall make an equitable adjustment in the delivery schedule or Contract price, or both, and Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 57 | Page the Contract shall be amended in writing accordingly. 8.3. Non-exclusive Remedies. The rights and the remedies of the State under this Contract are not exclusive. 8.4. Nonconforming Tender. Materials or services supplied under this Contract shall fully comply with the Contract. The delivery of materials or services or a portion of the materials or services that do not fully comply constitutes a breach of contract. On delivery of nonconforming materials or services, the State may terminate the Contract for default under applicable termination clauses in the Contract, exercise any of its rights and remedies under the Uniform Commercial Code, or pursue any other right or remedy available to it. 8.5. Right of Offset. The State shall be entitled to offset against any sums due the Contractor, any expenses or costs incurred by the State, or damages assessed by the State concerning the Contractor’s non-conforming performance or failure to perform the Contract, including expenses, costs and damages described in the Uniform Terms and Conditions. 9. Contract Termination 9.1. Cancellation for Conflict of Interest. Pursuant to A.R.S. § 38-511, the State may cancel this Contract within three (3) years after Contract execution without penalty or further obligation if any person significantly involved in initiating, negotiating, securing, drafting or creating the Contract on behalf of the State is or becomes at any time while the Contract or an extension of the Contract is in effect an employee of or a consultant to any other party to this Contract with respect to the subject matter of the Contract. The cancellation shall be effective when the Contractor receives written notice of the cancellation unless the notice specifies a later time. If the Contractor is a political subdivision of the State, it may also cancel this Contract as provided in A.R.S. § 38-511. 9.2. Gratuities. The State may, by written notice, terminate this Contract, in whole or in part, if the State determines that employment or a Gratuity was offered or made by the Contractor or a representative of the Contractor to any officer or employee of the State for the purpose of influencing the outcome of the procurement or securing the Contract, an amendment to the Contract, or favorable treatment concerning the Contract, including the making of any determination or decision about contract performance. The State, in addition to any other rights or remedies, shall be entitled to recover exemplary damages in the amount of three times the value of the Gratuity offered by the Contractor. 9.3. Suspension or Debarment. The State may, by written notice to the Contractor, immediately terminate this Contract if the State determines that the Contractor has been debarred, suspended or otherwise lawfully prohibited from participating in any public procurement activity, including but not limited to, being disapproved as a subcontractor of any public procurement unit or other governmental body. Submittal of an offer or execution of a contract shall attest that the contractor is not currently suspended or debarred. If the contractor becomes suspended or debarred, the contractor shall immediately notify the State. 9.4. Termination for Convenience. The State reserves the right to terminate the Contract, in whole or in part at any time when in the best interest of the State, without penalty or recourse. Upon receipt of the written notice, the Contractor shall stop all work, as directed in the notice, notify all subcontractors of the effective date of the termination and minimize all further costs to the State. In the event of termination under this paragraph, all documents, data and reports prepared by Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions State of Arizona State Procurement Office 100 North 15th Avenue, Suite 201 Phoenix, AZ 85007 Contract No: ADSPO16-130652 Description: Software Value-Added Reseller (SVAR) Services 58 | Page the Contractor under the Contract shall become the property of and be delivered to the State upon demand. The Contractor shall be entitled to receive just and equitable compensation for work in progress, work completed and materials accepted before the effective date of the termination. The cost principles and procedures provided in A.A.C. R2-7-701 shall apply. 9.5. Termination for Default. 9.5.1. In addition to the rights reserved in the contract, the State may terminate the Contract in whole or in part due to the failure of the Contractor to comply with any term or condition of the Contract, to acquire and maintain all required insurance policies, bonds, licenses and permits, or to make satisfactory progress in performing the Contract. The Procurement Officer shall provide written notice of the termination and the reasons for it to the Contractor. 9.5.2. Upon termination under this paragraph, all goods, materials, documents, data and reports prepared by the Contractor under the Contract shall become the property of and be delivered to the State on demand. 9.5.3. The State may, upon termination of this Contract, procure, on terms and in the manner that it deems appropriate, materials or services to replace those under this Contract. The Contractor shall be liable to the State for any excess costs incurred by the State in procuring materials or services in substitution for those due from the Contractor. 9.6. Continuation of Performance Through Termination. The Contractor shall continue to perform, in accordance with the requirements of the Contract, up to the date of termination, as directed in the termination notice. 10. Contract Claims All contract claims or controversies under this Contract shall be resolved according to A.R.S. Title 41, Chapter 23, Article 9, and rules adopted thereunder. 11. Arbitration The parties to this Contract agree to resolve all disputes arising out of or relating to this contract through arbitration, after exhausting applicable administrative review, to the extent required by A.R.S. § 12-1518, except as may be required by other applicable statutes (Title 41). 12. Comments Welcome The State Procurement Office periodically reviews the Uniform Terms and Conditions and welcomes any comments you may have. Please submit your comments to: State Procurement Administrator, State Procurement Office, 100 North 15th Avenue, Suite 201, Phoenix, Arizona, 85007. NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-1 Attachment A: Qualifications 1. Overall Company Information Requirement 1.1 Business Operations 1.1.1 Provide a Brief overview of business operations, with an emphasis on the provision of services as a Software Value-Added Reseller. Response CDW was founded in 1984 as a home-based business, and has since grown tremendously through strategic partnerships, online and onsite inventories and services, and strong technical expertise to earn $12 billion in net sales in 2014. CDW partners with over 1,000 manufacturers to offer a portfolio of 100,000-plus products. Over 7,000 individuals constitute the CDW workforce, ranging from salespeople and field executives to administrative and service experts to highly skilled technology specialists and engineers. Incorporated in 1998, CDW·G is the wholly owned subsidiary of CDW LLC that focuses on the public sector, including federal, state, and local government agencies, educational institutions, and healthcare facilities. With over 200 government and education contracts, we are the nation’s largest direct response provider of multi-brand IT solutions. We are currently the largest value-added reseller in the United States, ranked #253 on the 2015 Fortune 500 list. CDW·G focuses on building strong customer relationships by leveraging our knowledgeable account managers and technical specialists to provide extensive pre- and post-award support. Our experts lead the industry in public-sector customer service and product knowledge, directly benefitting the various personnel of our public-sector customers. Software Services CDW is a market-leading software provider with $3 billion annually in software revenue. Through our distribution partner network, we offer nearly every software title available on the market today and have direct partnerships with over 300 software partners. As a company, we manage 25,000 software agreements and process over 180,000 annual software renewals. For the key itemized publishers named in this RFP, we maintain top-tier partnerships (e.g., Adobe Platinum Partner) and regularly receive annual awards (e.g., 2014 Microsoft O365 Sales Achievement Award). NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-2 Proof of Authorization Our ability to supply NASPO ValuePoint members with the key and secondary itemized software publishers listed in the RFP rests on the strong partnerships forged with industry- leading manufacturers, whose solutions meet the needs of our public sector customers. Letters of authorization for each publisher can be provided upon request. Key Itemized Publishers Publisher Relationship with CDW·G Learn More Adobe Fully authorized Adobe Licensing Center (ALC) Platinum Channel Partner Adobe’s largest and most successful reseller partner since 2001 CDW named Adobe 2015 Consumer and Business Worldwide Partner of the Year at Global Sales Conference (12/15/2015) Internal Adobe support team (8 licensing specialists, 1 Creative Cloud program specialists, 1 senior brand manager) The only Adobe reseller with multiple dedicated, onsite channel account managers (23 total) www.cdwg.com/content/brands/adobe/ Citrix Citrix LAR Certified Partner certification Large Account Reseller Partner of the Year 2013, 2012, 2011 at Citrix Summit conference Internal Citrix specialist team (1 partner specialist, 3 technical specialists, 2 business development specialists, 1 brand manager) Hold over 400 Citrix certifications (e.g., CCA/Certified Administrator, CCEA/Certified Enterprise Administrator, CCSP/Certified Sales Professional) www.cdwg.com/cont ent/brands/citrix/ Microsoft Microsoft Gold Certified Partner, Software Asset Management (SAM) Partner, Authorized Direct Reseller (ADR) for Open Value licensing programs Number-one ranked Licensing Solution Provider (LSP) and Enterprise Software Advisor (ESA) Manage over 25,000 active Microsoft agreements Largest Microsoft Partner in Office 365 customer deployments, contract volume LSP of EAs/SAs, new enterprise agreements 2014 US OEM Reseller of the Year, Office 365 Sales Achievement Award, Experience Center (MEC) Partner of the Year www.cdwg.com/cont ent/brands/microsoft/ Novell Novell Gold Partner with distinctions: o ALA, MLSA, SLA, VLA, VLA academic, VLA nonprofit/government authorized reseller o End-user computing sales specialization o California SLP contract authorized reseller o NetIQ authorized reseller 4/6/2015: Micro Focus completed its merger with The Attachmate Group, which acquired acquired Novell, Inc. (4/27/2011); Novell now operates as two separate business units under Novell® and SUSE® brand names, having joined Attachmate® and NetIQ® as holdings of The Attachmate Group www.cdwg.com/content/brands/novell/ NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-3 Key Itemized Publishers Publisher Relationship with CDW·G Learn More Symantec Symantec Platinum Partner Named the Symantec 2015 National Access Reseller (NAR) Innovation Partner of the Year at Partner Engage awards (11/5/2015) Largest/top-selling LAR partner; Specialization Member (includes Endpoint Management, Data Loss Prevention, IT Compliance, Managed Security Services, SMB Backup, SMB Security, Enterprise Security, Archiving and eDiscovery, Data Protection with NetBackup, Storage Management) Dedicated internal Symantec team (16 CDW-badged coworkers (segment, renewals)) www.cdwg.com/cont ent/brands/symantec/ VMware VMware Authorized Consulting (VAC) Program Gold member 2014 Global and Americas Marketing Partner of the Year award at VMware Partner Exchange 55+ dedicated internal VMware personnel (1 onsite brand manager, 6 pre-sales support specialists, 4 vCloud Air pre-sales/technical/business development specialists, 1 end-user computing channel account representative, 3 business development specialists, 5 renewal specialists, 5 capacity planner assessment engineers, 2 national account managers, 12 inside sales reps, 2 systems engineers, 14 virtualization solution architects) Over 1,500 VMware Sales Professional (VSP) accreditations; 34 VMware Certified Professional (VCP) accreditations; 71 VMware Technical Sales Professional (VTSP) accreditations www.cdwg.com/content/brands/vmware/ Requirement 1.1.2 Provide the following information using the format below. Response 1.1 Business Operations Required Information Offeror’s Response 1.1.2.1 Offeror’s full legal name CDW Government LLC (CDW·G) 1.1.2.2 Primary business contact information (name, address, phone number, email address, website) Jason Schwartz, Sales Manager 230 N Milwaukee Ave Vernon Hills, IL 60061 P: 877.325.0934 E: jasons@cdw.com W: cdwg.com/PeopleWhoGetIT 1.1.2.3 Date Company was established CDW·G was incorporated in 1998; parent company CDW was founded in 1984. 1.1.2.4 Location where the Offeror is incorporated CDW·G is incorporated in the state of Illinois. 1.1.2.5 Ownership structure (public, partnership, subsidiary, etc.) CDW Government LLC is a wholly owned subsidiary of CDW LLC, which is owned by CDW Corporation, a publicly traded entity under NASDAQ (ticker symbol “CDW”). 1.1.2.6 Office location(s) Corporate Headquarters NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-4 1.1 Business Operations Required Information Offeror’s Response responsible for performance of contract. Include address, contact information. 230 N Milwaukee Ave Vernon Hills, IL 60061 P: 800.808.4239 Eastern Distribution Center 200 N Milwaukee Ave Vernon Hills, IL 60061 P: 847.465.6000 Western Distribution Center 3201 E Alexander Road North Las Vegas, NV 89030 P: 702.495.5000 1.1.2.7 Organizational chart relevant to Scope of Work of this solicitation. An organizational chart pertaining to this solicitation immediately follows this table. Names in red boxes have resumes included in this Attachment. 1.1.2.8 Contact information for the individual who is responsible for any clarifications or discussions regarding the submitted response. Edie Harris, Proposal Manager P: 312.705.6285 E: ellharr@cdw.com The following organizational chart is indicative of the personnel structure that will be supporting the NASPO ValuePoint contract and its members throughout the life of the agreement. Names in red boxes have resumes included in this Attachment. NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-5 Requirement 1.2 Key Personnel—Provide the information, using the format below, regarding each Key Personnel for a resultant contract for items 1.2.1 through 1.2.5: Response The following key personnel will participate in serving the NASPO ValuePoint contract and its participating member agencies. Please note that the named personnel included in this response are not meant to provide an exhaustive list of the CDW·G sales, software, and support individuals who will be involved in serving this contract’s participating states. Program Management 1.2 Key Personnel Required Information Offeror’s Response 1.2.1 Name Jumana Dihu 1.2.2 Position/Title and reporting responsibilities Program Manager, State & Local Government 1.2.3 Years of industry experience 13 years 1.2.4 Years in current position Two (2) years 1.2.5 Proposed role relative to Offered services. Include the functions and tasks for which they will have prime responsibilities. Program Manager; will oversee NASPO ValuePoint contract details post-award, including reports, audits, and management NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-6 Software Solutions 1.2 Key Personnel Required Information Offeror’s Response 1.2.1 Name Gabriel Adler 1.2.2 Position/Title and reporting responsibilities Sales Manager, Software Solutions 1.2.3 Years of industry experience Nine (9) Years 1.2.4 Years in current position Two (2) years 1.2.5 Proposed role relative to Offered services. Include the functions and tasks for which they will have prime responsibilities. Sales Manager, Software; oversees team of licensing account executives and field specialists, grows public-sector software sales 1.2 Key Personnel Required Information Offeror’s Response 1.2.1 Name Gabe Arias 1.2.2 Position/Title and reporting responsibilities Licensing Account Executive, Software Solutions 1.2.3 Years of industry experience Nine (9) years 1.2.4 Years in current position Four (4) years 1.2.5 Proposed role relative to Offered services. Include the functions and tasks for which they will have prime responsibilities. Licensing Account Executive, Software; helps NASPO ValuePoint customers manage software investments and cultivates trusted client relationships at CIO/Director level within state agencies State & Local Sales 1.2 Key Personnel Required Information Offeror’s Response 1.2.1 Name Jason Schwartz 1.2.2 Position/Title and reporting responsibilities Sales Manager, State & Local 1.2.3 Years of industry experience 10 years 1.2.4 Years in current position Two (2) years 1.2.5 Proposed role relative to Offered services. Include the functions and tasks for which they will have prime responsibilities. Sales Manager, Pacific Geography; oversees account managers handling NASPO ValuePoint members, maintains regional relationships with publishers/manufacturers, long-term contract success strategy 1.2 Key Personnel Required Information Offeror’s Response 1.2.1 Name Michael Truncone 1.2.2 Position/Title and reporting responsibilities Sales Manager, State & Local 1.2.3 Years of industry experience 11 years 1.2.4 Years in current position One (1) year 1.2.5 Proposed role relative to Offered services. Include the functions and tasks for which they will have prime responsibilities. Sales Manager, Keystone Geography; oversees account managers handling NASPO ValuePoint members, maintains regional relationships with NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-7 1.2 Key Personnel Required Information Offeror’s Response publishers/manufacturers, long-term contract success strategy 1.2 Key Personnel Required Information Offeror’s Response 1.2.1 Name Clayton Boras 1.2.2 Position/Title and reporting responsibilities Sales Manager, State & Local 1.2.3 Years of industry experience 17 years 1.2.4 Years in current position 12 years 1.2.5 Proposed role relative to Offered services. Include the functions and tasks for which they will have prime responsibilities. Sales Manager, Keystone Geography; oversees account managers handling NASPO ValuePoint members, maintains regional relationships with publishers/manufacturers, long-term contract success strategy 1.2 Key Personnel Required Information Offeror’s Response 1.2.1 Name Dave Stephens 1.2.2 Position/Title and reporting responsibilities Business Development Manager, Public Safety 1.2.3 Years of industry experience 30 years 1.2.4 Years in current position Seven (7) years 1.2.5 Proposed role relative to Offered services. Include the functions and tasks for which they will have prime responsibilities. Business Development, Northwest and Pacific Geographies (15 states); works with publishers/manufacturers and NASPO ValuePoint customers to determine best-fit solution options K–12 Sales 1.2 Key Personnel Required Information Offeror’s Response 1.2.1 Name Russell Keene 1.2.2 Position/Title and reporting responsibilities Sales Manager, K–12 Sales 1.2.3 Years of industry experience 19 years 1.2.4 Years in current position 12 years 1.2.5 Proposed role relative to Offered services. Include the functions and tasks for which they will have prime responsibilities. Sales Manager, Pacific Geography (includes Arizona, Hawaii); oversees account managers handling NASPO ValuePoint members, maintains regional relationships with publishers/manufacturers, long-term contract success strategy NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-8 1.2 Key Personnel Required Information Offeror’s Response 1.2.1 Name Alex Haycock 1.2.2 Position/Title and reporting responsibilities Sales Manager, K–12 Sales 1.2.3 Years of industry experience Five (5) years 1.2.4 Years in current position One (1) year 1.2.5 Proposed role relative to Offered services. Include the functions and tasks for which they will have prime responsibilities. Sales Manager, North Pacific (California and Alaska) Geography; oversees account managers handling NASPO ValuePoint members, maintains regional relationships with publishers/manufacturers, long-term contract success strategy 1.2 Key Personnel Required Information Offeror’s Response 1.2.1 Name Sean Galligan 1.2.2 Position/Title and reporting responsibilities Sales Manager, K–12 Sales 1.2.3 Years of industry experience Eight (8) years 1.2.4 Years in current position One (1) year 1.2.5 Proposed role relative to Offered services. Include the functions and tasks for which they will have prime responsibilities. Sales Manager, New England Geography; oversees account managers handling NASPO ValuePoint members, maintains regional relationships with publishers/manufacturers, long-term contract success strategy Higher Education Sales 1.2 Key Personnel Required Information Offeror’s Response 1.2.1 Name Mike Clinton 1.2.2 Position/Title and reporting responsibilities Sales Manager, Higher Education 1.2.3 Years of industry experience 13 years 1.2.4 Years in current position One (1) year 1.2.5 Proposed role relative to Offered services. Include the functions and tasks for which they will have prime responsibilities. Sales Manager, Northwest Geography; oversees account managers handling NASPO ValuePoint members, maintains regional relationships with publishers/manufacturers, long-term contract success strategy 1.2 Key Personnel Required Information Offeror’s Response 1.2.1 Name Chris Webb 1.2.2 Position/Title and reporting responsibilities Business Development Manager, Higher Education 1.2.3 Years of industry experience 11 years 1.2.4 Years in current position Seven (7) years 1.2.5 Proposed role relative to Offered Business Development, National Contracts; works NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-9 1.2 Key Personnel Required Information Offeror’s Response services. Include the functions and tasks for which they will have prime responsibilities. with publishers/manufacturers and NASPO ValuePoint customers to determine best-fit solution options 1.2 Key Personnel Required Information Offeror’s Response 1.2.1 Name Eric Goff 1.2.2 Position/Title and reporting responsibilities Sales Manager, Higher Education 1.2.3 Years of industry experience 15 years 1.2.4 Years in current position Seven (7) years 1.2.5 Proposed role relative to Offered services. Include the functions and tasks for which they will have prime responsibilities. Sales Manager, Pacific Geography; oversees account managers handling NASPO ValuePoint members, maintains regional relationships with publishers/manufacturers, long-term contract success strategy Requirement 1.2.6 In addition, provide a brief resume which contains education/credentials/certifications/employment. Response Resumes for the named key personnel in the previous requirement are featured at the end of this section, in the following order: Jumana Dihu Gabriel Adler Gabe Arias Jason Schwartz Michael Truncone Clayton Boras Dave Stephens Russell Keene Alex Haycock Sean Galligan Mike Clinton Chris Webb Eric Goff Requirement 1.3 Account Management Team—Provide a description of the responsibilities of the dedicated account management team(s) that would be assigned to each Participating State under resultant contract. Include a description of how the account management structure ensures that service will continue despite vacations, illness, other absences or resignations. Response Whenever an account manager (AM) is out of the office (e.g., vacation, illness, absence), they designate a fellow coworker to assist their customers, leaving no gap in support. NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-10 This designated backup AM will be an individual who supports other NASPO ValuePoint customers, to ensure knowledge of contract requirements. As an extra point of redundancy, customers can also reach out to our CDW·G general sales support team at the following: Phone: 800.808.4239 Email: cdwgsales@web.cdwg.com Chat: www.cdwg.com Our Connecticut-based team staffing these lines of communication is available Monday- Friday, 7am-6pm CST. In instances of coworker resignation, the sales manager overseeing a given account team will assign the departing AM’s customers to an experienced account manager who possesses familiarity with the NASPO ValuePoint contract and purchase history. Account managers are proactively available to their customers to make regular solution recommendations, in addition to addressing support concerns. For more familiar and less complex public-sector software solutions, the AM can call our Supplemental Presales Support line to assist with product research, competitive comparison, simple design, standard architecture, and more. If necessary, the AM will include the customer on this call to further craft the best solution. With complex customer requests or solutions, the AM engages our software licensing team, and their technology specialists and solution architects. Within 48 hours of the initial request, this group works out an offer/solution to present to the customer, including (but not limited to) features, cost analysis, licensing agreement/contract details, interoperability with current environment, implementation actions, and any available maintenance or software assurance programs. Sales managers work with our AMs to develop strategies that best serve customers for long-term success. They spend significant time meeting with customers to understand the dynamics of the local market, and will ensure NASPO ValuePoint customers receive full advantage of CDW·G’s software offerings. Additionally, sales managers are responsible for building and maintaining strong relationships with our top manufacturing partners in each region. For example, leveraging a strong existing relationship with the area Symantec representative can provide contract-specific cost savings that benefit NASPO ValuePoint members. When the number of customers being supported in a particular geographic location reaches a certain capacity, CDW·G dedicates a local resource to support the group. Field account managers work jointly with our AMs to provide comprehensive sales support, and are available for onsite business meetings as needed to offer project development, technical expertise, roadmapping, and business reviews. NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-11 These coworkers are responsible for promoting the contract to end-users, including free trainings in the field, presentations, and attendance at regional tech fairs. They will meet with NASPO ValuePoint, the LSCA, or agency customers for contract status and progress reports, and will assist in solving customer-service issues in the field. Requirement 1.4 Subcontractors—Provide the following information for items 1.4.1 through 1.4.3, using the format below, for any subcontractors you propose to use. 1.4.1 Name of individual or company; 1.4.2 Proposed work to be performed; 1.4.3 Approximate percentage of work directed to subcontractor relative to total work under a resultant contract; 1.4.4 In addition, provide a brief resume which contains education / credentials / certifications / employment. Response For the purposes of this RFP, at the time of this submission, CDW·G is not proposing the use of any subcontracting partners. 2. Company’s Experience Requirement Describe the Offeror’s experience and expertise providing the following services: 2.1 Account Management (assume ‘accounts’ as equivalent to a state contract, and to a using municipality). Response Expert contract support is a hallmark of CDW·G’s program management team. Most vendors—even large resellers—neglect to have a team devoted to managing their contracts, instead relying on salespeople for compliance and reporting issues, which can result in delayed responses, unreliable support, and potentially faulty reporting. CDW·G, however, understands that contracts are serious commitments, and we honor these commitments through our dedicated program management team. Jumana Dihu will manage the NASPO ValuePoint SVAR contract and agreements. Ms. Dihu has over a decade of contract management experience and has been supporting our NASPO ValuePoint reseller agreements for over two years. Our account teams and manufacturing partners know Ms. Dihu is the resident expert for our NASPO ValuePoint contracts and often reach out to her for assistance on related issues. Other knowledgeable program managers will be actively supporting the contract, both as out-of-office backup for Ms. Dihu or in a scenario where she transitions to a new career level. NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-12 To support our NASPO ValuePoint customers, CDW·G provides one primary point-of- contact—an account manager (as described in requirement 1.3). Our account managers, their supporting product specialists, and their sales managers understand the current technology trends and are specialized to only work public-sector customers. The multiple teams that will be supporting the participating states are, by and large, generalists; they understand the broad range of equipment and services we offer and often have sales certifications for several leading manufacturers. Rather than organizing our account teams by solution type, we’ve seen greater customer benefit organizing them by the type and location of the patrons they serve. By asking our generalist sales teams to have laser-like focus on their customers and a strong general understanding of our product offering, we ensure that we’re matching the right products to each customer’s highly individual needs. For this reason, we go through the effort of breaking down the geography that each of our account managers covers by having them work with customers that are closely located to each other. This is done because we understand that our government customers like to benchmark how they purchase and what they purchase in relation to their neighbors. Due to this degree of granularity when distributing accounts, our account managers can propose products that an agency’s counterpart is using in the next town, middle school, or university in many instances from personal experience. However, we recognize that some of our products and services are so complex that a generalist’s approach is not enough. That is where our specialized sales force comes in. Similar to the general account teams, our specialists are split between in-house teams and field teams. They are organized primarily around technology type (e.g., cloud, mobility, data centers, etc.) and secondarily around customer type. If an account manager or field account executive requires additional depth of knowledge for a certain type of solution, they’ll call in their specialist resources. Requirement 2.2 License Management. Response The Software Licensing Support Team is vital in ensuring purchases that are scalable and complement software that is currently in place, as well as those forecasted for future projects. Our software support team includes over 85 Software Licensing Specialists, 250 Presales Systems Engineers, and 45 Licensing Account Executives. They assist with the full scope of software licensing and assist customers with leveraging their buying power for software purchases; provide the right mix of software products; and offer cost analysis of available discounts and credits. NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-13 Dedicated account managers will help NASPO ValuePoint customers with software license management needs. License management is detailed further in Attachment B. Requirement 2.3 Training Response After the six-week intensive training members of our sales team undergo, they continue to receive an average of 165 hours of training in their first year at CDW·G, and participate in more than 140 hours in each subsequent year of employment. Our sales teams are also proactive in being certified experts in the products they sell, with proof of this dedication in the numbers. For example, we have over 1,500 VMware Sales Professionals (VSPs) on staff; the result is more leads generated, stronger customer relationships, and the ability to help our customers prioritize their technology needs. Requirement 2.4 Software Advisement Response The software-specific coworkers of CDW·G who collaborate with our account managers to help advise customers on their right-size solution include the following: Software Licensing Specialists (SLS). This team is certified in a wide array of the licensing programs members seek. SLSs are dedicated to assisting customers in understanding and navigating complex licensing options for the top software publishers. They help compare key features of different programs, and ensure interoperability of products and the accuracy and comprehensiveness of software quotes. They assist users in finding the best software to fit their needs, along with the most advantageous licensing level. Partner Specialists. These individuals provide insight into product features and functionality, making sure that software is being sold correctly. Among their duties, they provide accurate licensing solutions. The Partner Specialist teams providing support to CDW·G solutions include over 30 experts focused on our software offering. These coworkers are designated to a specific brand, such as Microsoft, or to a solution, such as cloud. This relates to expert assistance for not only key itemized manufacturers, but to all the publishers users are purchasing. Cloud Client Executives (CCE). Similar to our SLS team, our 14 CCEs work with our customers to provide guidance and optional engagements to align their unique business goals with a cloud plan that provides maximum benefits. NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-14 Requirement 2.5 Other (specify) Response CDW·G also leverages the following resources to provide unmatched support for customers’ IT solutions: Engineers Also included in our recognizable attributes is an investment in engineers that are available to help design custom solutions. We have the largest team of engineers when compared to our direct IT competitors, more on par with the big integrator firms that serve the federal market—such as Boeing—than other potential respondents. Through the account teams located in strategic geographies across the nation, our engineers provide customers design and consultative services at no additional charge. Partner Resources Many of our OEM partners have staff dedicated to support CDW•G customers exclusively. In March 2015, over 340 partner coworkers from over 100 various partners were collocated with CDW•G, collaborating with our sales teams and engineers to provide expert help to our customers. The wide variety of partners that are onsite allows us to help customers analyze the best value among the products under consideration and provide the right product for each customer the first time. Distribution Facilities Our distribution infrastructure is another key reason why no other IT solution provider in the industry can match our ability to service NASPO ValuePoint customers. As our number of orders has increased across the public and corporate sector, we continue to achieve higher order accuracy year over year. We own two distribution centers that have one million square feet of storage space and stock over $200 million in inventory at any given time. This combination of stock and shipping infrastructure allows us to ship on average 37,000 boxes per day. Despite all of these capabilities, we do not solely rely on our facilities to meet customer needs; we complement our own distribution centers with our distribution partner network, leveraging the most cost-effective solution for each individual product line and customer order. Distribution Partner Network Our Distribution Partner Network includes over 130 different suppliers, meaning we can provide any solution customers need. Similarly to our OEM partners, we’re the largest partner for many of our distributors. Like our manufacturer partner relationships, this results in direct benefits for CDW•G, which we pass along to our customers. NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-15 Most partners send us EDI (Electronic Data Interchange) downloads or real time information on their available inventory, resulting in access to products usually in as little as a day. As an example, we are a top Ingram Micro partner and hold Elite Partner status. This partnership provides a customized and exclusive support resource to our account teams and customers, among other benefits. 3. Clients Requirement 3.1 Provide information on Offeror’s current government client list. 3.1.1 Explain the services provided to each and how long Offeror has been working with each. Response CDW·G has vested partnerships with nearly every government entity in the US. For insight into our customer base, we served over 5,200 customers in 2014 on our NASPO ValuePoint reseller agreements alone. Our 2014 net sales to federal, state, and local governments totaled $1.5 billion; state and local government sales accounted for approximately 41 percent of these net sales. The top product categories provided to state and local government customers included software, notebooks/mobile devices, and enterprise storage. Specific to this RFP, software is a multibillion-dollar component of CDW’s net revenue. As a whole, we manage more than 25,000 software agreements and conduct over 18,000 software renewals annually. Additionally, we offer electronic delivery of many of our software solutions (about one-fifth of our total revenue). Many of these product sales were components of integrated solutions and coupled with services typical of solutions, such as Data Center, Unified Communications and Collaboration, Security, Mobility, and Cloud. The average customer relationship for CDW, as a whole, is eight years. Our government customers sit at the highest end of the average, as our corporate customer relationships are typically no more than three years. Multiyear contracts and the cultivation of personal connections between customer and account manager attribute greatly to the lengthy tenure of these government relationships. Requirement 3.1.2 List government contracts Offeror has gained over the past three (3) years. Provide an explanation of why Offeror was chosen. Response CDW·G has gained 363 public-sector contracts (non-federal) over the past (3) years; the list of these contracts is attached to this section of our response. Most often, customers select CDW·G for contract award due to our capacity for managing large-scale agreements, as well as the value we can provide their purchasers and end- NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-16 users. Unique differentiators that lead to an award decision include our vendor agnosticism and the investment of ongoing sales training to best serve our customers. CDW·G employs over 1,300 account managers, meaning that size and consistency of support staff is a consistent development initiative in order to support national contracts such as NASPO ValuePoint with any necessary transitions. Requirement 3.1.3 List government contracts Offeror has lost or resigned over the past three (3) years. Provide an explanation of why they were lost or resigned. Response As you can see from the following table, of the total 512 contracts lost or resigned, we were named to a new contract in 211 instances and awarded upon rebid in 73 instances, meaning that over half of the no-longer-current contracts are in new iterations being held by CDW·G. 3.1.3 Lost or Resigned Government Contracts Reason Number Agreement out to RFP 1 Agreement rebid and awarded to CDW·G 73 Agreement rebid and not awarded to CDW·G 7 CDW·G was named to a new Contract 211 Contract may be renewed, pending NY OGS 9 Moved purchasing to local cooperative agreements 7 Signed a new agreement 11 Unknown reason 82 We are still awaiting renewal 3 OEM did not sign a new contract 22 Contract expired and was not rebid/renewed 86 GRAND TOTAL 512 A full list is attached to this section of the response, as well. Through the normal course of business, CDW·G’s contract portfolio changes year to year. Contracts in the Public segment are generally terminable at any time for convenience of the contracting agency or group purchasing organization (GPO) or upon default. An adverse change in government spending policies (including ongoing budget cuts), budget priorities, or revenue levels could cause our government customers to reduce their purchases or to terminate or not renew their contracts with us. In the past three (3) years, CDW·G has not lost a contract to default. The primary reason our contracts end is when a customer is out of available options to extend the contract. NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-17 Requirement 3.2 If Offeror has no government clients, note this in your response and answer questions 3.1.1 through 3.1.3 based on non-government clients. Response As detailed, CDW·G has a substantial number of government clients. We provide our responses to 3.1.1 through 3.1.3 to reflect these relationships. Requirement 3.3 References—Provide information for three (3) client references that replicate or are similar to the requirements of this solicitation. All references shall be for engagements received and completed within the last five (5) years. The State may, at its sole discretion, contact additional clients not presented as references. Reference information is to be provided using the following table format: Response The following references are submitted for NASPO ValuePoint review. 3.3 References Reference Information Client One Client Two Client Three Company Name State of Illinois Central Management Services (CMS) Federal Aviation Administration (FAA) University of Washington Type of Contract Product and Services Delivered CDW·G’s IL CMS Microsoft Large Account Reseller contract includes Microsoft Select, Enterprise Agreements, and Microsoft Academic Select. CMS currently has both a Microsoft Select and an Enterprise Agreement. CDW·G has held this contract for three consecutive iterations, starting in 2005. The current contract, recently awarded, expires September 2019. Software contract includes but is not limited to ACD Systems, Software AG, EMC, HP, IBM, Oracle, and Symantec (among dozens of other publishers, including “weirdware”). With CDW·G has grown software sales from $5 million the first year of the contract to $26 million in GFY15, and grown hardware sales from $15 million to $37 million. Both catalog contracts (Software DTFACT-13-D- 00004, Hardware DTFAWA-11-D-00057) are administered by the SAVES Contracts Office; mandatory for the FAA and open to the Department of Transportation Software agreements under contract include Microsoft EES Agreement, VMware ELA, Citrix ELA, Adobe CLP (all Adobe products = 1,000+ orders annually) Support through assessing changes in UW’s licensing needs, deploying software to end-users, providing guidance on new licensing/support structures, renewing maintenance for all OEMs, identifying large spend of similar products across campus to drive campus-wide agreements that reduce cost Contact Name, Mailing Address, Phone Number, Email James Ellenburg, Contracting Officer 120 W Jefferson 3rd Floor Springfield, IL 62702 Harry Lutz, Contracting Officer USDOT/FAA 800 Independence Ave SW Washington, DC 20591 Ray Hsu, Assistant Director, Procurement Services 4300 Roosevelt Way NE Seattle, WA 98195 NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-18 3.3 References Reference Information Client One Client Two Client Three Address P: 217.785.0897 E: james.ellenburg@illinois .gov P: 609.485.6127 E: harry.lutz@faa.org Elizabeth Ford Ochs, Authorized Contract Officer P: 609.485.5557 E: elizabeth.ford@faa.gov Robert Cochran, Contracting Officer Representative P: 571.209.3111 E: robert.cochron@faa.gov P: 206.543.0793 E: rayhsu@uw.edu Contract Start and End Date October 2015-November 2019 Software: May 2013-April 2018 Hardware: September 2011-September 2016 2010-2020 (10-year renewal) Contract Value Estimated $140 million/duration of contract Software: sales through September 2015 = $52 million Hardware: sales through September 2015 = $96 million $5 million/annual 4. Financial/Accounting Information and Disclosures Requirement 4.1 Offeror must provide evidence of financial stability and capability to fund all cost associated with providing the services through the term of the Contract. The latest two (2) years audited annual financial statement(s), including Total Revenue, Net Income, and Total Assets, must be submitted with the Offeror’s Offer. If audited financial data is unavailable, explain in full the reason and provide latest non-audited financial information to include Balance Sheet, Income Statement, as well as, Statement of Cash flows and Change in Financial position. Include information to attest to the accuracy of the information provided. Response Included at the end of this attachment are CDW’s most recent 10K audit reports (2013 and 2014); audited financial statements are located in Item 8: Financial Statements and Supplementary Data. CDW Financial Information 2014 2013 Total Revenue (listed as Net Sales) $12,074.5 million $10,768.6 million Net Income $244.9 million $132.8 million Total Assets $6,099.9 million $5,924.6 million NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-19 Online versions of these documents are also located at investor.cdw.com. 4.2 Disclosures Requirement 4.2.1 Information regarding any irregularities that were discovered in any account maintained by the Offeror on behalf of others. Describe the circumstances and disposition of the irregularities. Response To the best of our knowledge, at the time of this submission, accounts maintained by CDW on behalf of others have not been subject to any irregularities of circumstance or disposition. Requirement 4.2.2 Full disclosure of any potential conflict of interest, i.e. serving as a member, board member, officer, or having significant financial interest with any company, firm or joint venture with interests in the provision of software. Response To the best of our knowledge, at the time of this submission, CDW does not have any potential conflicts of interest that would prevent us from serving NASPO ValuePoint members via this contract. Requirement 4.2.3 Whether or not, in the last ten (10) years, the Offeror has filed (or had filed against it) any bankruptcy or insolvency proceeding, whether voluntary or involuntary, or undergone the appointment of a receiver, trustee, or assignee for the benefit of creditors, and if so, an explanation providing relevant details; Response To the best of our knowledge, at the time of this submission, CDW has not filed (nor had filed against it) any bankruptcy or insolvency proceeding. No receiver, trustee, or assignee for the benefit of creditors has been specifically appointed. Requirement 4.2.4 Whether or not there are any pending Securities Exchange Commission investigations involving the Offeror, and if such are pending or in progress, an explanation providing relevant details and an attached opinion of counsel as to whether the pending investigation(s) may impair the Offeror’s performance in a Contract under this RFP. Response On 29 October 2015, CDW (the Company) received a request for production of documents in connection with an investigation by the SEC of our vendor partner program incentives. We are cooperating with the SEC in this matter. The Company is party to various legal proceedings that arise in the ordinary course of its business, which include commercial, intellectual property, employment, tort, and other litigation matters. NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-20 The Company is also subject to audit by federal, state, and local authorities by various partners, group purchasing organizations, and customers (e.g., government agencies) relating to purchases and sales under various contracts. In addition, the Company is subject to indemnification claims under various contracts. From time to time, certain customers of the Company file voluntary petitions for reorganization or liquidation under the US bankruptcy laws. In such cases, certain pre-petition payments received by the Company could be considered preference items and subject to return to the bankruptcy administrator. As of 30 September 2015, the Company does not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for these proceedings and matters, if any, has been incurred. However, the ultimate resolutions of these proceedings and matters are inherently unpredictable. As such, the Company’s financial condition and results of operations could be adversely affected in any particular period by the unfavorable resolution of one of more of these proceedings or matters. Requirement 4.2.5 Documenting all open or pending litigation initiated by the Offeror or where the Offeror is a dependent or party in litigation that may have a material impact on Offeror’s ability to deliver the contracted services; Response To the best of our knowledge, at the time of this submission, CDW does not have any open or pending litigation that would present a material impact on our ability to deliver the contracted services. Requirement 4.2.6 Full disclosure of any public sector contracts terminated for cause or convenience in the past five (5) years. Response To the best of our knowledge, at the time of this submission, CDW has not had any public sector contracts terminated for cause or convenience in the past five (5) years. Jumana Dihu Relevant Experience CDW Program Manager (2013–Present) Manages contract portfolio for healthcare, higher education, K–12, state & local sales segments within CDW Government LLC Responsible for full range of customer-facing contracts and partner contracts, including master purchase agreement, subcontractor agreements, teaming agreements, referral agreements Initiates and responds to requests for contract changes, product substitutions, technical refreshments Facilitates preliminary dispute resolution and coordinates with legal department as necessary to maintain customer satisfaction and bring prompt closure Ensures document compliance and analyzes success of program to make recommendations for improvement, including product add/drop, offer expansion Manages all reporting capabilities for high-visibility contracts Sirva, Inc. Program Manager (2002–2013) Handled contract negotiation, cost/price analysis, compliance, market and channel analysis, development of strategic initiatives, and directed business goals and project management Education BS, International Economics, DePaul University Gabriel Adler Relevant Experience CDW Sales Manager, Software Solutions (2014—Present) Responsible for software sales in multiple public-sector segments with CDW Government LLC (e.g., federal, state & local, K–12, higher education) Manages team of six inside software solution and licensing sellers, five outside software solution and licensing sellers Manages continuous pipeline of software number, including cascade of forecast to upper management Goes in-market with field sellers and interfaces with clients Develops coworkers via education around products, services, solutions Program Manager, Software Sales (2011–2014) Responsible for multiple software programs, including Microsoft T36 Contract Management, Select Plus, NGVL (Next Generation Volume Licensing), OTRR (On Time Renewal Rate), Licensing Help Desk Microsoft Inside Enterprise Licensing Specialist (2009–2011) Microsoft Sales Executive (2006–2009) AMSB Account Manager (2005–2006) Dave Adler, Inc. Controller & Lead Sales Person Education BA, Business, Northeastern Illinois University Professional Memberships International Association of Web Masters and Designers Skills Microsoft Office Suite (Excel, Word, Access, Outlook) Microsoft FrontPage HTML Programmer Adobe Photoshop Cute FTP Adapta 2000 Microsoft Certified Professional— SAM (Software Asset Management) Microsoft ESA/LAR FY09 Certified VMware VSP 5.5 Citrix CSP AS/400 Gabe Arias Relevant Experience CDW Licensing Account Executive (2011–Present) Supports state & local government customers manage software investments, including Microsoft volume licensing Builds trusted client relationships at CIO/Director level within state agencies, counties, cities Presents CDW Government LLC’s software solution capabilities at client-facing meetings, hosted events, selected software partner events Acts as subject matter expert for all Microsoft licensing agreements, VMware, Adobe, Citrix, Red Hat, HP, IBM, and professional services offerings Manages multiple government contracts, answers complex licensing and product questions/scenarios, supports CDW account teams, proactively manages client software business (e.g., EA enrollment process, QBRs, trend analysis, technology briefings) Dell, Inc. Licensing Specialist, Global Accounts (2007–2011) Focused on software and service solutions for large Enterprise and global segment ASAP Software Inside Account Manager (2006–2007) Education BS, Marketing, Illinois State University Awards, Certifications & Trainings Certified Microsoft Licensing Expert CDW·G Most Valuable Player, Software Team (2013, 2015) CDW Presidents Achievement (2014) Classroom Training Program Sales Leadership Training Yellow Belt Certification Training Microsoft Solution Selling Training Cloud Computing & Virtualization Conference Microsoft Volume Licensing Certification VMware Licensing Certification Symantec Licensing Certification Citrix Licensing Certification Oracle Licensing Certification IBM Licensing Certification Effective Presentations Training Jason Schwartz Relevant Experience CDW Sales Manager, State & Local Sales (2015–Present) Manages 20 account managers supporting state & local government customers in California, Arizona, Alaska, and Hawaii Builds relationships with coworkers, customers, partners for both small and large enterprises in the public sector Leads team of sales professionals through motivational coaching, effective partner management, and customer engagement Consistently interacts with field personnel, customer base, and OEM partners Performs business pipeline review calls with sales teams to ensure financial objectives are achieved monthly, quarterly, and annually Sales Manager, Sales Academy (2014–2015) Responsible for onboarding account managers hired into Medium Large Central and South regions and Small Business teams; developed individual coaching plans for each account manager Senior Account Manager (2010–2014) Achieved strong sales results with higher education customers through consultative selling of hardware, software, and professional services solutions to assist in long-term strategic IT plan of each customer Education BA, Political Science & Business Administration, University of Iowa Michael Truncone Relevant Experience CDW Sales Manager, State & Local Sales (2015–Present) Travels to discover, develop, and increase relationships with key clients, manufacturers, and service business partners Performs business pipeline reviews with sales teams to ensure financial objectives are achieved monthly, quarterly, and annually Conducts services scope reviews on opportunities with integration services to ensure successful project execution Executive Account Manager (2005–2015) Worked to develop partner relationships while holding weekly cadence with partners including Cisco, HP, and Lenovo Demonstrated consistent sales growth throughout career Pursued relevant certifications within IT field, including partners HP, NetApp, EMC, Cisco, and Microsoft Participated in Emerging Leaders Program Worked efficiently and effectively while coordinating and managing within large sales organization Coached and developed high-performing coworkers Education BA, Economics & Business Administration, University of Connecticut Clayton Boras Relevant Experience CDW Sales Manager, Higher Education (2011–Present) Supervises 20 inside sales and field sales personnel supporting higher education business in Northeast and Keystone geographies Develops team members with career opportunities in Emerging Leaders program and promotion to Sales Operations Consistently interacts with field personnel, customer base, and OEM partners Lead sales team ranked #1 in Higher Education (2012) Executes large higher education wins for hardware, software, licensing, and services solutions Sales Manager, K–12 Sales (2007–2011) Oversaw 22 internal sales and two field sales personnel supporting K–12 education business for Keystone geography Created sales strategies to identify lucrative contract opportunities and leveraged vendor relationships to achieve significant sales and gain visibility Interfaced with vendors, executive management contracts for key accounts, and information technology, purchasing, and general services personnel at state level Regional Sales Manager (2003–2007) Territory Sales Manager (2001–2003) Micro Warehouse Inc. Group Business Unit Education Manager (1999–2003) Strategic Business Unit Account Manager (1998–1999) Education MBA, Marketing, Sacred Heart University BS, Finance, Sacred Heart University Awards & Certifications CDW Presidents Club Achievement Award (2008, 2012) CDW #1 Ranked K–12 Sales Manager (2003, 2008) CDW #1 Ranked Higher Education Sales Manager (2012) Mitsubishi Sales Award (2006-2009) Dave Stephens Relevant Experience CDW Business Development Manager, Public Safety (2010–Present) Manages sales engineering process for large-scale integration projects involving public safety agencies Provides subject matter expertise to CDW Government LLC resources and offers resource training, as well as partner development and management Presents at state, regional, and national public safety conferences on topics such as mobility, digital evidence management, CJIS mandate compliance Senior Field Account Executive (2002–2010) Worked with account teams to grow state & local government marketplace; additionally developed high-visibility opportunities within specific sales geography CATG Inc. dba MBS CONNECTING POINT Operation Director (2000–2001) President and General Manager (1999–2000) National Sales Manager (1997–1999) State Contract Sales Manager (1991–1997) Account Manager (1988–1990) VALCOM COMPUTER Account/Assistant/Service Manager (1984–1988) Education BA, Data Processing & Business Administration, Weber State University Russell Keene Relevant Experience CDW Sales Manager, K–12 Sales (2006–Present) Trains and manages inside sales team of 27 account managers covering K–12 accounts in California, Arizona, Alaska, and Hawaii Manages a team of six field account executives in California and Arizona Travels to discover, develop, and increase relationships with key clients, manufacturers, and service business partners Performs business pipeline reviews with sales teams to ensure financial objectives are achieved monthly, quarterly, and annually Conducts services scope reviews on opportunities with integration services to ensure successful project execution Acts as Education liaison for CDW Emerging Leaders Program Analyzes contracts prior to RFP response submission to ensure positive outcome and acceptable company risk District Manager, Northwest & Pacific Regions (2005–2006) Created regional business plan leading to sales increase and trained/coached inside account teams covering customers in western US Senior Account Manager (1997–2005) Proactively targeted key contracts and successfully bid to further business opportunities while acting as team mentor for new sales coworkers Education BS, Marketing, North Central College Alex Haycock Relevant Experience CDW Sales Manager, K–12 Sales (2015–Present) Mentors account team with various lengths of tenure across multiple CDW segments Leads account team to exceed goals via one-on-one coaching and focused selling efforts Builds strong relationships with vendor partners, inside sales reps, and field resources to ensure customer satisfaction and support Senior Account Manager (2014–2015) Guided peers through daily and monthly sales activities while maintaining and expanding customer relationships in Aggregation Services team Account Manager (2011–2014) Developed strong and long-lasting relationships with back-end departments and vendors to become consistent and reliable resource to customers and colleagues Education BA, Business Administration, Columbia College Awards & Certifications Cisco CCE EMC Sales Professional NetApp Sales Professional VMware Sales Professional Tripp Lite Sales Professional Sean Galligan Relevant Experience CDW Sales Manager, K–12 Sales (2014–Present) Manages recruitment, selection, training, and coaching of 18 direct reports handling millions in total business to ensure sales goals are met Drives business growth by capitalizing on new revenue potential in existing markets in New England geography Leverages strategic relationships with customers, peers, and vendor partners Provides customer service management and problem resolution training and mentorship Utilizes knowledge of partner sales programs and procedures to effectively steer sales growth projects with key partners such as Cisco, NetApp, VMware, and Aruba Account Manager (2007–2014) Managed, fostered, and maintained successful working relationship with multiple vendor partners in K–12 education IT sales Nielsen Media Research Sports Product Placement Auditor (2006–2007) Edited and evaluated analysis of sports marketing initiatives of product vendors, athletic teams, sports venues to assist in formulation of appropriate business strategy Sports Product Placement Analyst (2005–2006) Education BBA, Finance, University of Connecticut Awards & Certifications Cisco Sales Expert NetApp Accredited Sales Professional Microsoft Sales Accreditation EMC Velocity Sales Accreditation Major Projects Project Name 1 (Project Date), 5-7 word description Project Name 2 (Project Date), 5-7 word description Mike Clinton Relevant Experience CDW Sales Manager, Higher Education (2015–Present) Covers higher education sales in Northwest geography Leads experienced inside and outside sales team to sell best-in-class manufacturers and technology from Cisco, Lenovo, Microsoft, Adobe, VMware, etc. Principal ISA, Unified Communications (2008–2015) Subject matter expert for CDW’s unified communications portfolio to customers, colleagues, account managers Assessed customer business goals and technical requirements to develop UC strategies Leveraged extensive knowledge of CDW’s Professional Services to provide customers with turnkey solutions Supported Med/Lar, nonprofit, and healthcare teams Senior Account Manager, Med/Lar (2002–2008) Provided IT solutions and services to mid-market and Enterprise clients Education BS, Telecommunications Management, DeVry University Chris Webb Relevant Experience CDW Business Development Manager, Higher Education (2015–Present) Owns higher-education strategy for contracts, eProcurement, and key OEM partnership in CDW Government LLC Directs team of five field-based business development resources focuses on higher education market Builds strategic partnerships with key OEM partners, providers, and third-party service organizations Drives customer relationships through C-level engagement, partnership reviews, mutually beneficial contracts Reports to VP, Higher Education Sales Business Development, Higher Education (2008–2015) Positioned CDW and negotiated contracts for west coast higher education business Conducted business reviews with executive-level large clients to identify growth opportunities Sales Manager, Higher Education (2007–2008) Led team of 18 account mangers covering higher education in mid-Atlantic and Keystone geographies Inside Account Manager, K–12 Education (2005–2007) Proactively sought new customers and innovative ways to solve the technology needs of K– 12 education Education BS, Information Systems, Wake Forest University Awards & Certifications CDW Annual Sales Top Performers (2005, 2006, 2007) CDW #1 Higher Education/Sales Manager (2008) Eric Goff Relevant Experience CDW Sales Manager, Higher Education, Pacific Region (2009–Present) Manages day-to-day sales team activities to achieve financial plan, interacting with direct reports, coworkers, customers, and partners Responsible for two territories consisting of 15 states; develops, improves, and maintains customer and partner relationships Hosts meetings, delivers presentations, conducts onsite visits, develops plans and strategic planning sessions, handles contract negotiation Works effectively with internal and external stakeholders to achieve business objectives and exceed sales goals Motivates and coaches sales team, educates and teams with OEM partners, engages customers to provide consultation and value Sales Manager, Corporate Academy (2007–2009) Responsible for managing newest sales representatives, coaching effective career strategies, and providing selling assistance Account Manager (2001–2007) Responsible for corporate accounts across the country (focus on Northern California) Education BS, Marketing, Illinois State University Awards & Certifications CDW Presidents Achievement Award of Excellence (2009, 2014) Public Sales Manager Advisory Council (PSMAC) Higher Education liaison, CDW Emerging Leaders Program GAINED GOVERNMENT CONTRACTS Issuing Agency Contract Title Start Date Exp Date Academy School District 20 Peripheral Purchase Agreement 07/10/2015 07/31/2016 Alabama Joint Purchasing Program ALJP 2013 - HP Networking 03/08/2013 03/08/2016 Alabama Joint Purchasing Program ALJP 2013 - NEC 03/08/2013 03/08/2016 Alabama Joint Purchasing Program ALJP 2013 - Lenovo 03/08/2013 03/08/2016 Alabama Joint Purchasing Program ALJP2015-0102 GoGuardian 07/06/2015 07/01/2017 Alabama Joint Purchasing Program ALJP2015-0113: Microsoft Hardware 07/29/2015 06/30/2017 American Lebanese Syrian Associated Charities, Inc (ALSAC)Master Services and Product Sales Agreement be 12/18/2013 12/18/2015 American Public University System Master Product Sales Agreement 04/15/2013 04/14/2016 Arlington Independent School District Computer, AV Equipment, Supplies and Services 07/01/2015 06/30/2016 Aruba Networks, Inc.California Aruba WSCA Data Communications 02/17/2015 05/31/2019 Aruba Networks, Inc.Aruba WSCA Data Communications 02/17/2015 05/31/2019 Aruba Networks, Inc.Florida Aruba NASPO Data Communications 05/11/2015 05/31/2019 Aruba Networks, Inc.Alaska Aruba NVP Data Communications 08/18/2015 05/31/2019 Aruba Networks, Inc.Nevada Aruba NVP Data Communications 08/19/2015 05/31/2019 Aruba Networks, Inc.Montana Aruba NVP Data Communications 08/24/2015 05/31/2019 Aruba Networks, Inc.New Jersey Aruba NVP Data Communications 08/24/2015 05/31/2019 Aruba Networks, Inc.South Carolina Aruba NVP Data Communications 08/24/2015 05/31/2019 Aruba Networks, Inc.Washington Aruba NVP Data Communications 08/24/2015 05/31/2019 Aruba Wireless Networks, Inc.Ohio STS Aruba 11/13/2014 06/30/2017 Associated Colleges of the Twin Cities NJPA Stretch Agreement 12/01/2014 11/18/2018 Association of Computer Technology Educators of Maine Master Product Sales Agreement 05/30/2014 05/30/2016 Baltimore City Public Schools Symantec Software Maintenance 07/01/2014 06/30/2017 Beaufort County School District APC Smart UPSs and Batteries 06/05/2015 06/04/2018 BJC Healthcare Mutual Non-Disclosure Agreement 11/20/2013 11/20/2016 Board of Regents of the Nevada System of Higher Education on behalf of Bus NJPA Stretch Agreement 12/01/2014 11/18/2018 Bossier Parish School Board Technology Catalog Contract 11/01/2015 10/31/2020 Brocade Communications Systems, Inc.State of Georgia Brocade 04/30/2013 06/30/2016 Brocade Communications Systems, Inc.Brocade WSCA Data Communications 07/10/2014 05/31/2019 Brocade Communications Systems, Inc.Alaska Brocade NVP Data Communications 07/10/2014 05/31/2019 Brocade Communications Systems, 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Oregon IT Hardware Value Added Reseller 09/25/2015 09/30/2017 State of Tennessee, Department of General Services Tennessee Cisco Hardware, Software, and Servic 01/01/2013 12/31/2015 State of Tennessee, Department of General Services Tennessee Ultrabooks and Related Peripherals 07/11/2014 07/10/2016 State of Tennessee, Department of General Services Tennessee Multi Manufacturer Software 04/01/2015 03/31/2016 State of Texas, Department of Information Resources TX DIR Networking 09/20/2014 09/19/2016 State of Texas, Department of Information Resources TX DIR Education IT Products 06/18/2015 06/18/2016 Tegile Systems, Inc.Florida Tegile NASPO ValuePoint Computer Equi 07/22/2015 03/31/2017 Tegile Systems, Inc.Tegile NASPO ValuePoint Computer Equipment 07/22/2015 03/31/2017 Texas A&M University TCPN Stretch Agreement 07/01/2013 10/31/2016 Texas Christian University Texas Christian Managed Print Services Contract 08/19/2013 08/19/2016 The Catholic University of America The Catholic University 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11/18/2018 University of Minnesota University of Minnesota Juniper and Powerdsine 07/01/2013 06/30/2016 University of Montana NJPA Stretch Agreement 12/01/2014 11/18/2018 University of Virginia NJPA Stretch Agreement 12/01/2014 11/18/2018 University of Wisconsin Foundation Master Services Sales Agreement 09/11/2015 09/10/2017 US Educational Technology Purchasing Alliance End User Devices 01/01/2015 12/31/2019 US Educational Technology Purchasing Alliance LAN/WAN Security (E-Rate)01/01/2015 12/31/2019 Vanguard University Vanguard University MPSA 12/12/2013 12/13/2015 Victoria Independent School District Audio Visual Equipment & Supplies 01/01/2014 12/31/2015 Victoria Independent School District Technology RFP 03/01/2014 02/28/2016 Village of Lombard MPS-Village of Lombard 10/30/2013 10/30/2016 Village of Lombard Village of Lombard PSMP 10/30/2013 10/29/2016 Virginia Information Technologies Agency VITA Governance, Risk and Compliance Software 02/04/2013 02/04/2017 Virginia Information 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County Director's Association Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Clark County School District Classroom Visual Presentation Equipment and Accessories 03/23/2011 03/22/2013 Unknown reason Irvine Unified School District Irvine Unified School District Product Purchase Agreement 56943 04/15/2008 04/16/2013 Signed a new agreement New Caney Independent School District Special Education Supplies 05/17/2011 05/16/2013 Unknown reason San Francisco Unified School District Interactive Whiteboard Classroom Solution 06/09/2010 06/07/2013 Unknown reason Region 18 Education Service Center Computer Hardware, Software, Supplies and Accessories 06/23/2012 06/22/2013 Unknown reason Socorro Independent School District District Software 06/24/2011 06/25/2013 Agreement rebid and awarded to CDW•G Tuscon Unified School District Computer, Technology, Electrical Parts and Supplies 09/18/2008 06/30/2013 Unknown reason Corona-Norco Unified School District Audio Visual Equipment 07/01/2011 06/30/2013 Unknown reason Garden Grove Unified School District Audio Visual Equipment 09/19/2012 06/30/2013 Unknown reason Orange County Public Schools Projectors 07/01/2011 06/30/2013 Unknown reason Jackson-Madison County School System Slate-Tablet Computers 03/15/2013 06/30/2013 Agreement rebid and awarded to CDW•G Copper Country Intermediate School District 22i SPOT Device 05/23/2013 08/30/2013 Agreement rebid and awarded to CDW•G NORTH ALABAMA COOPERATIVE PURCHASING ASSOCIATION MANUFACTURER SUPPLIED TECHNOLOGY EQUIPMENT WITH PERIPH 09/01/2010 08/31/2013 Agreement rebid and awarded to CDW•G Academy School District 20 Peripherals 09/01/2012 08/31/2013 Agreement rebid and awarded to CDW•G Eagle Pass Independent School District Computer Hardware & Equipment 10/01/2011 08/31/2013 Unknown reason Harlingen Consolidated Independent School District Audio Visual 09/11/2012 08/31/2013 Unknown reason Lone Star College System Technology Solutions 11/20/2012 10/13/2013 Agreement not renewed due to lack of sales School District of Palm Beach County Computer Software, Peripherals, Accessories & Repair Parts 11/20/2009 11/19/2013 Unknown reason Smoky Hill Education Service Center NJPA Stretch Agreement 12/17/2012 11/22/2013 Signed new NJPA Stretch Agreement Associated Colleges of the Twin Cities Technology Catalog 08/08/2012 11/22/2013 Signed new Stretch Agreement under new NJPA Agreement City of Chesapeake Technology Solutions and Related Services 10/11/2012 11/23/2013 Signed new Stretch Agreement under new NJPA Agreement Socorro Independent School District Audio Visual Equipment 12/18/2011 12/17/2013 Agreement rebid and awarded to CDW•G Lake County School Board Catalog Bid for Incidental Supplies 09/25/2006 12/31/2013 Unknown reason Regional Educational Media Center Association of Michigan uipment & Supplies 2013 01/01/2013 12/31/2013 Agreement rebid and awarded to CDW•G School District of Kansas City Missouri Computer Technology and Peripherals 01/01/2013 12/31/2013 Unknown reason Cypress-Fairbanks Independent School District Repair Parts for AV, Computer, Printer & Miscellaneous Office Equip 01/01/2012 12/31/2013 Unknown reason Northside Independent School District Audio, Visual & DVD Software 02/01/2012 01/31/2014 Unknown reason University of Alabama Lenovo Product 03/01/2013 02/28/2014 Agreement rebid and awarded to CDW•G Colorado BOCES Association Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Panhandle Area Education Consortium Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Iowa Educators Consortium Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Indiana Association Educational Service Centers Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Indiana Association Educational Service Centers - GovPro Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Oakland Schools Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Minnesota Service Cooperatives Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Cooperating School Districts of Greater St Louis Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Montana Cooperative Services, LLC Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G North Dakota Educators Service Cooperative Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G InterMountain ESD Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Portland Public Schools Technology Catalog 01/03/2006 02/28/2014 Agreement rebid and awarded to CDW•G Keystone Purchasing Network Technology Catalog 07/01/2013 02/28/2014 Agreement rebid and awarded to CDW•G TexBuy (Region 16 Education Service Center)Technology Catalog 09/27/2010 02/28/2014 Agreement rebid and awarded to CDW•G Fairfax County Public Schools Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Richmond Public Schools Audio Visual Equipment & Misc Items 03/01/2011 02/28/2014 Unknown reason Regional Education Service Agencies 5 Technology Catalog 05/09/2012 02/28/2014 Agreement rebid and awarded to CDW•G Atlanta Independent School System Instructional Interactive Devices Accessories for Promethean 04/08/2013 03/27/2014 Agreement rebid and awarded to CDW•G Socorro Independent School District District Technology 03/27/2013 03/27/2014 Agreement rebid and awarded to CDW•G City of Mesquite Annual Supply of Miscellaneous PC Components 04/05/2012 04/04/2014 Unknown reason North County Educational Purchasing Corsoritum Audio Visual 04/15/2011 04/15/2014 Agreement rebid and not awarded to CDW•G National Joint Powers Alliance Emergency Response Agreement 04/15/2009 04/15/2014 Agreement rebid and awarded to CDW•G San Bernardino City Unified School District Audio Visual Equipment & Supplies 05/06/2013 05/05/2014 Unknown reason Community Unified School District 300 Replacement Computers 05/13/2013 05/13/2014 Agreement rebid and awarded to CDW•G Douglas County Schools (Omaha Public Schools)Promethean Interactive Whiteboards 05/21/2013 05/20/2014 Unknown reason San Diego County Office of Education Chromebook 08/27/2013 06/30/2014 Unknown reason Hillsborough County Public Schools Audio Visual Equipment, Related Parts and Periodic Services 01/25/2012 06/30/2014 Unknown reason Lenovo (United States) Inc.KETS Instructional Devices Workstations 12/04/2012 06/30/2014 Agreement rebid and awarded to CDW•G Montgomery County Public Schools Chrome-Android-Windows Mobile Devices 07/15/2014 06/30/2014 Unknown reason Jackson-Madison County School System Computer Requirements 08/20/2013 06/30/2014 Agreement rebid and not awarded to CDW•G Arlington Independent School District Computer / Audio Visual Equipment, Supplies and/or Services 08/16/2013 06/30/2014 Agreement rebid and awarded to CDW•G Jefferson County School District No. R-1 AV Equipment & Supplies 08/01/2013 07/31/2014 Agreement rebid and awarded to CDW•G School District of Desoto County Catalog Discount Term Contract 11/13/2012 07/31/2014 Unknown reason Copper Country Intermediate School District 22i SPOT Device 04/23/2014 07/31/2014 Agreement rebid and awarded to CDW•G Desert Sands Unified School District Chromebooks 08/21/2013 08/20/2014 Agreement rebid and awarded to CDW•G Education Service Center Region VII Computer Hardware & Supplies Bid Award 08/22/2013 08/22/2014 Agreement rebid and awarded to CDW•G Amarillo Independent School District Audio Visual 09/01/2013 08/31/2014 Moved purchasing to local cooperative agreements Socorro Independent School District District Interactive Projectors 09/20/2013 09/19/2014 Agreement rebid and awarded to CDW•G Aldine Independent School District Instructional Supplies & Equipment 09/21/2011 09/20/2014 Signed VPA Agreement with CDW•G Mesa Unified School District No. 4 Student Devices 09/24/3013 09/23/2014 Agreement rebid and awarded to CDW•G School Board of Polk County Kindle Fire 04/25/2012 11/27/2014 Unknown reason Hillsborough County Public Schools Classroom Supplies & Equipment Catalog 12/09/2009 12/08/2014 Unknown reason National Joint Powers Alliance Technology Catalog 12/09/2009 12/15/2014 Agreement rebid and awarded to CDW•G Montana State University NJPAStretch Agreement 11/06/2013 12/15/2014 Signed a new NJPA Stretch Agreement Board of Regents of the Nevada System of Higher Education on beh NJPA Stretch Agreement 05/01/2014 12/15/2014 Signed new Stretch Agreement under new NJPA Agreement College of Southern Nevada NJPA Stretch Agreement 06/05/2014 12/15/2014 Signed new Stretch Agreement under new NJPA Agreement Massapequa Union Free School District NJPA Stretch Agreement 09/01/2013 12/15/2014 Signed new Stretch Agreement under new NJPA Agreement West Hempsted Unified Free School District NJPA Stretch Agreement 09/16/2014 12/15/2014 Agreement not renewed Ohio Inter-University Council Purchasing Group Technology Solutions with Related Equipment and Accesories 03/14/2011 12/15/2014 Signed new NJPA Stretch Agreement Fayette County Board of Education LocknCharge Carrier Charging Carts 10/01/2014 12/31/2014 Unknown reason The School Board of Sarasota County Audio Visual & Video Equipment 01/22/2013 01/21/2015 Unknown reason Unified School District 229 Master Services Sales Agreement 01/27/2014 01/26/2015 Unknown reason Adams County School District 14 Microsoft Office 365 08/18/2014 01/30/2015 Unknown reason Fountain Fort Carson School District 8 Laptop & Ultrabook Contract 03/03/2014 03/02/2015 Unknown reason Victoria Independent School District Educational Computer Software 06/01/2013 05/31/2015 Unknown reason Montgomery County Public Schools Televisions for Schools and Offices 06/15/2013 06/14/2015 Unknown reason Region 18 Education Service Center Catalog Bid 06/23/2014 06/22/2015 Agreement rebid and awarded to CDW•G Alum Rock Union Elementary School District Visual and Audio Installation 04/25/2013 06/30/2015 Agreement not rebid Alum Rock Union Elementary School District Installation of Interactive Classroom Promethean Boards 05/07/2013 06/30/2015 Agreement not rebid Pinellas County School Board Audio Visual & Video Equipment/Materials 01/26/2014 06/30/2015 Unknown reason Des Moines Independent Community School District Technology - Electronic Products 07/01/2012 06/30/2015 Unknown reason Rockford Public Schools Lenovo ThinkPads 07/01/2012 06/30/2015 Unknown reason Regional Educational Media Center Association of Michigan Software 2012 07/01/2012 06/30/2015 Agreement rebid and awarded to CDW•G Middlesex Regional Educational Services Commission Technology Catalog 07/01/2013 06/30/2015 Agreement rebid and awarded to CDW•G Metropolitan Nashville Public Schools Nutrition Services Computers/Supplies 06/01/2014 06/30/2015 Unknown reason Birdville Independent School District Birdville ISD 07/01/2014 06/30/2015 Moved purchasing to local cooperative agreements Pearland Independent School District Careet and Technical Education Catalog 07/01/2014 06/30/2015 Unknown reason Arlington Independent School District Computer, AV Equipment, Supplies and Services 07/01/2014 06/30/2015 Agreement rebid and awarded to CDW•G Donna Independent School District Computer Peripherals & IPads 2014-2015 11/19/2014 06/30/2015 Unknown reason Jefferson County Public Schools R-1 Projection, A/V and Charging Carts 09/30/2015 07/31/2015 Unknown reason Pharr-San Juan-Alamo Independent School District Computer Equipment, Servers, Microsoft Licensing, Services and Fina 08/23/2013 08/22/2015 Unknown reason Education Service Center Region VII Computer Hardware & Supplies 08/21/2014 08/22/2015 Agreement rebid and awarded to CDW•G Academy School District 20 District-wide Peripheral Purchase 08/19/2014 08/31/2015 Agreement rebid and awarded to CDW•G Edinburg Consolidated Independent School District Audio Visual Supplies & Equipment 09/01/2013 08/31/2015 Moved purchasing to local cooperative agreements Pharr-San Juan-Alamo Independent School District Toner and Ink Cartridges for Printers, Equipment, Services and Suppl 09/01/2014 08/31/2015 Unknown reason Pharr-San Juan-Alamo Independent School District Computer and Printer Equipment, Services and Supplies Catalog 09/01/2014 08/31/2015 Unknown reason Portland Water District Information Technology Supplies 09/12/2014 09/11/2015 Unknown reason Aldine Independent School District VPA for Technology Devices 09/17/2014 09/16/2015 Moved purchasing to local cooperative agreements School Board of Volusia County IT Hardware and Software - Percent Discount 10/28/2013 09/30/2015 Using other school agreement in Florida El Paso Independent School District iPads, Computer, Telephone & AV Repairs 10/11/2012 10/10/2015 Unknown reason Judson Independent School District Computer and Networking Equipment 10/23/2014 10/22/2015 Unknown reason Clear Creek Independent School District Audio Visual Equipment, Supplies & Discounts 12/01/2011 11/30/2015 Unknown reason Henrico County Public Schools Promethean Interactive White Boards 12/01/2010 11/30/2015 Unknown reason CalSAVE Technology Catalog 04/01/2011 12/31/2015 Agreement out to RFP Education Service Center Region 19 Special Education & Assistive Technology Equipment, Supplies, and C 12/09/2012 12/31/2015 Not renewed for lack of sales Victoria Independent School District Audio Visual Equipment & Supplies 01/01/2014 12/31/2015 Unknown reason National Cooperative Purchasing Alliance Red Hat Software 09/02/2015 12/31/2015 Agreement not renewed Epson America, Inc.Epson Brighter Futures Printers 03/20/2005 03/31/2013 Unknown reason Catholic Purchasing Services Master Service and Product Sales Agreement 06/23/2009 06/22/2013 Not renewed for lack of sales California Charter Schools Association Product Purchase Agreement 06/25/2009 06/25/2013 Moved purchasing to local cooperative agreements Long Beach Unified School District Audio Visual Equipment 09/30/2010 06/30/2013 Unknown reason Education Service Center Region VI Technology Supplies 07/01/2012 06/30/2013 Unknown reason South County Support Service Agency MSPSA 07/07/2009 07/06/2013 Not renewed for lack of sales Chicago Public Schools Software Resale and Support Services 08/01/2010 07/31/2013 Signed new agreement with CDW•G using City of Chicago contract Alabama Joint Purchasing Program ALJP 2012 - Amazon Kindle & ServiceNet Warranty 08/15/2012 08/14/2013 Line item rebid and awarded to CDW•G Alabama Joint Purchasing Program ALJP 2012 - Asus 08/15/2012 08/14/2013 Line item rebid and awarded to CDW•G Alabama Joint Purchasing Program ALJP 2012 - Brocade 08/15/2012 08/14/2013 Line item rebid and awarded to CDW•G Alabama Joint Purchasing Program ALJP 2012 - McAfee 08/15/2012 08/14/2013 Line item rebid and awarded to CDW•G Alabama Joint Purchasing Program ALJP 2012 - Ruckus 08/15/2012 08/14/2013 Line item rebid and not awarded to CDW•G Alabama Joint Purchasing Program ALJP 2012 - Spectrum 08/15/2012 08/14/2013 Line item rebid and awarded to CDW•G Alabama Joint Purchasing Program ALJP 2012 - Trend Micro 08/15/2012 08/14/2013 Line item rebid and awarded to CDW•G Alabama Joint Purchasing Program ALJP 2012 - Xerox 08/15/2012 08/14/2013 Line item rebid and awarded to CDW•G Alabama Joint Purchasing Program ALJP 2012 - Belkin 09/10/2012 08/14/2013 Line item rebid and awarded to CDW•G Alabama Joint Purchasing Program ALJP 2012 - Tripp Lite 11/02/2012 08/14/2013 Line item rebid and awarded to CDW•G Education Service Center Region VII Computer Hardware & Supplies 08/16/2012 08/18/2013 Agreement rebid and awarded to CDW•G Rockwood School District Rockwood School District Product Purchase Agreement 92547 10/01/2008 10/01/2013 Unknown reason Harris County Department of Education Technology Catalog 12/14/2004 12/14/2013 Agreement rebid and awarded to CDW•G Victoria Independent School District Technology RFP 03/01/2011 03/01/2014 Unknown reason McKinney Independent School District Technology & Technical Products & Services 03/25/2009 03/24/2014 Unknown reason Alabama Joint Purchasing Program ALJP 2011 - Planar 05/16/2011 05/15/2014 Line item rebid and not awarded to CDW•G Alabama Joint Purchasing Program ALJP2011-037: AVerMedia 09/25/2012 05/15/2014 Line item rebid and not awarded to CDW•G Washington Learning Source Adobe CLP Software 07/13/2007 07/31/2014 Agreement not rebid Washington Learning Source Aruba Networking Equipment 05/22/2009 07/31/2014 Agreement not rebid Management Council Ohio Education Computer Network MSPSA 41025 02/01/2013 01/31/2015 Unknown reason The Interlocal Purchasing System Computer Equipment, Components and Peripherals 06/28/2012 06/29/2015 Agreement rebid and awarded to CDW•G The Interlocal Purchasing System TIPS-TAPS Software 08/09/2010 07/23/2015 Agreement rebid and awarded to CDW•G Digital Edge Digital Edge Wireless Mobile Devices 05/28/2014 12/31/2015 Agreement rebid and not awarded to CDW•G State of Alabama Department of Finance Blackberry Support 04/22/2010 04/21/2015 Contract expired. No reason on file for why this was not renewed. State of Alabama Department of Finance Alabama Apple PC and Servers 11/01/2013 10/31/2015 CDW•G was named to a new Contract. State of Alabama Department of Finance Alabama Printers and Scanners 12/17/2012 12/16/2015 CDW•G was named to a new Contract. County of Albany Department of General Services Albany County Printers, Accessories and Supplies 08/22/2013 08/21/2015 Contract expired and was not renewed. There was no replacement RFP. Xerox Corporation State of Arkansas Xerox 04/06/2012 04/30/2015 CDW•G was named to a new Contract. Baldwin County Baldwin County Commission Microcomputer 10/21/2014 10/21/2015 CDW•G was named to a new Contract. State of California, Department of General Services SLP Adobe 01/24/2014 12/31/2015 CDW•G was named to a new Contract. City of St. Petersburg City of St. Petersburg Computers, Ruggedized Laptop 03/07/2011 02/28/2014 Contract expired and was not renewed. There was no replacement RFP. Commonwealth of Pennsylvania PA Commonwealth- Networking Equipment 10/01/2013 09/30/2016 Contract was extended until 2016. County of Ventura County of Ventura Cisco 12/12/2013 06/30/2015 Contract expired. No reason on file for why this was not renewed. State of Connecticut, Dept of Information Technology Audio Visual 08/01/2010 05/30/2014 CDW•G was named to a new Contract. American Power Conversion FL APC IT Hardware 09/08/2008 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA. Cisco Systems, Inc.Florida Cisco IT Hardware 09/12/2008 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA. EMC Corporation State of Florida EMC 09/13/2005 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA. Enterasys Networks, Inc.Florida Enterasys 09/08/2008 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA. Brocade Communications Systems, Inc.Florida Brocade IT Hardware 09/08/2008 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA. Hewlett- Packard Company Florida HP IT Storage, Network 09/12/2008 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA. Promark Technology, Inc.FL Promark IT Hardware 12/18/2008 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA. Aruba Networks, Inc.Florida Aruba 10/14/2008 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA. Trippe Manufacturing Co.Florida Tripp Lite 03/23/2011 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA. NetApp Florida NetApp 09/12/2008 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA. IBM Corporation Florida IBM 09/08/2008 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA. immixGroup, Inc.Florida Immix Riverbed 02/14/2013 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA. Cisco Systems, Inc. Florida Cisco Audio and Visual Equipment and Accessories 08/19/2011 02/18/2015 Contract expired and was not renewed. FL wanted to move to WSCA. Cisco Systems, Inc.Florida Cisco Telephony 12/09/2008 09/02/2015 Contract expired and was not renewed. FL wanted to move to WSCA. Carahsoft Technology Corp State of Georgia F5/Carahsoft 12/31/2014 06/30/2015 CDW•G was named to a new Contract. Extreme Networks, Inc.State of Georgia Extreme Networks 07/01/2012 06/30/2015 CDW•G was named to a new Contract. Extreme Networks, Inc.State of Georgia Enterasys 07/01/2012 06/30/2015 CDW•G was named to a new Contract. Pace Microsoft Licenses, Terminal Services CAL and Core CAL Step-up 06/19/2012 12/31/2013 Contract expired and was not renewed. There was no replacement RFP. Illinois Department of Central Management Services IL EMC Capacity Expansion/Maint. Contract 06/27/2013 07/01/2015 Contract expired and was not renewed. There was no replacement RFP. Illinois Department of Central Management Services Illinois Adobe Master Contract 07/14/2008 06/30/2013 Contract expired and was not renewed. There was no replacement RFP. Illinois Department of Central Management Services IL Microsoft EA Agreement 10/01/2011 09/30/2015 CDW•G was named to a new Contract. Illinois Department of Central Management Services Illinois Microsoft LAR Agreement 10/01/2011 09/30/2015 CDW•G was named to a new Contract. Illinois DOT Illinois DOT Microsoft Premier Support Service 11/24/2013 11/23/2014 CDW•G was named to a new Contract. Hewlett- Packard Company Indiana HP QPA 03/05/2014 10/31/2015 Contract expired. No reason on file for why this was not renewed. Kansas Department of Administration Kansas Cisco Contract 07/23/2007 12/31/2015 CDW•G was named to a new Contract. Aruba Wireless Networks, Inc.Louisiana Aruba 08/26/2013 08/25/2015 Contract expired. No reason on file for why this was not renewed. County of Los Angeles Internal Services Department County of Los Angeles Cisco Hardware 07/21/2010 10/20/2015 CDW•G was named to a new Contract. Promethean, Inc.State of Louisiana Promethean 04/05/2012 10/04/2015 Contract expired. No reason on file for why this was not renewed. Trippe Manufacturing Company State of Louisiana Tripp Lite 05/15/2012 11/14/2015 We are still awaiting renewal Epson America, Inc.State of Louisiana Epson 10/01/2014 06/10/2015 CDW•G was named to a new Contract. Lake County Computer Workstation Hardware 12/01/2011 11/30/2015 Contract expired. No reason on file for why this was not renewed. Louisville Jefferson County Metro Government Louisville Jefferson County Metro Government Hardware, Software 05/18/2010 09/30/2015 CDW•G was named to a new Contract. City of Cambridge Misc Computer Hardware & Software for the Police Department 12/10/2014 12/09/2015 Contract expired. No reason on file for why this was not renewed. Mississippi Department of Information Technology Services Mississippi Microsoft EPL 3640 12/01/2010 06/01/2014 CDW•G was named to a new Contract. Mississippi Department of Information Technology Services Software Express Products List 06/23/2009 06/30/2014 CDW•G was named to a new Contract. Mississippi Department of Information Technology Services Mississippi IT Hardware EPL 3658 07/01/2011 02/13/2015 CDW•G was named to a new Contract. Carahsoft Technology Corp North Carolina Carahsoft VMware 11/20/2014 09/11/2015 Contract expired. No reason on file for why this was not renewed. Ricoh Americas Corporation NC Ricoh Printer 204D 08/01/2007 03/31/2013 Contract expired and was not renewed, but Ricoh is looking to award a new cont Hewlett- Packard Company North Carolina HP Thin Client 06/15/2012 06/14/2013 Contract expired. No reason on file for why this was not renewed. North Carolina Department of Administration North Carolina Citrix 08/01/2012 07/31/2013 CDW•G chose not to extend the contract for no sales. North Carolina Department of Administration NC Ruggedized Accessories 204B 06/01/2007 10/31/2013 CDW•G was named to a new Contract. Panasonic Computer Solutions Company NC Panasonic Rugged Computers 06/01/2007 10/31/2013 CDW•G was named to a new Contract. Hewlett- Packard Company North Carolina HP Printer 04/01/2013 03/31/2014 CDW•G was named to a new Contract. Carahsoft Technology Corp.Carahsoft VMWare Software 09/10/2014 09/09/2015 Contract expired. No reason on file for why this was not renewed. North Carolina Department of Administration NC Mass Storage ITS-006498 09/20/2012 03/31/2016 Contract was extended until 2016. NetApp, Inc.NC 204J NetApp Mass Storage 09/20/2012 09/20/2015 Contract expired. No reason on file for why this was not renewed. North Carolina Department of Administration NC Ruggedized Computers and Accessories 11/01/2013 10/31/2015 Contract expired. No reason on file for why this was not renewed. Synnex Corporation North Central EMS Cooperative 04/25/2011 02/09/2014 Contract expired. No reason on file for why this was not renewed. Synnex Corporation North Central EMS Cooperative 04/25/2011 02/09/2014 Contract expired. No reason on file for why this was not renewed. Noble County Clerk Noble County Office Supplies 07/01/2015 12/31/2015 Still awaiting 3M Projection Systems NY OGS-3M Projection Systems Audio Visual 11/01/2008 10/31/2013 Contract expired and was not renewed. NY OGS did not open up for RFP again. Mitsubishi Digital Electronics NY OGS-Mitsubishi Audio Visual 11/01/2008 10/31/2013 Contract expired and was not renewed. NY OGS did not open up for RFP again. Optoma Technology, Inc.NY OGS-Optoma Technology Audio Visual 10/01/2008 10/31/2013 Contract expired and was not renewed. NY OGS did not open up for RFP again. PolyVision Corporation NY OGS-Polyvision Audio Visual 05/06/2010 10/31/2013 Contract expired and was not renewed. NY OGS did not open up for RFP again. Hitachi Data Systems NY OGS-Hitachi Systems & Peripherals Storage 11/25/2009 02/10/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again. ExaGrid Systems, Inc.NY OGS-ExaGrid Systems Inc Storage Systems and Peripherals 08/17/2011 02/10/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again. Quantum Corporation NY OGS-Quantum Corporation Systems and Peripheral (Storage)02/11/2004 02/11/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again. Trend Micro, Inc.NY OGS-Trend Micro Microcomputer Software 03/03/2009 03/02/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again. International Business Machines Corporation (IBM)NY OGS-IBM Enterprise Systems Xseries 07/02/2008 07/01/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again. Citrix Systems, Inc.NY OGS-Citrix Microcomputer Software 08/09/2004 08/08/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again. Epson America, Inc.NY OGS-Epson Audio Visual 11/01/2008 10/31/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again. Infocus Corporation NY OGS-Infocus Audio Visual 11/01/2008 10/31/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again. NEC Display Solutions of America NY OGS-NEC Audio Visual 11/01/2008 10/31/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again. AverMedia Technologies, Inc.NY OGS-AverMedia Technologies Audio Visual 11/01/2008 10/31/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again. Elmo USA Corp.NY OGS-Elmo Corp Audio Visual 11/01/2008 10/31/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again. Steelcase, Inc.NY OGS-NY OGS Steelcase VID#1000009217 08/29/2005 10/31/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again. EMC Corporation NY OGS-EMC Storage Systems and Peripherals 03/05/2004 08/31/2015 Contract expired and was not renewed. NY OGS did not open up for RFP again. NetApp, Inc.NY OGS-NetApp Inc Systems and Peripheral (Storage)02/11/2004 08/31/2015 Contract expired and was not renewed. NY OGS did not open up for RFP again. Hewlett- Packard Company NY OGS-HP Enterprise Systems 06/17/2011 10/22/2015 Contract expired and was not renewed. NY OGS did not open up for RFP again. Hewlett- Packard Company NY OGS-HP Storage Systems and Peripherals 07/19/2007 12/10/2015 Contract expired and was not renewed. NY OGS did not open up for RFP again. Acer America Corp.NY OGS-Acer Computer Microcomputer Systems 12/29/2010 12/28/2015 Contract may be renewed, pending NY OGS. Fujitsu Computer Systems, Corporation NY OGS-Fujitsu Microcomputer Systems 12/29/2010 12/28/2015 Contract may be renewed, pending NY OGS. Hewlett- Packard Company NY OGS-HP Microcomputer Systems 12/29/2010 12/28/2015 Contract may be renewed, pending NY OGS. Lenovo (United States) Inc.NY OGS-Lenovo Microcomputer Systems 12/29/2010 12/28/2015 Contract may be renewed, pending NY OGS. Panasonic Computer Solutions Company NY OGS-Panasonic Microcomputer Systems 12/29/2010 12/28/2015 Contract may be renewed, pending NY OGS. Seneca Data Distributors, Inc.NY OGS-SenecaData Microcomputer Systems 12/29/2010 12/28/2015 Contract may be renewed, pending NY OGS. Sony Electronics, Inc.NY OGS-Sony Microcomputer Systems 12/29/2010 12/28/2015 Contract may be renewed, pending NY OGS. Toshiba America Information Systems, Inc.NY OGS-Toshiba Microcomputer Systems 02/24/2011 12/28/2015 Contract may be renewed, pending NY OGS. Asus Computer International NY OGS-Asus Microcomputer System 04/21/2011 12/28/2015 Contract may be renewed, pending NY OGS. Department of Information Technology and Telecommunications (DNYC DOITT Panasonic 04/10/2013 12/29/2015 Contract will expire and not being renewed. Oakland County, Michigan Oakland County Microsoft Enterprise 09/01/2010 08/31/2013 Contract expired and was not renewed. There was no replacement RFP. Oakland County, Michigan Oakland County Michigan Fujitsu Tablets 10/01/2010 09/30/2013 Contract expired and was not renewed. There was no replacement RFP. Aruba Wireless Networks, Inc.State of Oklahoma Aruba Networking 02/20/2014 02/19/2015 CDW•G was named to a new Contract. State of Pennsylvania, Department of General Services Costars-3 IT Hardware 09/23/2005 09/08/2015 CDW•G was named to a new Contract. State of Pennsylvania, Department of General Services Costars Software 08/01/2008 11/30/2015 CDW•G was named to a new Contract. Philadelphia Housing Authority Philadelphia Housing Authority Hardware 04/01/2014 03/31/2015 Contract expired and was not renewed. There was no replacement RFP. Philadelphia Housing Authority Philadelphia Housing Authority Software 04/01/2014 03/31/2015 Contract expired and was not renewed. There was no replacement RFP. Pennsylvania Department of General Services PA IT Hardware Rugged Toughbooks 01/15/2009 09/30/2013 CDW•G was named to a new Contract. Pennsylvania Department of General Services PA IT Networking Contract 08/12/2008 09/30/2013 CDW•G was named to a new Contract. South Carolina Information Technology Management Office South Carolina AverMedia 08/03/2011 08/02/2015 CDW•G was named to a new Contract. Mitsubishi Digital Electronics South Carolina Mitsubishi AV 08/11/2006 08/05/2015 CDW•G was named to a new Contract. South Carolina Information Technology Management Office South Carolina Polyvision 08/03/2011 08/05/2015 CDW•G was named to a new Contract. South Carolina Information Technology Management Office South Carolina Enterasys 09/08/2010 09/07/2015 CDW•G was named to a new Contract. Bretford Manufacturing South Carolina Bretford 09/03/2009 12/31/2015 Still awaiting Epson America, Inc.South Carolina Epson AV 07/10/2006 12/31/2015 Still awaiting NEC Display Solutions of America South Carolina NEC Audio Visual 08/02/2006 12/31/2015 Still awaiting State of Tennessee, Department of General Services Tennessee Cisco Hardware, Software, and Services 01/01/2013 12/31/2015 CDW•G was named to a new Contract. EMC Corporation TX DIR EMC Software 05/04/2011 05/04/2015 CDW•G was named to a new Contract. Lexmark International, Inc.TX DIR Lexmark 09/27/2012 05/18/2015 CDW•G was named to a new Contract. Oki Data Americas, Inc.TX DIR Okidata 05/30/2007 06/07/2015 CDW•G was named to a new Contract. Xerox Corporation TX DIR Xerox 03/26/2007 06/07/2015 CDW•G was named to a new Contract. Ricoh Americas Corporation TX DIR Ricoh 08/09/2012 06/10/2015 We are still awaiting renewal Samsung Electronics America, Inc.Texas DIR Samsung 03/17/2014 08/07/2015 CDW•G was named to a new Contract. EMC Corporation TX DIR EMC 09/10/2014 09/10/2015 CDW•G was named to a new Contract. Epson America, Inc.TX DIR Epson Projectors 03/29/2013 12/07/2015 Epson has renewed and is working with DIR to update site soon Panasonic Computer Solutions Company TX DIR Panasonic 12/20/2013 12/20/2015 Not technically expired but we are still awaiting renewal Lenovo (United States) Inc.TX DIR Lenovo 12/28/2012 12/28/2015 CDW•G was named to a new Contract. City of Richmond Department of Procurement Services Richmond Information Technology Supply Schedule 04/16/2008 04/30/2014 CDW•G was named to a new Contract. Virginia Information Technologies Agency VITA Statewide Printer Wide Format Device 10/29/2010 04/30/2013 Contract expired and was not renewed. There was no replacement RFP. Virginia Information Technologies Agency VITA Hardware and Maintenance Contract 02/06/2009 03/31/2014 CDW•G was named to a new Contract. Virginia Information Technologies Agency VITA Software License Contract 02/06/2009 03/31/2014 CDW•G was named to a new Contract. Virginia Information Technologies Agency VITA Server and Maintenance Contract 01/11/2010 03/31/2014 Contract expired and was not renewed. There was no replacement RFP. Virginia Information Technologies Agency VITA Storage 01/13/2011 11/29/2016 Contract was extended until 2016. State of Vermont VT Computer Peripherals 10/12/2011 09/30/2015 Contract expired. No reason on file for why this was not renewed. Wisconsin Department of Administration, Bureau of Procurement Wisconsin Microcomputer Software Contact 09/01/2005 02/28/2013 CDW•G was named to a new Contract. Wisconsin Department of Administration, Bureau of Procurement Wisconsin Microcomputer Software Contact 09/01/2010 08/31/2015 CDW•G was named to a new Contract. Hewlett- Packard Company HP WSCA Data Communications 04/29/2010 05/31/2014 CDW•G was named to a new Contract. Extreme Networks, Inc.Extreme WSCA 08/14/2009 05/31/2014 CDW•G was named to a new Contract. Extreme Networks, Inc.Alaska Extreme WSCA 03/15/2011 05/31/2014 CDW•G was named to a new Contract. Cisco Systems, Inc.California WSCA Cisco 05/23/2008 05/31/2014 CDW•G was named to a new Contract. Hewlett- Packard Company California HP WSCA Data Communications 04/29/2010 05/31/2014 CDW•G was named to a new Contract. Hewlett- Packard Company Colorado HP WSCA Data Communications 04/29/2010 05/31/2014 CDW•G was named to a new Contract. Extreme Networks, Inc.Colorado Extreme WSCA 03/15/2011 05/31/2014 CDW•G was named to a new Contract. Hewlett- Packard Company Hawaii HP WSCA Data Communications 04/29/2010 05/31/2014 CDW•G was named to a new Contract. Cisco Systems, Inc.Iowa WSCA Cisco 08/14/2009 05/31/2014 CDW•G was named to a new Contract. Extreme Networks, Inc.Iowa Extreme WSCA 10/24/2011 05/31/2014 CDW•G was named to a new Contract. Extreme Networks, Inc.Kansas Extreme WSCA 10/24/2011 05/31/2014 CDW•G was named to a new Contract. Cisco Systems, Inc.Kentucky Cisco WSCA 08/01/2011 05/31/2014 CDW•G was named to a new Contract. Cisco Systems, Inc.Louisiana Cisco WSCA 10/23/2012 05/31/2014 CDW•G was named to a new Contract. Cisco Systems, Inc.Michigan Cisco WSCA 05/02/2012 05/31/2014 CDW•G was named to a new Contract. Hewlett- Packard Company Minnesota HP WSCA Data Communications 04/29/2010 05/31/2014 CDW•G was named to a new Contract. Cisco Systems, Inc.New Jersey Cisco WSCA 04/21/2009 05/31/2014 CDW•G was named to a new Contract. Hewlett- Packard Company New Jersey HP WSCA Data Communications 04/29/2010 05/31/2014 CDW•G was named to a new Contract. Extreme Networks, Inc.Nevada Extreme WSCA 08/14/2009 05/31/2014 CDW•G was named to a new Contract. Cisco Systems, Inc.Nevada Cisco WSCA 05/13/2013 05/31/2014 CDW•G was named to a new Contract. Cisco Systems, Inc.Oregon Cisco WSCA 09/01/2009 05/31/2014 CDW•G was named to a new Contract. Extreme Networks, Inc.South Dakota Extreme WSCA 10/24/2011 05/31/2014 CDW•G was named to a new Contract. Hewlett- Packard Company Utah HP WSCA Data Communications 04/29/2010 05/31/2014 CDW•G was named to a new Contract. Cisco Systems, Inc.Washington Cisco WSCA NASPO 02/08/2010 05/31/2014 CDW•G was named to a new Contract. Hewlett- Packard Company Washington HP WSCA Data Communications 04/29/2010 05/31/2014 CDW•G was named to a new Contract. Extreme Networks, Inc.Washington Extreme WSCA 10/24/2011 05/31/2014 CDW•G was named to a new Contract. Cisco Systems, Inc.Wisconsin Cisco WSCA 09/22/2010 05/31/2014 CDW•G was named to a new Contract. Extreme Networks, Inc.California Extreme WSCA 03/15/2011 08/31/2014 CDW•G was named to a new Contract. EMC Corporation Colorado EMC WSCA 10/09/2009 08/31/2014 CDW•G was named to a new Contract. Extreme Networks, Inc.Missouri Extreme WSCA 10/24/2011 08/31/2014 CDW•G was named to a new Contract. Panasonic Systems Communications Company South Carolina Panasonic WSCA NASPO 12/28/2011 08/31/2014 CDW•G was named to a new Contract. Lexmark International, Inc.South Carolina Lexmark WSCA NASPO 09/01/2009 08/31/2014 Lexmark did not sign a new contract. Lexmark International, Inc.South Dakota Lexmark WSCA NASPO 09/01/2009 08/31/2014 Lexmark did not sign a new contract. Lexmark International, Inc.Utah Lexmark WSCA NASPO 09/01/2009 08/31/2014 Lexmark did not sign a new contract. Extreme Networks, Inc.Utah Extreme WSCA 10/24/2011 08/31/2014 CDW•G was named to a new Contract. Lexmark International, Inc.Washington Lexmark WSCA NASPO 09/01/2009 08/31/2014 Lexmark did not sign a new contract. Lexmark International, Inc.Wisconsin Lexmark WSCA NASPO 09/01/2009 08/31/2014 Lexmark did not sign a new contract. EMC Corporation Connecticut EMC WSCA 09/01/2009 12/31/2014 CDW•G was named to a new Contract. NetApp, Inc.Georgia NetApp WSCA 10/20/2010 12/31/2014 CDW•G was named to a new Contract. NetApp, Inc.Minnesota NetApp WSCA 03/29/2012 12/31/2014 CDW•G was named to a new Contract. Lenovo (United States) Inc.Ohio Lenovo WSCA NASPO 09/01/2009 12/31/2014 CDW•G was named to a new Contract. EMC Corporation Rhode Island EMC WSCA 09/01/2009 12/31/2014 CDW•G was named to a new Contract. NetApp, Inc.NetApp WSCA NASPO 09/01/2009 03/31/2015 CDW•G was named to a new Contract. NetApp, Inc.Arizona NetApp WSCA 09/08/2010 03/31/2015 CDW•G was named to a new Contract. EMC Corporation Florida EMC NVP Computer Equipment 11/30/2015 03/31/2015 CDW•G was named to a new Contract. NetApp, Inc.Idaho NetApp WSCA 01/13/2011 03/31/2015 CDW•G was named to a new Contract. Hewlett Packard Company Alaska HP WSCA NASPO 06/04/2013 06/30/2015 CDW•G was named to a new Contract. Hewlett Packard Company Delaware HP WSCA NASPO 06/13/2012 06/30/2015 CDW•G was named to a new Contract. Fujitsu America, Inc.Idaho Fujitsu WSCA NASPO 11/08/2010 06/30/2015 CDW•G was named to a new Contract. Lenovo (United States) Inc.Lenovo WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract. Panasonic Systems Communications Company Panasonic WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract. EMC Corporation EMC WSCA/NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract. Lexmark International, Inc.Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract. Hewlett Packard Company HP WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract. Fujitsu America, Inc.Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract. Ricoh Americas Corporation Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract. Xerox Corporation Xerox WSCA NASPO 03/01/2011 09/30/2015 Xerox did not sign a new contract. Lenovo (United States) Inc.Alaska Lenovo WSCA NASPO 06/30/2010 09/30/2015 CDW•G was named to a new Contract. Panasonic Systems Communications Company Alaska Panasonic WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract. EMC Corporation Alaska EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract. Ricoh Americas Corporation Alaska Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract. Lexmark International, Inc.Alaska Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract. Panasonic Systems Communications Company Arkansas Panasonic WSCA NASPO 11/23/2011 09/30/2015 CDW•G was named to a new Contract. NetApp, Inc.Arkansas NetApp WSCA 03/29/2012 09/30/2015 CDW•G was named to a new Contract. Hewlett Packard Company Arkansas HP WSCA NASPO 11/11/2013 09/30/2015 CDW•G was named to a new Contract. Ricoh Americas Corporation Arizona Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract. Lenovo (United States) Inc.California Lenovo WSCA NASPO 08/22/2011 09/30/2015 CDW•G was named to a new Contract. EMC Corporation California EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract. NetApp, Inc.California NetApp WSCA 10/13/2010 09/30/2015 CDW•G was named to a new Contract. Ricoh Americas Corporation California Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract. Lexmark International, Inc.California Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract. Fujitsu America, Inc.California Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract. Hewlett Packard Company California HP WSCA NASPO 05/09/2013 09/30/2015 CDW•G was named to a new Contract. Lenovo (United States) Inc.Colorado Lenovo WSCA NASPO 07/17/2012 09/30/2015 CDW•G was named to a new Contract. Panasonic Systems Communications Company Colorado Panasonic WSCA NASPO 08/01/2009 09/30/2015 CDW•G was named to a new Contract. NetApp, Inc.Colorado NetApp WSCA 09/08/2010 09/30/2015 CDW•G was named to a new Contract. Lexmark International, Inc.Colorado Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract. Fujitsu America, Inc.Colorado Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract. Hewlett Packard Company Colorado HP WSCA NASPO 06/04/2013 09/30/2015 CDW•G was named to a new Contract. Lenovo (United States) Inc.Delaware Lenovo WSCA NASPO 11/22/2010 09/30/2015 CDW•G was named to a new Contract. Panasonic Systems Communications Company Delaware Panasonic WSCA NASPO 09/02/2009 09/30/2015 CDW•G was named to a new Contract. EMC Corporation Delaware EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract. NetApp, Inc.Delaware NetApp WSCA 01/13/2011 09/30/2015 CDW•G was named to a new Contract. Ricoh Americas Corporation Delaware Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract. Fujitsu America, Inc.Delaware Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract. Lenovo (United States) Inc.Florida Lenovo WSCA NASPO 06/01/2012 09/30/2015 CDW•G was named to a new Contract. Panasonic Systems Communications Company Florida Panasonic WSCA NASPO 06/14/2012 09/30/2015 CDW•G was named to a new Contract. Hewlett Packard Company Florida HP WSCA NASPO 08/30/2013 09/30/2015 CDW•G was named to a new Contract. Fujitsu America, Inc.Florida Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract. EMC Corporation Florida EMC WSCA 01/27/2015 09/30/2015 CDW•G was named to a new Contract. NetApp, Inc.Florida NetApp WSCA 03/09/2015 09/30/2015 CDW•G was named to a new Contract. EMC Corporation Georgia EMC WSCA 11/01/2010 09/30/2015 CDW•G was named to a new Contract. NetApp, Inc.Georgia NetApp WSCA 02/28/2013 09/30/2015 CDW•G was named to a new Contract. Ricoh Americas Corporation Hawaii Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract. Lenovo (United States) Inc.Iowa Lenovo WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract. Panasonic Systems Communications Company Iowa Panasonic WSCA NASPO 05/04/2010 09/30/2015 CDW•G was named to a new Contract. EMC Corporation Iowa EMC WSCA 11/03/2010 09/30/2015 CDW•G was named to a new Contract. NetApp, Inc.Iowa NetApp WSCA 09/28/2010 09/30/2015 CDW•G was named to a new Contract. Lexmark International, Inc.Iowa Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract. Fujitsu America, Inc.Iowa Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract. Panasonic Systems Communications Company Idaho Panasonic WSCA NASPO 08/31/2009 09/30/2015 CDW•G was named to a new Contract. Lenovo (United States) Inc.Kansas Lenovo WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract. Lexmark International, Inc.Kansas Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract. Fujitsu America, Inc.Kansas Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract. Lenovo (United States) Inc.Louisiana Lenovo WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract. EMC Corporation Louisiana EMC WSCA 12/13/2010 09/30/2015 CDW•G was named to a new Contract. NetApp, Inc.Louisiana NetApp WSCA 04/18/2011 09/30/2015 CDW•G was named to a new Contract. Lexmark International, Inc.Louisiana Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract. Hewlett Packard Company Louisiana HP WSCA NASPO 06/05/2013 09/30/2015 CDW•G was named to a new Contract. Lenovo (United States) Inc.Missouri Lenovo WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract. Panasonic Systems Communications Company Missouri Panasonic WSCA NASPO 08/28/2009 09/30/2015 CDW•G was named to a new Contract. EMC Corporation Missouri EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract. NetApp, Inc.Missouri NetApp WSCA 03/29/2012 09/30/2015 CDW•G was named to a new Contract. Lexmark International, Inc.Missouri Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract. Fujitsu America, Inc.Missouri Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract. Ricoh Americas Corporation Missouri Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract. Lenovo (United States) Inc.Montana Lenovo WSCA NASPO 09/01/2008 09/30/2015 CDW•G was named to a new Contract. Panasonic Systems Communications Company Montana Panasonic WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract. EMC Corporation Montana EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract. NetApp, Inc.Montana NetApp WSCA 03/29/2012 09/30/2015 CDW•G was named to a new Contract. Ricoh Americas Corporation Montana Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract. Lexmark International, Inc.Montana Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract. Hewlett Packard Company Montana HP WSCA NASPO 06/04/2013 09/30/2015 CDW•G was named to a new Contract. Lenovo (United States) Inc.North Dakota Lenovo WSCA NASPO 12/09/2010 09/30/2015 CDW•G was named to a new Contract. Panasonic Systems Communications Company North Dakota Panasonic WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract. Lexmark International, Inc.North Dakota Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract. EMC Corporation North Dakota EMC WSCA 05/10/2013 09/30/2015 CDW•G was named to a new Contract. Panasonic Systems Communications Company Nebraska Panasonic WSCA NASPO 12/28/2011 09/30/2015 CDW•G was named to a new Contract. NetApp, Inc.Nebraska NetApp WSCA 01/11/2012 09/30/2015 CDW•G was named to a new Contract. EMC Corporation Nebraska EMC WSCA 10/01/2012 09/30/2015 CDW•G was named to a new Contract. Panasonic Systems Communications Company New Jersey Panasonic WSCA NASPO 02/10/2010 09/30/2015 CDW•G was named to a new Contract. EMC Corporation New Jersey EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract. NetApp, Inc.New Jersey NetApp WSCA 03/23/2011 09/30/2015 CDW•G was named to a new Contract. Xerox Corporation New Jersey Xerox WSCA 02/23/2011 09/30/2015 Xerox did not sign a new contract. Hewlett Packard Company New Jersey HP WSCA NASPO 11/16/2011 09/30/2015 CDW•G was named to a new Contract. Lexmark International, Inc.New Jersey Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract. Ricoh Americas Corporation New Mexico Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract. Panasonic Systems Communications Company Nevada Panasonic WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract. EMC Corporation Nevada EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract. NetApp, Inc.Nevada NetApp WSCA 03/29/2012 09/30/2015 CDW•G was named to a new Contract. Ricoh Americas Corporation Nevada Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract. Lexmark International, Inc.Nevada Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract. Fujitsu America, Inc.Nevada Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract. Hewlett Packard Company Ohio HP WSCA NASPO 11/16/2011 09/30/2015 CDW•G was named to a new Contract. Panasonic Systems Communications Company Oklahoma Panasonic WSCA NASPO 06/14/2012 09/30/2015 CDW•G was named to a new Contract. Hewlett Packard Company OR PC Peripherals Agreement 07/01/2010 09/30/2015 CDW•G was named to a new Contract. Panasonic Systems Communications Company Oregon Panasonic WSCA NASPO 07/31/2009 09/30/2015 CDW•G was named to a new Contract. EMC Corporation Oregon EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract. NetApp, Inc.Oregon NetApp WSCA 03/29/2012 09/30/2015 CDW•G was named to a new Contract. Xerox Corporation Oregon Xerox WSCA 03/01/2011 09/30/2015 Xerox did not sign a new contract. Hewlett Packard Company Oregon HP WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract. Lexmark International, Inc.Oregon Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract. Panasonic Systems Communications Company South Dakota Panasonic WSCA NASPO 11/23/2011 09/30/2015 CDW•G was named to a new Contract. EMC Corporation South Dakota EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract. Fujitsu America, Inc.South Dakota Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract. NetApp, Inc.South Dakota NetApp WSCA 03/29/2012 09/30/2015 CDW•G was named to a new Contract. EMC Corporation Tennessee EMC WSCA 03/22/2013 09/30/2015 CDW•G was named to a new Contract. Panasonic Systems Communications Company Utah Panasonic WSCA NASPO 06/14/2012 09/30/2015 CDW•G was named to a new Contract. EMC Corporation Utah EMC WSCA 09/01/2010 09/30/2015 CDW•G was named to a new Contract. NetApp, Inc.Utah NetApp WSCA 06/30/2010 09/30/2015 CDW•G was named to a new Contract. Hewlett Packard Company Utah HP WSCA NASPO 06/04/2013 09/30/2015 CDW•G was named to a new Contract. Hewlett Packard Company Vermont HP WSCA NASPO 06/13/2012 09/30/2015 CDW•G was named to a new Contract. Panasonic Systems Communications Company Vermont Panasonic WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract. EMC Corporation Vermont EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract. Ricoh Americas Corporation Vermont Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract. Fujitsu America, Inc.Vermont Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract. Panasonic Systems Communications Company Washington Panasonic WSCA NASPO 08/10/2011 09/30/2015 CDW•G was named to a new Contract. NetApp, Inc.Washington NetApp WSCA 09/28/2010 09/30/2015 CDW•G was named to a new Contract. Xerox Corporation Washington Xerox WSCA 04/25/2011 09/30/2015 Xerox did not sign a new contract. EMC Corporation Washington EMC WSCA 09/02/2009 09/30/2015 CDW•G was named to a new Contract. Fujitsu America, Inc.Washington Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract. Hewlett Packard Company Washington HP WSCA NASPO 06/26/2013 09/30/2015 CDW•G was named to a new Contract. Panasonic Systems Communications Company Wisconsin Panasonic WSCA NASPO 12/28/2011 09/30/2015 CDW•G was named to a new Contract. EMC Corporation Wisconsin EMC WSCA 09/02/2009 09/30/2015 CDW•G was named to a new Contract. NetApp, Inc.Wisconsin NetApp WSCA 03/29/2012 09/30/2015 CDW•G was named to a new Contract. Ricoh Americas Corporation Wisconsin Ricoh WSCA NASPO 05/21/2010 09/30/2015 CDW•G was named to a new Contract. Fujitsu America, Inc.Wisconsin Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract. NetApp, Inc.West Virginia NetApp WSCA 03/29/2012 09/30/2015 CDW•G was named to a new Contract. EMC Corporation Wyoming EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract. West Virginia Department of Administration Purchasing Division West Virgina Personal Computers and Peripherals Blanket Order 05/01/2008 06/30/2013 Contract expired and was not renewed. There was no replacement RFP. Wyoming Game and Fish Dept Wyoming Game and Fish Dept. GPS Units 09/02/2011 06/30/2014 Contract expired. No reason on file for why this was not renewed. Samaritan Health Services Master Service Sales Agreement 03/28/2012 03/27/2014 Contract expired. No reason on file for why this was not renewed. Brocade Communications Systems, Inc.Alaska Brocade WSCA Data Communications 11/01/2012 05/31/2014 CDW•G was named to a new Contract. Brocade Communications Systems, Inc.California Brocade WSCA Data Communications 11/02/2012 05/31/2014 CDW•G was named to a new Contract. Brocade Communications Systems, Inc.Delaware Brocade WSCA Data Communications 11/01/2012 05/31/2014 CDW•G was named to a new Contract. Brocade Communications Systems, Inc.Washington Brocade WSCA Data Communications 11/01/2012 05/31/2014 CDW•G was named to a new Contract. Brocade Communications Systems, Inc.Brocade WSCA Data Communications 11/01/2012 08/31/2014 CDW•G was named to a new Contract. Brocade Communications Systems, Inc.Colorado Brocade WSCA Data Communications 11/01/2012 08/31/2014 CDW•G was named to a new Contract. Brocade Communications Systems, Inc.Hawaii Brocade WSCA Data Communications 03/21/2013 08/31/2014 CDW•G was named to a new Contract. Brocade Communications Systems, Inc.Missouri Brocade WSCA Data Communications 11/01/2012 08/31/2014 CDW•G was named to a new Contract. Brocade Communications Systems, Inc.New Jersey Brocade WSCA Data Communications 11/01/2012 08/31/2014 CDW•G was named to a new Contract. Brocade Communications Systems, Inc.Utah Brocade WSCA Data Communications 11/01/2012 08/31/2014 CDW•G was named to a new Contract. Onondaga- Cortland DATA COMMUNICATIONS EQUIPMENT 11/01/2013 10/31/2014 Contract expired. No reason on file for why this was not renewed. Harris County Harris County Virtualization Software Upgrade 10/28/2014 10/27/2015 CDW•G was named to a new Contract. Technical College System of Georgia CISCO Unified Communications Products 04/14/2010 04/13/2013 Unknown reason Ohio Wesleyan University Master Product Sales Agreement 06/21/2010 06/20/2013 Customer is using other contarcts CDW holds University of Minnesota Electronic Commerce Agreement between the University of Minneso 11/15/2008 06/30/2013 New Contract was awarded to CDW City of Tucson Department of Procurement-EXPIRED National IPA Technology Solutions 03/01/2009 08/18/2013 New Contract was awarded to CDW Paine College Master Product Sales Agreement 09/14/2011 09/14/2013 Not Enough contract spend so Agreement was not extended Massachusetts Higher Education Consortium Massachusetts Consortium Contract - Multi-Media Equipment MC10 11/01/2010 09/30/2013 New Contract was awarded to CDW University of Tennssee Microcomputers University of Tennessee 10/01/2008 09/30/2013 CDW was not awarded a new agreement University of Kentucky Cisco Networking Products and Services 03/08/2010 03/09/2014 Unknown reason Toccoa Falls College Managed Print Services 04/13/2011 04/13/2014 Not Enough contract spend so Agreement was not extended University of New Mexico Agreement between University of New Mexico and CDWG for techn 04/17/2006 04/16/2014 Unknown reason Morehouse School of Medicine Master Product Sales Agreement 04/22/2013 04/22/2014 Agreement was not renewed as they became a member of a co-op York College of Pennsylvania York College of Pennsylvania Product Purchase Agreement 09/12/2008 05/20/2014 Spend was not high enough to extend Universal Technical Institute Master Product Sales Agreement between CDW Government LLC an 06/07/2010 06/07/2014 Unknown reason Massachusetts Higher Education Consortium MHEC Contract #F04, Software 07/01/2012 06/30/2014 New Contract was awarded to CDW•G University of Connecticut Invitation to Bid Document B991910-G Network and Security Hardwa 07/10/2009 06/30/2014 Unknown reason University of Connecticut Network and Security Software 06/16/2010 06/30/2014 Unknown reason Massachusetts Higher Education Consortium MHEC Contract #04, Software 07/01/2010 06/30/2014 New Contract was awarded to CDW•G Stratford University MPSA between Stratford University and CDWG 07/13/2010 07/13/2014 Unknown reason Illinois Valley Community College Managed Print Services Agreement 08/04/2009 08/03/2014 Agreement was not renewed as they use other agreements Bay De Noc Community College Managed Print Services 08/19/2009 08/18/2014 Not Enough contract spend so Agreement was not extended Barry University Master Product Sales Agreement 08/22/2011 08/21/2014 Agreement was not renewed as they became a member of a co-op Eastern Illinois University Product Sales and Service Projects Agreement 04/15/2013 04/14/2015 Agreement was not renewed customer uses oterh agreements instead Massachusetts Higher Education Consortium MHEC Contract #F05, Technology 08/06/2011 07/31/2015 New Contract was awarded to CDW•G Broome-Tioga BOCES Broome-Tioga BOCES AV and Related Technology Equipment 01/16/2014 01/15/2015 Unknown reason City of Hartford - Hartford Public Schools City of Hartford - Hartford Public Schools Desktop, Laptop, Tablet Devices, Servers, Deployment/Other Technical Services, Device Parts/Peripherals, and Software Licensing 11/19/2012 08/31/2013 Rebid and CDWG was awarded a new contract Clarkstown Central School District Clarkstown Central School District Chromebooks (as needed)01/24/2014 01/23/2014 Unknown reason Eastern Suffolk BOCES Eastern Suffolk BOCES Wireless Tablets and Notebooks 01/01/2014 11/30/2014 Unknown reason Nassau BOCES Nassau BOCES Computer Hardware, Software, Networking Supplies 01/30/2014 01/29/2015 Unknown reason Nassau BOCES Nassau BOCES NASSAU BOCES iPad Cases 05/01/2014 08/09/2015 Unknown reason New York City Department of Education New York City Department of Education A/V Equipment 11/06/2008 01/31/2014 Rebid and CDWG was awarded a new contract New York City Department of Education New York City Department of Education Interactive Whiteboard 11/06/2008 06/30/2013 Rebid and CDWG was awarded a new contract New York City Department of Education New York City Department of Education Printers, Software, Peripherals, Accessories & Related Services 04/01/2012 03/31/2015 Rebid and CDWG was awarded a new contract Onondaga-Cortland-Madison Board of Cooperative Educational Serv Onondaga-Cortland-Madison Board of Cooperative Educational Services DATA COMMUNICATIONS EQUIPMENT 11/01/2014 11/02/2015 Unknown reason Onondaga-Cortland-Madison Board of Cooperative Educational Serv Onondaga-Cortland-Madison Board of Cooperative Educational Services COMPUTER PERIPHERALS 04/04/2014 03/31/2015 Unknown reason Onondaga-Cortland-Madison Board of Cooperative Educational Serv Onondaga-Cortland-Madison Board of Cooperative Educational Services Computers, Storage Systems, Accessories and Replacement Parts 04/04/2014 03/31/2015 Unknown reason Onondaga-Cortland-Madison Board of Cooperative Educational Serv Onondaga-Cortland-Madison Board of Cooperative Educational Services (BOCES) OCM Data Communications Equip RFB-215-20 11/01/2014 11/02/2015 Unknown reason Orange Ulster BOCES Orange Ulster BOCES Google Chromebooks 10/19/2013 10/18/2014 Unknown reason Patchogue Medford Schools Patchogue Medford Schools AV Supply Bid 03/27/2015 06/30/2015 Unknown reason PEPPM PEPPM General Hardware & Software / Remanufacturered Toner & Ink Cartridges 01/01/2010 12/31/2013 Rebid and CDWG was awarded a new contract PEPPM PEPPM General Hardware and Software 04/21/2011 12/31/2014 Rebid and CDWG was awarded a new contract Southern Westchester Board of Cooperative Educational Services Southern Westchester Board of Cooperative Educational Services Chromebooks 01/17/2013 06/30/2014 Rebid and CDWG was awarded a new contract Southern Westchester Board of Cooperative Educational Services Southern Westchester Board of Cooperative Educational Services Misc. Printers 07/11/2013 12/31/2014 Unknown reason Southern Westchester Board of Cooperative Educational Services Southern Westchester Board of Cooperative Educational Services Microcomputer Hardware 09/05/2014 06/30/2015 Unknown reason Southern Westchester Board of Cooperative Educational Services Southern Westchester Board of Cooperative Educational Services Southern Westchester BOCES AV Pricing 09/01/2014 09/01/2015 Unknown reason Southern Westchester Board of Cooperative Educational Services Southern Westchester Board of Cooperative Educational Services Southern Westchester BOCES Chromebook & Google Software 07/10/2014 07/01/2015 Unknown reason Ulster County BOCES Ulster County BOCES Chromebook & Chromebox 12/20/2012 08/31/2014 Unknown reason Western Suffolk BOCES Western Suffolk BOCES Printer & Toner Cartidges 07/01/2013 06/30/2014 Unknown reason Western Suffolk BOCES Western Suffolk BOCES Samsung Series 3 Chromebook/Google MGT License & config services 01/01/2013 12/30/2013 Unknown reason Western Suffolk BOCES Western Suffolk BOCES Professional Days for Computer Network Support LAN/WAN 07/01/2013 06/30/2014 Unknown reason UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2013 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-35985 CDW CORPORATION (Exact name of registrant as specified in its charter) Delaware 26-0273989 (State or other jurisdiction ofincorporation or organization)(I.R.S. EmployerIdentification No.) 200 N. Milwaukee AvenueVernon Hills, Illinois 60061 (Address of principal executive offices)(Zip Code) (847) 465-6000 (Registrant’s telephone number, including area code) None (Former name, former address and former fiscal year, if changed since last report) ____________________________________________ Securities registered pursuant to Section 12(b) of the Act: Title of each class:Name of each exchange on which registered Common stock, par value $0.01 per share NASDAQ Global Select Market Securities registered pursuant to Section 12(g) of the Act: None ____________________________________________ Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10- K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one): Large accelerated filer Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company)Smaller reporting company Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No Table of Contents The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 28, 2013, the last business day of the registrant’s most recently completed second fiscal quarter, was $654,984,661, based on the per share closing sale price of $18.62 on that date (assuming the closing of the registrant's initial public offering). As of February 28, 2014, there were 171,954,277 shares of common stock, $0.01 par value, outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive proxy statement for use in connection with its 2014 Annual Meeting of Shareholders, to be filed not later than 120 days after December 31, 2013, are incorporated by reference into Part III of this report. Table of Contents 2 CDW CORPORATION AND SUBSIDIARIES ANNUAL REPORT ON FORM 10-K Year Ended December 31, 2013 TABLE OF CONTENTS Item Page PART I Item 1. Item 1A. Item 1B. Item 2. Item 3. Item 4. PART II Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 9A. Item 9B. PART III Item 10. Item 11. Item 12. Item 13. Item 14. PART IV Item 15. SIGNATURES Business 4 Risk Factors 9 Unresolved Staff Comments 20 Properties 20 Legal Proceedings 21 Mine Safety Disclosures 21 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 24 Selected Financial Data 26 Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Quantitative and Qualitative Disclosures About Market Risk 60 Financial Statements and Supplementary Data 61 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 109 Controls and Procedures 109 Other Information 111 Directors, Executive Officers and Corporate Governance 112 Executive Compensation 112 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 112 Certain Relationships and Related Transactions, and Director Independence 112 Principal Accountant Fees and Services 112 Exhibits and Financial Statement Schedules 113 114 3 FORWARD-LOOKING STATEMENTS This report contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact included in this report are forward-looking statements. These statements relate to analyses and other information, which are based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to our future prospects, developments and business strategies. We claim the protection of The Private Securities Litigation Reform Act of 1995 for all forward-looking statements in this report. These forward-looking statements are identified by the use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will” and similar terms and phrases, including references to assumptions. However, these words are not the exclusive means of identifying such statements. Although we believe that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot assure you that we will achieve those plans, intentions or expectations. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected. Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under the section entitled “Risk Factors” included elsewhere in this report. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements contained in the section entitled “Risk Factors” included elsewhere in this report as well as other cautionary statements that are made from time to time in our other Securities and Exchange Commission ("SEC") filings and public communications. You should evaluate all forward-looking statements made in this report in the context of these risks and uncertainties. We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this report are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. Table of Contents 4 PART I Item 1. Business Our Company CDW is a Fortune 500 company and a leading provider of integrated information technology (“IT”) solutions in the U.S. and Canada. We help our customer base of approximately 250,000 small, medium and large business, government, education and healthcare customers by delivering critical solutions to their increasingly complex IT needs. Our broad array of offerings ranges from discrete hardware and software products to integrated IT solutions such as mobility, security, data center optimization, cloud computing, virtualization and collaboration. We are technology "agnostic," with a product portfolio that includes more than 100,000 products from more than 1,000 brands. We provide our products and solutions through sales force and service delivery teams consisting of more than 4,400 coworkers, including nearly 1,800 field sellers, highly-skilled technology specialists and advanced service delivery engineers. We are a leading U.S. sales channel partner for many original equipment manufacturers (“OEMs”) and software publishers (collectively, our “vendor partners”), whose products we sell or include in the solutions we offer. We believe we are an important extension of our vendor partners' sales and marketing capabilities, providing them with a cost-effective way to reach customers and deliver a consistent brand experience through our established end-market coverage and extensive customer access. We provide value to our customers by simplifying the complexities of technology across design, selection, procurement, integration and management. Our goal is to have our customers, regardless of their size, view us as an indispensable extension of their IT staffs. We seek to achieve this goal by providing our customers with superior service through our large and experienced sales force and service delivery teams. Our multi-brand offering approach enables us to identify the products or combination of products that best address each customer's specific organizational IT requirements and to evolve our offerings as new technologies develop. We believe we offer the following value proposition to our customers and our vendor partners: Our value proposition to our customers Our value proposition to our vendor partners Broad selection of products and multi-branded IT solutions Value-added services with integration capabilities Highly-skilled specialists and engineers Solutions across a very broad IT landscape Access to approximately 250,000 customers throughout the U.S. and Canada Large and established customer channels Strong distribution and implementation capabilities Value-added solutions and marketing programs that generate end-user demand Our customers include private sector businesses that typically employ fewer than 5,000 employees, government agencies and educational and healthcare institutions. We serve our customers through channel-specific sales teams and service delivery teams with extensive technical skills and knowledge of the specific markets they serve. This market segmentation allows us to customize our offerings and to provide enhanced expertise in designing and implementing IT solutions for our customers. We currently have five dedicated customer channels: medium/large business, small business, government, education and healthcare, each of which generated over $1 billion in net sales in 2013. The scale and diversity of our customer channels provide us with multiple avenues for growth and a balanced customer base to weather economic and technology cycles. Table of Contents 5 The following table provides information regarding our reportable segments and our customer channels: Corporate Segment Public Segment CustomerChannels Medium/LargeBusiness SmallBusiness Government Education Healthcare Other TargetCustomers 100 - 5,000employees 10 - 100employees Various federal,state and localagencies Highereducationand K-12 Hospitals,ambulatory serviceproviders and long-term care facilities Advanced services customers plus Canada 2013 Net Sales (in billions) $4.9 $1.1 $1.3 $1.4 $1.5 $0.6 For further information on our segments, including financial results, see Note 16 to the accompanying audited consolidated financial statements included elsewhere in this report. We offer more than 1,000 brands, from well-established companies such as APC, Apple, Cisco, EMC, Hewlett- Packard, IBM, Lenovo, Microsoft, NetApp, Symantec and VMware to emerging vendor partners such as Drobo, Fusion-io, Meraki, Nimble Storage, Salesforce.com, Sophos and Splunk. In 2013, we generated over $1 billion of revenue for each of four of our vendor partners and over $100 million of revenue for each of 11 other vendor partners. We have received the highest level of certification from major vendor partners such as Cisco, EMC and Microsoft, which reflects the extensive product and solution knowledge and capabilities that we bring to our customers' IT challenges. These certifications also provide us with access to favorable pricing, tools and resources, including vendor incentive programs, which we use to provide additional value to our customers. Our vendor partners also regularly recognize us with top awards and select us to develop and grow new customer solutions. History CDW was founded in 1984. In 2003, we purchased selected U.S. assets and the Canadian operations of Micro Warehouse, which extended our growth platform into Canada. In 2006, we acquired Berbee Information Networks Corporation, a regional provider of technology products, solutions and customized engineering services in advanced technologies primarily across Cisco, IBM and Microsoft portfolios. This acquisition increased our capabilities in customized engineering services and managed services. On October 12, 2007, CDW Corporation, an Illinois corporation, was acquired through a merger transaction by an entity controlled by investment funds affiliated with Madison Dearborn Partners, LLC and Providence Equity Partners L.L.C. (the “Acquisition”). CDW Corporation continued as the surviving corporation and same legal entity after the Acquisition, but became a wholly owned subsidiary of VH Holdings, Inc., a Delaware corporation. On December 31, 2009, CDW Corporation merged into CDWC LLC, an Illinois limited liability company owned by VH Holdings, Inc., with CDWC LLC as the surviving entity. This change had no impact on our operations or management. On December 31, 2009, CDWC LLC was renamed CDW LLC (“CDW LLC”). On August 17, 2010, VH Holdings, Inc. was renamed CDW Corporation (“Parent”), a Delaware corporation. Throughout this report, the terms “the Company” and “CDW” refer to Parent and its 100% owned subsidiaries subsequent to the Acquisition. Parent was previously owned directly by CDW Holdings LLC ("CDW Holdings"), a company controlled by investment funds affiliated with Madison Dearborn Partners, LLC and Providence Equity Partners L.L.C. (the "Sponsors"), certain other co-investors and certain members of CDW management. See "Sponsors" below. On July 2, 2013, Parent completed an initial public offering ("IPO") of its common stock. In connection with the IPO, CDW Holdings distributed all of its shares of Parent's common stock to its members in June 2013 in accordance with the members' respective membership interests and was subsequently dissolved in August 2013. See Note 9 to the accompanying audited consolidated financial statements included elsewhere in this report for additional discussion of the IPO. The Sponsors beneficially owned approximately 63.7% of our common stock as of December 31, 2013. Table of Contents 6 Our Market We operate in the U.S. and Canadian IT market, which is a large and growing market. According to IDC, the overall U.S. IT market generated approximately $660 billion in sales in 2013. We believe our addressable market in the U.S. in the indirect sales channel represents more than $200 billion in annual sales and for the year ended December 31, 2013, our U.S. net sales of $10.3 billion represented approximately 5% of that highly diverse and fragmented market. According to IDC, the overall Canadian IT market generated more than $50 billion in sales in 2013. We believe our addressable market in Canada in the indirect sales channel represents more than $10 billion in annual sales and for the year ended December 31, 2013, our net sales of $475 million in Canada represented approximately 4% of that market. We believe we have the largest market share in our addressable market, with our 2013 net sales exceeding the cumulative North American net sales of our four largest publicly traded sales channel competitors, based upon publicly available information for those companies. New technologies, including cloud, virtualization and mobility, coupled with the resulting increase in demand for data as well as aging infrastructure, are increasingly requiring businesses and institutions to seek integrated solutions to their IT needs. We expect this trend to continue for the foreseeable future, with end-user demand for business efficiency and productivity driving future IT spending growth. Our Offerings Our offerings range from discrete hardware and software products and services to complex integrated solutions that include one or more of these elements. We believe our customers increasingly view technology purchases as integrated solutions rather than discrete product and service categories and we estimate that approximately 51% of our net sales in 2013 came from sales of product categories and services typically associated with solutions. Our hardware products include notebooks/mobile devices (including tablets), network communications, enterprise and data storage, video monitors, printers, desktop computers and servers. Our software products include application suites, security, virtualization, operating systems, network management and Software as a Service (“SaaS”) offerings. We also provide a full suite of value-added-services, which range from basic installation, warranty and repair services to custom configuration, data center and network implementation services, as well as managed services that include Infrastructure as a Service (“IaaS”) offerings. We also offer a variety of integrated solutions, such as: • Mobility: We assist our customers with the selection, procurement and integration of mobile security software, hardware devices such as smartphones, tablets and notebooks, and cellular wireless activation systems. We also provide mobile device management applications with policy and security management capabilities across a variety of mobile operating systems and platforms. • Security: We assess our customers' security needs and provide them with threat prevention tools in order to protect their networks, servers and applications, such as anti-virus, anti-spam, content filtering, intrusion prevention, firewall and virtual private network services, and network access control. We also design and implement data loss prevention solutions, using data monitoring and encryption across a wide array of devices to ensure the security of customer information, personal employee information and research and development data. • Data Center Optimization: We help our customers evaluate their data centers for convergence and optimization opportunities. Our data center optimization solutions consist of server virtualization, physical server consolidation, data storage management and energy-efficient power and cooling systems. • Cloud Computing: Cloud computing is a combination of software and computing delivered on demand as a service. We provide SaaS and IaaS solutions that reside in the public cloud, meaning any person or organization interested in porting applications and resources to an external “public” cloud system can do so. Likewise, we provide similar private cloud-based solutions to our customers that prefer to avoid running their infrastructure on a shared public platform but want to obtain the flexibility, scalability and access offered by cloud computing and collaboration. • Virtualization: We design and implement server, storage and desktop virtualization solutions. Virtualization enables our customers to efficiently utilize hardware resources by running multiple, independent, virtual operating systems on a single computer and multiple virtual servers simultaneously on a single server. Virtualization also can separate a desktop environment and associated application software from the hardware device that is used to access it, and provides employees with remote desktop access. Our specialists assist customers with the steps of implementing virtualization solutions, including evaluating network environments, deploying shared storage options and licensing platform software. • Collaboration: We provide our customers with communication tools that allow employees to share knowledge, ideas and information among each other and with clients and partners effectively and quickly. Our collaboration solutions unite communications and applications via the integration of products that facilitate the use of Table of Contents 7 multiple enterprise communication methods including email, instant messaging, presence, social media, voice, video, hardware, software and services. We also host cloud-based collaboration solutions. While we believe customers increasingly view technology purchases as solutions rather than discrete product and service categories, the following table shows our net sales by major category, based upon our internal category classifications. Year Ended December 31, 2013 Year Ended December 31, 2012(1)Year Ended December 31, 2011(1) Dollars inMillions Percentageof Total Net Sales Dollars inMillions Percentageof Total Net Sales Dollars inMillions Percentageof Total Net Sales Notebooks/Mobile Devices $1,706.0 15.8%$1,470.1 14.5%$1,336.9 13.9% NetComm Products 1,489.1 13.8 1,351.1 13.3 1,237.7 12.9 Enterprise and Data Storage(Including Drives)998.1 9.3 979.4 9.7 929.9 9.7 Other Hardware 4,173.3 38.8 4,068.8 40.2 3,988.3 41.5 Software 1,994.7 18.5 1,849.4 18.3 1,767.2 18.4 Services 327.1 3.0 284.6 2.8 254.3 2.6 Other (2)80.3 0.8 124.8 1.2 88.1 1.0 Total net sales $10,768.6 100.0%$10,128.2 100.0%$9,602.4 100.0% (1) Amounts have been reclassified for changes in individual product classifications to conform to the presentation for the year ended December 31, 2013. (2) Includes items such as delivery charges to customers and certain commission revenue. Our Customers We provide integrated IT solutions to approximately 250,000 small, medium and large business, government, education and healthcare customers throughout the U.S. and Canada. Sales to the U.S. federal government, which are diversified across multiple agencies and departments, collectively accounted for approximately 7%, 10% and 10% of total net sales in 2013, 2012 and 2011, respectively. However, there are several independent purchasing decision-makers across these agencies and departments. Excluding these sales to the federal government, we are not reliant on any one customer, as our next five largest customers cumulatively comprised approximately 3% of our net sales in 2013. Inventory Management We utilize our IT systems to manage our inventory in a cost-efficient manner, resulting in a rapid-turn inventory model. We generally only stock items that have attained a minimum sales volume. Our distribution process is highly automated. Once a customer order is received and credit approved, orders are automatically routed to one of our distribution centers for picking and shipping as well as configuration and imaging services. We operate two distribution centers: an approximately 450,000 square foot facility in Vernon Hills, Illinois, and an approximately 513,000 square foot facility in North Las Vegas, Nevada. We ship almost 35 million units annually on an aggregate basis from our two distribution centers. We believe that the location of our distribution centers allows us to efficiently ship products throughout the U.S. and provide timely access to our principal distributors. In addition, in the event of weather-related or other disruptions at one of our distribution centers, we are able to shift order processing and fulfillment from one center to the other quickly and efficiently, enabling us to continue to ship products in a timely manner. We believe that competitive sources of supply are available in substantially all of the product categories we offer. We continue to improve the productivity of our distribution centers as measured by key performance indicators such as units shipped per hour worked and bin accuracy. We also have drop-shipment arrangements with many of our OEMs and wholesale distributors, which permit us to offer products to our customers without having to take physical delivery at either of our distribution centers. These arrangements generally represent approximately 40% to 50% of total net sales, including approximately 10% to 15% related to electronic delivery for software licenses. Information Technology Systems We maintain customized IT and unified communication systems that enhance our ability to provide prompt, efficient and expert service to our customers. In addition, these systems enable centralized management of key functions, including Table of Contents 8 purchasing, inventory management, billing and collection of accounts receivable, sales and distribution. Our systems provide us with thorough, detailed and real-time information regarding key aspects of our business. This capability helps us to continuously enhance productivity, ship customer orders quickly and efficiently, respond appropriately to industry changes and provide high levels of customer service. We believe that our websites, which provide electronic order processing and advanced tools, such as order tracking, reporting and asset management, make it easy for customers to transact business with us and ultimately strengthen our customer relationships. Product Procurement We may purchase all or only some of the products that our vendor partners offer for resale to our customers or for inclusion in the solutions we offer. Each vendor partner agreement provides for specific terms and conditions, which may include one or more of the following: product return privileges, price protection policies, purchase discounts and vendor incentive programs, such as purchase or sales rebates and cooperative advertising reimbursements. We also purchase software from major software publishers for resale to our customers or for inclusion in the solutions we offer. Our agreements with software publishers allow the end-user customer to acquire software or licensed products and services. In addition to purchasing products directly from our vendor partners, we purchase products from wholesale distributors for resale to our customers or for inclusion in the solutions we offer. These wholesale distributors provide logistics management and supply-chain services for us, as well as for our vendor partners. For the year ended December 31, 2013, we purchased 54% of the products we sold as discrete products or as components of a solution directly from our vendor partners and the remaining 46% from wholesale distributors. Purchases from wholesale distributors Tech Data, SYNNEX and Ingram Micro represented 11%, 9% and 9%, respectively, of our total purchases. Sales of products manufactured by Apple, Cisco, EMC, Hewlett-Packard, Lenovo and Microsoft, whether purchased directly from these vendor partners or from a wholesale distributor, represented in the aggregate 56% of our net sales in 2013. Sales of products manufactured by Hewlett-Packard and Cisco represented 20% and 14%, respectively, of our 2013 net sales. Competition The market for technology products and services is highly competitive. Competition is based on the ability to tailor specific solutions to customer needs, quality and breadth of product and service offerings, knowledge and expertise of sales force, customer service, price, product availability, speed of delivery and credit availability. Our competition includes: • resellers such as Dimension Data, ePlus, Insight Enterprises, PC Connection, PCM, Presidio, Softchoice, World Wide Technology and many smaller resellers; • manufacturers who sell directly to customers, such as Dell, Hewlett-Packard and Apple; • large service providers and system integrators, such as IBM, Accenture, Hewlett-Packard and Dell; • e-tailers such as Amazon, Newegg, and TigerDirect.com; • cloud providers such as AT&T, Amazon Web Services and Box; and • retailers (including their e-commerce activities) such as Staples and Office Depot. We expect the competitive landscape in which we compete to continue to change as new technologies are developed. While innovation can help our business as it creates new offerings for us to sell, it can also disrupt our business model and create new and stronger competitors. For a discussion of the risks associated with competition, see “Risk Factors” included elsewhere in this report. Table of Contents 9 Marketing We market the CDW brand to both national and local audiences using a variety of channels that include online, broadcast, print, social and other media. This promotion is supported by integrated communication efforts that target decision- makers, influencers and the general public using a combination of news releases, case studies, media interviews and speaking opportunities. We also market to current and prospective customers through integrated marketing programs that include behaviorally targeted email, print, online media, events and sponsorships, as well as broadcast media. As a result of our relationships with our vendor partners, a significant portion of our advertising and marketing expenses are reimbursed through cooperative advertising reimbursement programs. These programs are at the discretion of our vendor partners and are typically tied to sales or purchasing volumes or other commitments to be met by us within a specified period of time. We believe that our national scale and analytical techniques that measure the efficacy of our marketing programs differentiate us from our competitors. Coworkers As of December 31, 2013, we employed nearly 7,000 coworkers, none of whom is covered by collective bargaining agreements. We consider our coworker relations to be good. Intellectual Property The CDW trademark and certain variations thereon are registered or subject to pending trademark applications in the U.S., Canada and certain other jurisdictions. We believe our trademarks have significant value and are important factors in our marketing programs. In addition, we own registrations for domain names, including cdw.com and cdwg.com, for certain of our primary trademarks. We also have unregistered copyrights in our website content. Sponsors Madison Dearborn Partners, LLC is a leading private equity investment firm based in Chicago, Illinois that has raised over $18 billion of equity capital. Since its formation in 1992, it has invested in approximately 125 companies across a broad spectrum of industries, including basic industries, business and government services, consumer, financial and transaction services, healthcare and telecom, media and technology services. Madison Dearborn's objective is to invest in companies in partnership with outstanding management teams to achieve significant long-term appreciation in equity value. Providence Equity Partners L.L.C. ("Providence") is a leading global private equity firm focused on media, communications, education and information investments. Providence manages funds with $39 billion of commitments and has invested in more than 130 companies over its 25-year history. Providence is headquartered in Providence, Rhode Island and has offices in New York, London, Hong Kong, Beijing and New Delhi. Providence's objective is to build extraordinary companies that will shape the future of the media, communications, education and information industries. Item 1A. Risk Factors There are many factors that affect our business and the results of operations, some of which are beyond our control. The following is a description of some important factors that may cause the actual results of operations in future periods to differ materially from those currently expected or desired. Risks Related to Our Business General economic conditions could negatively affect technology spending by our customers and put downward pressure on prices, which may have an adverse impact on our business, results of operations or cash flows. Weak economic conditions generally, sustained uncertainty about global economic conditions, U.S. federal government spending cuts and the impact of new government programs, or a tightening of credit markets could cause our customers and potential customers to postpone or reduce spending on technology products or services or put downward pressure on prices, which could have an adverse effect on our business, results of operations or cash flows. Table of Contents 10 Our financial performance could be adversely affected by decreases in spending on technology products and services by our Public segment customers. Our sales to our Public segment customers are impacted by government spending policies, budget priorities and revenue levels. Although our sales to the federal government are diversified across multiple agencies and departments, they collectively accounted for approximately 7% of 2013 net sales. An adverse change in government spending policies (including ongoing budget cuts at the federal level), budget priorities or revenue levels could cause our Public segment customers to reduce their purchases or to terminate or not renew their contracts with us, which could adversely affect our business, results of operations or cash flows. For example, in 2013, as a result of sequestration and related budget uncertainty and the partial shutdown of the federal government for 16 days, we experienced significantly reduced Federal sales in our Public segment. Our business depends on our vendor partner relationships and the availability of their products. We purchase products for resale from vendor partners, which include OEMs and software publishers, and wholesale distributors. For the year ended December 31, 2013, we purchased approximately 54% of the products we sold directly from vendor partners and the remaining amount from wholesale distributors. We are authorized by vendor partners to sell all or some of their products via direct marketing activities. Our authorization with each vendor partner is subject to specific terms and conditions regarding such things as sales channel restrictions, product return privileges, price protection policies, purchase discounts and vendor partner programs and funding, including purchase rebates, sales volume rebates, purchasing incentives and cooperative advertising reimbursements. However, we do not have any long-term contracts with our vendor partners and many of these arrangements are terminable upon notice by either party. A reduction in vendor partner programs or funding or our failure to timely react to changes in vendor partner programs or funding could have an adverse effect on our business, results of operations or cash flows. In addition, a reduction in the amount of credit granted to us by our vendor partners could increase our need for, and the cost of, working capital and could have an adverse effect on our business, results of operations or cash flows, particularly given our substantial indebtedness. From time to time, vendor partners may terminate or limit our right to sell some or all of their products or change the terms and conditions or reduce or discontinue the incentives that they offer us. For example, there is no assurance that, as our vendor partners continue to sell directly to end users and through resellers, they will not limit or curtail the availability of their products to solutions providers like us. Any such termination or limitation or the implementation of such changes could have a negative impact on our business, results of operations or cash flows. Although we purchase from a diverse vendor base, in 2013, products we purchased from distributors Tech Data, SYNNEX and Ingram Micro represented 11%, 9% and 9%, respectively, of our total purchases. In addition, sales of Apple, Cisco, EMC, Hewlett-Packard, Lenovo and Microsoft products comprise a substantial portion of our sales, representing approximately 56% of net sales in 2013. Sales of products manufactured by Hewlett-Packard and Cisco represented approximately 20% and 14%, respectively, of our 2013 net sales. The loss of, or change in business relationship with, any of these or any other key vendor partners, the diminished availability of their products, or backlogs for their products leading to manufacturer allocation, could reduce the supply and increase the cost of products we sell and negatively impact our competitive position. Additionally, the relocation of key distributors utilized in our purchasing model could increase our need for, and the cost of, working capital and have an adverse effect on our business, results of operations or cash flows. Further, the sale, spin- off or combination of any of our vendor partners and/or certain of their business units, including any such sale to or combination with a vendor with whom we do not currently have a commercial relationship or whose products we do not sell, could have an adverse impact on our business, results of operations or cash flows. Our sales are dependent on continued innovations in hardware, software and services offerings by our vendor partners and the competitiveness of their offerings, and our ability to partner with new and emerging technology providers. The technology industry is characterized by rapid innovation and the frequent introduction of new and enhanced hardware, software and services offerings, such as cloud-based solutions, including SaaS, IaaS and Platform as a Service ("PaaS"). We have been and will continue to be dependent on innovations in hardware, software and services offerings, as well as the acceptance of those innovations by customers. A decrease in the rate of innovation, or the lack of acceptance of innovations by customers, could have an adverse effect on our business, results of operations or cash flows. In addition, if we are unable to keep up with changes in technology and new hardware, software and services offerings, for example by providing the appropriate training to our account managers, sales technology specialists and engineers to enable them to effectively sell and deliver such new offerings to customers, our business, results of operations or cash flows could be adversely affected. Table of Contents 11 We also are dependent upon our vendor partners for the development and marketing of hardware, software and services to compete effectively with hardware, software and services of vendors whose products and services we do not currently offer or that we are not authorized to offer in one or more customer channels. In addition, our success is dependent on our ability to develop relationships with and sell hardware, software and services from new emerging vendors and vendors that we have not historically represented in the marketplace. To the extent that a vendor's offering that is highly in demand is not available to us for resale in one or more customer channels, and there is not a competitive offering from another vendor that we are authorized to sell in such customer channels, or we are unable to develop relationships with new technology providers or companies that we have not historically represented, our business, results of operations or cash flows could be adversely impacted. Substantial competition could reduce our market share and significantly harm our financial performance. Our current competition includes: • resellers, such as Dimension Data, ePlus, Insight Enterprises, PC Connection, PCM, Presidio, Softchoice, World Wide Technology and many smaller resellers; • manufacturers who sell directly to customers, such as Dell, Hewlett-Packard and Apple; • large service providers and system integrators, such as IBM, Accenture, Hewlett-Packard and Dell; • e-tailers, such as Amazon, Newegg and TigerDirect.com; • cloud providers, such as AT&T, Amazon Web Services and Box; and • retailers (including their e-commerce activities), such as Staples and Office Depot. We expect the competitive landscape in which we compete to continue to change as new technologies are developed. While innovation can help our business as it creates new offerings for us to sell, it can also disrupt our business model and create new and stronger competitors. For instance, technologies that deliver technology solutions as a service, such as cloud- based solutions, could increase the amount of sales directly to customers rather than through solutions providers like us, or could lead to a reduction in our profitability. In addition, some of our hardware and software vendor partners sell, and could intensify their efforts to sell, their products directly to our customers. Moreover, traditional OEMs have increased their services capabilities through mergers and acquisitions with service providers, which could potentially increase competition in the market to provide comprehensive technology solutions to customers. If any of these trends becomes more prevalent, it could adversely affect our business, results of operations or cash flows. We focus on offering a high level of service to gain new customers and retain existing customers. To the extent we face increased competition to gain and retain customers, we may be required to reduce prices, increase advertising expenditures or take other actions which could adversely affect our business, results of operations or cash flows. Additionally, some of our competitors may reduce their prices in an attempt to stimulate sales, which may require us to reduce prices. This would require us to sell a greater number of products to achieve the same level of net sales and gross profit. If such a reduction in prices occurs and we are unable to attract new customers and sell increased quantities of products, our sales growth and profitability could be adversely affected. The success of our business depends on the continuing development, maintenance and operation of our information technology systems. Our success is dependent on the accuracy, proper utilization and continuing development of our information technology systems, including our business systems, such as our sales, customer management, financial and accounting, marketing, purchasing, warehouse management, e-commerce and mobile systems, as well as our operational platforms, including voice and data networks and power systems. The quality and our utilization of the information generated by our information technology systems, and our success in implementing new systems and upgrades, affects, among other things, our ability to: • conduct business with our customers, including delivering services and solutions to them; • manage our inventory and accounts receivable; • purchase, sell, ship and invoice our hardware and software products and provide and invoice our services efficiently and on a timely basis; and Table of Contents 12 • maintain our cost-efficient operating model while scaling our business. The integrity of our information technology systems is vulnerable to disruption due to forces beyond our control. While we have taken steps to protect our information technology systems from a variety of threats, including computer viruses, malware, phishing, social engineering, unauthorized access and other malicious attacks, both internal and external, and human error, there can be no guarantee that those steps will be effective. Furthermore, although we have redundant systems at a separate location to back up our primary systems, there can be no assurance that these redundant systems will operate properly if and when required. Any disruption to or infiltration of our information technology systems could significantly harm our business and results of operations. Breaches of data security could adversely impact our business. Our business involves the storage and transmission of proprietary information and sensitive or confidential data, including personal information of coworkers, customers and others. In addition, we operate data centers for our customers which host their technology infrastructure and may store and transmit both business-critical data and confidential information. In connection with our services business, our coworkers also have access to our customers' confidential data and other information. We have privacy and data security policies in place that are designed to prevent security breaches; however, as newer technologies evolve, we could be exposed to increased risk of breaches in security. Breaches in security could expose us, our customers or other individuals to a risk of public disclosure, loss or misuse of this information, resulting in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information, as well as the loss of existing or potential customers and damage to our brand and reputation. In addition, the cost and operational consequences of implementing further data protection measures could be significant. Such breaches, costs and consequences could adversely affect our business, results of operations or cash flows. The failure to comply with our Public segment contracts or applicable laws and regulations could result in, among other things, termination, fines or other liabilities, and changes in procurement regulations could adversely impact our business, results of operations or cash flows. Revenues from our Public segment customers are derived from sales to governmental departments and agencies, educational institutions and healthcare customers, through various contracts and open market sales of products and services. Sales to Public segment customers are highly regulated. Noncompliance with contract provisions, government procurement regulations or other applicable laws or regulations (including but not limited to the False Claims Act and the Medicare and Medicaid Anti-Kickback Statute) could result in civil, criminal and administrative liability, including substantial monetary fines or damages, termination of government contracts or other Public segment customer contracts, and suspension, debarment or ineligibility from doing business with the government and other customers in the Public segment. In addition, generally contracts in the Public segment are terminable at any time for convenience of the contracting agency or group purchasing organization (“GPO”) or upon default. Furthermore, our inability to enter into or retain contracts with GPOs may threaten our ability to sell to customers in those GPOs and compete. The effect of any of these possible actions could adversely affect our business, results of operations or cash flows. In addition, the adoption of new or modified procurement regulations and other requirements may increase our compliance costs and reduce our gross margins, which could have a negative effect on our business, results of operations or cash flows. If we fail to provide high-quality services to our customers, or if our third-party service providers fail to provide high-quality services to our customers, our reputation, business, results of operations or cash flows could be adversely affected. Our service offerings include field services, managed services, warranties, configuration services, partner services and telecom services. Additionally, we deliver and manage mission critical software, systems and network solutions for our customers. We also offer certain services, such as implementation and installation services and repair services, to our customers through various third-party service providers engaged to perform these services on our behalf. If we or our third-party service providers fail to provide high quality services to our customers or such services result in a disruption of our customers' businesses, this could, among other things, result in legal claims and proceedings and liability. Moreover, as we expand our services and solutions business, we may be exposed to additional operational, regulatory and other risks. We also could incur liability for failure to comply with the rules and regulations applicable to the new services and solutions we provide to our customers. If any of the foregoing were to occur, our reputation with our customers, our brand and our business, results of operations or cash flows could be adversely affected. If we lose any of our key personnel, or are unable to attract and retain the talent required for our business, our business could be disrupted and our financial performance could suffer. Our success is heavily dependent upon our ability to attract, develop, engage and retain key personnel to manage and grow our business, including our key executive, management, sales, services and technical coworkers. Table of Contents 13 Our future success will depend to a significant extent on the efforts of Thomas E. Richards, our Chairman and Chief Executive Officer, as well as the continued service and support of our other executive officers. Our future success also will depend on our ability to retain our customer-facing coworkers, who have been given critical CDW knowledge regarding, and the opportunity to develop strong relationships with, many of our customers. In addition, as we seek to expand our offerings of value-added services and solutions, our success will even more heavily depend on attracting and retaining highly skilled technology specialists and engineers, for whom the market is extremely competitive. Our inability to attract, develop and retain key personnel could have an adverse effect on our relationships with our vendor partners and customers and adversely affect our ability to expand our offerings of value-added services and solutions. Moreover, our inability to train our sales, services and technical personnel effectively to meet the rapidly changing technology needs of our customers could cause a decrease in the overall quality and efficiency of such personnel. Such consequences could adversely affect our business, results of operations or cash flows. The interruption of the flow of products from suppliers could disrupt our supply chain. A significant portion of the products we sell are manufactured or purchased by our vendor partners outside of the U.S., primarily in Asia. Political, social or economic instability in Asia, or in other regions in which our vendor partners purchase or manufacture the products we sell, could cause disruptions in trade, including exports to the U.S. Other events that could also cause disruptions to our supply chain include: • the imposition of additional trade law provisions or regulations; • the imposition of additional duties, tariffs and other charges on imports and exports; • foreign currency fluctuations; • natural disasters or other adverse occurrences at, or affecting, any of our suppliers' facilities; • restrictions on the transfer of funds; • the financial instability or bankruptcy of manufacturers; and • significant labor disputes, such as strikes. We cannot predict whether the countries in which the products we sell are purchased or manufactured, or may be purchased or manufactured in the future, will be subject to new or additional trade restrictions or sanctions imposed by the U.S. or foreign governments, including the likelihood, type or effect of any such restrictions. Trade restrictions, including new or increased tariffs or quotas, embargoes, sanctions, safeguards and customs restrictions against the products we sell, as well as foreign labor strikes and work stoppages or boycotts, could increase the cost or reduce the supply of product available to us and adversely affect our business, results of operations or cash flows. A natural disaster or other adverse occurrence at one of our primary facilities or customer data centers could damage our business. Substantially all of our corporate, warehouse and distribution functions are located at our Vernon Hills, Illinois facilities and our second distribution center in North Las Vegas, Nevada. If the warehouse and distribution equipment at one of our distribution centers were to be seriously damaged by a natural disaster or other adverse occurrence, we could utilize the other distribution center or third-party distributors to ship products to our customers. However, this may not be sufficient to avoid interruptions in our service and may not enable us to meet all of the needs of our customers and would cause us to incur incremental operating costs. In addition, we operate three customer data centers and numerous sales offices which may contain both business-critical data and confidential information of our customers. A natural disaster or other adverse occurrence at any of the customer data centers or at any of our major sales offices could negatively impact our business, results of operations or cash flows. We are heavily dependent on commercial delivery services. We generally ship hardware products to our customers by FedEx, United Parcel Service and other commercial delivery services and invoice customers for delivery charges. If we are unable to pass on to our customers future increases in the cost of commercial delivery services, our profitability could be adversely affected. Additionally, strikes, inclement weather, natural disasters or other service interruptions by such shippers could adversely affect our ability to deliver products on a timely basis. Table of Contents 14 We are exposed to accounts receivable and inventory risks. We extend credit to our customers for a significant portion of our net sales, typically on 30-day payment terms. We are subject to the risk that our customers may not pay for the products they have purchased, or may pay at a slower rate than we have historically experienced, the risk of which is heightened during periods of economic downturn or uncertainty or, in the case of Public segment customers, during periods of budget constraints. We are also exposed to inventory risks as a result of the rapid technological changes that affect the market and pricing for the products we sell. We seek to minimize our inventory exposure through a variety of inventory management procedures and policies, including our rapid-turn inventory model, as well as vendor price protection and product return programs. However, if we were unable to maintain our rapid-turn inventory model, if there were unforeseen product developments that created more rapid obsolescence or if our vendor partners were to change their terms and conditions, our inventory risks could increase. We also from time to time take advantage of cost savings associated with certain opportunistic bulk inventory purchases offered by our vendor partners or we may decide to carry high inventory levels of certain products that have limited or no return privileges due to customer demand or request. These bulk purchases could increase our exposure to inventory obsolescence. We could be exposed to additional risks if we make acquisitions or enter into alliances. We may pursue transactions, including acquisitions or alliances, in an effort to extend or complement our existing business. These types of transactions involve numerous business risks, including finding suitable transaction partners and negotiating terms that are acceptable to us, the diversion of management's attention from other business concerns, extending our product or service offerings into areas in which we have limited experience, entering into new geographic markets, the potential loss of key coworkers or business relationships and successfully integrating acquired businesses, any of which could adversely affect our operations. In addition, our financial results could be adversely affected by financial adjustments required by accounting principles generally accepted in the United States of America (“GAAP”) in connection with these types of transactions where significant goodwill or intangible assets are recorded. To the extent the value of goodwill or identifiable intangible assets with indefinite lives becomes impaired, we may be required to incur material charges relating to the impairment of those assets. Our future operating results may fluctuate significantly. We may experience significant variations in our future quarterly results of operations. These fluctuations may cause the market price of our common stock to be volatile and may result from many factors, including the condition of the technology industry in general, shifts in demand and pricing for hardware, software and services and the introduction of new products or upgrades. Our operating results are also highly dependent on our level of gross profit as a percentage of net sales. Our gross profit percentage fluctuates due to numerous factors, some of which may be outside of our control, including general macroeconomic conditions; pricing pressures; changes in product costs from our vendor partners; the availability of price protection, purchase discounts and incentive programs from our vendor partners; changes in product, order size and customer mix; the risk of some items in our inventory becoming obsolete; increases in delivery costs that we cannot pass on to customers; and general market and competitive conditions. In addition, our cost structure is based, in part, on anticipated sales and gross margins. Therefore, we may not be able to adjust our cost structure quickly enough to compensate for any unexpected sales or gross margin shortfall, and any such inability could have an adverse effect on our business, results of operations or cash flows. We are exposed to risks from legal proceedings and audits. We are party to various legal proceedings that arise in the ordinary course of our business, which include commercial, employment, tort and other litigation. We are subject to intellectual property infringement claims against us in the ordinary course of our business, either because of the products and services we sell or the business systems and processes we use to sell such products and services, in the form of cease-and-desist letters, licensing inquiries, lawsuits and other communications and demands. In our industry, such intellectual property claims have become more frequent as the complexity of technological products and the intensity of competition in our industry have increased. Increasingly, many of these assertions are brought by non-practicing entities whose principal business model is to secure patent licensing revenue, but we may also be subject to suits from inventors, competitors or other patent holders who may seek licensing revenue, lost profits and/or an injunction preventing us from engaging in certain activities, including selling certain products and services. Table of Contents 15 Because of our significant sales to governmental entities, we also are subject to audits by federal, state and local authorities. We also are subject to audits by various vendor partners and large customers, including government agencies, relating to purchases and sales under various contracts. In addition, we are subject to indemnification claims under various contracts. Current and future litigation, infringement claims, governmental proceedings, audits or indemnification claims that we face may result in substantial costs and expenses and significantly divert the attention of our management regardless of the outcome. In addition, current and future litigation, infringement claims, governmental proceedings, audits or indemnification claims could lead to increased costs or interruptions of our normal business operations. Litigation, infringement claims, governmental proceedings, audits or indemnification claims involve uncertainties and the eventual outcome of any litigation, infringement claim, governmental proceeding, audit or indemnification claim could adversely affect our business, results of operations or cash flows. We have significant deferred cancellation of debt income. As a result of a 2009 debt modification, we realized $395.5 million of cancellation of debt income (“CODI”). We made an election under Code Section 108(i) to defer this CODI from taxable income, pursuant to which we are also required to defer certain original issue discount (“OID”) deductions as they accrue. As of December 31, 2013, we had already deferred approximately $114.5 million of OID deductions. Starting in 2014, we will be required to include the deferred CODI into taxable income ratably over a five-year period ending in 2018. During this same period, we will also be permitted to benefit from our deferred OID deductions. Because we have more CODI than the aggregate of our deferred and unaccrued OID on the relevant remaining debt instruments, we will have a future cash tax liability associated with our significant deferred CODI. We have reflected the associated cash tax liability in our deferred taxes for financial accounting purposes. All of our deferred CODI will be accelerated into current taxable income if, prior to 2018, we engage in a so-called “impairment transaction” and the gross value of our assets immediately afterward is less than 110% of the sum of our total liabilities and the tax on the net amount of our deferred CODI and OID (the “110% test”) as determined under the applicable Treasury Regulations. An “impairment transaction” is any transaction that impairs our ability to pay the tax on our deferred CODI, and includes dividends or distributions with respect to our equity and charitable contributions, in each case in a manner that is not consistent with our historical practice within the meaning of the applicable Treasury Regulations. Prior to 2018, our willingness to pay dividends or make distributions with respect to our equity could be adversely affected if, at the time, we do not meet the 110% test and, as a result, the payment of a dividend or the making of a distribution would accelerate the tax payable with respect to our deferred CODI. We believe that, based on our interpretation of applicable Treasury Regulations, the gross value of our assets exceeds 110% of the sum of our total liabilities and the tax on the net amount of our deferred CODI and OID as of the filing date of this Annual Report on Form 10-K. However, we cannot assure you that this will continue to be true in the future. Risks Related to Our Indebtedness We have a substantial amount of indebtedness, which could have important consequences to our business. We have a substantial amount of indebtedness. As of December 31, 2013, we had $3.3 billion of total long-term debt outstanding, as defined by GAAP, and $256.6 million of obligations outstanding under our inventory financing agreements, and the ability to borrow an additional $641.1 million under our senior secured asset-based revolving credit facility (the “Revolving Loan”). Our substantial indebtedness could have important consequences, including the following: • making it more difficult for us to satisfy our obligations with respect to our indebtedness; • requiring us to dedicate a substantial portion of our cash flow from operations to debt service payments on our and our subsidiaries' debt, which reduces the funds available for working capital, capital expenditures, acquisitions and other general corporate purposes; • requiring us to comply with restrictive covenants in our senior credit facilities and indentures, which limit the manner in which we conduct our business; • making it more difficult for us to obtain vendor financing from our vendor partners; • limiting our flexibility in planning for, or reacting to, changes in the industry in which we operate; • placing us at a competitive disadvantage compared to any of our less-leveraged competitors; Table of Contents 16 • increasing our vulnerability to both general and industry-specific adverse economic conditions; and • limiting our ability to obtain additional debt or equity financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements and increasing our cost of borrowing. Restrictive covenants under our senior credit facilities and indentures may adversely affect our operations and liquidity. Our senior credit facilities and our indentures contain, and any future indebtedness of ours may contain, various covenants that limit our ability to, among other things: • incur or guarantee additional debt; • pay dividends or make distributions to holders of our capital stock or to make certain other restricted payments or investments; • repurchase or redeem capital stock; • make loans, capital expenditures or investments or acquisitions; • receive dividends or other payments from our subsidiaries; • enter into transactions with affiliates; • create liens; • merge or consolidate with other companies or transfer all or substantially all of our assets; • transfer or sell assets, including capital stock of subsidiaries; and • prepay, repurchase or redeem debt. As a result of these covenants, we are limited in the manner in which we conduct our business and we may be unable to engage in favorable business activities or finance future operations or capital needs. A breach of any of these covenants or any of the other restrictive covenants would result in a default under our senior credit facilities. Upon the occurrence of an event of default under our senior credit facilities, the lenders: • will not be required to lend any additional amounts to us; • could elect to declare all borrowings outstanding thereunder, together with accrued and unpaid interest and fees, to be due and payable; • could require us to apply all of our available cash to repay these borrowings; or • could prevent us from making payments on our senior subordinated notes due 2017; • any of which could result in an event of default under the indentures. If we were unable to repay those amounts, the lenders under our senior credit facilities could proceed against the collateral granted to them to secure our borrowings thereunder. We have pledged a significant portion of our assets as collateral under our senior credit facilities and our senior secured notes due 2018. If the lenders under our senior credit facilities or the holders of our senior secured notes due 2018 accelerate the repayment of borrowings, we cannot assure you that we will have sufficient assets to repay our senior credit facilities and our other indebtedness or the ability to borrow sufficient funds to refinance such indebtedness. Even if we were able to obtain new financing, it may not be on commercially reasonable terms, or terms that are acceptable to us. In addition, under our Revolving Loan, we are permitted to borrow an aggregate amount of up to $900 million; however, our ability to borrow under our Revolving Loan is limited by a borrowing base and a liquidity condition. The borrowing base at any time equals the sum of up to 85% of CDW LLC and its subsidiary guarantors’ eligible accounts receivable (net of accounts reserves) (up to 30% of such eligible accounts receivable which can consist of federal government accounts receivable) plus the lesser of (i) 70% of CDW LLC and its subsidiary guarantors’ eligible inventory (valued at cost and net of inventory reserves) and (ii) the product of 85% multiplied by the net orderly liquidation value percentage multiplied by eligible inventory (valued at cost and net of inventory reserves), less reserves (other than accounts reserves and inventory reserves). The borrowing base in effect as of December 31, 2013 was $1,065.5 million. Table of Contents 17 Our ability to borrow under our Revolving Loan is also limited by a minimum liquidity condition, which provides that, if excess cash availability is less than the lesser of (i) $90 million or (ii) the greater of (A) 10% of the borrowing base or (B) $60 million, the lenders are not required to lend any additional amounts under our Revolving Loan unless the consolidated fixed charge coverage ratio (as defined in the credit agreement for our Revolving Loan) is at least 1.0 to 1.0. Moreover, our Revolving Loan provides discretion to the agent bank acting on behalf of the lenders to impose additional availability reserves, which could materially impair the amount of borrowings that would otherwise be available to us. We cannot assure you that the agent bank will not impose such reserves or, were it to do so, that the resulting impact of this action would not materially and adversely impair our liquidity. We will be required to generate sufficient cash to service our indebtedness and, if not successful, we may be forced to take other actions to satisfy our obligations under our indebtedness. Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. Our outstanding long-term debt will impose significant cash interest payment obligations on us in 2014 and subsequent years and, accordingly, we will have to generate significant cash flow from operating activities to fund our debt service obligations. We cannot assure you that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources” included elsewhere in this report. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional debt or equity capital, restructure or refinance our indebtedness, or revise or delay our strategic plan. We cannot assure you that we would be able to take any of these actions, that these actions would be successful and permit us to meet our scheduled debt service obligations or satisfy our capital requirements, or that these actions would be permitted under the terms of our existing or future debt agreements, including our senior credit facilities and indentures. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. Our senior credit facilities and indentures restrict our ability to dispose of assets and use the proceeds from the disposition. We may not be able to consummate those dispositions or to obtain the proceeds which we could realize from them and these proceeds may not be adequate to meet any debt service obligations then due. Furthermore, the Sponsors have no obligation to provide us with debt or equity financing. If we cannot make scheduled payments on our debt, we will be in default and, as a result: • our debt holders could declare all outstanding principal and interest to be due and payable; • the lenders under our senior credit facilities could foreclose against the assets securing the borrowings from them and the lenders under our term loan facility could terminate their commitments to lend us money; and • we could be forced into bankruptcy or liquidation. Despite our indebtedness levels, we and our subsidiaries may be able to incur substantially more debt, including secured debt. This could further increase the risks associated with our leverage. We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of our senior credit facilities and indentures do not fully prohibit us or our subsidiaries from doing so. To the extent that we incur additional indebtedness or such other obligations, the risks associated with our substantial indebtedness described above, including our possible inability to service our debt, will increase. As of December 31, 2013, we had approximately $641.1 million available for additional borrowing under our Revolving Loan after taking into account borrowing base limitations (net of $2.2 million of issued and undrawn letters of credit and $256.7 million of reserves related to our floorplan sub-facility). Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly. Certain of our borrowings, primarily borrowings under our senior credit facilities, are at variable rates of interest and expose us to interest rate risk. As of December 31, 2013, we had $1,528.9 million of variable rate debt outstanding. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income would decrease. Although we have entered into interest rate cap agreements on our term loan facility to reduce interest rate volatility, we cannot assure you we will be able to do so in the future on acceptable terms or that such caps or the caps we have in place now will be effective. Table of Contents 18 Risks Related to Ownership of Our Common Stock Our common stock price may be volatile and may decline regardless of our operating performance, and holders of our common stock could lose a significant portion of their investment. The market price for our common stock may be volatile. Our stockholders may not be able to resell their shares of common stock at or above the price at which they purchased such shares, due to fluctuations in the market price of our common stock, which may be caused by a number of factors, many of which we cannot control, including the risk factors described in this Annual Report on Form 10-K and the following: • changes in financial estimates by any securities analysts who follow our common stock, our failure to meet these estimates or failure of securities analysts to initiate or maintain coverage of our common stock; • downgrades by any securities analysts who follow our common stock; • future sales of our common stock by our officers, directors and significant stockholders, including the Sponsors; • market conditions or trends in our industry or the economy as a whole; • investors’ perceptions of our prospects; • announcements by us or our competitors of significant contracts, acquisitions, joint ventures or capital commitments; • changes in key personnel; and • our limited public float in light of the Sponsors’ beneficial ownership of a majority of our common stock, which may result in the trading of relatively small quantities of shares by our stockholders having a disproportionate positive or negative influence on the market price of our common stock. In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies, including companies in our industry. In the past, securities class action litigation has followed periods of market volatility. If we were involved in securities litigation, we could incur substantial costs, and our resources and the attention of management could be diverted from our business. The Sponsors have the ability to control significant corporate activities and their interests may not align with yours. The Sponsors beneficially own approximately 63.7% of our common stock as of February 28, 2014. As a result of their ownership, the Sponsors, so long as they hold a majority of our outstanding common stock, will have the ability to control the outcome of matters submitted to a vote of stockholders and, through our board of directors, the ability to control decision- making with respect to our business direction and policies. Matters over which the Sponsors will, directly or indirectly, exercise control include: • the election of our board of directors and the appointment and removal of our officers; • mergers and other business combination transactions, including proposed transactions that would result in our stockholders receiving a premium price for their shares; • other acquisitions or dispositions of businesses or assets; • incurrence of indebtedness and the issuance of equity securities; • repurchase of stock and payment of dividends; and • the issuance of shares to management under our equity incentive plans. Even if the Sponsors’ ownership of our shares falls below a majority, they may continue to be able to strongly influence or effectively control our decisions. Under our amended and restated certificate of incorporation, the Sponsors and their affiliates do not have any obligation to present to us, and the Sponsors may separately pursue, corporate opportunities of which they become aware, even if those opportunities are ones that we would have pursued if granted the opportunity. Table of Contents 19 Future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price. Sales of substantial amounts of our common stock in the public market, or the perception that these sales could occur, could adversely affect the price of our common stock and could impair our ability to raise capital through the sale of additional shares. As of February 28, 2014, there were 171,954,277 shares of our common stock outstanding. The shares of our common stock sold in our initial public offering and secondary offering in 2013 are freely tradable without restriction under the Securities Act of 1933, as amended (the “Securities Act”), except that any shares of our common stock that may be acquired by our directors, executive officers and other affiliates may be sold only in compliance with certain volume limitations and other restrictions of Rule 144 of the Securities Act. The remaining shares of our common stock, to the extent not previously sold pursuant to an exemption from registration, will continue to be “restricted shares” within the meaning of Rule 144 of the Securities Act and subject to certain restrictions on resale. Restricted shares may be sold in the public market only if they are registered under the Securities Act or are sold pursuant to an exemption from registration such as Rule 144 or Rule 701 under the Securities Act. As of February 28, 2014, approximately 119,000,000 shares of our common stock will continue to have the right to require us to register the sales of their shares under the Securities Act, under the terms of an agreement between us and the holders of these securities. In the future, we may also issue our securities in connection with investments or acquisitions. The number of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then- outstanding shares of our common stock. Anti-takeover provisions in our charter documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable. Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of the Company more difficult without the approval of our board of directors. These provisions: • authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock; • establish a classified board of directors so that not all members of our board of directors are elected at one time; • generally prohibit stockholder action by written consent, requiring all stockholder actions be taken at a meeting of our stockholders, except that any action required or permitted to be taken by our stockholders may be effected by written consent until such time as the Sponsors cease to beneficially own 50% or more of our common stock; • provide that special meetings of the stockholders can only be called by or at the direction of (i) our board of directors pursuant to a written resolution adopted by the affirmative vote of the majority of the total number of directors that the Company would have if there were no vacancies or (ii) until such time as the Sponsors cease to beneficially own 50% or more of our common stock (a) the chairman or vice chairman of our board of directors, (b) our chief executive officer, (c) a majority of our board of directors through a special resolution or (d) the holders of at least 10% of our common stock; • establish advance notice requirements for nominations for elections to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; and • provide that our board of directors is expressly authorized to make, alter or repeal our amended and restated bylaws. Our amended and restated certificate of incorporation also contains a provision that provides us with protections similar to Section 203 of the Delaware General Corporation Law, and will prevent us from engaging in a business combination with a person who acquires at least 15% of our common stock for a period of three years from the date such person acquired such common stock, unless board or stockholder approval is obtained prior to the acquisition. These anti-takeover provisions and other provisions under Delaware law could discourage, delay or prevent a transaction involving a change in control of the Company, even if doing so would benefit our stockholders. These provisions could also discourage proxy contests and make it more difficult for our stockholders to elect directors of their choosing and to cause us to take other corporate actions our stockholders desire. Table of Contents 20 Conflicts of interest may arise because some of our directors are principals of our largest stockholders. Paul Finnegan and Robin Selati, who are principals of Madison Dearborn, and Glenn Creamer and Michael Dominguez, who are managing directors of Providence Equity, serve on our board of directors. As of February 28, 2014, the Sponsors continue to hold a majority of our outstanding common stock. The Sponsors and the entities respectively controlled by them may hold equity interests in entities that directly or indirectly compete with us, and companies in which they currently invest may begin competing with us. As a result of these relationships, when conflicts arise between the interests of Madison Dearborn or Providence Equity, on the one hand, and of other stockholders, on the other hand, these directors may not be disinterested. Although our directors and officers have a duty of loyalty to us under Delaware law and our amended and restated certificate of incorporation, transactions that we enter into in which a director or officer has a conflict of interest are generally permissible so long as (1) the material facts relating to the director’s or officer’s relationship or interest as to the transaction are disclosed to our board of directors and a majority of our disinterested directors approves the transaction, (2) the material facts relating to the director’s or officer’s relationship or interest as to the transaction are disclosed to our stockholders and a majority of our disinterested stockholders approve the transaction or (3) the transaction is otherwise fair to us. Our amended and restated certificate of incorporation also provides that any principal, officer, member, manager and/or employee of a Sponsor or any entity that controls, is controlled by or under common control with a Sponsor (other than us or any company that is controlled by us) or a Sponsor-managed investment fund will not be required to offer any transaction opportunity of which they become aware to us and could take any such opportunity for themselves or offer it to other companies in which they have an investment, unless such opportunity is offered to them solely in their capacities as our directors. We cannot assure you that we will continue to pay dividends on our common stock, and our indebtedness and certain tax considerations could limit our ability to continue to pay dividends on our common stock. If we do not continue to pay dividends, you may not receive any return on investment unless you are able to sell your common stock for a price greater than your purchase price. In each of the fourth quarter of 2013 and the first quarter of 2014, our board of directors declared a quarterly cash dividend of $0.0425 per share of common stock. We expect to continue to pay a cash dividend on our common stock of $0.0425 per share per quarter, or $0.17 per share per annum. Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend upon our results of operations, financial condition, business prospects, capital requirements, contractual restrictions, including those under our senior credit facilities and indentures, any potential indebtedness we may incur, restrictions imposed by applicable law, tax considerations and other factors our board of directors deems relevant. There can be no assurance that we will continue to pay a dividend at the current rate or at all. Accordingly, if we do not pay dividends in the future, realization of a gain on your investment will depend entirely on the appreciation of the price of our common stock, which may never occur. See “-Risks Related to Our Business-We have significant deferred cancellation of debt income” for a discussion of certain tax considerations that could affect our willingness to pay dividends in the future. We are a holding company and rely on dividends, distributions and other payments, advances and transfers of funds from our subsidiaries to meet our obligations. We are a holding company that does not conduct any business operations of our own. As a result, we are largely dependent upon cash dividends and distributions and other transfers from our subsidiaries to meet our obligations. The agreements governing the indebtedness of our subsidiaries impose restrictions on our subsidiaries’ ability to pay dividends or other distributions to us. The deterioration of the earnings from, or other available assets of, our subsidiaries for any reason could also limit or impair their ability to pay dividends or other distributions to us. Item 1B. Unresolved Staff Comments None. Item 2. Properties As of December 31, 2013, we owned or leased a total of approximately 2.0 million square feet of space throughout the U.S. and Canada. We own two properties: a combined office and an approximately 450,000 square foot distribution center in Vernon Hills, Illinois, and an approximately 513,000 square foot distribution center in North Las Vegas, Nevada. In addition, we conduct sales, services and administrative activities in various leased locations throughout the U.S. and Canada, including data centers in Madison, Wisconsin and Minneapolis, Minnesota. We believe that our facilities are well maintained, suitable for our business and occupy sufficient space to meet our operating needs. As part of our normal business, we regularly evaluate sales center performance and site suitability. Leases Table of Contents 21 covering our currently occupied leased properties expire at varying dates, generally within the next ten years. We anticipate no difficulty in retaining occupancy through lease renewals, month-to-month occupancy or replacing the leased properties with equivalent properties. We believe that suitable additional or substitute leased properties will be available as required. Item 3. Legal Proceedings We are party to various legal proceedings that arise in the ordinary course of our business, which include commercial, intellectual property, employment, tort and other litigation matters. We are also subject to audit by federal, state and local authorities, and by various partners and large customers, including government agencies, relating to purchases and sales under various contracts. In addition, we are subject to indemnification claims under various contracts. From time to time, certain of our customers file voluntary petitions for reorganization or liquidation under the U.S. bankruptcy laws. In such cases, certain pre-petition payments received by us could be considered preference items and subject to return to the bankruptcy administrator. As of December 31, 2013, we do not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for these proceedings and matters, if any, has been incurred. However, the ultimate resolutions of these proceedings and matters are inherently unpredictable. As such, our financial condition and results of operations could be adversely affected in any particular period by the unfavorable resolution of one or more of these proceedings or matters. We previously filed a claim as part of a class action settlement in a case alleging price fixing during the period of January 1, 1996 through December 31, 2006, by certain manufacturers of thin-film liquid crystal display panels. On July 13, 2013, the United Stated District Court for the Northern District of California approved distribution of the settlement proceeds, including a net payment to us of $10.4 million after fees and expenses. We have recognized a pre-tax benefit of $10.4 million within selling and administrative expenses in the consolidated statement of operations for the year ended December 31, 2013. The first of two settlement payments was received by us on July 29, 2013 in the amount of $8.5 million. The balance of $1.9 million was received in February 2014. Item 4. Mine Safety Disclosures Not applicable. Table of Contents 22 Executive Officers Name Age Position Thomas E. Richards 59 Chairman, President and Chief Executive Officer, and Director Dennis G. Berger 49 Senior Vice President and Chief Coworker Services Officer Neal J. Campbell 52 Senior Vice President and Chief Marketing Officer Christina M. Corley 46 Senior Vice President - Corporate Sales Douglas E. Eckrote 49 Senior Vice President - Strategic Solutions and Services Christine A. Leahy 49 Senior Vice President, General Counsel and Corporate Secretary Christina V. Rother 50 Senior Vice President - Public and Advanced Technology Sales Jonathan J. Stevens 44 Senior Vice President - Operations and Chief Information Officer Matthew A. Troka 43 Senior Vice President - Product and Partner Management Ann E. Ziegler 55 Senior Vice President and Chief Financial Officer Thomas E. Richards serves as our Chairman, President and Chief Executive Officer, as a member of our board of directors and as a manager of CDW LLC. From October 2011 to December 31, 2012, Mr. Richards served as our Chief Executive Officer. From September 2009 to October 2011, Mr. Richards served as our President and Chief Operating Officer. Prior to joining CDW, Mr. Richards held leadership positions with Qwest Communications, a telecommunications carrier. From 2008 to 2009, he served as Executive Vice President and Chief Operating Officer, where he was responsible for the day-to-day operation and performance of Qwest Communications, and before assuming that role, was the Executive Vice President of the Business Markets Group from 2005 to 2008. Mr. Richards also has served as Chairman and Chief Executive Officer of Clear Communications Corporation and as Executive Vice President of Ameritech Corporation. He currently serves as a board member of Junior Achievement of Chicago, Rush University Medical Center and the University of Pittsburgh. Mr. Richards is also a member of the Economic Club of Chicago and the Executives’ Club of Chicago. Mr. Richards is a graduate of the University of Pittsburgh where he earned a bachelor’s degree and a graduate of Massachusetts Institute of Technology where he earned a Master of Science in Management as a Sloan Fellow. As a result of these and other professional experiences, Mr. Richards possesses particular knowledge and experience in technology industries, strategic planning and leadership of complex organizations that strengthen the board’s collective qualifications, skills and experience. Dennis G. Berger serves as our Senior Vice President and Chief Coworker Services Officer. Mr. Berger joined CDW in September 2005 as Vice President-Coworker Services. In January 2007, he was named Senior Vice President and Chief Coworker Services Officer. Mr. Berger is responsible for leading CDW’s programs in coworker learning and development, benefits, compensation, performance management, coworker relations and talent acquisition. Prior to joining CDW, he served as Vice President of Human Resources at PepsiAmericas, a beverage company, from 2002 to 2005. Mr. Berger has also held human resources positions of increasing responsibility at Pepsi Bottling Group, Inc., Pepsico, Inc. and GTE Corporation. Mr. Berger serves on the board of directors of Glenwood Academy, Anti-Defamation League of Chicago and Skills for Chicagoland’s Future. Mr. Berger is a graduate of Northeastern University where he earned a bachelor’s degree and a graduate of John M. Olin School of Business at Washington University in St. Louis where he earned a Master of Business Administration. Neal J. Campbell serves as our Senior Vice President and Chief Marketing Officer. Mr. Campbell joined CDW in January 2011, and is responsible for the strategy and development of CDW’s advertising, public relations, channel marketing, marketing intelligence and research, merchandising, microsites, creative services and direct marketing content, along with relationship marketing, corporate communications and e-commerce initiatives including content development, online marketing and e-procurement. Prior to joining CDW, Mr. Campbell served as Chief Executive Officer of TrafficCast, a provider of real- time and predictive traffic information to Google, Yahoo and others from 2008 to 2011. From 2006 to 2008, he served as Executive Vice President and General Manager-Strategic Marketing and Next Generation Products for ISCO International, a manufacturer of wireless telecommunications components. Mr. Campbell also spent 17 years with Motorola, most recently as Vice President and General Manager, GSM Portfolio Marketing and Planning for the company’s mobile device business. He currently serves as a board member of TrafficCast and Junior Achievement of Chicago, and is on the Executive Advisory Council of Bradley University. Mr. Campbell is a graduate of Bradley University where he earned a bachelor’s degree and a graduate of Northwestern University’s Kellogg School of Management where he earned a Master of Business Administration. Christina M. Corley serves as our Senior Vice President of Corporate Sales and is responsible for managing all aspects of our corporate sales force, including sales force strategy, structure, goals, operations, revenue generation and training and development. Prior to joining CDW in September 2011, Ms. Corley served as President and Chief Operating Officer of Zones, Inc., a provider of IT products and solutions, from 2006 to 2011. She served as Executive Vice President of Purchasing Table of Contents 23 and Operations for Zones, Inc. from April 2005 to October 2006. She served as President of Corporate PC Source (“CPCS”), a wholly owned subsidiary of Zones, Inc., from March 2003 to April 2005. Prior to its acquisition by Zones, Inc., Ms. Corley served as Chief Executive Officer of CPCS from 1999 to 2003. Ms. Corley began her career in sales and marketing, holding various positions at IBM, Dataflex and VisionTek. She currently serves as a board member of the Boys and Girls Club of Chicago. Ms. Corley is a graduate of the University of Illinois at Urbana-Champaign where she earned a bachelor’s degree and a graduate of Northwestern University’s Kellogg School of Management where she earned a Master of Business Administration in management and strategy. Douglas E. Eckrote serves as our Senior Vice President of Strategic Solutions and Services and is responsible for our technology specialist teams focusing on servers and storage, unified communications, security, wireless, power and cooling, networking, software licensing and mobility solutions. He also holds responsibility for CDW Canada, Inc. Mr. Eckrote joined CDW in 1989 as an account manager. Mr. Eckrote was appointed Director of Operations in 1996, Vice President of Operations in 1999 and Senior Vice President of Purchasing in April 2001. In October 2001, he was named Senior Vice President of Purchasing and Operations. He was named Senior Vice President of Operations, Services and Canada in 2006 and assumed his current role in 2009. Prior to joining CDW, Eckrote worked in outside sales for Arrow Electronics and Cintas Uniform Company. From 2003 to 2009, Mr. Eckrote served on the board of directors of the Make-A-Wish Foundation of Illinois, completing the last two years as board chair, and currently serves on the Make-A-Wish Foundation of America National Chapter Performance Committee. Mr. Eckrote also served on the board of directors of the Center for Enriched Living from 2002-2011, serving as Vice President from 2004-2005, President from 2006-2008, board emeritus from 2009-2011 and currently serves as a trustee. Mr. Eckrote is a graduate of Purdue University where he earned a bachelor’s degree and a graduate of Northwestern University’s Kellogg School of Management where he earned an Executive Master of Business Administration. Christine A. Leahy serves as our Senior Vice President, General Counsel and Corporate Secretary and is responsible for our legal, corporate governance, enterprise risk management and compliance functions. Ms. Leahy joined CDW in January 2002 as Vice President, General Counsel and Corporate Secretary. In January of 2007, she was named Senior Vice President. Before joining CDW, Ms. Leahy served as a corporate partner in the Chicago office of Sidley Austin LLP where she specialized in corporate governance, securities law, mergers and acquisitions and strategic counseling. Ms. Leahy serves on the board of trustees of Children’s Home and Aid. Ms. Leahy is a graduate of Brown University where she earned a bachelor’s degree and a graduate of Boston College Law School where she earned her Juris Doctor. She also completed the CEO Perspective and Women’s Director Development Programs at Northwestern University’s Kellogg School of Management. Christina V. Rother serves as our Senior Vice President of Public and Advanced Technology Sales and is responsible for managing all aspects of our public sector and advanced technology sales forces, including sales force strategy, structure, goals, operations, revenue generation and training and development. Ms. Rother joined CDW in 1991 as an account manager. In 2002, she was appointed Vice President for Education and State and Local Sales. In 2005, she was chosen to lead our newly formed healthcare sales team. Beginning in 2006, Ms. Rother has held various positions ranging from Group Vice President of CDW Government LLC, President of CDW Government LLC and Senior Vice President of Sales. In September 2011, Ms. Rother assumed her current role as Senior Vice President of Public and Advanced Technology Sales. Prior to joining CDW, Ms. Rother held a number of sales positions with technology companies including Laser Computers and Price Electronics. Ms. Rother currently serves as chair of the board of directors of the Make-A-Wish Foundation of Illinois. Ms. Rother is a graduate of the University of Illinois at Chicago where she earned a bachelor’s degree. Jonathan J. Stevens serves as our Senior Vice President of Operations and Chief Information Officer. Mr. Stevens joined CDW in June 2001 as Vice President-Information Technology, was named Chief Information Officer in January 2002 and Vice President-International and Chief Information Officer from 2005 until December 2006. In January 2007, he was named Senior Vice President and Chief Information Officer and assumed his current role in November 2009. Mr. Stevens is responsible for the strategic direction of our information technology. Additionally, he holds responsibility for our distribution centers, transportation, facilities, customer relations, operational excellence and the business technology center. Prior to joining CDW, Mr. Stevens served as regional technology director for Avanade, an international technology integration company formed through a joint venture between Microsoft and Accenture from 2000 to 2001. Prior to that, Mr. Stevens was a principal with Microsoft Consulting Services and led an information technology group for a corporate division of AT&T/NCR. He currently serves on the board of directors of SingleWire Software, LLC and Northeast Illinois Council: Boy Scouts of America. Mr. Stevens is a graduate of the University of Dayton where he earned a bachelor’s degree. Matthew A. Troka serves as our Senior Vice President of Product and Partner Management. Mr. Troka is responsible for managing our relationships with all of our vendor partners. In addition, he directs the day-to-day operations of our purchasing department. Mr. Troka joined CDW in 1992 as an account manager and became a sales manager in 1995. From 1998 to 2001, he served as Corporate Sales Director. From 2001 to 2004, Mr. Troka was Senior Director of Purchasing. From 2004 to 2006, Mr. Troka served as Vice President of Purchasing. From 2006 to 2011, Mr. Troka was Vice President of Product and Partner Management. On March 3, 2011, Mr. Troka was elected Senior Vice President of Product and Partner Management. Table of Contents 24 Mr. Troka serves as a member of the board of directors of Encompass Championship Charities. Mr. Troka is a graduate of the University of Illinois where he earned a bachelor’s degree. Ann E. Ziegler joined CDW in April 2008 as Senior Vice President and Chief Financial Officer. Prior to joining CDW, Ms. Ziegler spent 15 years at Sara Lee Corporation (“Sara Lee”), a global consumer goods company, in a number of executive roles including finance, mergers and acquisitions, strategy and general management positions in both U.S. and international businesses. Most recently, from 2005 until April 2008, Ms. Ziegler served as Chief Financial Officer and Senior Vice President of Administration for Sara Lee Food and Beverage. Prior to joining Sara Lee, Ms. Ziegler was a corporate attorney at Skadden, Arps, Slate, Meagher & Flom. Ms. Ziegler serves on the board of directors of Hanesbrands, Inc. During the previous five years, Ms. Ziegler also served on the board of directors of Unitrin, Inc. Ms. Ziegler is a graduate of The College of William and Mary where she earned a bachelor’s degree and a graduate of the University of Chicago Law School where she earned her Juris Doctor. PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock has been listed on the NASDAQ Global Select Market since June 27, 2013 under the symbol “CDW.” Prior to that date, there was no public market for our common stock. Shares sold in our initial public offering ("IPO") were priced at $17.00 per share on June 26, 2013. The following table sets forth the ranges of high and low sales prices per share of our common stock as reported on the NASDAQ Global Select Market for the periods indicated. Year ended December 31, 2013 High Low Second quarter (beginning June 27, 2013).......................................................................................................$19.17 $17.38 Third quarter.....................................................................................................................................................$24.51 $18.26 Fourth quarter...................................................................................................................................................$23.56 $20.50 Holders As of February 28, 2014, there were 143 holders of record of our common stock. The number of beneficial stockholders is substantially greater than the number of holders of record because a portion of our common stock is held through brokerage firms. Dividends We expect to continue to pay a quarterly cash dividend on our common stock of $0.0425 per share, or $0.17 per annum. The initial quarterly cash dividend of $0.0425 per share was paid on December 2, 2013 to all common stockholders of record as of the close of business on November 15, 2013. On February 13, 2014, we announced that our board of directors declared a quarterly cash dividend on our common stock of $0.0425 per share. The dividend will be paid on March 10, 2014 to all stockholders of record as of the close of business on February 25, 2014. The payment of dividends in quarters beyond the first quarter of 2014 remains at the discretion of our board of directors and will depend upon our results of operations, financial condition, business prospects, capital requirements, contractual restrictions, any potential indebtedness we may incur, restrictions imposed by applicable law, tax considerations and other factors that our board of directors deems relevant. In addition, our ability to pay dividends on our common stock will be limited by restrictions on our ability to pay dividends or make distributions to our stockholders and on the ability of our subsidiaries to pay dividends or make distributions to us, in each case, under the terms of our current and any future agreements governing our indebtedness. For a discussion of our cash resources and needs and restrictions on our ability to pay dividends, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” included elsewhere in this report. For additional discussion of restrictions on our ability to pay dividends, see Note 7 "Long-Term Debt", to the accompanying audited consolidated financial statements included elsewhere in this report. Stock Performance Graph The information contained in this Stock Performance Graph section shall not be deemed to be "soliciting material" or "filed" or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, except to the extent that CDW specifically incorporates it by reference into a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934. Table of Contents 25 The following graph compares the cumulative total shareholder return, calculated on a dividend reinvested basis, on $100.00 invested at the opening of the market on June 27, 2013, the date our common stock first traded on the NASDAQ Global Select Market, through and including the market close on December 31, 2013, with the cumulative total return for the same time period of the same amount invested in the S&P MidCap 400 index and a peer group index. The Company's peer group index for 2013 consists of the following companies: Accenture plc, Anixter International, Inc., Arrow Electronics, Inc., Avnet, Inc., CGI Group Inc., Genuine Parts Company, Henry Schein, Inc., Insight Enterprises, Inc., Owens & Minor, Inc., Patterson Companies, Inc., SYNNEX Corporation, United Stationers Inc., W.W. Grainger, Inc. and Wesco International, Inc. This peer group was selected based on a review of publicly available information about these companies and the Company’s determination that they met one or more of the following criteria: (i) similar size in terms of revenue and/or enterprise value (one-third to three times the Company’s revenue or enterprise value); (ii) operates in a business-to-business distribution environment; (iii) members of the technology industry; (iv) similar customers (i.e., business, government, healthcare, and education); (v) companies that provide services and/or solutions; and (vi) similar EBITDA and gross margins. Shareholder returns over the indicated period are based on historical data and should not be considered indicative of future shareholder returns. June 27, 2013 December 31, 2013 CDW Corp $100 $138 S&P MidCap 400 index 100 118 CDW Peers 100 113 Use of Proceeds from Registered Securities On July 2, 2013, the Company completed an IPO of its common stock in which it issued and sold 23,250,000 shares of common stock. On July 31, 2013, the Company completed the sale of an additional 3,487,500 shares of common stock to the underwriters of the IPO pursuant to the underwriters' July 26, 2013 exercise in full of the overallotment option granted to them in connection with the IPO. Such shares were registered under the Securities Act of 1933, as amended, pursuant to the Company's Registration Statement on Form S-1 (File 333-187472), which was declared effective by the SEC on June 26, 2013. Table of Contents 26 The shares of common stock are listed on the NASDAQ Global Select Market under the symbol “CDW.” The Company's shares of common stock were sold to the underwriters at a price of $17.00 per share in the IPO and upon the exercise of the overallotment option, which together, generated aggregate net proceeds of $424.7 million to the Company after deducting $29.8 million in underwriting discounts, expenses and transaction costs. Using a portion of the net proceeds from the IPO (exclusive of proceeds from the exercise of the overallotment option), the Company paid a $24.4 million termination fee to affiliates of Madison Dearborn Partners, LLC and Providence Equity Partners, L.L.C. in connection with the termination of the management services agreement with such entities that was effective upon completion of the IPO, redeemed $175.0 million aggregate principal amount of senior secured notes due 2018, and redeemed $146.0 million aggregate principal amount of senior subordinated notes due 2017. The redemption price of the senior secured notes due 2018 was 108.0% of the principal amount redeemed, plus accrued and unpaid interest to the date of redemption. The Company used cash on hand to pay such accrued and unpaid interest. The redemption price of the senior subordinated notes due 2017 was 106.268% of the principal amount redeemed, plus accrued and unpaid interest to the date of redemption. The Company used cash on hand to pay such accrued and unpaid interest. On October 18, 2013, proceeds from the overallotment option exercise of $56.0 million and cash on hand were used to redeem $155.0 million aggregate principal amount of senior subordinated notes due 2017. The redemption price of the senior subordinated notes due 2017 was 104.178% of the principal amount redeemed, plus accrued and unpaid interest to the date of redemption. The Company used cash on hand to pay such redemption premium and accrued and unpaid interest. J.P. Morgan Securities LLC, Barclays Capital Inc. and Goldman, Sachs & Co. acted as joint book-running managers of the IPO and as representatives of the underwriters. Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC acted as additional book-running managers in the IPO. Robert W. Baird & Co. Incorporated, Raymond James & Associates, Inc., William Blair & Company, L.L.C., Needham & Company, LLC, Stifel, Nicolaus & Company, Incorporated, Loop Capital Markets LLC and The Williams Capital Group, L.P. acted as managing underwriters in the IPO. Item 6. Selected Financial Data The selected financial data set forth below are not necessarily indicative of the results of future operations and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited consolidated financial statements and the related notes included elsewhere in this report. We have derived the selected financial data presented below as of December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012, and 2011 from our audited consolidated financial statements and related notes, which are included elsewhere in this report. The selected financial data as of December 31, 2010 and December 31, 2009 have been derived from our audited consolidated financial statements as of and for those periods, which are not included in this report. The following are some of the items affecting comparability of the selected financial data for the periods presented: • During the year ended December 31, 2013, we recorded IPO- and secondary-offering related expenses of $75.0 million. • During the years ended December 31, 2013, 2012, and 2011, we recorded net losses on extinguishments of long-term debt of $64.0 million, $17.2 million, and $118.9 million, respectively. The losses represented the difference between the amount paid upon extinguishment, including call premiums and expenses paid to the debt holders and agents, and the net carrying amount of the extinguished debt, adjusted for a portion of the unamortized deferred financing costs. • During the year ended December 31, 2009, we recorded goodwill impairment charges of $241.8 million. This impairment was primarily attributable to deterioration in macroeconomic conditions and overall declines in net sales. Table of Contents 27 Years Ended December 31, (dollars and shares in millions, except per share amounts)2013 2012 2011 2010 2009 Statement of Operations Data: Net sales $10,768.6 $10,128.2 $9,602.4 $8,801.2 $7,162.6 Cost of sales 9,008.3 8,458.6 8,018.9 7,410.4 6,029.7 Gross profit 1,760.3 1,669.6 1,583.5 1,390.8 1,132.9 Selling and administrative expenses 1,120.9 1,029.5 990.1 932.1 821.1 Advertising expense 130.8 129.5 122.7 106.0 101.9 Goodwill impairment ————241.8 Income (loss) from operations 508.6 510.6 470.7 352.7 (31.9) Interest expense, net (250.1)(307.4)(324.2)(391.9)(431.7) Net (loss) gain on extinguishments of long-term debt (64.0)(17.2)(118.9)2.0 — Other income, net 1.0 0.1 0.7 0.2 2.4 Income (loss) before income taxes 195.5 186.1 28.3 (37.0)(461.2) Income tax (expense) benefit (62.7)(67.1)(11.2)7.8 87.8 Net income (loss)$132.8 $119.0 $17.1 $(29.2)$(373.4) Net income (loss) per common share: Basic $0.85 $0.82 $0.12 $(0.20)$(2.60) Diluted $0.84 $0.82 $0.12 $(0.20)$(2.60) Weighted-average common shares outstanding: Basic 156.6 145.1 144.8 144.4 143.8 Diluted 158.7 145.8 144.9 144.4 143.8 Balance Sheet Data (at period end): Cash and cash equivalents $188.1 $37.9 $99.9 $36.6 $88.0 Working capital 810.9 666.5 538.1 675.4 923.2 Total assets 5,924.6 5,720.0 5,967.7 5,943.8 5,976.0 Total debt and capitalized lease obligations (1)3,251.2 3,771.0 4,066.0 4,290.0 4,621.9 Total shareholders’ equity (deficit)711.7 136.5 (7.3)(43.5)(44.7) Other Financial Data: Capital expenditures $47.1 $41.4 $45.7 $41.5 $15.6 Depreciation and amortization 208.2 210.2 204.9 209.4 218.2 Gross profit as a percentage of net sales 16.3%16.5%16.5%15.8%15.8% Ratio of earnings to fixed charges (2)1.8 1.6 1.1 (a)(a) EBITDA (3)$653.8 $703.7 $557.4 $564.3 $188.7 Adjusted EBITDA (3)808.5 766.6 717.3 601.8 465.4 Non-GAAP net income (loss) (4)314.3 247.1 198.8 85.7 (14.5) Statement of Cash Flows Data: Net cash provided by (used in): Operating activities $366.3 $317.4 $214.7 $423.7 $107.6 Investing activities (47.1)(41.7)(56.0)(125.4)(82.6) Financing activities (168.3)(338.0)(95.4)(350.1)(31.9) (1) Excludes borrowings of $256.6 million, $249.2 million, $278.7 million, $28.2 million and $25.0 million, as of December 31, 2013, 2012, 2011, 2010 and 2009, respectively, under our inventory financing agreements. We do not include these borrowings in total debt because we have not in the past incurred, and in the future do not expect to incur, any interest expense or late fees under these agreements. Table of Contents 28 (2) For purposes of calculating the ratio of earnings to fixed charges, earnings consist of earnings before income taxes minus income from equity investees plus fixed charges. Fixed charges consist of interest expense and the portion of rental expense we believe is representative of the interest component of rental expense. (a) For the years ended December 31, 2010 and 2009, earnings available for fixed charges were inadequate to cover fixed charges by $37.0 million and $461.2 million, respectively. (3) EBITDA is defined as consolidated net income (loss) before interest expense, income tax expense (benefit), depreciation, and amortization. Adjusted EBITDA, which is a measure defined in our credit agreements, is calculated by adjusting EBITDA for certain items of income and expense including (but not limited to) the following: (a) non- cash equity-based compensation; (b) goodwill impairment charges; (c) sponsor fees; (d) certain consulting fees; (e) debt-related legal and accounting costs; (f) equity investment income and losses; (g) certain severance and retention costs; (h) gains and losses from the early extinguishment of debt; (i) gains and losses from asset dispositions outside the ordinary course of business; and (j) non-recurring, extraordinary or unusual gains or losses or expenses. We have included a reconciliation of EBITDA and Adjusted EBITDA in the table below. Both EBITDA and Adjusted EBITDA are considered non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. We believe that EBITDA and Adjusted EBITDA provide helpful information with respect to our operating performance and cash flows including our ability to meet our future debt service, capital expenditures and working capital requirements. Adjusted EBITDA also provides helpful information as it is the primary measure used in certain financial covenants contained in our credit agreements. The following unaudited table sets forth reconciliations of net income (loss) to EBITDA and EBITDA to Adjusted EBITDA for the periods presented: Years Ended December 31, (in millions)2013 2012 2011 2010 2009 Net income (loss)$132.8 $119.0 $17.1 $(29.2)$(373.4) Depreciation and amortization 208.2 210.2 204.9 209.4 218.2 Income tax expense (benefit)62.7 67.1 11.2 (7.8)(87.8) Interest expense, net 250.1 307.4 324.2 391.9 431.7 EBITDA 653.8 703.7 557.4 564.3 188.7 Non-cash equity-based compensation 8.6 22.1 19.5 11.5 15.9 Sponsor fees 2.5 5.0 5.0 5.0 5.0 Consulting and debt-related professional fees 0.1 0.6 5.1 15.1 14.1 Goodwill impairment ————241.8 Net loss (gain) on extinguishments of long-term debt 64.0 17.2 118.9 (2.0)— Litigation, net (i)(4.1)4.3 ——— IPO- and secondary-offering related expenses 75.0 ———— Other adjustments (ii)8.6 13.7 11.4 7.9 (0.1) Adjusted EBITDA $808.5 $766.6 $717.3 $601.8 $465.4 (i) Relates to unusual, non-recurring litigation matters. (ii) Includes certain retention costs and equity investment income, certain severance costs in 2009 and a gain related to the sale of the Informacast software and equipment in 2009. Table of Contents 29 The following unaudited table sets forth a reconciliation of EBITDA to net cash provided by operating activities for the periods presented: Years Ended December 31, (in millions)2013 2012 2011 2010 2009 EBITDA $653.8 $703.7 $557.4 $564.3 $188.7 Depreciation and amortization (208.2)(210.2)(204.9)(209.4)(218.2) Income tax (expense) benefit (62.7)(67.1)(11.2)7.8 87.8 Interest expense, net (250.1)(307.4)(324.2)(391.9)(431.7) Net income (loss)132.8 119.0 17.1 (29.2)(373.4) Depreciation and amortization 208.2 210.2 204.9 209.4 218.2 Goodwill impairment ————241.8 Equity-based compensationexpense 46.6 22.1 19.5 11.5 15.9 Amortization of deferredfinancing costs, debt premium,and debt discount, net 8.8 13.6 15.7 18.0 16.2 Deferred income taxes (48.7)(56.3)(10.2)(4.3)(94.4) Allowance for doubtful accounts ——0.4 (1.3)(0.2) Realized loss on interest rate swapagreements ——2.8 51.5 103.2 Mark to market loss on interestrate derivatives 0.1 0.9 4.2 4.7 — Net loss (gain) onextinguishments of long-term debt 64.0 17.2 118.9 (2.0)— Net loss (gain) on sale anddisposal of assets —0.1 0.3 0.7 (1.7) Changes in assets and liabilities (47.1)(9.4)(158.3)165.3 (18.0) Other non-cash items 1.6 —(0.6)(0.6)— Net cash provided by operatingactivities $366.3 $317.4 $214.7 $423.7 $107.6 Table of Contents 30 (4) Non-GAAP net income (loss) is considered a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. We believe that non-GAAP net income (loss) provides meaningful information regarding our operating performance and our prospects for the future. This supplemental measure excludes, among other things, charges related to the amortization of Acquisition-related intangibles, non-cash equity-based compensation and gains and losses from the early extinguishment of debt. The following unaudited table sets forth a reconciliation of net income (loss) to non-GAAP net income (loss) for the periods presented: Years Ended December 31, (in millions)2013 2012 2011 2010 2009 Net income (loss)$132.8 $119.0 $17.1 $(29.2)$(373.4) Amortization of intangibles (i)161.2 163.7 165.7 166.8 168.9 Non-cash equity-based compensation 8.6 22.1 19.5 11.5 15.9 Litigation, net (ii)(6.3)———— Net loss on extinguishments of long-term debt 64.0 17.2 118.9 (2.0)— Interest expense adjustment related to extinguishments of long-term debt (iii)(7.5)(3.3)(19.4)(0.7)— IPO- and secondary-offering related expenses (iv)75.0 ———— Debt-related refinancing costs (v)——3.8 5.6 — Goodwill impairment ————241.8 Severance expense ————1.4 Aggregate adjustment for income taxes (vi)(113.5)(71.6)(106.8)(66.3)(69.1) Non-GAAP net income (loss)$314.3 $247.1 $198.8 $85.7 $(14.5) (i) Includes amortization expense for Acquisition-related intangible assets, primarily customer relationships and trade names. (ii) Relates to unusual, non-recurring litigation matters. (iii) Reflects adjustments to interest expense resulting from debt extinguishments. Represents the difference between interest expense previously recognized under the effective interest method and actual interest paid. (iv) IPO- and secondary-offering related expenses consist of the following: (in millions)Year Ended December 31, 2013 Acceleration charge for certain equity awards andrelated employer payroll taxes $40.7 RDU Plan cash retention pool accrual 7.5 Management services agreement termination fee 24.4 Other expenses 2.4 IPO- and secondary-offering related expenses $75.0 (v) Represents fees and costs expensed related to the December 2010 and March 2011 amendments to our prior senior secured term loan facility. (vi) Based on a normalized effective tax rate of 39.0%. Table of Contents 31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Unless otherwise indicated or the context otherwise requires, as used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the terms “we,” “us,” “the Company,” “our,” “CDW” and similar terms refer to CDW Corporation and its subsidiaries. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the audited consolidated financial statements and the related notes included elsewhere in this report. This discussion contains forward-looking statements that are subject to numerous risks and uncertainties. Actual results may differ materially from those contained in any forward-looking statements. See “Forward- Looking Statements” above. Overview CDW is a Fortune 500 company and a leading provider of integrated information technology (“IT”) solutions in the U.S. and Canada. We help our customer base of approximately 250,000 small, medium and large business, government, education and healthcare customers by delivering critical solutions to their increasingly complex IT needs. Our broad array of offerings ranges from discrete hardware and software products to integrated IT solutions such as mobility, security, data center optimization, cloud computing, virtualization and collaboration. We are technology "agnostic," with a product portfolio that includes more than 100,000 products from more than 1,000 brands. We provide our products and solutions through sales force and service delivery teams consisting of more than 4,400 coworkers, including nearly 1,800 field sellers, highly-skilled technology specialists and advanced service delivery engineers. We are a leading U.S. sales channel partner for many original equipment manufacturers (“OEMs”) and software publishers (collectively, our “vendor partners”), whose products we sell or include in the solutions we offer. We believe we are an important extension of our vendor partners' sales and marketing capabilities, providing them with a cost-effective way to reach customers and deliver a consistent brand experience through our established end-market coverage and extensive customer access. We have two reportable segments: Corporate, which is comprised primarily of private sector business customers, and Public, which is comprised of government agencies and education and healthcare institutions. Our Corporate segment is divided into a medium/large business customer channel, primarily serving customers with more than 100 employees, and a small business customer channel, primarily serving customers with up to 100 employees. We also have two other operating segments, CDW Advanced Services and Canada, which do not meet the reportable segment quantitative thresholds and, accordingly, are combined together as “Other.” The CDW Advanced Services business consists primarily of customized engineering services delivered by technology specialists and engineers, and managed services that include Infrastructure as a Service (“IaaS”) offerings. Revenues from the sale of hardware, software, custom configuration and third-party provided services are recorded within our Corporate and Public segments. We may sell all or only select products that our vendor partners offer. Each vendor partner agreement provides for specific terms and conditions, which may include one or more of the following: product return privileges, price protection policies, purchase discounts and vendor incentive programs, such as purchase or sales rebates and cooperative advertising reimbursements. We also resell software for major software publishers. Our agreements with software publishers allow the end- user customer to acquire software or licensed products and services. In addition to helping our customers determine the best software solutions for their needs, we help them manage their software agreements, including warranties and renewals. A significant portion of our advertising and marketing expenses is reimbursed through cooperative advertising reimbursement programs with our vendor partners. These programs are at the discretion of our vendor partners and are typically tied to sales or purchasing volumes or other commitments to be met by us within a specified period of time. Trends and Key Factors Affecting our Financial Performance We believe the following trends may have an important impact on our financial performance: • Our Public segment sales are impacted by government spending policies, budget priorities and revenue levels. An adverse change in any of these factors could cause our Public segment customers to reduce their purchases or to terminate or not renew contracts with us, which could adversely affect our business, results of operations or cash flows. Although our sales to the federal government are diversified across multiple agencies and departments, they collectively accounted for approximately 7%, 10% and 10% of our net sales for the years ended December 31, 2013, 2012 and 2011, respectively. Second half 2013 Public segment results were negatively impacted by federal government budget uncertainty, sequestration and the partial shutdown of the federal government for 16 days. Table of Contents 32 • An important factor affecting our ability to generate sales and achieve our targeted operating results is the impact of general economic conditions on our customers’ willingness to spend on information technology. In the second quarter of 2012, we began to see customers take a more cautious approach to spending as increased macroeconomic uncertainty impacted decision-making and led to some customers delaying purchases. As we moved through 2013, we saw improvements in operating results for certain sales channels. We will continue to closely monitor macroeconomic conditions during 2014. Uncertainties related to potential reductions in government spending, requirements associated with implementation of the Affordable Care Act, potential changes in tax and regulatory policy, weakening consumer and business confidence or increased unemployment could result in reduced or deferred spending on information technology products and services by our customers and result in increased competitive pricing pressures. • We believe that our customers’ transition to more complex technology solutions will continue to be an important growth area for us in the future. However, because the market for technology products and services is highly competitive, our success at capitalizing on this transition will be based on our ability to tailor specific solutions to customer needs, the quality and breadth of our product and service offerings, the knowledge and expertise of our sales force, price, product availability and speed of delivery. 2013 Initial Public Offering On July 2, 2013, we completed an initial public offering ("IPO") of 23,250,000 shares of common stock. On July 31, 2013, we completed the sale of an additional 3,487,500 shares of common stock to the underwriters of the IPO pursuant to the underwriters' July 26, 2013 exercise in full of the overallotment option granted to them in connection with the IPO. Our shares of common stock were sold to the underwriters at a price of $17.00 per share in the IPO and upon the exercise of the overallotment option, which together, generated aggregate net proceeds of $424.7 million to the Company after deducting underwriting discounts, expenses and transaction costs. On November 19, 2013, we completed a secondary public offering, whereby certain selling stockholders sold 15,000,000 shares of common stock. On December 18, 2013, such selling stockholders sold an additional 2,250,000 shares of common stock to the underwriters of the secondary public offering pursuant to the underwriters' December 13, 2013 exercise in full of the overallotment option granted to them in connection with the secondary public offering. We did not receive any proceeds from the sale of shares in the secondary public offering or upon the exercise of the overallotment option. The consolidated statement of operations for the year ended December 31, 2013 included pre-tax IPO- and secondary- offering related expenses of $75.0 million. See Note 9 of the accompanying audited consolidated financial statements for additional discussion of our IPO and secondary offering. Key Business Metrics Our management monitors a number of financial and non-financial measures and ratios on a regular basis in order to track the progress of our business and make adjustments as necessary. We believe that the most important of these measures and ratios include average daily sales, gross margin, operating margin, net income, Non-GAAP net income, net income per common share, Non-GAAP net income per diluted share, EBITDA and Adjusted EBITDA, return on invested capital, cash and cash equivalents, net working capital, cash conversion cycle (defined to be days of sales outstanding in accounts receivable plus days of supply in inventory minus days of purchases outstanding in accounts payable, based on a rolling three-month average), debt levels including available credit and leverage ratios, sales per coworker and coworker turnover. These measures and ratios are compared to standards or objectives set by management, so that actions can be taken, as necessary, in order to achieve the standards and objectives. Non-GAAP net income and Adjusted EBITDA are non-GAAP financial measures. We believe these measures provide helpful information with respect to the company’s operating performance and cash flows including our ability to meet our future debt service, capital expenditures, dividend payments, and working capital requirements, Adjusted EBITDA also provides helpful information as it is the primary measure used in certain financial covenants contained in our senior credit facilities. See "Selected Financial Data" included elsewhere in this report for the definitions of Non-GAAP net income and Adjusted EBITDA and reconciliations to net income. Table of Contents 33 The results of certain key business metrics are as follows: (dollars in millions)Years Ended December 31, 2013 2012 2011 Net sales $10,768.6 $10,128.2 $9,602.4 Gross profit 1,760.3 1,669.6 1,583.5 Income from operations 508.6 510.6 470.7 Net income 132.8 119.0 17.1 Non-GAAP net income 314.3 247.1 198.8 Adjusted EBITDA 808.5 766.6 717.3 Average daily sales 42.4 39.9 37.7 Net debt (defined as total debt minus cash and cash equivalents)3,063.1 3,733.1 3,966.1 Cash conversion cycle (in days) (1)24 24 28 (1) Cash conversion cycle is defined as days of sales outstanding in accounts receivable plus days of supply in inventory minus days of purchases outstanding in accounts payable, based on a rolling three-month average. Results of Operations Year Ended December 31, 2013 Compared to Year Ended December 31, 2012 The following table presents our results of operations, in dollars and as a percentage of net sales, for the years ended December 31, 2013 and 2012: Year Ended December 31, 2013 Year Ended December 31, 2012 Dollars inMillions Percentage ofNet Sales Dollars inMillions Percentage ofNet Sales Net sales $10,768.6 100.0%$10,128.2 100.0% Cost of sales 9,008.3 83.7 8,458.6 83.5 Gross profit 1,760.3 16.3 1,669.6 16.5 Selling and administrative expenses 1,120.9 10.4 1,029.5 10.2 Advertising expense 130.8 1.2 129.5 1.3 Income from operations 508.6 4.7 510.6 5.0 Interest expense, net (250.1)(2.3)(307.4)(3.0) Net loss on extinguishments of long-term debt (64.0)(0.6)(17.2)(0.2) Other income, net 1.0 —0.1 — Income before income taxes 195.5 1.8 186.1 1.8 Income tax expense (62.7)(0.6)(67.1)(0.7) Net income $132.8 1.2%$119.0 1.1% Table of Contents 34 Net sales The following table presents our net sales by segment, in dollars and as a percentage of total net sales, and the year- over-year dollar and percentage change in net sales for the years ended December 31, 2013 and 2012: Years Ended December 31, 2013 2012 Dollars inMillions Percentage ofTotal Net Sales Dollars inMillions Percentage ofTotal Net Sales DollarChange PercentChange (1) Corporate $5,960.1 55.3%$5,512.8 54.4%$447.3 8.1% Public 4,164.5 38.7 4,023.0 39.7 141.5 3.5 Other 644.0 6.0 592.4 5.9 51.6 8.7 Total net sales $10,768.6 100.0%$10,128.2 100.0%$640.4 6.3% (1) There were 254 selling days in both the years ended December 31, 2013 and 2012. The following table presents our net sales by customer channel for our Corporate and Public segments and the year- over-year dollar and percentage change in net sales for the years ended December 31, 2013 and 2012: (dollars in millions)Years Ended December 31, 2013 2012 Dollar Change Percent Change Corporate: Medium / Large $4,902.6 $4,448.5 $454.1 10.2 % Small Business 1,057.5 1,064.3 (6.8)(0.6) Total Corporate $5,960.1 $5,512.8 $447.3 8.1 % Public: Government $1,250.6 $1,394.1 $(143.5)(10.3)% Education 1,449.0 1,192.3 256.7 21.5 Healthcare 1,464.9 1,436.6 28.3 2.0 Total Public $4,164.5 $4,023.0 $141.5 3.5 % Total net sales in 2013 increased $640.4 million, or 6.3%, to $10,768.6 million, compared to $10,128.2 million in 2012. There were 254 selling days for both the years ended December 31, 2013 and 2012. The increase in total net sales was primarily the result of growth in hardware and software, a more tenured sales force, a continued focus on seller productivity across all areas of the organization and the addition of nearly 120 customer-facing coworkers, the majority in pre- and post-sale technical positions such as technical specialists and service delivery roles. Our total net sales growth for the year ended December 31, 2013 reflected growth in notebooks/mobile devices, netcomm products and software. Software gains were driven by growth in security, document management software and network management software, partially offset by a decline in application suites. Corporate segment net sales in 2013 increased $447.3 million, or 8.1%, compared to 2012, driven by sales growth in the medium/large customer channel. Within our Corporate segment, net sales to medium/large customers increased 10.2% between years primarily due to certain of these customers increasing their IT spending, a more tenured sales force, a continued focus on seller productivity and additional customer-facing coworkers, the majority in pre- and post-sale technical positions such as technical specialists and service delivery roles. This increase was led by unit volume growth in netcomm products and growth in notebooks/mobile devices and software. Partially offsetting the growth in the medium/large customer channel was a 0.6% decline in net sales to small business customers, due to certain of these customers taking a more cautious approach to spending as macroeconomic and regulatory uncertainty impacted decision-making. This decrease was led by unit volume declines in notebooks/mobile devices, partially offset by growth in netcomm products. Public segment net sales in 2013 increased $141.5 million, or 3.5%, between years, driven by strong performance in the education customer channel. Net sales to education customers increased $256.7 million, or 21.5%, between years, led by growth in net sales to K-12 customers, reflecting increased sales of notebooks/mobile devices to support new standardized digital testing requirements that will take effect in 2014. Net sales to government customers decreased $143.5 million, or Table of Contents 35 10.3%, in 2013 compared to 2012 due to reductions and delays in federal government spending following sequestration, uncertainty over future budget negotiations and the partial shutdown of the federal government. The government customer channel net sales decline was led by decreases in sales of enterprise storage and notebooks/mobile devices, partially offset by growth in software. Net sales to healthcare customers increased $28.3 million, or 2.0%, between years, driven by growth in notebooks/mobile devices and desktop computers. Gross profit Gross profit increased $90.7 million, or 5.4%, to $1,760.3 million in 2013, compared to $1,669.6 million in 2012. As a percentage of total net sales, gross profit decreased 20 basis points to 16.3% in 2013, down from 16.5% in 2012. Gross profit margin was negatively impacted 30 basis points by unfavorable price/mix changes within product margin, as we experienced product margin compression in transactional product categories such as desktops and notebooks. Partially offsetting this decrease was an increase of 10 basis points due to a higher mix of net service contract revenue. Net service contract revenue, including items such as third-party services and warranties, has a positive impact on gross profit margin as our cost paid to the vendor or third-party service provider is recorded as a reduction to net sales, resulting in net sales being equal to the gross profit on the transaction. The gross profit margin may fluctuate based on various factors, including vendor incentive and inventory price protection programs, cooperative advertising funds classified as a reduction of cost of sales, product mix, net service contract revenue, commission revenue, pricing strategies, market conditions and other factors, any of which could result in changes in gross profit margins. Selling and administrative expenses Selling and administrative expenses increased $91.4 million, or 8.9%, to $1,120.9 million in 2013, compared to $1,029.5 million in 2012. As a percentage of total net sales, selling and administrative expenses increased 20 basis points to 10.4% in 2013, up from 10.2% in 2012. Sales payroll, including sales commissions and other variable compensation costs, increased $28.9 million, or 6.4%, between years, consistent with higher sales and gross profit. Additionally, selling and administrative expenses for 2013 included IPO- and secondary-offering related expenses of $75.0 million, as follows: • Pre-tax charges of $36.7 million related to the acceleration of the expense recognition for certain equity awards and $4.0 million for the related employer payroll taxes. See Note 10 of the accompanying audited consolidated financial statements for additional discussion of the impact of the IPO on our equity awards. • A pre-tax charge of $24.4 million related to the payment of a termination fee to affiliates of the Sponsors in connection with the termination of the management services agreement with such entities. • A pre-tax charge of $7.5 million related to compensation expense in connection with the Restricted Debt Unit Plan. See Note 12 of the accompanying audited consolidated financial statements for additional discussion of this charge. • Other IPO- and secondary-offering related expenses of $2.4 million. We did not record any IPO- or secondary-offering related expenses during 2012. Partially offsetting these increases in 2013, was the favorable resolution of a class action legal proceeding in which we were a claimant, which reduced selling and administrative expenses by $10.4 million in 2013 compared to 2012. Total coworker count increased by 163 coworkers, from 6,804 at December 31, 2012, to 6,967 at December 31, 2013. Advertising expense Advertising expense increased $1.3 million, or 0.9%, to $130.8 million in 2013, compared to $129.5 million in 2012. As a percentage of net sales, advertising expense was 1.2% in 2013, compared to 1.3% in 2012. The dollar increase in advertising expense was due to a continued focus on advertising our solutions and products, which reinforces our reputation as a leading IT solutions provider. Table of Contents 36 Income from operations The following table presents income (loss) from operations by segment, in dollars and as a percentage of net sales, and the year-over-year percentage change in income (loss) from operations for the years ended December 31, 2013 and 2012: Year Ended December 31, 2013 Year Ended December 31, 2012 Dollars inMillions OperatingMarginPercentage Dollars inMillions OperatingMarginPercentage Percent Changein Income (Loss)from Operations Segments: (1) Corporate $363.3 6.1%$349.0 6.3%4.1 % Public 246.5 5.9 246.7 6.1 (0.1) Other 27.2 4.2 18.6 3.1 46.3 Headquarters (2)(128.4)nm*(103.7)nm*(23.8) Total income from operations $508.6 4.7%$510.6 5.0%(0.4)% * Not meaningful (1) Segment income (loss) from operations includes the segment’s direct operating income (loss) and allocations for Headquarters’ costs, allocations for income and expenses from logistics services, certain inventory adjustments and volume rebates and cooperative advertising from vendors. (2) Includes certain Headquarters’ function costs that are not allocated to the segments. Income from operations was $508.6 million in 2013, a decrease of $2.0 million, or 0.4%, compared to $510.6 million in 2012. The decrease in income from operations was driven by higher selling and administrative expenses primarily resulting from $75.0 million of IPO- and secondary-offering related expenses recorded during 2013, mostly offset by higher net sales and gross profit. Total operating margin percentage decreased 30 basis points to 4.7% in 2013, from 5.0% in 2012. Operating margin percentage was negatively impacted by the increase in selling and administrative expenses as a percentage of net sales and gross profit margin compression, partially offset by a decrease in advertising expense as a percentage of net sales. Corporate segment income from operations was $363.3 million in 2013, an increase of $14.3 million, or 4.1%, compared to $349.0 million in 2012. Corporate segment operating margin percentage decreased 20 basis points to 6.1% in 2013, from 6.3% in 2012. Results for 2013 included $26.4 million of IPO- and secondary-offering related expenses, which reduced Corporate segment operating margin by 40 basis points. Higher sales and gross profit dollars offset the effect of IPO- and secondary-offering related expenses on income from operations for 2013. Public segment income from operations was $246.5 million in 2013, a decrease of $0.2 million, or 0.1%, compared to $246.7 million in 2012. Public segment operating margin percentage decreased 20 basis points to 5.9% in 2013, from 6.1% in 2012. Results for 2013 included $14.4 million of IPO- and secondary-offering related expenses, which reduced Public segment operating margin by 30 basis points. Higher sales and gross profit dollars nearly offset the effect of IPO- and secondary- offering related expenses on income from operations for 2013. Interest expense, net At December 31, 2013, our outstanding long-term debt totaled $3,251.2 million, compared to $3,771.0 million at December 31, 2012. We reduced long-term debt throughout the year primarily through the use of a portion of the net proceeds from the IPO and cash flows provided by operating activities. Net interest expense in 2013 was $250.1 million, a decrease of $57.3 million compared to $307.4 million in 2012. This decrease was primarily due to lower debt balances and effective interest rates for 2013 compared to 2012 as a result of debt repayments and refinancing activities completed during 2012 and 2013. See "Liquidity and Capital Resources" below. Net loss on extinguishments of long-term debt During 2013, we recorded a net loss on extinguishments of long-term debt of $64.0 million compared to $17.2 million in 2012. In October 2013, we redeemed $155.0 million aggregate principal amount of senior subordinated notes. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $8.5 million, representing the difference Table of Contents 37 between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs. In August 2013, we redeemed $324.0 million aggregate principal amount of senior subordinated notes. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $24.6 million, representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs. In July 2013, we redeemed $175.0 million aggregate principal amount of senior secured notes. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $16.7 million, representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs. In April 2013, we entered into a new seven-year, $1,350.0 million aggregate principal amount senior secured term loan facility. Substantially all of the proceeds were used to repay the $1,299.5 million outstanding aggregate principal amount of the prior senior secured term loan facility. In connection with this refinancing, we recorded a loss on extinguishment of long-term debt of $10.3 million, representing a write-off of the remaining unamortized deferred financing costs related to the prior senior secured term loan facility. In March 2013, we redeemed $50.0 million aggregate principal amount of senior subordinated notes. We recorded a loss on extinguishment of long-term debt of $3.9 million, representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs. In December 2012, we redeemed $100.0 million aggregate principal amount of senior subordinated notes. We recorded a loss on extinguishment of long-term debt of $7.8 million representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs. In February and March 2012, we purchased or redeemed the remaining $129.0 million of senior notes due 2015, funded with the issuance of an additional $130.0 million of senior notes due 2019. As a result, we recorded a loss on extinguishment of long-term debt of $9.4 million, representing the difference between the purchase or redemption price of the senior notes due 2015 and the net carrying amount of the purchased debt, adjusted for the remaining unamortized deferred financing costs. Income tax expense Income tax expense was $62.7 million in 2013, compared to $67.1 million in 2012. The effective income tax rate, expressed by calculating income tax expense or benefit as a percentage of income before income taxes, was 32.1% and 36.0% for 2013 and 2012, respectively. For 2013, the effective tax rate differed from the U.S. federal statutory rate primarily due to state income taxes, including current year state income tax credits and an adjustment to deferred state income taxes due to changes in apportionment factors. For 2012, the effective tax rate differed from the U.S. federal statutory rate primarily due to favorable adjustments to state tax credits which were partially offset by the unfavorable impact of adjustments to deferred state income taxes due to changes in state tax laws and non-deductible expenses, primarily equity-based compensation and meals and entertainment. The lower effective tax rate for 2013 as compared to 2012 was primarily driven by the favorable impact of adjustments to deferred state income taxes due to changes in state tax apportionment factors and lower non-deductible expenses. Net income Net income was $132.8 million in 2013, compared to $119.0 million in 2012. Significant factors and events causing the net changes between the periods are discussed above. Non-GAAP net income Non-GAAP net income was $314.3 million for the year ended December 31, 2013, an increase of $67.2 million, or 27.2%, compared to $247.1 million for the year ended December 31, 2012. Table of Contents 38 We have included a reconciliation of Non-GAAP net income for the years ended December 31, 2013 and 2012 below. Non-GAAP net income excludes, among other things, charges related to the amortization of acquisition-related intangibles, non-cash equity-based compensation, IPO- and secondary-offering related expenses and gains and losses from the early extinguishment of debt. Non-GAAP net income is considered a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. We believe that Non-GAAP net income provides helpful information with respect to our operating performance and cash flows including our ability to meet our future debt service, capital expenditures and working capital requirements. (in millions)Years Ended December 31, 2013 2012 Net income $132.8 $119.0 Amortization of intangibles (1)161.2 163.7 Non-cash equity-based compensation 8.6 22.1 Litigation, net (2)(6.3)— Net loss on extinguishments of long-term debt 64.0 17.2 Interest expense adjustment related to extinguishments of long-term debt (3)(7.5)(3.3) IPO- and secondary-offering related expenses (4)75.0 — Aggregate adjustment for income taxes (5)(113.5)(71.6) Non-GAAP net income $314.3 $247.1 (1) Includes amortization expense for acquisition-related intangible assets, primarily customer relationships and trade names. (2) Relates to unusual, non-recurring litigation matters. (3) Reflects adjustments to interest expense resulting from debt extinguishments. Represents the difference between interest expense previously recognized under the effective interest method and actual interest paid. (4) IPO- and secondary-offering related expenses consist of the following: (in millions)Years Ended December 31, 2013 2012 Acceleration charge for certain equity awards andrelated employer payroll taxes $40.7 $— RDU Plan cash retention pool accrual 7.5 — Management services agreement termination fee 24.4 — Other expenses 2.4 — IPO- and secondary-offering related expenses $75.0 $— (5) Based on a normalized effective tax rate of 39.0%. Adjusted EBITDA Adjusted EBITDA was $808.5 million in 2013, an increase of $41.9 million, or 5.5%, compared to $766.6 million in 2012. As a percentage of net sales, Adjusted EBITDA was 7.5% and 7.6% in 2013 and 2012, respectively. We have included a reconciliation of EBITDA and Adjusted EBITDA for 2013 and 2012 in the table below. EBITDA is defined as consolidated net income before interest expense, income tax expense, depreciation and amortization. Adjusted EBITDA, which is a measure defined in our credit agreements, means EBITDA adjusted for certain items which are described in the table below. Both EBITDA and Adjusted EBITDA are considered non-GAAP financial measures. Generally, a non- GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by the Company may differ from similar measures used Table of Contents 39 by other companies, even when similar terms are used to identify such measures. We believe that EBITDA and Adjusted EBITDA provide helpful information with respect to our operating performance and cash flows including our ability to meet our future debt service, capital expenditures and working capital requirements. Adjusted EBITDA also provides helpful information as it is the primary measure used in certain financial covenants contained in our credit agreements. (in millions)Years Ended December 31, 2013 2012 Net income $132.8 $119.0 Depreciation and amortization 208.2 210.2 Income tax expense 62.7 67.1 Interest expense, net 250.1 307.4 EBITDA 653.8 703.7 Adjustments: Non-cash equity-based compensation 8.6 22.1 Sponsor fee 2.5 5.0 Consulting and debt-related professional fees 0.1 0.6 Net loss on extinguishments of long-term debt 64.0 17.2 Litigation, net (1)(4.1)4.3 IPO- and secondary-offering related expenses (2)75.0 — Other adjustments (3)8.6 13.7 Total adjustments 154.7 62.9 Adjusted EBITDA $808.5 $766.6 (1) Relates to unusual, non-recurring litigation matters. (2) As defined under Non-GAAP net income above. (3) Other adjustments primarily include certain retention costs and equity investment income. The following table sets forth a reconciliation of EBITDA to net cash provided by operating activities for the years ended December 31, 2013 and 2012. Years Ended December 31, (in millions)2013 2012 EBITDA $653.8 $703.7 Depreciation and amortization (208.2)(210.2) Income tax expense (62.7)(67.1) Interest expense, net (250.1)(307.4) Net income 132.8 119.0 Depreciation and amortization 208.2 210.2 Equity-based compensation expense 46.6 22.1 Deferred income taxes (48.7)(56.3) Amortization of deferred financing costs, debt premium, anddebt discount, net 8.8 13.6 Net loss on extinguishments of long-term debt 64.0 17.2 Other 1.7 1.0 Changes in assets and liabilities (47.1)(9.4) Net cash provided by operating activities $366.3 $317.4 Table of Contents 40 Year Ended December 31, 2012 Compared to Year Ended December 31, 2011 The following table presents our results of operations, in dollars and as a percentage of net sales, for the years ended December 31, 2012 and 2011: Year Ended December 31, 2012 Year Ended December 31, 2011 Dollars inMillions Percentage ofNet Sales Dollars inMillions Percentage ofNet Sales Net sales $10,128.2 100.0%$9,602.4 100.0% Cost of sales 8,458.6 83.5 8,018.9 83.5 Gross profit 1,669.6 16.5 1,583.5 16.5 Selling and administrative expenses 1,029.5 10.2 990.1 10.3 Advertising expense 129.5 1.3 122.7 1.3 Income from operations 510.6 5.0 470.7 4.9 Interest expense, net (307.4)(3.0)(324.2)(3.4) Net loss on extinguishments of long-term debt (17.2)(0.2)(118.9)(1.2) Other income, net 0.1 —0.7 — Income before income taxes 186.1 1.8 28.3 0.3 Income tax expense (67.1)(0.7)(11.2)(0.1) Net income $119.0 1.1%$17.1 0.2% Net sales The following table presents our net sales by segment, in dollars and as a percentage of total net sales, and the year- over-year dollar and percentage change in net sales for the years ended December 31, 2012 and 2011: Years Ended December 31, 2012 2011 Dollars inMillions Percentage ofTotal Net Sales Dollars inMillions Percentage ofTotal Net Sales DollarChange PercentChange (1) Corporate $5,512.8 54.4%$5,334.4 55.6%$178.4 3.3% Public 4,023.0 39.7 3,757.2 39.1 265.8 7.1 Other 592.4 5.9 510.8 5.3 81.6 16.0 Total net sales $10,128.2 100.0%$9,602.4 100.0%$525.8 5.5% (1) There were 254 and 255 selling days in the years ended December 31, 2012 and 2011, respectively. On an average daily basis, total net sales increased 5.9%. Table of Contents 41 The following table presents our net sales by customer channel for our Corporate and Public segments and the year- over-year dollar and percentage change in net sales for the years ended December 31, 2012 and 2011: (in millions)Years Ended December 31, 2012 2011 Dollar Change Percent Change Corporate: Medium / Large $4,448.5 $4,287.1 $161.4 3.8% Small Business 1,064.3 1,047.3 17.0 1.6 Total Corporate $5,512.8 $5,334.4 $178.4 3.3% Public: Government $1,394.1 $1,343.5 $50.6 3.8% Education 1,192.3 1,197.7 (5.4)(0.4) Healthcare 1,436.6 1,216.0 220.6 18.1 Total Public $4,023.0 $3,757.2 $265.8 7.1% Total net sales in 2012 increased $525.8 million, or 5.5%, to $10,128.2 million, compared to $9,602.4 million in 2011. There were 254 and 255 selling days in the years ended December 31, 2012 and 2011, respectively. On an average daily basis, total net sales increased 5.9%. The increase in total net sales was the result of general volume growth, market share gains, a more tenured sales force, and a continued focus on seller productivity across all areas of the organization. Our net sales growth for the year ended December 31, 2012 reflected growth in notebooks/mobile devices, netcomm products, software products, desktop computers and enterprise storage. Corporate segment net sales in 2012 increased $178.4 million, or 3.3%, compared to 2011. Within our Corporate segment, net sales to medium/large customers increased 3.8% between years, and net sales to small business customers increased 1.6% between years. Customers within the Corporate segment continued to take a more cautious approach to spending as increased macroeconomic uncertainty impacted decision-making and led to some customers delaying purchases. The increases in Corporate segment net sales were primarily a result of hardware growth, most notably in netcomm products, and unit volume growth in desktop computers. Software product growth, led by network management and security software, also contributed to the increase in net sales. Partially offsetting the growth was a decline in net sales of memory products due to several large orders in the second and third quarters of 2011 that did not recur. Public segment net sales in 2012 increased $265.8 million, or 7.1%, between years, driven by continued strong performance in the healthcare customer channel. Net sales to healthcare customers increased $220.6 million, or 18.1%, between years, led by hardware growth, most notably in enterprise storage, and unit volume growth in netcomm products, desktop computers and point of care technology carts. Software product growth also contributed to the increase in net sales in healthcare. The healthcare customer channel growth was primarily the result of deeper relationships with several group purchasing organizations and increased healthcare industry demand for IT products, as the healthcare industry continued its adoption of electronic medical records and point of care technologies. Net sales to government customers increased $50.6 million, or 3.8%, in 2012 compared to 2011 led by unit volume increases in sales of notebooks/mobile devices, partially offset by a decline in net sales of netcomm products. Net sales to education customers decreased $5.4 million, or 0.4%, between years, reflecting budget constraints. A decline in sales to K-12 customers was partially offset by growth in sales to higher education customers that was led by increased sales of netcomm products, as higher education customers refreshed and added additional enterprise technology. Gross profit Gross profit increased $86.1 million, or 5.4%, to $1,669.6 million in 2012, compared to $1,583.5 million in 2011. As a percentage of total net sales, gross profit was 16.5% in both 2012 and 2011. Gross profit margin was positively impacted 10 basis points by a higher mix of commission and net service contract revenue. Fully offsetting these increases in gross profit margin were declines in vendor funding primarily due to program changes for certain vendors. Commission revenue, including agency fees earned on sales of software licenses and software assurance under enterprise agreements, has a positive impact on our gross profit margin, as we record the fee or commission as a component of net sales when earned and there is no corresponding cost of sales. Net service contract revenue, including items such as third-party services and warranties, also has a positive impact on gross profit margin as our cost paid to the vendor or third-party service provider is recorded as a reduction to net sales, resulting in net sales being equal to the gross profit on the transaction. Vendor funding includes purchase discounts, volume rebates and cooperative advertising. Table of Contents 42 The gross profit margin may fluctuate based on various factors, including vendor incentive and inventory price protection programs, cooperative advertising funds classified as a reduction of cost of sales, product mix, net service contract revenue, commission revenue, pricing strategies, market conditions, and other factors, any of which could result in changes in gross profit margins. Selling and administrative expenses Selling and administrative expenses increased $39.4 million, or 4.0%, to $1,029.5 million in 2012, compared to $990.1 million in 2011. As a percentage of total net sales, selling and administrative expenses decreased 10 basis points to 10.2% in 2012, down from 10.3% in 2011. The dollar increase in selling and administrative expenses was primarily due to higher payroll costs (excluding bonus compensation tied to Adjusted EBITDA) of $43.0 million. The higher payroll costs reflected in selling and administrative expenses were driven by increased sales commissions and other variable compensation costs consistent with higher sales and gross profit. While total coworker count increased by 59 coworkers, from 6,745 coworkers at December 31, 2011 to 6,804 coworkers at December 31, 2012, the increase was primarily comprised of service delivery coworkers, the cost of which is reflected in cost of sales. Other factors that increased selling and administrative expenses included a $5.8 million increase in health benefits due to higher claims costs and a higher average number of participants in 2012 compared to 2011, a $5.3 million increase in depreciation and amortization expense related primarily to additional capital expenditures for information technology systems, and a $2.6 million increase in stock compensation expense, primarily due to incremental expense related to a modified Class B Common Unit grant agreement with our former chief executive officer. Partially offsetting these increases was an $11.8 million decline in bonus compensation tied to Adjusted EBITDA, as performance fell below target, $3.8 million of expenses related to the modification of our senior secured term loan facility in 2011 that did not recur in 2012, and a $3.3 million decline in litigation expenses between years. The decrease in selling and administrative expenses as a percentage of sales of 10 basis points between years was driven by the decline in incentive compensation tied to Adjusted EBITDA performance. Advertising expense Advertising expense increased $6.8 million, or 5.6%, to $129.5 million in 2012, compared to $122.7 million in 2011. As a percentage of net sales, advertising expense was 1.3% in both 2012 and 2011. The increase in advertising expense was due to a focus on continuing to advertise our solutions and products and to build our reputation as a leading IT solutions provider, primarily through targeted digital advertising, partially offset by decreases in expenditures for print advertising. Income from operations The following table presents income (loss) from operations by segment, in dollars and as a percentage of net sales, and the year-over-year percentage change in income (loss) from operations for the years ended December 31, 2012 and 2011: Year Ended December 31, 2012 Year Ended December 31, 2011 Dollars inMillions OperatingMarginPercentage Dollars inMillions OperatingMarginPercentage Percent Changein Income (Loss)from Operations Segments: (1) Corporate $349.0 6.3%$331.6 6.2%5.2% Public 246.7 6.1 233.3 6.2 5.7 Other 18.6 3.1 17.5 3.4 6.5 Headquarters (2)(103.7)nm*(111.7)nm*7.2 Total income from operations $510.6 5.0%$470.7 4.9%8.5% * Not meaningful (1) Segment income (loss) from operations includes the segment’s direct operating income (loss) and allocations for Headquarters’ costs, allocations for logistics services, certain inventory adjustments, and volume rebates and cooperative advertising from vendors. (2) Includes Headquarters’ function costs that are not allocated to the segments. Income from operations was $510.6 million in 2012, an increase of $39.9 million, or 8.5%, compared to $470.7 million in 2011. This increase was driven by higher net sales and gross profit, partially offset by higher selling and administrative expenses and advertising expense. Total operating margin percentage increased 10 basis points to 5.0% in 2012, Table of Contents 43 compared to 4.9% in 2011. Operating margin percentage was positively impacted by the decrease in selling and administrative expenses as a percentage of net sales. Corporate segment income from operations was $349.0 million in 2012, an increase of $17.4 million, or 5.2%, compared to $331.6 million in 2011. This increase was primarily driven by higher net sales and gross profit margin, partially offset by higher selling and administrative expenses, resulting in a net increase in segment operating income before allocations of $14.4 million in 2012 compared to 2011. In addition, Corporate segment income from operations benefited from an increase of $2.5 million in income allocations from our logistics operations and a decrease of $0.5 million in Headquarters' expense allocations in 2012 compared to 2011. The improved profitability of our logistics operations was driven by stronger operating leverage given higher purchase volumes while support costs remained flat. Public segment income from operations was $246.7 million in 2012, an increase of $13.4 million, or 5.7%, compared to $233.3 million in 2011. This increase reflected higher segment operating income before allocations of $4.0 million as a result of increased net sales and gross profit dollars, partially offset by higher selling and administrative costs. In addition, Public segment income from operations benefited from an increase of $5.7 million in income allocations from our logistics operations and a decrease in Headquarters’ expense allocations of $3.7 million in 2012 compared to 2011. Interest expense, net At December 31, 2012, our outstanding long-term debt totaled $3,771.0 million, compared to $4,066.0 million at December 31, 2011. Net interest expense in 2012 was $307.4 million, a decrease of $16.8 million compared to $324.2 million in 2011. Interest expense in 2011 included a benefit of $19.4 million, due to an adjustment to the long-term accrued interest liability associated with the extinguishment of $1,078.0 million of senior notes due 2015. The long-term accrued interest liability represents the difference between interest expense previously recognized under the effective interest method and actual interest paid. Of the remaining net decrease of $36.2 million, $27.2 million was due to lower effective interest rates and lower debt balances in 2012 compared to the prior year as a result of debt repayment and refinancing activities completed during 2011 and 2012. The remaining net decrease was primarily attributable to additional interest expense in 2011 related to the interest rate swaps that terminated in January 2011, higher 2011 mark-to-market losses on interest rate caps, higher amortization of deferred financing costs in 2011 compared to 2012 and a 2012 benefit related to an adjustment to the long-term accrued interest liability associated with the extinguishment of $100.0 million of senior subordinated notes due 2017. Net loss on extinguishments of long-term debt During 2012, we recorded a net loss on extinguishments of long-term debt of $17.2 million compared to $118.9 million in 2011. In February and March 2012, we purchased or redeemed the remaining $129.0 million of senior notes due 2015, funded with the issuance of an additional $130.0 million of senior notes due 2019. As a result, we recorded a loss on extinguishment of long-term debt of $9.4 million, representing the difference between the purchase or redemption price of the senior notes due 2015 and the net carrying amount of the purchased debt, adjusted for the remaining unamortized deferred financing costs. In December 2012, we redeemed $100.0 million aggregate principal amount of senior subordinated notes. We recorded a loss on extinguishment of long-term debt of $7.8 million representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs. In March 2011, we amended our senior secured term loan facility and recorded a loss on extinguishment of long-term debt of $3.2 million, representing a write-off of a portion of the unamortized deferred financing costs on this facility. In April and May 2011, we purchased $1,078.0 million of senior notes due 2015, funded with the issuance of $1,175.0 million of senior notes due 2019. As a result, we recorded a loss on extinguishment of long-term debt of $114.1 million, representing the difference between the purchase price of the senior notes due 2015 at 109% of principal amount and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs. In June 2011, we entered into a new $900.0 million senior secured asset-based revolving credit facility, replacing the existing $800.0 million facility. As a result, we recorded a loss on extinguishment of long-term debt of $1.6 million representing a write-off of a portion of the unamortized deferred financing costs related to the previous facility. Income tax expense Income tax expense was $67.1 million in 2012, compared to $11.2 million in 2011. The effective income tax rate was 36.0% and 39.7% for 2012 and 2011, respectively. Table of Contents 44 For 2012, the effective tax rate differed from the U.S. federal statutory rate primarily due to favorable adjustments to state tax credits which are partially offset by the unfavorable impact of adjustments to deferred taxes due to changes in state tax laws and permanent differences. For 2011, the effective tax rate differed from the U.S. federal statutory rate primarily due to the unfavorable impact of permanent differences offset by a benefit for state income taxes. The lower effective tax rate for 2012 as compared to 2011 was primarily driven by the impact of favorable adjustments to state tax credits in 2012 and the lower rate impact of permanent differences in 2012 due to the significantly greater amount of pre-tax income. Net income Net income was $119.0 million in 2012, compared to $17.1 million in 2011. The 2012 and 2011 results included after tax losses on extinguishments of long-term debt of $10.5 million and $72.5 million, respectively. Other significant factors and events causing the net changes from 2011 to 2012 are discussed above. Non-GAAP net income Non-GAAP net income was $247.1 million for the year ended December 31, 2012, an increase of $48.3 million, or 24.3%, compared to $198.8 million for the year ended December 31, 2011. We have included a reconciliation of Non-GAAP net income for the years ended December 31, 2012 and 2011 below. Non-GAAP net income excludes, among other things, charges related to the amortization of acquisition-related intangibles, non-cash equity-based compensation and gains and losses from the early extinguishment of debt. Non-GAAP net income is considered a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. We believe that Non-GAAP net income provides helpful information with respect to our operating performance and cash flows including our ability to meet our future debt service, capital expenditures and working capital requirements. (in millions)Years Ended December 31, 2012 2011 Net income $119.0 $17.1 Amortization of intangibles (1)163.7 165.7 Non-cash equity-based compensation 22.1 19.5 Net loss on extinguishments of long-term debt 17.2 118.9 Interest expense adjustment related to extinguishments of long-term debt (2)(3.3)(19.4) Debt related refinancing costs (3)—3.8 Aggregate adjustment for income taxes (4)(71.6)(106.8) Non-GAAP net income $247.1 $198.8 (1) Includes amortization expense for acquisition-related intangible assets, primarily customer relationships and trade names. (2) Reflects adjustments to interest expense resulting from debt extinguishments. Represents the difference between interest expense previously recognized under the effective interest method and actual interest paid. (3) Reflects expenses for the March 2011 amendment to the prior term loan facility. (4) Based on a normalized effective tax rate of 39.0%. Adjusted EBITDA Adjusted EBITDA was $766.6 million in 2012, an increase of $49.3 million, or 6.9%, compared to $717.3 million in 2011. As a percentage of net sales, Adjusted EBITDA was 7.6% and 7.5% in 2012 and 2011, respectively. We have included a reconciliation of EBITDA and Adjusted EBITDA for 2012 and 2011 in the table below. EBITDA is defined as consolidated net income before interest expense, income tax expense, depreciation and amortization. Adjusted EBITDA, which is a measure defined in our credit agreements, means EBITDA adjusted for certain items which are described in the table below. Both EBITDA and Adjusted EBITDA are considered non-GAAP financial measures. Generally, a non- GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either Table of Contents 45 excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. We believe that EBITDA and Adjusted EBITDA provide helpful information with respect to our operating performance and cash flows including our ability to meet our future debt service, capital expenditures and working capital requirements. Adjusted EBITDA also provides helpful information as it is the primary measure used in certain financial covenants contained in our credit agreements. See “Selected Financial Data” included elsewhere in this report for a reconciliation of EBITDA to cash flows from operating activities. (in millions)Years Ended December 31, 2012 2011 Net income $119.0 $17.1 Depreciation and amortization 210.2 204.9 Income tax expense 67.1 11.2 Interest expense, net 307.4 324.2 EBITDA 703.7 557.4 Adjustments: Non-cash equity-based compensation 22.1 19.5 Sponsor fee 5.0 5.0 Consulting and debt-related professional fees 0.6 5.1 Net loss on extinguishments of long-term debt 17.2 118.9 Litigation, net (1)4.3 — Other adjustments (2)13.7 11.4 Total adjustments 62.9 159.9 Adjusted EBITDA $766.6 $717.3 (1) Relates to unusual, non-recurring litigation matters. (2) Other adjustments include certain retention costs and equity investment income. The following table sets forth a reconciliation of EBITDA to net cash provided by operating activities for the years ended December 31, 2012 and 2011. Years Ended December 31, (in millions)2012 2011 EBITDA $703.7 $557.4 Depreciation and amortization (210.2)(204.9) Income tax expense (67.1)(11.2) Interest expense, net (307.4)(324.2) Net income 119.0 17.1 Depreciation and amortization 210.2 204.9 Equity-based compensation expense 22.1 19.5 Deferred income taxes (56.3)(10.2) Allowance for doubtful accounts —0.4 Amortization of deferred financing costs and debt premium 13.6 15.7 Net loss on extinguishments of long-term debt 17.2 118.9 Other 1.0 6.7 Changes in assets and liabilities (9.4)(158.3) Net cash provided by operating activities $317.4 $214.7 Table of Contents 46 Seasonality While we have not historically experienced significant seasonality throughout the year, sales in our Corporate segment, which primarily serves private sector business customers, are typically higher in the fourth quarter than in other quarters due to customers spending their remaining technology budget dollars at the end of the year. Additionally, sales in our Public segment have historically been higher in the third quarter than in other quarters primarily due to the buying patterns of the federal government and education customers. Liquidity and Capital Resources Overview We finance our operations and capital expenditures through a combination of internally generated cash from operations and from borrowings under our senior secured asset-based revolving credit facility. We believe that our current sources of funds will be sufficient to fund our cash operating requirements for the next year. In addition, we believe that, in spite of the uncertainty of future macroeconomic conditions, we have adequate sources of liquidity and funding available to meet our longer-term needs. However, there are a number of factors that may negatively impact our available sources of funds. The amount of cash generated from operations will be dependent upon factors such as the successful execution of our business plan and general economic conditions. On July 2, 2013, we completed an IPO of 23,250,000 shares of common stock. On July 31, 2013, we completed the sale of an additional 3,487,500 shares of common stock to the underwriters of the IPO pursuant to the underwriters' July 26, 2013 exercise in full of the overallotment option granted to them in connection with the IPO. Such shares were registered under the Securities Act of 1933, as amended, pursuant to our Registration Statement on Form S-1, which was declared effective by the SEC on June 26, 2013. Our shares of common stock are listed on the NASDAQ Global Select Market under the symbol “CDW.” Our shares of common stock were sold to the underwriters at a price of $17.00 per share in the IPO and upon the exercise of the overallotment option, which together generated aggregate net proceeds of $424.7 million to us after deducting underwriting discounts, expenses and transaction costs. Using a portion of the net proceeds from the IPO, we paid a $24.4 million termination fee to affiliates of the Sponsors in connection with the termination of the management services agreement with such entities that was effective upon completion of the IPO and redeemed $175.0 million aggregate principal amount of senior secured notes due 2018. The redemption price of the senior secured notes due 2018 was 108.0% of the principal amount redeemed, plus $0.7 million of accrued and unpaid interest to the date of redemption. We used cash on hand to pay such accrued and unpaid interest. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $16.7 million in the consolidated statement of operations for the year ended December 31, 2013. This loss represented $14.0 million in redemption premium and $2.7 million for the write-off of a portion of the remaining deferred financing costs related to the senior secured notes due 2018. On August 1, 2013, we redeemed $324.0 million aggregate principal amount of senior subordinated notes due 2017. We used a portion of the net proceeds from the IPO to redeem $146.0 million aggregate principal amount of senior subordinated notes due 2017 and incremental borrowings of $190.0 million under the senior secured term loan facility to redeem $178.0 million aggregate principal amount of senior subordinated notes due 2017. The redemption price of the senior subordinated notes due 2017 was 106.268% of the principal amount redeemed, plus $12.0 million of accrued and unpaid interest to the date of redemption. We used cash on hand to pay such accrued and unpaid interest. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $24.6 million in the consolidated statement of operations for the year ended December 31, 2013. This loss represented $20.3 million in redemption premium and $4.3 million for the write-off of a portion of the remaining deferred financing costs related to the senior subordinated notes due 2017. On October 18, 2013, we redeemed $155.0 million aggregate principal amount of senior subordinated notes due 2017 at a redemption price that was 104.178% of the principal amount redeemed plus $0.2 million in accrued and unpaid interest to the date of redemption. We used a combination of cash on hand and the net proceeds from the sale of shares of common stock related to the underwriters' July 26, 2013 exercise in full of the overallotment option granted to them in connection with the IPO, in the amount of $56.0 million, to redeem the $155.0 million aggregate principal amount of senior subordinated notes due 2017, including the redemption premium and accrued and unpaid interest. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $8.5 million in the consolidated statement of operations during the year ended December 31, 2013. This loss represented $6.5 million in redemption premium and $2.0 million for the write-off of a portion of the remaining deferred financing costs related to the senior subordinated notes due 2017. See "Subsequent Events" below for a description of refinancing transactions completed during 2014. Table of Contents 47 On December 2, 2013, we paid a cash dividend on our common stock of $0.0425 per share to all stockholders of record as of the close of business on November 15, 2013. On February 13, 2014, we announced that our board of directors declared a quarterly cash dividend on our common stock of $0.0425 per share. The dividend will be paid on March 10, 2014 to all stockholders of record as of the close of business on February 25, 2014. The payment of any future dividends will be at the discretion of our board of directors and will depend upon our results of operations, financial condition, business prospects, capital requirements, contractual restrictions, any potential indebtedness we may incur, restrictions imposed by applicable law, tax considerations and other factors that our board of directors deems relevant. In addition, our ability to pay dividends on our common stock will be limited by restrictions on our ability to pay dividends or make distributions to our stockholders and on the ability of our subsidiaries to pay dividends or make distributions to us, in each case, under the terms of our current and any future agreements governing our indebtedness. In connection with the establishment of the MPK Incentive Plan II (the “MPK Plan”) in 2007, we agreed to make charitable contributions in amounts equal to the net income tax benefits derived from payouts to participants under the MPK Plan (net of any related employer payroll tax costs). As of December 31, 2013, we have accrued approximately $21 million related to this arrangement within other current liabilities. We expect to make the related cash contribution during the first quarter of 2014. See Note 10 of the accompanying audited consolidated financial statements for additional discussion of this arrangement. Cash Flows Cash flows from operating, investing and financing activities were as follows: (in millions)Years Ended December 31, 2013 2012 2011 Net cash provided by (used in): Operating activities $366.3 $317.4 $214.7 Investing activities (47.1)(41.7)(56.0) Net change in accounts payable - inventory financing 7.4 (29.5)250.5 Other financing activities (175.7)(308.5)(345.9) Financing activities (168.3)(338.0)(95.4) Effect of exchange rate changes on cash and cash equivalents (0.7)0.3 — Net increase (decrease) in cash and cash equivalents $150.2 $(62.0)$63.3 Operating Activities Net cash provided by operating activities for 2013 increased $48.9 million compared to 2012. Net income adjusted for the impact of non-cash items such as depreciation and amortization, equity-based compensation expense and net loss on extinguishments of long-term debt was $413.4 million during 2013, compared to $326.8 million during 2012, an increase of $86.6 million. The increase in cash of $86.6 million reflected stronger operating results in 2013 compared to 2012. Net changes in assets and liabilities reduced cash by $47.1 million in 2013 compared to a reduction of $9.4 million in 2012, resulting in a change of $37.7 million between periods. While changes in assets and liabilities were relatively flat during 2012, during 2013, accounts receivable and accounts payable balances decreased and increased cash by $170.8 million and $146.1 million, respectively, primarily as a result of accelerated sales growth during the final month of 2013. Merchandise inventory also increased during 2013 to support strong sales order volume near the end of 2013. Net cash provided by operating activities for 2012 increased $102.7 million compared to 2011. The increase was primarily driven by changes in assets and liabilities, resulting in a $148.9 million increase in net cash provided by operating activities between periods. Despite a 2012 fourth quarter increase in net sales of 4.9% between years, accounts receivable remained relatively flat from the prior year end driven by improved collection results, particularly within the Public segment. Accounts receivable in 2011 represented a use of cash of $183.4 million, primarily due to a 2011 fourth quarter increase in net sales of 9.3% from the same period in the prior year. Merchandise inventory also contributed $36.1 million of the increase in cash between years driven by a return to more normalized inventory levels in 2012 following the build-up at the end of 2011 related to the hard drive shortage from the Thailand floods, along with a higher percentage of drop shipments from vendor partners and distributors in 2012 compared to 2011. Partially offsetting these factors in 2012 was a $54.1 million decrease in other assets as we collected $53.3 million in income tax refunds in 2011 that did not repeat in 2012. Net income adjusted for the impact of non-cash items such as losses on extinguishment of long-term debt was $326.8 million in 2012 compared to $373.0 million in 2011, or a decrease of $46.2 million. Improved operating performance in 2012 drove higher net income between years, but also higher net cash income taxes paid. Net cash income taxes paid in 2012 were $123.2 million compared to a net Table of Contents 48 cash tax refund of $20.9 million in 2011. In addition to the $53.3 million in cash tax refunds received in 2011, we also fully utilized our remaining federal net operating tax loss carryforwards during 2011. In order to manage our working capital and operating cash needs, we monitor our cash conversion cycle, defined as days of sales outstanding in accounts receivable plus days of supply in inventory minus days of purchases outstanding in accounts payable, based on a rolling three-month average. The following table presents the components of our cash conversion cycle: (in days)December 31, 2013 2012 2011 Days of sales outstanding (DSO) (1)44 42 45 Days of supply in inventory (DIO) (2)15 14 15 Days of purchases outstanding (DPO) (3)(35)(32)(32) Cash conversion cycle 24 24 28 (1) Represents the rolling three-month average of the balance of trade accounts receivable, net at the end of the period divided by average daily net sales for the same three-month period. Also incorporates components of other miscellaneous receivables. (2) Represents the rolling three-month average of the balance of inventory at the end of the period divided by average daily cost of goods sold for the same three-month period. (3) Represents the rolling three-month average of the combined balance of accounts payable-trade, excluding cash overdrafts, and accounts payable-inventory financing at the end of the period divided by average daily cost of goods sold for the same three-month period. The cash conversion cycle remained flat at 24 days for both December 31, 2013 and 2012. The increase in DSO was primarily driven by an increase in receivables for third-party services such as software assurance and warranties. These services have an unfavorable impact on DSO as the receivable is recognized on the balance sheet on a gross basis while the corresponding sales amount in the statement of operations is recorded on a net basis. The DPO increase was primarily due to an increase in payables for third-party services, which offsets the related increase in DSO discussed above. These services have a favorable impact on DPO as the payable is recognized on the balance sheet without a corresponding cost of sales in the statement of operations because the cost paid to the vendor or third-party service provider is recorded as a reduction to net sales. The timing of quarter-end payments also had a favorable impact on DPO at December 31, 2013. The increase in DIO was primarily due to an increase in inventory to support strong sales order volume near the end of 2013. The cash conversion cycle decreased to 24 days at December 31, 2012 compared to 28 days at December 31, 2011, driven by improvements in DSO and DIO. The DSO decline was primarily related to improved collections in the Public segment. The DIO decline was primarily related to an increase in the percentage of products delivered to customers via drop- shipment in 2012 compared to 2011, which had the effect of increasing cost of sales without a corresponding increase in inventory-related working capital. Investing Activities Net cash used in investing activities increased $5.4 million in 2013 compared to 2012. Capital expenditures were $47.1 million and $41.4 million for 2013 and 2012, respectively, primarily for improvements to our information technology systems during both years. Net cash used in investing activities in 2012 decreased $14.3 million compared to 2011. This decline was primarily due to a reduction in cash payments between years of $6.6 million related to interest rate swap agreements, as the $6.6 million paid in 2011 reflected the final payment upon termination of the swap agreements on January 14, 2011. Capital expenditures were $41.4 million and $45.7 million for 2012 and 2011, respectively, primarily for improvements to our information technology systems during both years. During 2012 and 2011, we paid $0.3 million and $3.7 million, respectively, for new interest rate cap agreements. Financing Activities Net cash used in financing activities decreased $169.7 million in 2013 compared to 2012. The decrease was primarily driven by various debt transactions during each period and our July 2013 IPO, which generated net proceeds of $424.7 million after deducting underwriting discounts, expenses and transaction costs. The net impact of our debt transactions resulted in cash outflows of $569.4 million and $310.6 million during 2013 and 2012, respectively, as cash was used in each period to reduce Table of Contents 49 our total long-term debt. Debt transactions impacting each period presented are described below under "Long-Term Debt and Financing Arrangements." Net cash used in financing activities increased $242.6 million in 2012 compared to 2011. This change was primarily driven by 2011 net inflows from accounts payable-inventory financing of $250.5 million compared to 2012 outflows of $29.5 million, resulting in a total impact on the change in cash used in financing activities of $280.0 million from accounts payable- inventory financing. The reduction in cash during 2012 from accounts payable-inventory financing was primarily due to the termination of one of our inventory financing agreements in the first quarter of 2012, with amounts owed for subsequent purchases being included in accounts payable-trade on the consolidated balance sheet and classified as cash flows from operating activities on the consolidated statement of cash flows. As discussed below under “Inventory Financing Arrangements,” in June 2011 we entered into a new inventory financing agreement with a financial intermediary to facilitate the purchase of inventory from a certain vendor. Inventory purchases from this vendor under the June 2011 inventory financing agreement are included in accounts payable-inventory financing and reported as cash flows from financing activities. The net impact of our debt transactions resulted in cash outflows of $310.6 million during 2012 and $346.5 million during 2011 as cash was used in each period to reduce our total long-term debt. Debt transactions impacting each period presented are described below under "Long-Term Debt and Financing Arrangements." Long-Term Debt and Financing Arrangements Long-term debt was as follows: (dollars in millions)December 31, Interest Rate (1)2013 2012 Senior secured asset-based revolving credit facility —%$—$— Senior secured term loan facility 3.25%1,528.9 1,339.5 Unamortized discount on senior secured term loan facility (4.4)— Senior secured notes due 2018 8.0%325.0 500.0 Senior notes due 2019 8.5%1,305.0 1,305.0 Unamortized premium on senior notes due 2019 4.2 5.0 Senior subordinated notes due 2017 12.535%92.5 621.5 Total long-term debt 3,251.2 3,771.0 Less current maturities of long-term debt (45.4)(40.0) Long-term debt, excluding current maturities $3,205.8 $3,731.0 (1) Interest rate at December 31, 2013. At December 31, 2013, we were in compliance with the covenants under our various credit agreements and indentures as described below. Under the indentures governing the 8.5% Senior Notes due 2019 and 8.0% Senior Secured Notes due 2018, which contain the most restrictive restricted payment provisions in our various credit agreements and indentures, CDW LLC and its restricted subsidiaries are generally restricted from paying dividends and making other restricted payments unless CDW LLC could incur an additional dollar of indebtedness under its fixed charges ratio covenant and the amount of such dividend or other restricted payment, together with the amount of all other dividends and restricted payments made from January 1, 2011 through the end of the most recently ended fiscal quarter, is less than the sum of 50% of cumulative consolidated net income or 100% of any consolidated net loss incurred over the period plus the amount of certain other items occurring during that period that increase (and in some cases decrease) the amounts available for such payments. For the purpose of determining restricted payment capacity, consolidated net income or loss includes certain adjustments that are defined in the indentures. At December 31, 2013, the amount of cumulative consolidated net income free of restrictions under the credit agreements and indentures ("Restricted Payment Capacity") was $148.0 million. However, the transactions described below under "Subsequent Events" have since reduced the Restricted Payment Capacity to approximately $89 million. Senior Secured Asset-Based Revolving Credit Facility (“Revolving Loan”) At December 31, 2013, we had no outstanding borrowings under the Revolving Loan, $2.2 million of undrawn letters of credit and $256.7 million reserved related to the floorplan sub-facility. On June 24, 2011, we entered into the Revolving Loan, a five-year $900.0 million senior secured asset-based revolving credit facility, with the facility being available to us for borrowings, issuance of letters of credit and floorplan financing for certain vendor products. The Revolving Loan matures on June 24, 2016. The Revolving Loan replaced our previous revolving loan credit facility that was to mature on October 12, 2012. In connection with the termination of the Table of Contents 50 previous facility, we recorded a loss on extinguishment of long-term debt of $1.6 million in the consolidated statement of operations for the year ended December 31, 2011, representing a write-off of a portion of unamortized deferred financing costs. Fees of $7.2 million related to the Revolving Loan were capitalized as deferred financing costs and are being amortized over the term of the facility on a straight-line basis. As described in Note 5 to the consolidated financial statements, we have entered into agreements with certain financial intermediaries to facilitate the purchase of inventory from various suppliers. In connection with the floorplan sub-facility, we entered into the Revolving Loan inventory financing agreement. Amounts outstanding under the Revolving Loan inventory financing agreement are unsecured and noninterest bearing. We will either pay the outstanding Revolving Loan inventory financing agreement amounts when they become due, or the Revolving Loan's administrative agent will automatically initiate an advance on the Revolving Loan and use the proceeds to pay the balance on the due date. At December 31, 2013, the financial intermediary reported an outstanding balance of $246.8 million under the Revolving Loan inventory financing agreement. The total amount reported on the consolidated balance sheet as accounts payable-inventory financing related to the Revolving Loan inventory financing agreement is $9.3 million more than the $246.8 million owed to the financial intermediary due to differences in the timing of reporting activity under the Revolving Loan inventory financing agreement. The outstanding balance reported by the financial intermediary excludes $9.9 million in reserves for open orders that reduce the availability under the Revolving Loan. Changes in cash flows from the Revolving Loan inventory financing agreement are reported in financing activities on the consolidated statements of cash flows. Borrowings under the Revolving Loan bear interest at a variable interest rate plus an applicable margin. The variable interest rate is based on one of two indices, either (i) LIBOR, or (ii) the Alternate Base Rate (“ABR”) with the ABR being the greatest of (a) the prime rate, (b) the federal funds effective rate plus 50 basis points or (c) the one-month LIBOR plus 1.00%. The applicable margin varies (2.00% to 2.50% for LIBOR borrowings and 1.00% to 1.50% for ABR borrowings) depending upon our average daily excess cash availability under the agreement and is subject to a reduction of 0.25% if, and for as long as, the senior secured leverage ratio is less than 3.0. The senior secured leverage ratio is defined as the ratio of senior secured debt (including amounts owed under certain inventory floorplan arrangements) less cash and cash equivalents, to Adjusted EBITDA, a non-GAAP measure, for the four most recently ended fiscal quarters. For the four quarters ended December 31, 2013, the senior secured leverage ratio was 2.1. Availability under the Revolving Loan is limited to (a) the lesser of the revolving commitment of $900.0 million and the amount of the borrowing base less (b) outstanding borrowings, letters of credit, and amounts outstanding under the Revolving Loan inventory financing agreement plus a reserve of 15% of open orders. The borrowing base is (a) the sum of the products of the applicable advance rates on eligible accounts receivable and on eligible inventory as defined in the agreement less (b) any reserves. At December 31, 2013, the borrowing base was $1,065.5 million based on the amount of eligible inventory and accounts receivable balances as of November 30, 2013. We could have borrowed up to an additional $641.1 million under the Revolving Loan at December 31, 2013. The fee on the unused portion of the Revolving Loan ranges from 25 basis points to either 37.5 or 50 basis points, depending on the amount of utilization. CDW LLC is the borrower under the Revolving Loan. All obligations under the Revolving Loan are guaranteed by Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries. Borrowings under the Revolving Loan are collateralized by a first priority interest in inventory (excluding inventory collateralized under the inventory floorplan arrangements as described in Note 5), deposits, and accounts receivable, and a second priority interest in substantially all other assets. The Revolving Loan contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or consolidations, or engage in certain transactions with affiliates. The Revolving Loan also includes maintenance of a minimum average daily excess cash availability requirement. Should we fall below the minimum average daily excess cash availability requirement for five consecutive business days, we become subject to a fixed charge coverage ratio until such time as the daily excess cash availability requirement is met for 30 consecutive business days. Senior Secured Term Loan Facility On April 29, 2013, we entered into a new seven-year, $1,350.0 million aggregate principal amount senior secured term loan facility (the "Term Loan"). The Term Loan was issued at a price that was 99.75% of par, which resulted in a discount of $3.4 million. Substantially all of the proceeds from the Term Loan were used to repay the $1,299.5 million outstanding aggregate principal amount of the prior senior secured term loan facility (the "Prior Term Loan Facility"). In connection with this refinancing, we recorded a loss on extinguishment of long-term debt of $10.3 million in the consolidated statement of operations for the year ended December 31, 2013. This loss represented a write-off of the remaining unamortized deferred financing costs related to the Prior Term Loan Facility. Table of Contents 51 On July 31, 2013, we borrowed an additional $190.0 million aggregate principal amount under the Term Loan at a price that was 99.25% of par, which resulted in a discount of $1.4 million. Such proceeds were used to redeem a portion of outstanding Senior Subordinated Notes. The discounts are reported on the consolidated balance sheet as a reduction to the face amount of the Term Loan and are being amortized to interest expense over the term of the related debt. Fees of $6.1 million related to the Term Loan were capitalized as deferred financing costs and are being amortized over the term of the facility using the effective interest method. Borrowings under the Term Loan bear interest at either (a) the alternate base rate ("ABR") plus a margin or (b) LIBOR plus a margin; provided that for the purposes of the Term Loan, LIBOR shall not be less than 1.00% per annum at any time ("LIBOR Floor"). The margin is based upon a net leverage ratio as defined in the agreement governing the Term Loan, ranging from 1.25% to 1.50% for ABR borrowings and 2.25% to 2.50% for LIBOR borrowings. An interest rate of 3.25%, LIBOR Floor plus a 2.25% margin, was in effect during the three-month period ended December 31, 2013. Unlike the Prior Term Loan Facility, the Term Loan does not include a senior secured leverage ratio requirement or a hedging requirement. Additionally, the definition of debt under the Term Loan was revised to exclude amounts outstanding under our inventory financing agreements. The Term Loan is subject to certain requirements as was the Prior Term Loan Facility to make mandatory annual excess cash flow prepayments under designated circumstances, including (i) a prepayment in an amount equal to 50% of our excess cash flow for a fiscal year (the percentage rate of which decreases to 25% when the total net leverage ratio, as defined in the governing agreement, is less than or equal to 5.5 but greater than 4.5; and decreases to 0% when the total net leverage ratio is less than or equal to 4.5), and (ii) the net cash proceeds from the incurrence of certain additional indebtedness by us or our subsidiaries. The total net leverage ratio was 3.8 at December 31, 2013. We are required to pay quarterly principal installments equal to 0.25% of the original principal amount of the Term Loan, with the remaining principal amount payable on the maturity date of April 29, 2020. The quarterly principal installment payments commenced during the quarter ended June 30, 2013. At December 31, 2013, the outstanding principal amount of the Term Loan was $1,528.9 million, excluding $4.4 million in unamortized discount. We have interest rate cap agreements in effect through January 14, 2015 with a combined notional amount of $1,150.0 million. These cap agreements have not been designated as cash flow hedges of interest rate risk for GAAP accounting purposes. Of the total $1,150.0 million notional amount, $500.0 million entitle us to payments from the counterparty of the amount, if any, by which three-month LIBOR exceeds 3.5% during the agreement period. The remaining cap agreements with a notional amount of $650.0 million entitle us to payments from the counterparty of the amount, if any, by which the three-month LIBOR exceeds 1.5% during the agreement period. The fair value of our interest rate cap agreements was zero at December 31, 2013 and $0.1 million at December 31, 2012. During the first quarters of 2013, 2012 and 2011, we made principal prepayments totaling $40.0 million, $201.0 million and $132.0 million, respectively, under the Prior Term Loan Facility. These prepayments satisfied the excess cash flow payment provision of the Prior Term Loan Facility with respect to the years ended December 31, 2012, 2011 and 2010, respectively. On March 11, 2011, we entered into an amendment to the Prior Term Loan Facility, which became effective on March 14, 2011. In connection with this amendment, we recorded a loss on extinguishment of long-term debt of $3.2 million in the consolidated statement of operations for the year ended December 31, 2011. This loss represented a write-off of a portion of the unamortized deferred financing costs related to the Prior Term Loan Facility. CDW LLC is the borrower under the Term Loan. All obligations under the Term Loan are guaranteed by Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries. The Term Loan is collateralized by a second priority interest in substantially all inventory (excluding inventory collateralized under the inventory floorplan arrangements as described in Note 5 to the consolidated financial statements), deposits, and accounts receivable, and by a first priority interest in substantially all other assets. The Term Loan contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or consolidations, or engage in certain transactions with affiliates. 8.0% Senior Secured Notes due 2018 (“Senior Secured Notes”) The Senior Secured Notes were issued on December 17, 2010 and will mature on December 15, 2018. At December 31, 2013, the outstanding principal amount of the Senior Secured Notes was $325.0 million. Table of Contents 52 On July 2, 2013, we used a portion of the net proceeds from the IPO to redeem $175.0 million aggregate principal amount of Senior Secured Notes. The redemption price of the Senior Secured Notes was 108.0% of the principal amount redeemed, plus $0.7 million of accrued and unpaid interest to the date of redemption. We used cash on hand to pay such accrued and unpaid interest. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $16.7 million in the consolidated statement of operations for the year ended December 31, 2013. This loss represented $14.0 million in redemption premium and $2.7 million for the write-off of a portion of the remaining deferred financing costs related to the Senior Secured Notes. CDW LLC and CDW Finance Corporation are the co-issuers of the Senior Secured Notes and the obligations under the notes are guaranteed by Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries. The Senior Secured Notes are secured on a pari passu basis with the Term Loan by a second priority interest in substantially all inventory (excluding inventory collateralized under the inventory floorplan arrangements as described in Note 5 to the consolidated financial statements), deposits, and accounts receivable, and by a first priority interest in substantially all other assets. The Senior Secured Note indenture contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or consolidations, or engage in certain transactions with affiliates. The Senior Secured Note indenture does not contain any financial covenants. 11.0% Senior Exchange Notes due 2015 (“Senior Exchange Notes”); 11.5% / 12.25% Senior PIK Election Exchange Notes due 2015 (“PIK Election Notes” together with the Senior Exchange Notes, the “Senior Notes due 2015”) At December 31, 2013, there were no outstanding Senior Notes due 2015. On April 13, 2011, we completed a cash tender offer (the “Initial Senior Notes due 2015 Tender Offer”) and purchased $665.1 million aggregate principal amount of Senior Notes due 2015 comprised of $519.2 million of the Senior Exchange Notes and $145.9 million of the PIK Election Notes. We concurrently issued $725.0 million aggregate principal amount of Senior Notes (as defined below). The proceeds from this offering, together with cash on hand and borrowings under the then- outstanding revolving loan credit facility, were used to fund the purchase of the tendered Senior Notes due 2015, including $665.1 million aggregate principal amount of Senior Notes due 2015, $59.9 million in tender offer premium and $36.5 million of accrued and unpaid interest, along with transaction fees and expenses. On May 20, 2011, we completed a follow-on cash tender offer (the “Follow-on Senior Notes due 2015 Tender Offer,” and together with the Initial Senior Notes due 2015 Tender Offer, the “Senior Notes due 2015 Tender Offers”) and purchased an additional $412.8 million aggregate principal amount of Senior Notes due 2015 comprised of $321.4 million of the Senior Exchange Notes and $91.4 million of the PIK Election Notes. We concurrently issued $450.0 million in aggregate principal amount of additional Senior Notes. The proceeds from this offering, together with cash on hand and borrowings under the then- outstanding revolving loan credit facility, were used to fund the purchase of the tendered Senior Notes due 2015, including $412.8 million aggregate principal amount of Senior Notes due 2015, $37.2 million in tender offer premium and $4.5 million of accrued and unpaid interest, along with transaction fees and expenses. In connection with the Senior Notes due 2015 Tender Offers, we recorded a loss on extinguishment of long-term debt of $114.1 million in the consolidated statement of operations for the year ended December 31, 2011. This loss represented $97.0 million in tender offer premiums and $17.1 million for the write-off of a portion of the unamortized deferred financing costs related to the Senior Notes due 2015. In connection with the issuance of Senior Notes, fees of $19.1 million were capitalized as deferred financing costs and are being amortized over the term of the notes using the effective interest method. On February 2, 2012, we commenced a tender offer to purchase any and all of the remaining $129.0 million aggregate principal amount of Senior Notes due 2015. On February 17, 2012, we accepted for purchase $120.6 million aggregate principal amount of the outstanding Senior Notes due 2015 that were tendered. On March 5, 2012, we accepted for purchase an additional $0.1 million aggregate principal amount of the outstanding Senior Notes due 2015 that were tendered prior to the expiration of the tender offer on March 2, 2012. On March 19, 2012, we redeemed the remaining $8.3 million aggregate principal amount that was not tendered. We funded the purchases and redemptions of the Senior Notes due 2015 with the issuance of $130.0 million aggregate principal amount of additional Senior Notes on February 17, 2012. The proceeds from this issuance, together with cash on hand and borrowings under the Revolving Loan, funded the payment of $129.0 million aggregate principal amount of Senior Notes due 2015, $7.9 million in tender and redemption premiums and $5.0 million of accrued and unpaid interest, along with transaction fees and expenses. Table of Contents 53 In connection with these transactions, we recorded a loss on extinguishment of long-term debt of $9.4 million in the consolidated statement of operations for the year ended December 31, 2012. This loss represented $7.9 million in tender and redemption premiums and $1.5 million for the write-off of the remaining unamortized deferred financing costs related to the Senior Notes due 2015. 8.5% Senior Notes due 2019 (“Senior Notes”) At December 31, 2013, the outstanding principal amount of Senior Notes was $1,305.0 million, excluding $4.2 million in unamortized premium. The Senior Notes mature on April 1, 2019. On February 17, 2012, we issued $130.0 million aggregate principal amount of additional Senior Notes at an issue price of 104.375% of par. The $5.7 million premium received is reported on the consolidated balance sheet as an addition to the face amount of the Senior Notes and is being amortized as a reduction of interest expense over the term of the related debt. As discussed above, on April 13, 2011, we issued $725.0 million aggregate principal amount of Senior Notes and on May 20, 2011, we issued an additional $450.0 million aggregate principal amount of Senior Notes. The proceeds from these issuances together with cash on hand and borrowings under the then-outstanding revolving loan credit facility were used to fund the Senior Notes due 2015 Tender Offers. CDW LLC and CDW Finance Corporation are the co-issuers of the Senior Notes. Obligations under the Senior Notes are guaranteed on an unsecured senior basis by Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries. The Senior Note indenture contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or consolidations, or engage in certain transactions with affiliates. The Senior Notes do not contain any financial covenants. 12.535% Senior Subordinated Exchange Notes due 2017 (“Senior Subordinated Notes”) At December 31, 2013, the outstanding principal amount of the Senior Subordinated Notes was $92.5 million. The Senior Subordinated Notes have a maturity date of October 12, 2017. On October 18, 2013, we redeemed $155.0 million aggregate principal amount of Senior Subordinated Notes at a redemption price that was 104.178% of the principal amount redeemed. A combination of cash on hand and the net proceeds from the sale of shares of common stock related to the underwriters' July 26, 2013 exercise in full of the overallotment option granted to them in connection with the IPO, in the amount of $56.0 million, was used to fund the redemption of $155.0 million aggregate principal amount, $6.5 million of redemption premium and $0.2 million in accrued and unpaid interest to the date of redemption. See Note 9 in the consolidated financial statements for additional discussion of the underwriters' overallotment option. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $8.5 million in the consolidated statement of operations for the year ended December 31, 2013. This loss represented $6.5 million in redemption premium and $2.0 million for the write-off of a portion of the remaining unamortized deferred financing costs related to the Senior Subordinated Notes. On August 1, 2013, we redeemed $324.0 million aggregate principal amount of Senior Subordinated Notes at a redemption price that was 106.268% of the principal amount redeemed. We used a portion of the net proceeds from the IPO to redeem $146.0 million aggregate principal amount of Senior Subordinated Notes and incremental borrowings of $190.0 million under the Term Loan to redeem $178.0 million aggregate principal amount of Senior Subordinated Notes. We used cash on hand to pay $12.0 million of accrued and unpaid interest to the date of redemption. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $24.6 million in the consolidated statement of operations for the year ended December 31, 2013. This loss represented $20.3 million in redemption premium and $4.3 million for the write-off of a portion of the remaining deferred financing costs related to the Senior Subordinated Notes. On March 8, 2013, we redeemed $50.0 million aggregate principal amount of Senior Subordinated Notes at a redemption price that was 106.268% of the principal amount redeemed. Cash on hand was used to fund the redemption of $50.0 million aggregate principal amount, $3.1 million of redemption premium and $2.5 million in accrued and unpaid interest to the date of redemption. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $3.9 million in the consolidated statement of operations for the year ended December 31, 2013. This loss represented $3.1 million in redemption premium and $0.8 million for the write-off of a portion of the remaining unamortized deferred financing costs related to the Senior Subordinated Notes. Table of Contents 54 On December 21, 2012, we redeemed $100.0 million aggregate principal amount of Senior Subordinated Notes at a redemption price that was 106.268% of the principal amount redeemed. Cash on hand was used to fund the redemption of $100.0 million aggregate principal amount, $6.3 million of redemption premium and $2.3 million in accrued and unpaid interest to the date of redemption. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $7.8 million in the consolidated statement of operations for the year ended December 31, 2012. This loss represented $6.3 million in redemption premium and $1.5 million for the write-off of a portion of the remaining unamortized deferred financing costs related to the Senior Subordinated Notes. CDW LLC and CDW Finance Corporation are the co-issuers of the Senior Subordinated Notes. Obligations under the Senior Subordinated Notes are guaranteed on an unsecured senior basis by Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries. The Senior Subordinated Note indenture contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or consolidations, or engage in certain transactions with affiliates. The Senior Subordinated Notes do not contain any financial covenants. Inventory Financing Agreements We have entered into agreements with certain financial intermediaries to facilitate the purchase of inventory from various suppliers under certain terms and conditions, as described below. These amounts are classified separately as accounts payable-inventory financing on the consolidated balance sheets. We do not incur any interest expense associated with these agreements as balances are paid when they are due. The following table presents the amounts included in accounts payable-inventory financing: (in millions)December 31, 2013 2012 Revolving Loan inventory financing agreement $256.1 $248.3 Other inventory financing agreements 0.5 0.9 Accounts payable-inventory financing $256.6 $249.2 We maintain a senior secured asset-based revolving credit facility as described in Note 7 to our consolidated financial statements, which incorporates a $400.0 million floorplan sub-facility to facilitate the purchase of inventory from a certain vendor. In connection with the floorplan sub-facility, we maintain the Revolving Loan inventory financing agreement. Amounts outstanding under the Revolving Loan inventory financing agreement are unsecured and non-interest bearing. At December 31, 2013 and 2012, we reported $256.1 million and $248.3 million, respectively, for this agreement within accounts payable- inventory financing on the consolidated balance sheets. We also maintain other inventory financing agreements with financial intermediaries to facilitate the purchase of inventory from certain vendors. At December 31, 2013 and 2012, amounts owed under other inventory financing agreements of $0.5 million and $0.9 million, respectively, were collateralized by the inventory purchased under these financing agreements and a second lien on the related accounts receivable. Contractual Obligations We have future obligations under various contracts relating to debt and interest payments, operating leases and asset retirement obligations. The following table presents our estimated future payments under contractual obligations that existed as of December 31, 2013, based on undiscounted amounts. Table of Contents 55 (in millions)Payments Due by Period Total < 1 year 1-3 years 4-5 years > 5 years Revolving Loan (1)$—$—$—$—$— Term Loan (2)1,832.7 64.9 128.3 126.3 1,513.2 Senior Secured Notes (3)455.0 26.0 52.0 377.0 — Senior Notes (3)1,915.1 110.9 221.9 221.9 1,360.4 Senior Subordinated Notes (3)124.8 38.8 15.7 70.3 — Operating leases (4)89.2 17.9 30.9 19.7 20.7 Asset retirement obligations (5)0.5 —0.5 —— Total $4,417.3 $258.5 $449.3 $815.2 $2,894.3 (1) Includes only principal payments. Excludes interest payments and fees related to this facility because of variability with respect to the timing of advances and repayments. (2) Includes future principal and cash interest payments on long-term borrowings through scheduled maturity dates. Interest payments for variable rate debt were calculated using interest rates as of December 31, 2013. Excluded from these amounts are the amortization of debt issuance and other costs related to indebtedness. (3) Includes future principal and cash interest payments on long-term borrowings through scheduled maturity dates. Interest on the Senior Secured Notes, Senior Notes and Senior Subordinated Notes is calculated using the stated interest rate. Excluded from these amounts are the amortization of debt issuance and other costs related to indebtedness. See "Subsequent Events" for a description of refinancing transactions completed during 2014. (4) Includes the minimum lease payments for non-cancelable leases of properties and equipment used in our operations. (5) Represent commitments to return property subject to operating leases to original condition upon lease termination. Off-Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. Inflation Inflation has not had a material impact on our operating results. We generally have been able to pass along price increases to our customers, though certain economic factors and technological advances in recent years have tended to place downward pressure on pricing. We also have been able to generally offset the effects of inflation on operating costs by continuing to emphasize productivity improvements and by accelerating our overall cash conversion cycle. There can be no assurances, however, that inflation would not have a material impact on our sales or operating costs in the future. Commitments and Contingencies We are party to various legal proceedings that arise in the ordinary course of our business, which include commercial, intellectual property, employment, tort and other litigation matters. We are also subject to audit by federal, state and local authorities, and by various partners and large customers, including government agencies, relating to purchases and sales under various contracts. In addition, we are subject to indemnification claims under various contracts. From time to time, certain of our customers file voluntary petitions for reorganization or liquidation under the U.S. bankruptcy laws. In such cases, certain pre-petition payments received by us could be considered preference items and subject to return to the bankruptcy administrator. As of December 31, 2013, we do not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for these proceedings and matters, if any, has been incurred. However, the ultimate resolutions of these proceedings and matters are inherently unpredictable. As such, our financial condition and results of operations could be adversely affected in any particular period by the unfavorable resolution of one or more of these proceedings or matters. We previously filed a claim as part of a class action settlement in a case alleging price fixing during the period of January 1, 1996 through December 31, 2006, by certain manufacturers of thin-film liquid crystal display panels. On July 13, 2013, the United Stated District Court for the Northern District of California approved distribution of the settlement proceeds, including a net payment to us of $10.4 million after fees and expenses. We have recognized a pre-tax benefit of $10.4 million within selling and administrative expenses in the consolidated statement of operations for the year ended December 31, 2013. Table of Contents 56 The first of two settlement payments was received by us on July 29, 2013 in the amount of $8.5 million. The balance of $1.9 million was received in February 2014. Critical Accounting Policies and Estimates The preparation of financial statements in accordance with GAAP requires management to make use of certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. In Note 1 to the accompanying audited consolidated financial statements, we include a discussion of the significant accounting policies used in the preparation of our consolidated financial statements. We believe the following are the most critical accounting policies and estimates that include significant judgments used in the preparation of our financial statements. We consider an accounting policy or estimate to be critical if it requires assumptions to be made that were uncertain at the time they were made, and if changes in these assumptions could have a material impact on our financial condition or results of operations. Revenue Recognition We are a primary distribution channel for a large group of vendors and suppliers, including OEMs, software publishers and wholesale distributors. We record revenue from sales transactions when title and risk of loss are passed to our customer, there is persuasive evidence of an arrangement for sale, delivery has occurred and/or services have been rendered, the sales price is fixed or determinable, and collectability is reasonably assured. Our shipping terms typically specify F.O.B. destination, at which time title and risk of loss have passed to the customer. Revenues from the sales of hardware products and software products and licenses are generally recognized on a gross basis with the selling price to the customer recorded as sales and the acquisition cost of the product recorded as cost of sales. These items can be delivered to customers in a variety of ways, including (i) as physical product shipped from our warehouse, (ii) via drop-shipment by the vendor or supplier, or (iii) via electronic delivery for software licenses. At the time of sale, we record an estimate for sales returns and allowances based on historical experience. Our vendor partners warrant most of the products we sell. We leverage drop-shipment arrangements with many of our vendors and suppliers to deliver products to our customers without having to physically hold the inventory at our warehouses, thereby increasing efficiency and reducing costs. We recognize revenue for drop-shipment arrangements on a gross basis upon delivery to the customer with contract terms that typically specify F.O.B. destination. We recognize revenue on a gross basis as the principal in the transaction because we are the primary obligor in the arrangement, we assume inventory risk if the product is returned by the customer, we set the price of the product charged to the customer, we assume credit risk for the amounts invoiced, and we work closely with our customers to determine their hardware and software specifications. These arrangements generally represent approximately 40% to 50% of total net sales, including approximately 10% to 15% related to electronic delivery for software licenses. Revenue from professional services is either recognized as provided for services billed at an hourly rate or recognized using a proportional performance model for services provided at a fixed fee. Revenue from cloud computing solutions including Software as a Service ("SaaS") and Infrastructure as a Service ("IaaS") arrangements, as well as data center services such as managed and remote managed services, server co-location, internet connectivity and data backup and storage, is recognized over the period service is provided. We also sell certain products for which we act as an agent. Products in this category include the sale of third-party services, warranties, software assurance (“SA”) and third-party hosted SaaS and IaaS arrangements. SA is a product that allows customers to upgrade, at no additional cost, to the latest technology if new applications are introduced during the period that the SA is in effect. These sales do not meet the criteria for gross sales recognition, and thus are recognized on a net basis at the time of sale. Under net sales recognition, the cost paid to the vendor or third-party service provider is recorded as a reduction to sales, resulting in net sales being equal to the gross profit on the transaction. Our larger customers are offered the opportunity by certain of our vendors to purchase software licenses and SA under enterprise agreements (“EAs”). Under EAs, customers are considered to be compliant with applicable license requirements for the ensuing year, regardless of changes to their employee base. Customers are charged an annual true-up fee for changes in the number of users over the year. With most EAs, our vendors will transfer the license and bill the customer directly, paying resellers such as us an agency fee or commission on these sales. We record these fees as a component of net sales as earned and Table of Contents 57 there is no corresponding cost of sales amount. In certain instances, we bill the customer directly under an EA and account for the individual items sold based on the nature of the item. Our vendors typically dictate how the EA will be sold to the customer. From time to time, we sell some of our products and services as part of bundled contract arrangements containing multiple deliverables, which may include a combination of the products and services. For each deliverable that represents a separate unit of accounting, total arrangement consideration is allocated based upon the relative selling prices of each element. The allocated arrangement consideration is recognized as revenue in accordance with the principles described above. Selling prices are determined by using vendor specific objective evidence (“VSOE”) if it exists. Otherwise, selling prices are determined using third party evidence (“TPE”). If neither VSOE or TPE is available, we use our best estimate of selling prices. We record freight billed to our customers as net sales and the related freight costs as a cost of sales. Deferred revenue includes (1) payments received from customers in advance of providing the product or performing services, and (2) amounts deferred if other conditions of revenue recognition have not been met. We perform an analysis of the estimated number of days of sales in-transit to customers at the end of each period based on a weighted-average analysis of commercial delivery terms that includes drop-shipment arrangements. This analysis is the basis upon which we estimate the amount of sales in-transit at the end of the period and adjust revenue and the related costs to reflect only what has been received by the customer. Changes in delivery patterns may result in a different number of business days used in making this adjustment and could have a material impact on our revenue recognition for the period. Inventory Valuation Inventory is valued at the lower of cost or market value. Cost is determined using a weighted-average cost method. Price protection is recorded when earned as a reduction to the cost of inventory. We decrease the value of inventory for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value, based upon an aging analysis of the inventory on hand, specifically known inventory-related risks, and assumptions about future demand and market conditions. If future demand or actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required. Vendor Programs We receive incentives from certain of our vendors related to cooperative advertising allowances, volume rebates, bid programs, price protection and other programs. These incentives generally relate to written agreements with specified performance requirements with the vendors and are recorded as adjustments to cost of sales or inventory, depending on the nature of the incentive. Vendors may change the terms of some or all of these programs, which could have an impact on our results of operations. We record receivables from vendors related to these programs when the amounts are probable and reasonably estimable. Some programs are based on the achievement of specific targets, and we base our estimates on information provided by our vendors and internal information to assess our progress toward achieving those targets. If actual performance does not match our estimates, we may be required to adjust our receivables. We record reserves for vendor receivables for estimated losses due to vendors’ inability to pay or rejections by vendors of claims; however, if actual collections differ from our estimates, we may incur additional losses that could have a material impact on gross margin and operating income. Table of Contents 58 Goodwill and Other Intangible Assets Goodwill is not amortized but is subject to periodic testing for impairment at the reporting unit level. Our reporting units used to assess potential goodwill impairment are the same as our operating segments. We are required to perform an evaluation of goodwill on an annual basis or more frequently if circumstances indicate a potential impairment. The annual test for impairment is conducted as of December 1. We have the option of performing a qualitative assessment of a reporting unit's fair value from the last quantitative assessment to determine if it is more likely than not that the reporting unit's goodwill is impaired or performing a quantitative assessment by comparing a reporting unit's estimated fair value to its carrying amount. Under the quantitative assessment, testing for impairment of goodwill is a two-step process. The first step compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of reporting unit goodwill with the carrying amount of that goodwill to determine the amount of impairment loss. Fair value of a reporting unit is determined by using a weighted combination of an income approach and a market approach, as this combination is considered the most indicative of the reporting units’ fair value in an orderly transaction between market participants. Under the income approach, we determine fair value based on estimated future cash flows of a reporting unit, discounted by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of a reporting unit and the rate of return an outside investor would expect to earn. Under the market approach, we utilize valuation multiples derived from publicly available information for peer group companies to provide an indication of how much a knowledgeable investor in the marketplace would be willing to pay for a company. We have weighted the income approach and the market approach at 75% and 25%, respectively. Determining the fair value of a reporting unit (and the allocation of that fair value to individual assets and liabilities within the reporting unit to determine the implied fair value of goodwill in the event a step two analysis is required) is judgmental in nature and requires the use of significant estimates and assumptions. These estimates and assumptions include primarily, but are not limited to, discount rate, terminal growth rate, selection of appropriate peer group companies and control premium applied, and forecasts of revenue growth rates, gross margins, operating margins, and working capital requirements. The allocation requires analysis to determine the fair value of assets and liabilities including, among others, customer relationships, trade names, and property and equipment. Any changes in the judgments, estimates, or assumptions used could produce significantly different results. Although we believe our assumptions are reasonable, actual results may vary significantly and may expose us to material impairment charges in the future. Intangible assets include customer relationships, trade names, internally developed software and other intangibles. Intangible assets with determinable lives are amortized on a straight-line basis over the estimated useful lives of the assets. The cost of software developed or obtained for internal use is capitalized and amortized on a straight-line basis over the estimated useful life of the software. These intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s carrying amount over its fair value. Allowance for Doubtful Accounts We record an allowance for doubtful accounts related to trade accounts receivable for estimated losses resulting from the inability of our customers to make required payments. We take into consideration historical loss experience, the overall quality of the receivable portfolio and specifically identified customer risks. If actual collections of customer receivables differ from our estimates, additional allowances may be required which could have an impact on our results of operations. Income Taxes Deferred income taxes are provided to reflect the differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements using enacted tax rates in effect for the year in which the differences are expected to reverse. We perform an evaluation of the realizability of our deferred tax assets on a quarterly basis. This evaluation requires us to use estimates and make assumptions and considers all positive and negative evidence and factors, such as the scheduled reversal of temporary differences, the mix of earnings in the jurisdictions in which we operate, and prudent and feasible tax planning strategies. We account for unrecognized tax benefits based upon our assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. We report a liability for unrecognized tax benefits resulting from unrecognized tax benefits taken or expected to be taken in a tax return and recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense. Table of Contents 59 Recent Accounting Pronouncements Disclosure of the Effects of Reclassifications from Accumulated Other Comprehensive Income In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update 2013-02, which required that the effects of significant reclassifications from accumulated other comprehensive income to net income be shown parenthetically on the face of the consolidated financial statements or disclosed in a note. The adoption of this new guidance on January 1, 2013 did not have an impact on our consolidated financial position, results of operations or cash flows. Subsequent Events We redeemed $30.0 million and $20.0 million aggregate principal amounts of Senior Subordinated Notes on January 22, 2014 and February 21, 2014, respectively. The redemption prices were 104.178% of the principal amounts redeemed plus $1.0 million and $0.9 million in accrued and unpaid interest to the date of each redemption, respectively. Following these redemptions, $42.5 million aggregate principal amount of the Senior Subordinated Notes remain outstanding, which we expect to fully redeem during the next six months. In connection with these redemptions, we expect to record a loss on extinguishment of long-term debt of $2.7 million in the consolidated statement of operations during the first quarter of 2014. This loss represents $2.1 million in redemption premiums and $0.6 million for the write-off of a portion of the remaining deferred financing costs related to the Senior Subordinated Notes. On February 13, 2014, we announced that our board of directors declared a cash dividend on our common stock of $0.0425 per share. The dividend will be paid on March 10, 2014 to all stockholders of record as of the close of business on February 25, 2014. Future dividends will be subject to the approval of our board of directors. Table of Contents 60 Item 7A. Quantitative and Qualitative Disclosures of Market Risks Our market risks relate primarily to changes in interest rates. The interest rates on borrowings under our senior secured asset-based revolving credit facility and our senior secured term loan facility are floating and, therefore, are subject to fluctuations. In order to manage the risk associated with changes in interest rates on borrowings under our senior secured term loan facility, we have entered into interest rate derivative agreements to economically hedge a portion of the cash flows associated with the facility. Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate fluctuations. We utilize interest rate caps for the purpose of limiting current and future exposure to interest rate risk on our floating- rate debt under the senior secured term loan facility. We have interest rate cap agreements in effect through January 14, 2015 with a combined notional amount of $1,150.0 million. These cap agreements have not been designated as cash flow hedges of interest rate risk for GAAP accounting purposes. Of the total $1,150.0 million notional amount, $500.0 million entitle us to payments from the counterparty of the amount, if any, by which three-month LIBOR exceeds 3.5% during the agreement period. The remaining cap agreements with a notional amount of $650.0 million entitle us to payments from the counterparty of the amount, if any, by which the three-month LIBOR exceeds 1.5% during the agreement period. See “Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Contractual Obligations” for information on cash flows, interest rates and maturity dates of our debt obligations. Table of Contents 61 Item 8. Financial Statements and Supplementary Data Index to Consolidated Financial Statements Page Table of Contents Report of Independent Registered Public Accounting Firm 62 Consolidated Balance Sheets as of December 31, 2013 and 2012 63 Consolidated Statements of Operations for the years ended December 31, 2013, 2012 and 2011 64 Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2012 and 2011 65 Consolidated Statements of Shareholders’ Equity (Deficit) for the years ended December 31, 2013, 2012 and 2011 66 Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011 67 Notes to Consolidated Financial Statements 68 62 Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of CDW Corporation We have audited the accompanying consolidated balance sheets of CDW Corporation and subsidiaries as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income, shareholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 2013. Our audits also included the financial statement schedule listed in the Index at Item 15(a)(2). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of CDW Corporation and subsidiaries at December 31, 2013 and 2012, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2013, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), CDW Corporation and subsidiaries’ internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) and our report dated March 5, 2014 expressed an unqualified opinion thereon. /s/ Ernst & Young LLP Chicago, Illinois March 5, 2014 Table of Contents 63 CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in millions, except per-share amounts) December 31, 2013 2012 Assets Current assets: Cash and cash equivalents $188.1 $37.9 Accounts receivable, net of allowance for doubtful accounts of $5.4 and $5.4, respectively 1,451.0 1,285.0 Merchandise inventory 382.0 314.6 Miscellaneous receivables 146.3 148.5 Deferred income taxes —14.1 Prepaid expenses and other 46.1 34.6 Total current assets 2,213.5 1,834.7 Property and equipment, net 131.1 142.7 Goodwill 2,220.3 2,209.3 Other intangible assets, net 1,328.0 1,478.5 Deferred financing costs, net 30.1 53.2 Other assets 1.6 1.6 Total assets $5,924.6 $5,720.0 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable-trade $662.8 $518.6 Accounts payable-inventory financing 256.6 249.2 Current maturities of long-term debt 45.4 40.0 Deferred revenue 94.8 57.8 Accrued expenses: Compensation 112.2 99.4 Interest 31.8 50.7 Sales taxes 29.2 22.6 Advertising 33.2 33.9 Income taxes 6.3 0.2 Other 130.3 95.8 Total current liabilities 1,402.6 1,168.2 Long-term liabilities: Debt 3,205.8 3,731.0 Deferred income taxes 563.5 624.3 Other liabilities 41.0 60.0 Total long-term liabilities 3,810.3 4,415.3 Commitments and contingencies Shareholders’ equity: Preferred shares, $0.01 par value, 100.0 and no shares authorized, respectively; no shares issued or outstanding for bothperiods —— Common shares, $0.01 par value, 1,000.0 and 286.1 shares authorized, respectively; 172.0 and 145.2 shares issued,respectively; 172.0 and 145.1 shares outstanding, respectively 1.7 1.4 Paid-in capital 2,688.1 2,207.7 Accumulated deficit (1,971.8)(2,073.0) Accumulated other comprehensive (loss) income (6.3)0.4 Total shareholders’ equity 711.7 136.5 Total liabilities and shareholders’ equity $5,924.6 $5,720.0 The accompanying notes are an integral part of the consolidated financial statements. Table of Contents 64 CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per-share amounts) Years Ended December 31, 2013 2012 2011 Net sales $10,768.6 $10,128.2 $9,602.4 Cost of sales 9,008.3 8,458.6 8,018.9 Gross profit 1,760.3 1,669.6 1,583.5 Selling and administrative expenses 1,120.9 1,029.5 990.1 Advertising expense 130.8 129.5 122.7 Income from operations 508.6 510.6 470.7 Interest expense, net (250.1)(307.4)(324.2) Net loss on extinguishments of long-term debt (64.0)(17.2)(118.9) Other income, net 1.0 0.1 0.7 Income before income taxes 195.5 186.1 28.3 Income tax expense (62.7)(67.1)(11.2) Net income $132.8 $119.0 $17.1 Net income per common share: Basic $0.85 $0.82 $0.12 Diluted $0.84 $0.82 $0.12 Weighted-average number of common shares outstanding: Basic 156.6 145.1 144.8 Diluted 158.7 145.8 144.9 Cash dividends declared per common share $0.0425 $—$— The accompanying notes are an integral part of the consolidated financial statements. Table of Contents 65 CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) Years Ended December 31, 2013 2012 2011 Net income $132.8 $119.0 $17.1 Reclassification of realized loss on interest rate swap agreements from accumulated other comprehensive (loss) income to net income, net of tax ——1.9 Foreign currency translation adjustment (6.7)2.5 (1.8) Other comprehensive (loss) income, net of tax (6.7)2.5 0.1 Comprehensive income $126.1 $121.5 $17.2 The accompanying notes are an integral part of the consolidated financial statements. Table of Contents 66 CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT) (in millions) Preferred Stock Common Stock Shares Amount Shares Amount Paid-inCapital AccumulatedDeficit AccumulatedOtherComprehensive (Loss) Income TotalShareholders’Equity(Deficit) Balance at December 31, 2010 —$—144.6 $1.4 $2,165.3 $(2,208.0)$(2.2)$(43.5) Equity-based compensation expense ————19.5 ——19.5 Investment from CDW Holdings LLC ————1.0 ——1.0 Repurchase of common shares —————(0.4)—(0.4) Accrued charitable contribution related to theMPK Coworker Incentive Plan II, net of tax ——0.3 —(1.1)——(1.1) Net income —————17.1 —17.1 Reclassification of realized loss on interest rateswap agreements from accumulated othercomprehensive loss to net income, net of tax ——————1.9 1.9 Foreign currency translation adjustment ——————(1.8)(1.8) Balance at December 31, 2011 —$—144.9 $1.4 $2,184.7 $(2,191.3)$(2.1)$(7.3) Equity-based compensation expense ————22.1 ——22.1 Investment from CDW Holdings LLC ————2.8 ——2.8 Repurchase of common shares —————(0.7)—(0.7) Accrued charitable contribution related to theMPK Coworker Incentive Plan II, net of tax ——0.3 —(1.4)——(1.4) Incentive compensation plan units withheld fortaxes ————(0.5)——(0.5) Net income —————119.0 —119.0 Foreign currency translation adjustment ——————2.5 2.5 Balance at December 31, 2012 —$—145.2 $1.4 $2,207.7 $(2,073.0)$0.4 $136.5 Equity-based compensation expense ————46.6 ——46.6 Issuance of common shares ——26.8 0.3 424.4 ——424.7 Repurchase of common shares —————(0.2)—(0.2) Dividends declared —————(7.3)—(7.3) Reclassification to goodwill for accruedcharitable contributions ————9.4 ——9.4 Incentive compensation plan units withheld fortaxes —————(24.1)—(24.1) Net income —————132.8 —132.8 Foreign currency translation adjustment ——————(6.7)(6.7) Balance at December 31, 2013 —$—172.0 $1.7 $2,688.1 $(1,971.8)$(6.3)$711.7 The accompanying notes are an integral part of the consolidated financial statements. Table of Contents 67 CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Years Ended December 31, 2013 2012 2011 Cash flows from operating activities: Net income $132.8 $119.0 $17.1 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 208.2 210.2 204.9 Equity-based compensation expense 46.6 22.1 19.5 Deferred income taxes (48.7)(56.3)(10.2) Allowance for doubtful accounts ——0.4 Amortization of deferred financing costs, debt premium, and debt discount, net 8.8 13.6 15.7 Net loss on extinguishments of long-term debt 64.0 17.2 118.9 Realized loss on interest rate swap agreements ——2.8 Mark to market loss on interest rate derivatives 0.1 0.9 4.2 Net loss on sale and disposals of assets —0.1 0.3 Other 1.6 —(0.6) Changes in assets and liabilities: Accounts receivable (170.8)(10.4)(183.4) Merchandise inventory (67.5)7.1 (29.0) Other assets (10.1)(3.8)50.3 Accounts payable-trade 146.1 0.8 (19.8) Other current liabilities 64.1 (2.1)39.6 Long-term liabilities (8.9)(1.0)(16.0) Net cash provided by operating activities 366.3 317.4 214.7 Cash flows from investing activities: Capital expenditures (47.1)(41.4)(45.7) Cash settlements on interest rate swap agreements ——(6.6) Premium payments on interest rate cap agreements —(0.3)(3.7) Net cash used in investing activities (47.1)(41.7)(56.0) Cash flows from financing activities: Proceeds from borrowings under revolving credit facility 63.0 289.0 1,295.0 Repayments of borrowings under revolving credit facility (63.0)(289.0)(1,483.2) Repayments of long-term debt (51.1)(201.0)(132.0) Proceeds from issuance of long-term debt 1,535.2 135.7 1,175.0 Payments to extinguish long-term debt (2,047.4)(243.2)(1,175.0) Payments of debt financing costs (6.1)(2.1)(26.3) Investment from CDW Holdings LLC, net —2.8 1.0 Net change in accounts payable-inventory financing 7.4 (29.5)250.5 Payment of incentive compensation plan withholding taxes (24.1)—— Net proceeds from issuance of common shares 424.7 —— Repurchase of common shares (0.2)(0.7)(0.4) Dividends paid (7.3)—— Excess tax benefits from equity-based compensation 0.6 —— Net cash used in financing activities (168.3)(338.0)(95.4) Effect of exchange rate changes on cash and cash equivalents (0.7)0.3 — Net increase (decrease) in cash and cash equivalents 150.2 (62.0)63.3 Cash and cash equivalents – beginning of period 37.9 99.9 36.6 Cash and cash equivalents – end of period $188.1 $37.9 $99.9 Supplementary disclosure of cash flow information: Interest paid $(267.6)$(302.7)$(332.9) Taxes (paid) refunded, net $(82.5)$(123.2)$20.9 Non-cash investing and financing activities: Capital expenditures accrued in accounts payable-trade $0.2 $0.5 $1.1 The accompanying notes are an integral part of the consolidated financial statements. Table of Contents 68 1. Description of Business and Summary of Significant Accounting Policies Description of Business CDW is a Fortune 500 company and a leading provider of integrated information technology (“IT”) solutions to small, medium and large business, government, education and healthcare customers in the U.S. and Canada. The Company's offerings range from discrete hardware and software products to integrated IT solutions such as mobility, security, data center optimization, cloud computing, virtualization and collaboration. Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). On October 12, 2007, CDW Corporation, an Illinois corporation, was acquired through a merger transaction by an entity controlled by investment funds affiliated with Madison Dearborn Partners, LLC and Providence Equity Partners L.L.C. (the “Acquisition”). CDW Corporation continued as the surviving corporation and same legal entity after the Acquisition, but became a wholly owned subsidiary of VH Holdings, Inc., a Delaware corporation. On December 31, 2009, CDW Corporation merged into CDWC LLC, an Illinois limited liability company owned by VH Holdings, Inc., with CDWC LLC as the surviving entity. This change had no impact on the operations or management of the Company. On December 31, 2009, CDWC LLC was renamed CDW LLC (“CDW LLC”). On August 17, 2010, VH Holdings, Inc. was renamed CDW Corporation (“Parent”). Parent has two 100% owned subsidiaries, CDW LLC and CDW Finance Corporation. CDW LLC is an Illinois limited liability company that, together with its 100% owned subsidiaries, holds all material assets and conducts all business activities and operations of the Company. On August 6, 2010, CDW Finance Corporation, a Delaware corporation, was formed for the sole purpose of acting as co-issuer of certain debt obligations as described in Note 17 and does not hold any material assets or engage in any business activities or operations. Throughout this report, the terms “the Company” and “CDW” refer to Parent and its 100% owned subsidiaries. Parent was previously owned directly by CDW Holdings LLC ("CDW Holdings"), a company controlled by investment funds affiliated with Madison Dearborn Partners, LLC ("Madison Dearborn") and Providence Equity Partners L.L.C. ("Providence Equity," and together with Madison Dearborn, the "Sponsors"), certain other co- investors and certain members of CDW management. On July 2, 2013, Parent completed an initial public offering ("IPO") of its common stock. In connection with the IPO, CDW Holdings distributed all of its shares of Parent's common stock to its members in June 2013 in accordance with the members’ respective membership interests and was subsequently dissolved in August 2013. See Note 9 for additional discussion of the IPO. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Parent and its 100% owned subsidiaries. All intercompany transactions and accounts are eliminated in consolidation. Use of Estimates The preparation of the consolidated financial statements in accordance with GAAP requires management to make use of certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reported periods. The Company bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Reclassifications Certain reclassifications have been made to the prior period consolidated financial statements to conform to the current period presentation. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 69 Cash and Cash Equivalents Cash and cash equivalents include all deposits in banks and short-term (original maturities of three months or less), highly liquid investments that are readily convertible to known amounts of cash and are so near maturity that there is insignificant risk of changes in value due to interest rate changes. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and typically do not bear interest. The Company provides allowances for doubtful accounts related to accounts receivable for estimated losses resulting from the inability of its customers to make required payments. The Company takes into consideration the overall quality of the receivable portfolio along with specifically-identified customer risks. Merchandise Inventory Inventory is valued at the lower of cost or market value. Cost is determined using a weighted-average cost method. Price protection is recorded when earned as a reduction to the cost of inventory. The Company decreases the value of inventory for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value, based upon an aging analysis of the inventory on hand, specifically known inventory-related risks, and assumptions about future demand and market conditions. Miscellaneous Receivables Miscellaneous receivables generally consist of amounts due from vendors. The Company receives incentives from vendors related to cooperative advertising allowances, volume rebates, bid programs, price protection and other programs. These incentives generally relate to written vendor agreements with specified performance requirements and are recorded as adjustments to cost of sales or inventory, depending on the nature of the incentive. Property and Equipment Property and equipment are stated at cost. The Company calculates depreciation expense using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of their useful lives or the initial lease term. Expenditures for major renewals and improvements that extend the useful life of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. The following table shows estimated useful lives of property and equipment: Classification EstimatedUseful Lives Machinery and equipment 5 to 10 years Building and leasehold improvements 5 to 25 years Computer and data processing equipment 3 to 5 years Computer software 3 to 5 years Furniture and fixtures 5 to 10 years The Company has asset retirement obligations associated with commitments to return property subject to operating leases to its original condition upon lease termination. The Company’s asset retirement liability was $0.5 million as of December 31, 2013 and 2012. Goodwill and Other Intangible Assets The Company is required to perform an evaluation of goodwill on an annual basis or more frequently if circumstances indicate a potential impairment. The annual test for impairment is conducted as of December 1. The Company’s reporting units used to assess potential goodwill impairment are the same as its operating segments. The Company has the option of performing a qualitative assessment of a reporting unit's fair value from the last quantitative assessment to determine if it is more likely than not that the reporting unit's goodwill is impaired or performing a quantitative assessment by comparing a reporting unit's estimated fair value to its carrying amount. Under the quantitative assessment, testing for impairment of goodwill is a two-step process. The first step compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of reporting unit goodwill with the carrying amount of that goodwill to determine the amount of impairment loss. Fair value of a reporting unit is determined by using a weighted Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 70 combination of an income approach and a market approach, as this combination is considered the most indicative of the Company’s fair value in an orderly transaction between market participants. This assessment uses significant accounting judgments, estimates and assumptions. Any changes in the judgments, estimates or assumptions used could produce significantly different results. During the years ended December 31, 2013, 2012 and 2011, the Company recorded no goodwill impairment charges. See Note 4 for more information on the Company’s evaluations of goodwill for impairment. Intangible assets with determinable lives are amortized on a straight-line basis over their respective estimated useful lives. The cost of computer software developed or obtained for internal use is capitalized and amortized on a straight- line basis over the estimated useful life of the software. These intangible assets are reviewed for impairment when indicators are present using undiscounted cash flows. The Company uses the undiscounted cash flows, excluding interest charges, to assess the recoverability of the carrying value of such assets. To the extent carrying value exceeds the undiscounted cash flows, an impairment loss is recorded based upon the excess of the carrying value over fair value. In addition, each quarter, the Company evaluates whether events and circumstances warrant a revision to the remaining estimated useful life of each of these intangible assets. If the Company were to determine that a change to the remaining estimated useful life of an intangible asset was necessary, then the remaining carrying amount of the intangible asset would be amortized prospectively over that revised remaining useful life. During the years ended December 31, 2013, 2012 and 2011, no impairment existed with respect to the Company’s intangible assets with determinable lives and no significant changes to the remaining useful lives were necessary. The following table shows estimated useful lives of definite-lived intangible assets: Classification Estimated Useful Lives Customer relationships 11 to 14 years Trade name 20 years Internally developed software 3 to 5 years Other 1 to 10 years Deferred Financing Costs Deferred financing costs, such as underwriting, financial advisory, professional fees and other similar fees are capitalized and recognized in interest expense over the estimated life of the related debt instrument using the effective interest method or straight-line method, as applicable. Derivatives The Company has entered into interest rate cap agreements for the purpose of economically hedging its exposure to fluctuations in interest rates. These derivatives are recorded at fair value in the Company’s consolidated balance sheets. The Company’s interest rate cap agreements are not designated as cash flow hedges of interest rate risk. Changes in fair value of the derivatives are recorded directly to interest expense, net in the Company’s consolidated statements of operations. Fair Value Measurements Fair value is defined under GAAP as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy has been established for valuation inputs to prioritize the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: Level 1 – observable inputs such as quoted prices for identical instruments traded in active markets. Level 2 – inputs are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 71 Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models and similar techniques. Accumulated Other Comprehensive (Loss) Income Foreign currency translation adjustments are included in shareholders’ equity under accumulated other comprehensive (loss) income. The components of accumulated other comprehensive (loss) income are as follows: (in millions)December 31, 2013 2012 2011 Foreign currency translation adjustment $(6.3)$0.4 $(2.1) Accumulated other comprehensive (loss) income $(6.3)$0.4 $(2.1) Revenue Recognition The Company is a primary distribution channel for a large group of vendors and suppliers, including original equipment manufacturers (“OEMs”), software publishers and wholesale distributors. The Company records revenue from sales transactions when title and risk of loss are passed to the customer, there is persuasive evidence of an arrangement for sale, delivery has occurred and/or services have been rendered, the sales price is fixed or determinable, and collectability is reasonably assured. The Company's shipping terms typically specify F.O.B. destination, at which time title and risk of loss have passed to the customer. Revenues from the sales of hardware products and software products and licenses are generally recognized on a gross basis with the selling price to the customer recorded as sales and the acquisition cost of the product recorded as cost of sales. These items can be delivered to customers in a variety of ways, including (i) as physical product shipped from the Company's warehouse, (ii) via drop-shipment by the vendor or supplier, or (iii) via electronic delivery for software licenses. At the time of sale, the Company records an estimate for sales returns and allowances based on historical experience. The Company's vendor partners warrant most of the products the Company sells. The Company leverages drop-shipment arrangements with many of its vendors and suppliers to deliver products to its customers without having to physically hold the inventory at its warehouses, thereby increasing efficiency and reducing costs. The Company recognizes revenue for drop-shipment arrangements on a gross basis upon delivery to the customer with contract terms that typically specify F.O.B. destination. Revenue from professional services is either recognized as provided for services billed at an hourly rate or recognized using a proportional performance model for services provided at a fixed fee. Revenue from cloud computing solutions including Software as a Service ("SaaS") and Infrastructure as a Service ("IaaS") arrangements, as well as data center services such as managed and remote managed services, server co-location, internet connectivity and data backup and storage, is recognized over the period service is provided. The Company also sells certain products for which it acts as an agent. Products in this category include the sale of third-party services, warranties, software assurance (“SA”) and third-party hosted SaaS and IaaS arrangements. SA is a product that allows customers to upgrade, at no additional cost, to the latest technology if new applications are introduced during the period that the SA is in effect. These sales do not meet the criteria for gross sales recognition, and thus are recognized on a net basis at the time of sale. Under net sales recognition, the cost paid to the vendor or third-party service provider is recorded as a reduction to sales, resulting in net sales being equal to the gross profit on the transaction. The Company's larger customers are offered the opportunity by certain of its vendors to purchase software licenses and SA under enterprise agreements (“EAs”). Under EAs, customers are considered to be compliant with applicable license requirements for the ensuing year, regardless of changes to their employee base. Customers are charged an annual true-up fee for changes in the number of users over the year. With most EAs, the Company's vendors will transfer the license and bill the customer directly, paying resellers such as the Company an agency fee or commission on these sales. The Company records these fees as a component of net sales as earned and there is no corresponding cost of sales amount. In certain instances, the Company bills the customer directly under an EA and accounts for the individual items sold based on the nature of the item. The Company's vendors typically dictate how the EA will be sold to the customer. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 72 From time to time, the Company sells some of its products and services as part of bundled contract arrangements containing multiple deliverables, which may include a combination of products and services. For each deliverable that represents a separate unit of accounting, total arrangement consideration is allocated based upon the relative selling prices of each element. The allocated arrangement consideration is recognized as revenue in accordance with the principles described above. Selling prices are determined by using vendor specific objective evidence (“VSOE”) if it exists. Otherwise, selling prices are determined using third party evidence (“TPE”). If neither VSOE or TPE is available, the Company uses its best estimate of selling prices. The Company records freight billed to its customers as net sales and the related freight costs as a cost of sales. Deferred revenue includes (1) payments received from customers in advance of providing the product or performing services, and (2) amounts deferred if other conditions of revenue recognition have not been met. The Company performs an analysis of the estimated number of days of sales in-transit to customers at the end of each period based on a weighted-average analysis of commercial delivery terms that includes drop-shipment arrangements. This analysis is the basis upon which the Company estimates the amount of sales in-transit at the end of the period and adjusts revenue and the related costs to reflect only what has been received by the customer. Changes in delivery patterns may result in a different number of business days used in making this adjustment and could have a material impact on the Company's revenue recognition for the period. Sales Taxes Sales tax amounts collected from customers for remittance to governmental authorities are presented on a net basis in the Company’s consolidated statements of operations. Advertising Advertising costs are generally charged to expense in the period incurred. Cooperative reimbursements from vendors are recorded in the period the related advertising expenditure is incurred. The Company classifies vendor consideration as a reduction to cost of sales. Equity-Based Compensation The Company measures all equity-based payments using a fair-value-based method and records compensation expense over the requisite service period in its consolidated financial statements. Forfeiture rates have been developed based upon historical experience. Interest Expense Interest expense is typically recognized in the period incurred at the applicable interest rate in effect. For increasing- rate debt, the Company determines the periodic interest cost using the effective interest method over the estimated outstanding term of the debt. The difference between interest expense recorded and cash interest paid is reflected as short-term or long-term accrued interest in the Company’s consolidated balance sheets. Foreign Currency Translation The Company’s functional currency is the U.S. dollar. The functional currency of the Company’s Canadian subsidiary is the local currency, the Canadian dollar. Assets and liabilities of this subsidiary are translated at the spot rate in effect at the applicable reporting date and the consolidated results of operations are translated at the average exchange rates in effect during the applicable period. The resulting foreign currency translation adjustment is recorded as accumulated other comprehensive (loss) income, which is reflected as a separate component of shareholders’ equity. Income Taxes Deferred income taxes are provided to reflect the differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company performs an evaluation of the realizability of deferred tax assets on a quarterly basis. This evaluation requires management to make use of estimates and assumptions and considers all positive and negative evidence and factors, such as the scheduled reversal of temporary differences, the mix of earnings in the jurisdictions in which the Company operates, and prudent and feasible tax planning strategies. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 73 The Company accounts for unrecognized tax benefits based upon its assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. The Company reports a liability for unrecognized tax benefits resulting from unrecognized tax benefits taken or expected to be taken in a tax return and recognizes interest and penalties, if any, related to its unrecognized tax benefits in income tax expense. 2. Recent Accounting Pronouncements Disclosure of the Effects of Reclassifications from Accumulated Other Comprehensive Income In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update 2013-02, which required that the effects of significant reclassifications from accumulated other comprehensive income to net income be shown parenthetically on the face of the consolidated financial statements or disclosed in a note. The adoption of this new guidance on January 1, 2013 did not have an impact on the Company's consolidated financial position, results of operations or cash flows. 3. Property and Equipment Property and equipment consisted of the following: (in millions)December 31, 2013 2012 Land $27.7 $27.7 Machinery and equipment 53.0 50.9 Building and leasehold improvements 104.8 104.0 Computer and data processing equipment 61.2 56.4 Computer software 30.9 30.2 Furniture and fixtures 21.6 21.6 Construction in progress 10.9 11.9 Total property and equipment 310.1 302.7 Less accumulated depreciation 179.0 160.0 Net property and equipment $131.1 $142.7 During 2013, 2012 and 2011, the Company recorded disposals of $7.9 million, $12.2 million and $10.5 million, respectively, to remove assets that were no longer in use from property and equipment. The Company recorded a pre- tax loss of $0.0 million, $0.1 million and $0.3 million in 2013, 2012 and 2011, respectively, for certain disposed assets that were not fully depreciated. Depreciation expense for the years ended December 31, 2013, 2012 and 2011 was $27.2 million, $32.0 million and $31.3 million, respectively. 4. Goodwill and Other Intangible Assets As described in Note 1, the Company is required to perform an evaluation of goodwill on an annual basis or more frequently if circumstances indicate a potential impairment. The annual test for impairment is conducted as of December 1. The Company’s reporting units used to assess potential goodwill impairment are the same as its operating segments. The Company has two reportable segments: Corporate, which is comprised primarily of business customers, and Public, which is comprised of government entities and education and healthcare institutions. The Company also has two other operating segments, CDW Advanced Services and Canada, which do not meet the reportable segment quantitative thresholds and, accordingly, are combined together as “Other” for segment reporting purposes. The Company has the option of performing a qualitative assessment of a reporting unit's fair value from the last quantitative assessment to determine if it is more likely than not that the reporting unit's goodwill is impaired or performing a quantitative assessment by comparing a reporting unit's estimated fair value to its carrying amount. Under the quantitative assessment, testing for impairment of goodwill is a two-step process. The first step compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of reporting unit goodwill with the carrying amount of that goodwill to determine the amount of impairment loss. Fair value of a reporting unit is determined by using a weighted combination of an income approach and a market approach, as this combination is considered the most indicative of the Company’s fair value in an orderly transaction between market participants. Under the income Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 74 approach, the Company determined fair value based on estimated future cash flows of a reporting unit, discounted by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of a reporting unit and the rate of return an outside investor would expect to earn. Under the market approach, the Company utilized valuation multiples derived from publicly available information for guideline companies to provide an indication of how much a knowledgeable investor in the marketplace would be willing to pay for a company. The valuation multiples were applied to the reporting units. Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates, gross margins, operating margins, discount rates and future market conditions, among others. December 1, 2013 Evaluation The Company performed its annual evaluation of goodwill as of December 1, 2013 by utilizing a quantitative assessment for all reporting units. All reporting units passed the first step of the goodwill evaluation (with the fair value exceeding the carrying value by 107%, 82%, 167% and 168% for the Corporate, Public, Canada and CDW Advanced Services reporting units, respectively) and, accordingly, the Company was not required to perform the second step of the goodwill evaluation. To determine the fair value of the reporting units, the Company used a 75%/25% weighting of the income approach and market approach, respectively. Under the income approach, the Company estimated future cash flows of each reporting unit based on internally generated forecasts for the remainder of 2013 and the next six years. The Company used a 3.5% long-term assumed consolidated annual revenue growth rate for periods after the six-year forecast. The estimated future cash flows for the Corporate and Public reporting units were discounted at 10.0%; cash flows for the Canada and CDW Advanced Services reporting units were discounted at 10.3% and 10.5%, respectively, based on the future growth rates assumed in the discounted cash flows. Discount rates utilized during the 2013 goodwill evaluation declined compared to those used in 2012 as a result of the market performance of the Company's common stock and a lower equity risk premium. December 1, 2012 Evaluation The Company performed its annual evaluation of goodwill as of December 1, 2012 by utilizing a quantitative assessment for all reporting units. All reporting units passed the first step of the goodwill evaluation (with the fair value exceeding the carrying value by 49%, 44%, 104% and 17% for the Corporate, Public, Canada and CDW Advanced Services reporting units, respectively) and, accordingly, the Company was not required to perform the second step of the goodwill evaluation. To determine the fair value of the reporting units, the Company used a 75%/25% weighting of the income approach and market approach, respectively. Under the income approach, the Company estimated future cash flows of each reporting unit based on internally generated forecasts for the remainder of 2012 and the next six years. The Company used a 3.5% long-term assumed consolidated annual revenue growth rate for periods after the six-year forecast. The estimated future cash flows for the Corporate and Public reporting units were discounted at 11.5%; cash flows for the Canada and CDW Advanced Services reporting units were discounted at 11.8% and 12.0%, respectively, based on the future growth rates assumed in the discounted cash flows. December 1, 2011 Evaluation The Company performed its annual evaluation of goodwill as of December 1, 2011 by utilizing a quantitative assessment for all reporting units. All reporting units passed the first step of the goodwill evaluation (with the fair value exceeding the carrying value by 43%, 27%, 159% and 17%, for the Corporate, Public, Canada and CDW Advanced Services reporting units, respectively) and, accordingly, the Company was not required to perform the second step of the goodwill evaluation. To determine the fair value of the reporting units, the Company used a 75%/25% weighting of the income approach and market approach, respectively. Under the income approach, the Company estimated future cash flows of each reporting unit based on internally generated forecasts for the remainder of 2011 and the next six years. The Company used a 3.5% long-term assumed consolidated annual revenue growth rate for periods after the six-year forecast. The estimated future cash flows for the Corporate, Public and CDW Advanced Services reporting units were discounted at 11.5%; cash flows for the Canada reporting unit were discounted at 12.0% given inherent differences in the business model and risk profile. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 75 The following table presents the change in goodwill by segment for the years ended December 31, 2013 and 2012: (in millions)Corporate Public Other (1)Consolidated Balances as of December 31, 2011: Goodwill $2,794.4 $1,261.4 $106.4 $4,162.2 Accumulated impairment charges (1,571.4)(354.1)(28.3)(1,953.8) $1,223.0 $907.3 $78.1 $2,208.4 2012 Activity: Translation adjustment $—$—$0.9 $0.9 $—$—$0.9 $0.9 Balances as of December 31, 2012: Goodwill $2,794.4 $1,261.4 $107.3 $4,163.1 Accumulated impairment charges (1,571.4)(354.1)(28.3)(1,953.8) $1,223.0 $907.3 $79.0 $2,209.3 2013 Activity: Translation adjustment $—$—$(2.1)$(2.1) Contingent consideration (2)8.8 4.0 0.3 13.1 $8.8 $4.0 $(1.8)$11.0 Balances as of December 31, 2013: Goodwill $2,803.2 $1,265.4 $105.5 $4,174.1 Accumulated impairment charges (1,571.4)(354.1)(28.3)(1,953.8) $1,231.8 $911.3 $77.2 $2,220.3 (1) Other is comprised of CDW Advanced Services and Canada reporting units. (2) During 2013, the Company recorded a $13.1 million net-of-tax addition to goodwill in connection with the settlement of the MPK Coworker Incentive Plan II and related charitable contribution. The charitable contribution was accounted for as additional purchase price (goodwill) in accordance with pre-2009 business combinations accounting guidance. See Note 10 for additional discussion of this transaction. The following table presents a summary of intangible assets at December 31, 2013 and 2012: (in millions) December 31, 2013 GrossCarryingAmount AccumulatedAmortization Net CarryingAmount Customer relationships $1,860.8 $872.8 $988.0 Trade name 421.0 130.9 290.1 Internally developed software 128.5 79.8 48.7 Other 3.1 1.9 1.2 Total $2,413.4 $1,085.4 $1,328.0 December 31, 2012 Customer relationships $1,861.7 $733.3 $1,128.4 Trade name 421.0 109.9 311.1 Internally developed software 97.4 60.1 37.3 Other 3.3 1.6 1.7 Total $2,383.4 $904.9 $1,478.5 Amortization expense related to intangible assets for the years ended December 31, 2013, 2012 and 2011 was $181.0 million, $178.2 million and $173.5 million, respectively. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 76 Estimated future amortization expense related to intangible assets for the next five years is as follows: (in millions) Years ending December 31, 2014 $179.0 2015 171.7 2016 163.9 2017 161.5 2018 161.3 5. Inventory Financing Agreements The Company has entered into agreements with certain financial intermediaries to facilitate the purchase of inventory from various suppliers under certain terms and conditions, as described below. These amounts are classified separately as accounts payable-inventory financing on the accompanying consolidated balance sheets. The Company does not incur any interest expense associated with these agreements as balances are paid when they are due. The following table presents the amounts included in accounts payable-inventory financing: (in millions)December 31, 2013 2012 Revolving Loan inventory financing agreement $256.1 $248.3 Other inventory financing agreements 0.5 0.9 Accounts payable-inventory financing $256.6 $249.2 The Company maintains a senior secured asset-based revolving credit facility as described in Note 7, which incorporates a $400.0 million floorplan sub-facility to facilitate the purchase of inventory from a certain vendor. In connection with the floorplan sub-facility, the Company maintains an inventory financing agreement on an unsecured basis with a financial intermediary to facilitate the purchase of inventory from this vendor (the “Revolving Loan inventory financing agreement”). Amounts outstanding under the Revolving Loan inventory financing agreement are unsecured and non-interest bearing. At December 31, 2013 and 2012, the Company reported $256.1 million and $248.3 million, respectively, for this agreement within accounts payable-inventory financing on the consolidated balance sheets. The Company also maintains other inventory financing agreements with financial intermediaries to facilitate the purchase of inventory from certain vendors. At December 31, 2013 and 2012, amounts owed under other inventory financing agreements of $0.5 million and $0.9 million, respectively, were collateralized by the inventory purchased under these financing agreements and a second lien on the related accounts receivable. 6. Lease Commitments The Company is obligated under various non-cancelable operating lease agreements for office facilities that generally provide for minimum rent payments and a proportionate share of operating expenses and property taxes and include certain renewal and expansion options. For the years ended December 31, 2013, 2012 and 2011, rent expense under these lease arrangements was $20.7 million, $22.4 million and $21.6 million, respectively. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 77 Future minimum lease payments are as follows: (in millions) Years ending December 31, 2014 $17.9 2015 17.7 2016 13.2 2017 10.7 2018 9.0 Thereafter 20.7 Total future minimum lease payments $89.2 7. Long-Term Debt Long-term debt was as follows: (dollars in millions)December 31, Interest Rate (1)2013 2012 Senior secured asset-based revolving credit facility —%$—$— Senior secured term loan facility 3.25%1,528.9 1,339.5 Unamortized discount on senior secured term loan facility (4.4)— Senior secured notes due 2018 8.0%325.0 500.0 Senior notes due 2019 8.5%1,305.0 1,305.0 Unamortized premium on senior notes due 2019 4.2 5.0 Senior subordinated notes due 2017 12.535%92.5 621.5 Total long-term debt 3,251.2 3,771.0 Less current maturities of long-term debt (45.4)(40.0) Long-term debt, excluding current maturities $3,205.8 $3,731.0 (1) Interest rate at December 31, 2013. At December 31, 2013, the Company was in compliance with the covenants under its various credit agreements and indentures as described below. Under the indentures governing the 8.5% Senior Notes due 2019 and 8.0% Senior Secured Notes due 2018, which contain the most restrictive restricted payment provisions in the Company’s various credit agreements and indentures, CDW LLC and its restricted subsidiaries are generally restricted from paying dividends and making other restricted payments unless CDW LLC could incur an additional dollar of indebtedness under its fixed charges ratio covenant and the amount of such dividend or other restricted payment, together with the amount of all other dividends and restricted payments made from January 1, 2011 through the end of the most recently ended fiscal quarter, is less than the sum of 50% of cumulative consolidated net income or 100% of any consolidated net loss incurred over the period plus the amount of certain other items occurring during that period that increase (and in some cases decrease) the amounts available for such payments. For the purpose of determining restricted payment capacity, consolidated net income or loss includes certain adjustments that are defined in the indentures. At December 31, 2013, the amount of cumulative consolidated net income free of restrictions under the credit agreements and indentures ("Restricted Payment Capacity") was $148.0 million. However, the subsequent events transactions described in Note 19 have since reduced the Restricted Payment Capacity to approximately $89 million. Senior Secured Asset-Based Revolving Credit Facility (“Revolving Loan”) At December 31, 2013, the Company had no outstanding borrowings under the Revolving Loan, $2.2 million of undrawn letters of credit and $256.7 million reserved related to the floorplan sub-facility. On June 24, 2011, the Company entered into the Revolving Loan, a five-year $900.0 million senior secured asset- based revolving credit facility, with the facility being available to the Company for borrowings, issuance of letters of credit and floorplan financing for certain vendor products. The Revolving Loan matures on June 24, 2016. The Revolving Loan replaced the Company's previous revolving loan credit facility that was to mature on October 12, 2012. In connection with the termination of the previous facility, the Company recorded a loss on extinguishment of Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 78 long-term debt of $1.6 million in the Company's consolidated statement of operations for the year ended December 31, 2011, representing a write-off of a portion of unamortized deferred financing costs. Fees of $7.2 million related to the Revolving Loan were capitalized as deferred financing costs and are being amortized over the term of the facility on a straight-line basis. As described in Note 5, the Company has entered into agreements with certain financial intermediaries to facilitate the purchase of inventory from various suppliers. In connection with the floorplan sub-facility, the Company entered into the Revolving Loan inventory financing agreement. Amounts outstanding under the Revolving Loan inventory financing agreement are unsecured and noninterest bearing. The Company will either pay the outstanding Revolving Loan inventory financing agreement amounts when they become due, or the Revolving Loan's administrative agent will automatically initiate an advance on the Revolving Loan and use the proceeds to pay the balance on the due date. At December 31, 2013, the financial intermediary reported an outstanding balance of $246.8 million under the Revolving Loan inventory financing agreement. The total amount reported on the Company's consolidated balance sheet as accounts payable-inventory financing related to the Revolving Loan inventory financing agreement is $9.3 million more than the $246.8 million owed to the financial intermediary due to differences in the timing of reporting activity under the Revolving Loan inventory financing agreement. The outstanding balance reported by the financial intermediary excludes $9.9 million in reserves for open orders that reduce the availability under the Revolving Loan. Changes in cash flows from the Revolving Loan inventory financing agreement are reported in financing activities on the Company's consolidated statements of cash flows. Borrowings under the Revolving Loan bear interest at a variable interest rate plus an applicable margin. The variable interest rate is based on one of two indices, either (i) LIBOR, or (ii) the Alternate Base Rate (“ABR”) with the ABR being the greatest of (a) the prime rate, (b) the federal funds effective rate plus 50 basis points or (c) the one-month LIBOR plus 1.00%. The applicable margin varies (2.00% to 2.50% for LIBOR borrowings and 1.00% to 1.50% for ABR borrowings) depending upon the Company's average daily excess cash availability under the agreement and is subject to a reduction of 0.25% if, and for as long as, the senior secured leverage ratio is less than 3.0. The senior secured leverage ratio is defined as the ratio of senior secured debt (including amounts owed under certain inventory floorplan arrangements) less cash and cash equivalents, to Adjusted EBITDA, a non-GAAP measure, for the four most recently ended fiscal quarters. For the four quarters ended December 31, 2013, the senior secured leverage ratio was 2.1. Availability under the Revolving Loan is limited to (a) the lesser of the revolving commitment of $900.0 million and the amount of the borrowing base less (b) outstanding borrowings, letters of credit, and amounts outstanding under the Revolving Loan inventory financing agreement plus a reserve of 15% of open orders. The borrowing base is (a) the sum of the products of the applicable advance rates on eligible accounts receivable and on eligible inventory as defined in the agreement less (b) any reserves. At December 31, 2013, the borrowing base was $1,065.5 million based on the amount of eligible inventory and accounts receivable balances as of November 30, 2013. The Company could have borrowed up to an additional $641.1 million under the Revolving Loan at December 31, 2013. The fee on the unused portion of the Revolving Loan ranges from 25 basis points to either 37.5 or 50 basis points, depending on the amount of utilization. CDW LLC is the borrower under the Revolving Loan. All obligations under the Revolving Loan are guaranteed by Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries. Borrowings under the Revolving Loan are collateralized by a first priority interest in inventory (excluding inventory collateralized under the inventory floorplan arrangements as described in Note 5), deposits, and accounts receivable, and a second priority interest in substantially all other assets. The Revolving Loan contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or consolidations, or engage in certain transactions with affiliates. The Revolving Loan also includes maintenance of a minimum average daily excess cash availability requirement. Should the Company fall below the minimum average daily excess cash availability requirement for five consecutive business days, the Company becomes subject to a fixed charge coverage ratio until such time as the daily excess cash availability requirement is met for 30 consecutive business days. Senior Secured Term Loan Facility On April 29, 2013, the Company entered into a new seven-year, $1,350.0 million aggregate principal amount senior secured term loan facility (the "Term Loan"). The Term Loan was issued at a price that was 99.75% of par, which Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 79 resulted in a discount of $3.4 million. Substantially all of the proceeds from the Term Loan were used to repay the $1,299.5 million outstanding aggregate principal amount of the prior senior secured term loan facility (the "Prior Term Loan Facility"). In connection with this refinancing, the Company recorded a loss on extinguishment of long-term debt of $10.3 million in the consolidated statement of operations for the year ended December 31, 2013. This loss represented a write-off of the remaining unamortized deferred financing costs related to the Prior Term Loan Facility. On July 31, 2013, the Company borrowed an additional $190.0 million aggregate principal amount under the Term Loan at a price that was 99.25% of par, which resulted in a discount of $1.4 million. Such proceeds were used to redeem a portion of outstanding Senior Subordinated Notes. The discounts are reported on the consolidated balance sheet as a reduction to the face amount of the Term Loan and are being amortized to interest expense over the term of the related debt. Fees of $6.1 million related to the Term Loan were capitalized as deferred financing costs and are being amortized over the term of the facility using the effective interest method. Borrowings under the Term Loan bear interest at either (a) the alternate base rate ("ABR") plus a margin or (b) LIBOR plus a margin; provided that for the purposes of the Term Loan, LIBOR shall not be less than 1.00% per annum at any time ("LIBOR Floor"). The margin is based upon a net leverage ratio as defined in the agreement governing the Term Loan, ranging from 1.25% to 1.50% for ABR borrowings and 2.25% to 2.50% for LIBOR borrowings. An interest rate of 3.25%, LIBOR Floor plus a 2.25% margin, was in effect during the three-month period ended December 31, 2013. Unlike the Prior Term Loan Facility, the Term Loan does not include a senior secured leverage ratio requirement or a hedging requirement. Additionally, the definition of debt under the Term Loan was revised to exclude amounts outstanding under the Company's inventory financing agreements. The Term Loan is subject to certain requirements as was the Prior Term Loan Facility to make mandatory annual excess cash flow prepayments under designated circumstances, including (i) a prepayment in an amount equal to 50% of the Company's excess cash flow for a fiscal year (the percentage rate of which decreases to 25% when the total net leverage ratio, as defined in the governing agreement, is less than or equal to 5.5 but greater than 4.5; and decreases to 0% when the total net leverage ratio is less than or equal to 4.5), and (ii) the net cash proceeds from the incurrence of certain additional indebtedness by the Company or its subsidiaries. The total net leverage ratio was 3.8 at December 31, 2013. The Company is required to pay quarterly principal installments equal to 0.25% of the original principal amount of the Term Loan, with the remaining principal amount payable on the maturity date of April 29, 2020. The quarterly principal installment payments commenced during the quarter ended June 30, 2013. At December 31, 2013, the outstanding principal amount of the Term Loan was $1,528.9 million, excluding $4.4 million in unamortized discount. The Company has interest rate cap agreements in effect through January 14, 2015 with a combined notional amount of $1,150.0 million. These cap agreements have not been designated as cash flow hedges of interest rate risk for GAAP accounting purposes. Of the total $1,150.0 million notional amount, $500.0 million entitle the Company to payments from the counterparty of the amount, if any, by which three-month LIBOR exceeds 3.5% during the agreement period. The remaining cap agreements with a notional amount of $650.0 million entitle the Company to payments from the counterparty of the amount, if any, by which the three-month LIBOR exceeds 1.5% during the agreement period. The fair value of the Company's interest rate cap agreements was zero at December 31, 2013 and $0.1 million at December 31, 2012. During the first quarters of 2013, 2012 and 2011, the Company made principal prepayments totaling $40.0 million, $201.0 million and $132.0 million, respectively, under the Prior Term Loan Facility. These prepayments satisfied the excess cash flow payment provision of the Prior Term Loan Facility with respect to the years ended December 31, 2012, 2011 and 2010, respectively. On March 11, 2011, the Company entered into an amendment to the Prior Term Loan Facility, which became effective on March 14, 2011. In connection with this amendment, the Company recorded a loss on extinguishment of long-term debt of $3.2 million in the Company's consolidated statement of operations for the year ended December 31, 2011. This loss represented a write-off of a portion of the unamortized deferred financing costs related to the Prior Term Loan Facility. CDW LLC is the borrower under the Term Loan. All obligations under the Term Loan are guaranteed by Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries. The Term Loan is collateralized by a second priority interest in substantially all inventory (excluding inventory collateralized under the inventory floorplan arrangements as described in Note 5), deposits, and accounts receivable, and by a first priority interest in substantially all other assets. The Term Loan contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries to dispose of Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 80 assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or consolidations, or engage in certain transactions with affiliates. 8.0% Senior Secured Notes due 2018 (“Senior Secured Notes”) The Senior Secured Notes were issued on December 17, 2010 and will mature on December 15, 2018. At December 31, 2013, the outstanding principal amount of the Senior Secured Notes was $325.0 million. On July 2, 2013, the Company used a portion of the net proceeds from the IPO to redeem $175.0 million aggregate principal amount of Senior Secured Notes. The redemption price of the Senior Secured Notes was 108.0% of the principal amount redeemed, plus $0.7 million of accrued and unpaid interest to the date of redemption. The Company used cash on hand to pay such accrued and unpaid interest. In connection with this redemption, the Company recorded a loss on extinguishment of long-term debt of $16.7 million in the consolidated statement of operations for the year ended December 31, 2013. This loss represented $14.0 million in redemption premium and $2.7 million for the write- off of a portion of the remaining deferred financing costs related to the Senior Secured Notes. CDW LLC and CDW Finance Corporation are the co-issuers of the Senior Secured Notes and the obligations under the notes are guaranteed by Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries. The Senior Secured Notes are secured on a pari passu basis with the Term Loan by a second priority interest in substantially all inventory (excluding inventory collateralized under the inventory floorplan arrangements as described in Note 5), deposits, and accounts receivable, and by a first priority interest in substantially all other assets. The Senior Secured Note indenture contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or consolidations, or engage in certain transactions with affiliates. The Senior Secured Note indenture does not contain any financial covenants. 11.0% Senior Exchange Notes due 2015 (“Senior Exchange Notes”); 11.5% / 12.25% Senior PIK Election Exchange Notes due 2015 (“PIK Election Notes” together with the Senior Exchange Notes, the “Senior Notes due 2015”) At December 31, 2013, there were no outstanding Senior Notes due 2015. On April 13, 2011, the Company completed a cash tender offer (the “Initial Senior Notes due 2015 Tender Offer”) and purchased $665.1 million aggregate principal amount of Senior Notes due 2015 comprised of $519.2 million of the Senior Exchange Notes and $145.9 million of the PIK Election Notes. The Company concurrently issued $725.0 million aggregate principal amount of Senior Notes (as defined below). The proceeds from this offering, together with cash on hand and borrowings under the then-outstanding revolving loan credit facility, were used to fund the purchase of the tendered Senior Notes due 2015, including $665.1 million aggregate principal amount of Senior Notes due 2015, $59.9 million in tender offer premium and $36.5 million of accrued and unpaid interest, along with transaction fees and expenses. On May 20, 2011, the Company completed a follow-on cash tender offer (the “Follow-on Senior Notes due 2015 Tender Offer,” and together with the Initial Senior Notes due 2015 Tender Offer, the “Senior Notes due 2015 Tender Offers”) and purchased an additional $412.8 million aggregate principal amount of Senior Notes due 2015 comprised of $321.4 million of the Senior Exchange Notes and $91.4 million of the PIK Election Notes. The Company concurrently issued $450.0 million in aggregate principal amount of additional Senior Notes. The proceeds from this offering, together with cash on hand and borrowings under the then-outstanding revolving loan credit facility, were used to fund the purchase of the tendered Senior Notes due 2015, including $412.8 million aggregate principal amount of Senior Notes due 2015, $37.2 million in tender offer premium and $4.5 million of accrued and unpaid interest, along with transaction fees and expenses. In connection with the Senior Notes due 2015 Tender Offers, the Company recorded a loss on extinguishment of long- term debt of $114.1 million in the Company's consolidated statement of operations for the year ended December 31, 2011. This loss represented $97.0 million in tender offer premiums and $17.1 million for the write-off of a portion of the unamortized deferred financing costs related to the Senior Notes due 2015. In connection with the issuance of Senior Notes, fees of $19.1 million were capitalized as deferred financing costs and are being amortized over the term of the notes using the effective interest method. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 81 On February 2, 2012, the Company commenced a tender offer to purchase any and all of the remaining $129.0 million aggregate principal amount of Senior Notes due 2015. On February 17, 2012, the Company accepted for purchase $120.6 million aggregate principal amount of the outstanding Senior Notes due 2015 that were tendered. On March 5, 2012, the Company accepted for purchase an additional $0.1 million aggregate principal amount of the outstanding Senior Notes due 2015 that were tendered prior to the expiration of the tender offer on March 2, 2012. On March 19, 2012, the Company redeemed the remaining $8.3 million aggregate principal amount that was not tendered. The Company funded the purchases and redemptions of the Senior Notes due 2015 with the issuance of $130.0 million aggregate principal amount of additional Senior Notes on February 17, 2012. The proceeds from this issuance, together with cash on hand and borrowings under the Revolving Loan, funded the payment of $129.0 million aggregate principal amount of Senior Notes due 2015, $7.9 million in tender and redemption premiums and $5.0 million of accrued and unpaid interest, along with transaction fees and expenses. In connection with these transactions, the Company recorded a loss on extinguishment of long-term debt of $9.4 million in the Company's consolidated statement of operations for the year ended December 31, 2012. This loss represented $7.9 million in tender and redemption premiums and $1.5 million for the write-off of the remaining unamortized deferred financing costs related to the Senior Notes due 2015. 8.5% Senior Notes due 2019 (“Senior Notes”) At December 31, 2013, the outstanding principal amount of Senior Notes was $1,305.0 million, excluding $4.2 million in unamortized premium. The Senior Notes mature on April 1, 2019. On February 17, 2012, the Company issued $130.0 million aggregate principal amount of additional Senior Notes at an issue price of 104.375% of par. The $5.7 million premium received is reported on the consolidated balance sheet as an addition to the face amount of the Senior Notes and is being amortized as a reduction of interest expense over the term of the related debt. As discussed above, on April 13, 2011, the Company issued $725.0 million aggregate principal amount of Senior Notes and on May 20, 2011, the Company issued an additional $450.0 million aggregate principal amount of Senior Notes. The proceeds from these issuances together with cash on hand and borrowings under the then-outstanding revolving loan credit facility were used to fund the Senior Notes due 2015 Tender Offers. CDW LLC and CDW Finance Corporation are the co-issuers of the Senior Notes. Obligations under the Senior Notes are guaranteed on an unsecured senior basis by Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries. The Senior Note indenture contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or consolidations, or engage in certain transactions with affiliates. The Senior Notes do not contain any financial covenants. 12.535% Senior Subordinated Exchange Notes due 2017 (“Senior Subordinated Notes”) At December 31, 2013, the outstanding principal amount of the Senior Subordinated Notes was $92.5 million. The Senior Subordinated Notes have a maturity date of October 12, 2017. On October 18, 2013, the Company redeemed $155.0 million aggregate principal amount of Senior Subordinated Notes at a redemption price that was 104.178% of the principal amount redeemed. A combination of cash on hand and the net proceeds from the sale of shares of common stock related to the underwriters' July 26, 2013 exercise in full of the overallotment option granted to them in connection with the IPO, in the amount of $56.0 million, was used to fund the redemption of $155.0 million aggregate principal amount, $6.5 million of redemption premium and $0.2 million in accrued and unpaid interest to the date of redemption. See Note 9 for additional discussion of the underwriters' overallotment option. In connection with this redemption, the Company recorded a loss on extinguishment of long- term debt of $8.5 million in the Company's consolidated statement of operations for the year ended December 31, 2013. This loss represented $6.5 million in redemption premium and $2.0 million for the write-off of a portion of the remaining unamortized deferred financing costs related to the Senior Subordinated Notes. On August 1, 2013, the Company redeemed $324.0 million aggregate principal amount of Senior Subordinated Notes at a redemption price that was 106.268% of the principal amount redeemed. The Company used a portion of the net Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 82 proceeds from the IPO to redeem $146.0 million aggregate principal amount of Senior Subordinated Notes and incremental borrowings of $190.0 million under the Term Loan to redeem $178.0 million aggregate principal amount of Senior Subordinated Notes. The Company used cash on hand to pay $12.0 million of accrued and unpaid interest to the date of redemption. In connection with this redemption, the Company recorded a loss on extinguishment of long- term debt of $24.6 million in the consolidated statement of operations for the year ended December 31, 2013. This loss represented $20.3 million in redemption premium and $4.3 million for the write-off of a portion of the remaining deferred financing costs related to the Senior Subordinated Notes. On March 8, 2013, the Company redeemed $50.0 million aggregate principal amount of Senior Subordinated Notes at a redemption price that was 106.268% of the principal amount redeemed. Cash on hand was used to fund the redemption of $50.0 million aggregate principal amount, $3.1 million of redemption premium and $2.5 million in accrued and unpaid interest to the date of redemption. In connection with this redemption, the Company recorded a loss on extinguishment of long-term debt of $3.9 million in the Company's consolidated statement of operations for the year ended December 31, 2013. This loss represented $3.1 million in redemption premium and $0.8 million for the write-off of a portion of the remaining unamortized deferred financing costs related to the Senior Subordinated Notes. On December 21, 2012, the Company redeemed $100.0 million aggregate principal amount of Senior Subordinated Notes at a redemption price that was 106.268% of the principal amount redeemed. Cash on hand was used to fund the redemption of $100.0 million aggregate principal amount, $6.3 million of redemption premium and $2.3 million in accrued and unpaid interest to the date of redemption. In connection with this redemption, the Company recorded a loss on extinguishment of long-term debt of $7.8 million in the Company's consolidated statement of operations for the year ended December 31, 2012. This loss represented $6.3 million in redemption premium and $1.5 million for the write-off of a portion of the remaining unamortized deferred financing costs related to the Senior Subordinated Notes. CDW LLC and CDW Finance Corporation are the co-issuers of the Senior Subordinated Notes. Obligations under the Senior Subordinated Notes are guaranteed on an unsecured senior basis by Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries. The Senior Subordinated Note indenture contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or consolidations, or engage in certain transactions with affiliates. The Senior Subordinated Notes do not contain any financial covenants. Long-Term Debt Maturities As of December 31, 2013, the maturities of long-term debt were as follows: (in millions) Years ending December 31, 2014 $45.4 2015 15.4 2016 15.4 2017 77.9 2018 340.4 Thereafter 2,756.9 $3,251.4 See Note 19 for a description of refinancing transactions completed during 2014. Fair Value The fair value of the Company's long-term debt instruments at December 31, 2013 was $3,415.2 million. The fair value of the Senior Secured Notes, Senior Notes and Senior Subordinated Notes is estimated using quoted market prices for identical assets or liabilities that are traded in over-the-counter secondary markets that are not considered active. The fair value of the Term Loan is estimated using dealer quotes for identical assets or liabilities in markets that are not considered active. Consequently, the Company's long-term debt is classified as Level 2 within the fair value hierarchy. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 83 At December 31, 2013, the carrying value of the Company's long-term debt was $3,251.4 million, excluding $4.2 million in unamortized premium and $4.4 million in unamortized discount. Deferred Financing Costs The following table summarizes the deferred financing costs activity for the years ended December 31, 2013 and 2012: (in millions)December 31, 2013 2012 Beginning balance $53.2 $68.5 Additional costs capitalized 6.1 2.1 Recognized in interest expense (9.1)(14.4) Write-off of unamortized deferred financing costs (20.1)(3.0) Ending balance $30.1 $53.2 As of December 31, 2013 and December 31, 2012, the weighted-average remaining life of unamortized deferred financing costs was 4.9 and 5.1 years, respectively. 8. Income Taxes Income before income taxes was taxed under the following jurisdictions: (in millions)Years Ended December 31, 2013 2012 2011 Domestic $179.4 $170.3 $11.4 Foreign 16.1 15.8 16.9 Total $195.5 $186.1 $28.3 Components of the income tax expense (benefit) consisted of the following: (in millions)Years Ended December 31, 2013 2012 2011 Current: Federal $96.7 $110.3 $17.9 State 10.1 8.0 (0.6) Foreign 4.6 5.1 4.1 Total current 111.4 123.4 21.4 Deferred: Domestic (48.6)(56.2)(9.9) Foreign (0.1)(0.1)(0.3) Total deferred (48.7)(56.3)(10.2) Income tax expense $62.7 $67.1 $11.2 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 84 The reconciliation between the statutory tax rate expressed as a percentage of income before income taxes and the effective tax rate is as follows: (dollars in millions)Years Ended December 31, 2013 2012 2011 Statutory federal income tax rate $68.4 35.0%$65.1 35.0%$9.9 35.0% State taxes, net of federal effect (5.0)(2.6)0.4 0.2 (3.4)(11.8) Equity-based compensation 1.5 0.7 5.7 3.1 5.1 17.9 Effect of rates different than statutory (1.4)(0.7)(1.4)(0.8)(1.1)(4.0) Valuation allowance ————(0.9)(3.1) Other (0.8)(0.3)(2.7)(1.5)1.6 5.7 Effective tax rate $62.7 32.1%$67.1 36.0%$11.2 39.7% The tax effect of temporary differences that give rise to the net deferred income tax liability is presented below: (in millions)December 31, 2013 2012 Deferred Tax Assets: Deferred interest $42.5 $58.3 State net operating loss and credit carryforwards, net 20.6 18.0 Payroll and benefits 16.2 16.7 Rent 6.4 1.2 Accounts receivable 5.4 4.2 Equity compensation plans 1.6 10.3 Trade credits 1.5 1.8 Interest rate caps 0.8 1.8 Charitable contribution carryforward 0.5 4.1 Deferred financing costs 0.2 2.3 Other 7.1 7.2 Total deferred tax assets 102.8 125.9 Deferred Tax Liabilities: Software and intangibles 486.2 551.4 Deferred income 145.5 146.3 Property and equipment 25.0 29.3 Other 11.6 9.1 Total deferred tax liabilities 668.3 736.1 Deferred tax asset valuation allowance —— Net deferred tax liability $565.5 $610.2 The Company has state income tax net operating loss carryforwards of $202.8 million, which will expire at various dates from 2014 through 2033 and state tax credit carryforwards of $17.0 million, which expire at various dates from 2016 through 2018. The Company has not provided for U.S. federal income taxes or tax benefits on the undistributed earnings of its international subsidiary because such earnings are reinvested and it is currently intended that they will continue to be reinvested indefinitely. At December 31, 2013, the Company has not provided for federal income taxes on earnings of approximately $52.5 million from its international subsidiary. The Company had no unrecognized tax benefits at December 31, 2013, 2012 and 2011. In the ordinary course of business, the Company is subject to review by domestic and foreign taxing authorities, including the Internal Revenue Service (“IRS”). In general, the Company is no longer subject to audit by the IRS for Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 85 tax years through 2010 and state, local or foreign taxing authorities for tax years through 2008. Various other taxing authorities are in the process of auditing income tax returns of the Company and its subsidiaries. The Company does not anticipate that any adjustments from the audits would have a material impact on its consolidated financial position, results of operations or cash flows. The Company accrues net interest and penalties related to unrecognized tax benefits in income tax expense in its consolidated statements of operations. For the years ended December 31, 2013, 2012 and 2011, the Company had no liability recorded for the payment of interest and penalties on unrecognized tax benefits and did not recognize any such interest and penalty expense. 9. Shareholders' Equity On July 2, 2013, the Company completed an IPO of 23,250,000 shares of common stock. On July 31, 2013, the Company completed the sale of an additional 3,487,500 shares of common stock to the underwriters of the IPO pursuant to the underwriters' July 26, 2013 exercise in full of the overallotment option granted to them in connection with the IPO. Such shares were registered under the Securities Act of 1933, as amended, pursuant to the Company's Registration Statement on Form S-1, which was declared effective by the SEC on June 26, 2013. The shares of common stock are listed on the NASDAQ Global Select Market under the symbol “CDW.” The Company's shares of common stock were sold to the underwriters at a price of $17.00 per share in the IPO and upon the exercise of the overallotment option, which together, generated aggregate net proceeds of $424.7 million to the Company after deducting underwriting discounts, expenses and transaction costs. On November 19, 2013, the Company completed a secondary public offering, whereby certain selling stockholders sold 15,000,000 shares of common stock. On December 18, 2013, such selling stockholders sold an additional 2,250,000 shares of common stock to the underwriters of the secondary public offering pursuant to the underwriters' December 13, 2013 exercise in full of the overallotment option granted to them in connection with the secondary public offering. The Company did not receive any proceeds from the sale of shares in the secondary public offering or upon the exercise of the overallotment option. The following pre-tax IPO- and secondary-offering related expenses were included within selling and administrative expenses in the consolidated statement of operations for the year ended December 31, 2013: (in millions)Year EndedDecember 31, 2013 Acceleration charge for certain equity awards and related employer payroll taxes(1)$40.7 RDU Plan cash retention pool accrual(2)7.5 Management services agreement termination fee(3)24.4 Other expenses 2.4 IPO- and secondary-offering related expenses $75.0 (1) See Note 10 for additional discussion of the impact of the IPO on the Company's equity awards. (2) See Note 12 for additional discussion of this transaction. (3) Represents the payment of a termination fee to affiliates of the Sponsors in connection with the termination of the management services agreement with such entities. In June 2013, the Company’s Board of Directors and the Company's sole shareholder at that time, CDW Holdings, approved the reclassification of the Company’s Class A common shares and Class B common shares into a single class of common shares and a 143.0299613-for-1 stock split, effective immediately. The par value of the common shares was maintained at $0.01 per share. All references to common shares and per share amounts in the accompanying consolidated financial statements have been adjusted to reflect the reclassification and stock split on a retroactive basis. In June 2013, the Company amended and restated its certificate of incorporation to authorize the issuance of 100,000,000 shares of preferred stock with a par value of $0.01. No shares of preferred stock have been issued or are outstanding as of December 31, 2013. Additionally, the amended and restated certificate of incorporation increased the number of authorized common shares to 1,000,000,000. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 86 On December 2, 2013, the Company paid a cash dividend on the Company's common stock of $0.0425 per share, or $7.3 million, to all stockholders of record as of the close of business on November 15, 2013. See Note 19 for a discussion of the dividend declared during the first quarter of 2014. Future dividends will be subject to the approval of the Company's board of directors. 10. Equity-Based Compensation Equity-Based Compensation Plan Descriptions CDW has established certain equity-based compensation plans for the benefit of the Company’s coworkers and senior management. Pre-IPO Equity Awards Prior to the IPO, the Company had the following equity-based compensation plans in place: Class B Common Units The Board of Managers of CDW Holdings adopted the CDW Holdings LLC 2007 Incentive Equity Plan (the “Plan”) for coworkers, managers, consultants and advisors of the Company and its subsidiaries. The Plan permitted a committee designated by the Board of Managers of CDW Holdings (the “Committee”) to grant or sell to any participant Class A Common Units or Class B Common Units of CDW Holdings in such quantity, at such price, on such terms and subject to such conditions that were consistent with the Plan and as established by the Committee. The Class B Common Units that were granted vested daily on a pro rata basis between the date of grant and the fifth anniversary thereof and were subject to repurchase by, with respect to vested units, or forfeiture to, with respect to unvested units, the Company upon the coworker's separation from service as was set forth in each holder’s Class B Common Unit Grant Agreement. On June 30, 2011, the Board of Managers approved the terms of a modified Class B Common Unit grant agreement with the Company's former Chief Executive Officer, who retired as the Company's Chief Executive Officer effective October 1, 2011 but continued to serve as Chairman of the Board through December 31, 2012. As a result of this modification, the Company recorded incremental equity-based compensation expense of $6.6 million and $3.3 million during the years ended December 31, 2012 and 2011, respectively. MPK II Units Contemporaneous with the Acquisition, the Company agreed with Michael P. Krasny, CDW Corporation founder, former chairman and CEO and significant selling shareholder, to establish the MPK Coworker Incentive Plan II (the “MPK Plan”) for the benefit of all of the coworkers of the Company other than members of senior management who received incentive equity awards under the Plan. The MPK Plan established an “account” for each eligible participant which was notionally credited with a number of Class A Common Units of CDW Holdings LLC on October 15, 2007, the day the plan was established. The notional units credited to participants' accounts were to cliff-vest at the end of ten years, subject to acceleration upon the occurrence of certain events. On July 2, 2013, the Company completed an IPO of its common shares. Under the terms of the MPK Plan, vesting accelerated for all unvested units upon completion of the IPO. The Company recorded a pre-tax charge of $36.7 million for compensation expense related to the acceleration of the expense recognition for MPK Plan units in the year ended December 31, 2013. In connection with the completion of the IPO, the Company distributed common stock to each participant and withheld the number of shares of common stock equal to the required tax withholding for each participant. The Company paid required withholding taxes of $24.0 million to federal, state and foreign taxing authorities. This amount is reported as a financing activity in the consolidated statement of cash flows and as an increase to accumulated deficit in the consolidated statement of shareholders' equity for the year ended December 31, 2013. In addition, the Company paid $4.0 million of employer payroll taxes that are included as an operating activity in the consolidated statement of cash flows for the year ended December 31, 2013. In connection with the establishment of the MPK Plan, the Company agreed to make charitable contributions in amounts equal to the net income tax benefits derived from payouts to participants under the MPK Plan (net of any related employer payroll tax costs). The contributions of these amounts are due by March 15 of the calendar year Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 87 following the year in which the Company realizes the benefits of the deductions. This arrangement has been accounted for as contingent consideration. Pre-2009 business combinations were accounted for under a former accounting standard which, among other aspects, precluded the recognition of certain contingent consideration as of the business combination date. Instead, under the former accounting standard, contingent consideration is accounted for as additional purchase price (goodwill) at the time the contingency is resolved. As of December 31, 2013, the Company has accrued approximately $21 million related to this arrangement within other current liabilities, as the Company expects to realize the tax benefit of the compensation deductions during the 2013 tax year. The Company expects to make the related cash contribution during the first quarter of 2014. Post-IPO Equity Awards 2013 Long-Term Incentive Plan (the "2013 LTIP") In June 2013, the Company adopted the 2013 Long-Term Incentive Plan (the "2013 LTIP"). The 2013 LTIP provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, bonus stock and performance awards. The maximum aggregate number of shares that may be issued under the 2013 LTIP is 11,700,000 shares of the Company's common stock, in addition to the 3,798,508 shares of restricted stock granted in exchange for unvested Class B Common Units in connection with the Company's IPO, as discussed below. Restricted Stock In connection with the IPO, CDW Holdings distributed all of its shares of the Company's common stock to its existing members in accordance with their respective membership interests. Common stock received by holders of Class B Common Units in connection with the distribution is subject to any vesting provisions previously applicable to the holder's Class B Common Units. Class B Common Unit holders received 3,798,508 shares of restricted stock with respect to Class B Common Units that had not yet vested at the time of the distribution. For the year ended December 31, 2013, 1,200,544 shares of such restricted stock vested/settled and 5,931 shares were forfeited. As of December 31, 2013, 2,592,033 shares of restricted stock were outstanding. Stock Options In addition, in connection with the IPO, the Company issued 1,268,986 stock options to the Class B Common Unit holders to preserve their fully diluted equity ownership percentage. These options were issued with a per-share exercise price equal to the IPO price of $17.00 and are also subject to the same vesting provisions as the Class B Common Units to which they relate. The Company also granted 19,412 stock options under the 2013 LTIP during the year ended December 31, 2013. Restricted Stock Units ("RSUs") In connection with the IPO, the Company granted 1,416,543 RSUs under the 2013 LTIP at a weighted-average grant- date fair value of $17.03 per unit. The RSUs cliff-vest at the end of four years. Valuation Information The Company attributes the value of equity-based compensation awards to the various periods during which the recipient must perform services in order to vest in the award using the straight-line method. Post-IPO Equity Awards The Company has elected to use the Black-Scholes option pricing model to estimate the fair value of stock options granted. The Black-Scholes option pricing model incorporates various assumptions including volatility, expected term, risk-free interest rates and dividend yields. The assumptions used to value the stock options granted during the year ended December 31, 2013 are presented below. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 88 Year Ended December 31, Assumptions 2013 Weighted-average grant date fair value $4.75 Weighted-average volatility (1)35.00% Weighted-average risk-free rate (2)1.58% Dividend yield 1.00% Expected term (in years) (3)5.4 (1) Based upon an assessment of the two-year, five-year and implied volatility for the Company’s selected peer group, adjusted for the Company’s leverage. (2) Based on a composite U.S. Treasury rate. (3) The expected term is calculated using the simplified method. The simplified method defines the expected term as the average of the option’s contractual term and the option’s weighted-average vesting period. The Company utilizes this method as it has limited historical stock option data that is sufficient to derive a reasonable estimate of the expected stock option term. The following table sets forth a summary of the Company's stock option activity for the year ended December 31, 2013: Options Number ofOptions Weighted-AverageExercise Price Weighted-AverageRemainingContractualTerm AggregateIntrinsic Value(millions) Outstanding at January 1, 2013 —$— Granted 1,288,398 $17.00 Forfeited/Expired (8,143)$17.00 Exercised —$—N/A Outstanding at December 31, 2013 1,280,255 $17.00 8.4 $8.1 Vested at December 31, 2013 393,517 $17.00 8.0 $2.5 Exercisable at December 31, 2013 393,517 $17.00 8.0 $2.5 Expected to vest at December 31, 2013 852,713 $17.00 8.6 $5.4 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 89 The following table sets forth a summary of the Company's RSU activity for the year ended December 31, 2013: Number ofUnits Weighted-AverageGrant-DateFair Value Nonvested at January 1, 2013 —$— Granted 1,416,543 17.03 Vested/Settled (1,844)17.00 Forfeited (63,127)17.01 Nonvested at December 31, 2013 1,351,572 $17.04 The aggregate fair value of restricted stock and RSUs that vested during the year ended December 31, 2013, was $26.7 million. Pre-IPO Equity Awards The grant date fair value of Class B Common Unit grants was calculated using the Option-Pricing Method. This method considered Class A Common Units and Class B Common Units as call options on the total equity value, giving consideration to liquidation preferences and conversion of the preferred units. Such Class A Common Units and Class B Common Units were modeled as call options that gave their owners the right, but not the obligation, to buy the underlying equity value at a predetermined (or exercise) price. Class B Common Units were considered to be call options with a claim on equity value at an exercise price equal to the remaining value immediately after the Class A Common Units and Class B Common Units with a lower participation threshold were liquidated. The Option-Pricing Method is highly sensitive to key assumptions, such as the volatility assumption. As such, the use of this method can be applied when the range of possible future outcomes is difficult to predict. The following table summarizes the assumptions and resulting fair value of the Class B Common Unit grants for the years ended December 31, 2013, 2012 and 2011: Class B Common Units Years Ended December 31, Assumptions 2013 2012 2011 Weighted-average grant date fair value $119.00 $125.65 $148.89 Weighted-average volatility 65.50%65.26%82.87% Weighted-average risk-free rate 0.18%0.19%0.84% Dividend yield 0.00%0.00%0.00% The Company calculated the expected future volatility based upon an assessment of the two-year, five-year and implied volatility for the Company’s selected peer group, adjusted for the Company’s leverage. The risk-free interest rate of return used is based on a composite U.S. Treasury rate. Notional units granted under the MPK Plan were valued on the grant date at $1,000 per unit, the fair value equivalent of the Class A Common Units at the time the awards were granted. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 90 The following table sets forth a summary of equity plan activity for the year ended December 31, 2013: Class BCommon Units MPK PlanUnits Outstanding at January 1, 2013 216,483 66,137 Granted 400 — Forfeited (860)(2,228) Converted/Settled (1)(216,023)(63,909) Outstanding at December 31, 2013 —— Vested at December 31, 2013 —— (1) As discussed above, the Class B Common Units and MPK Plan Units were converted/settled into shares of the Company's common stock upon completion of the IPO. The converted Class B Common Units, to the extent unvested at the time of the IPO, relate to the grants of restricted stock disclosed above. Expense Information The Company’s net income included $46.6 million, $22.1 million and $19.5 million of compensation cost and $16.5 million, $2.3 million and $1.9 million of income tax benefits related to the Company’s equity-based compensation arrangements for the years ended December 31, 2013, 2012 and 2011, respectively. No portion of equity-based compensation was capitalized. Equity-based compensation expense for the year ended December 31, 2013 included incremental expense of $36.7 million related to the acceleration of the expense recognition for MPK units as discussed above. Equity-based compensation expense included incremental expense of $6.6 million and $3.3 million related to the Class B Common Unit modification for the Company's former Chief Executive Officer for the years ended December 31, 2012 and 2011, respectively. As of December 31, 2013, the Company estimated there was $24.9 million of total unrecognized compensation cost to be recognized over the next 3.3 years. 11. Earnings per Share The numerator for both basic and diluted earnings per share is net income. The denominator for basic earnings per share is the weighted-average number of common shares outstanding during the period. The 2013 denominator was impacted by the common shares issued during both the IPO and the underwriters' exercise in full of the overallotment option granted to them in connection with the IPO. Because such common shares were issued on July 2, 2013 and July 31, 2013, respectively, they are only partially reflected in the 2013 denominator. Such shares will be fully reflected in the 2014 denominator. See Note 9 for additional discussion of the IPO. The dilutive effect of outstanding restricted stock, restricted stock units, stock options and MPK Plan units is reflected in the denominator for diluted earnings per share using the treasury stock method. The following is a reconciliation of basic shares to diluted shares: Years Ended December 31, (in millions)2013 2012 2011 Weighted-average shares - basic 156.6 145.1 144.8 Effect of dilutive securities 2.1 0.7 0.1 Weighted-average shares - diluted 158.7 145.8 144.9 For the years ended December 31, 2013, 2012 and 2011, diluted earnings per share excludes the impact of 0.0 million, 0.0 million, and 4.3 million potential common shares, respectively, as their inclusion would have had an anti-dilutive effect. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 91 12. Deferred Compensation Plan On March 10, 2010, in connection with the Company’s purchase of $28.5 million principal amount of its outstanding senior subordinated debt, the Company established the Restricted Debt Unit Plan (the “RDU Plan”), an unfunded nonqualified deferred compensation plan. The total number of RDUs that can be granted under the RDU Plan is 28,500. At December 31, 2013, 28,500 RDUs were outstanding. RDUs that are outstanding vest daily on a pro rata basis over the three-year period from January 1, 2012 (or, if later, the date of hire or the date of a subsequent RDU grant) through December 31, 2014. Participants have no rights to the underlying debt. The total amount of compensation available to be paid under the RDU Plan was initially to be based on two components, a principal component and an interest component. The principal component credits the RDU Plan with a notional amount equal to the $28.5 million face value of the Senior Subordinated Notes (the "Debt Pool"), together with certain redemption premium equivalents as noted below. The interest component credits the RDU Plan with amounts equal to the interest that would have been earned on the Debt Pool from March 10, 2010 through maturity on October 12, 2017, except as discussed below. Interest amounts for 2010 and 2011 were deferred until 2012, and thereafter, interest amounts were paid to participants semi-annually on the interest payment due dates. Payments totaling $1.7 million and $1.3 million were made to participants under the RDU Plan in April and October 2013, respectively, in connection with the semi-annual interest payments due. The Company used a portion of the IPO proceeds together with incremental borrowings to redeem $324.0 million of the total Senior Subordinated Notes outstanding on August 1, 2013. In connection with the IPO and the partial redemption of the Senior Subordinated Notes, the Company amended the RDU Plan to increase the retentive value of the plan. In accordance with the original terms of the RDU Plan, the principal component of the RDUs converted to a cash-denominated pool upon the redemption of the Senior Subordinated Notes. In addition, the Company added $1.4 million to the principal component in the year ended December 31, 2013 as redemption premium equivalents in accordance with the terms of the RDU plan. Under the terms of the amended RDU Plan, upon the partial redemption of outstanding Senior Subordinated Notes, the RDUs ceased to accrue the proportionate related interest component credits. The amended RDU Plan provides participants the opportunity to share on a pro rata basis in cash retention pools payable to participants who satisfy certain retention requirements. The aggregate amount of the retention pools was determined to be $15.0 million based upon the amount of interest component credits that would have been allocated to the RDU Plan if the Senior Subordinated Notes had remained outstanding from August 1, 2013 through maturity. The Company recorded a pre-tax charge of $7.5 million in the year ended December 31, 2013 for payment of the first cash retention pool. The second cash retention pool payment is expected to be made to participants who remain employed through December 31, 2015 in the first quarter of 2016. Participants continue to accrue an interest component credit for the proportionate amount of Senior Subordinated Notes still outstanding, payable on the aforementioned semi-annual due dates; such payments, however, will be deducted from the second retention pool payment amount of $7.5 million. Unrecognized compensation expense as of December 31, 2013 of approximately $9 million is expected to be recognized through 2014 and approximately $7 million in 2015 through 2017. Payments under the RDU Plan may be impacted if certain significant events occur or circumstances change that would impact the financial condition or structure of the Company. Compensation expense of $16.8 million, $8.4 million, and $8.1 million related to the RDU Plan was recognized in the years ended December 31, 2013, 2012 and 2011, respectively. At December 31, 2013 and 2012, the Company had $21.8 million and $15.5 million of liabilities related to the RDU Plan recorded on the consolidated balance sheets, respectively. Payment of the principal component of the RDU Plan is expected to be made on October 12, 2017, unless accelerated due to a sale of the Company. 13. Profit Sharing and 401(k) Plan The Company has a profit sharing plan that includes a salary reduction feature established under the Internal Revenue Code Section 401(k) covering substantially all coworkers. Company contributions to the profit sharing plan are made in cash and determined at the discretion of the Board of Directors. For the years ended December 31, 2013, 2012 and 2011, the amounts charged to expense for this plan totaled $17.3 million, $14.6 million and $15.3 million, respectively. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 92 14. Commitments and Contingencies The Company is party to various legal proceedings that arise in the ordinary course of its business, which include commercial, intellectual property, employment, tort and other litigation matters. The Company is also subject to audit by federal, state and local authorities, and by various partners and large customers, including government agencies, relating to purchases and sales under various contracts. In addition, the Company is subject to indemnification claims under various contracts. From time to time, certain customers of the Company file voluntary petitions for reorganization or liquidation under the U.S. bankruptcy laws. In such cases, certain pre-petition payments received by the Company could be considered preference items and subject to return to the bankruptcy administrator. As of December 31, 2013, the Company does not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for these proceedings and matters, if any, has been incurred. However, the ultimate resolutions of these proceedings and matters are inherently unpredictable. As such, the Company’s financial condition and results of operations could be adversely affected in any particular period by the unfavorable resolution of one or more of these proceedings or matters. The Company previously filed a claim as part of a class action settlement in a case alleging price fixing during the period of January 1, 1996 through December 31, 2006, by certain manufacturers of thin-film liquid crystal display panels. On July 13, 2013, the United Stated District Court for the Northern District of California approved distribution of the settlement proceeds, including a net payment to the Company of $10.4 million after fees and expenses. The Company has recognized a pre-tax benefit of $10.4 million within selling and administrative expenses in the consolidated statement of operations for the year ended December 31, 2013. The first of two settlement payments was received by the Company on July 29, 2013 in the amount of $8.5 million. The balance of $1.9 million was received in February 2014. 15. Related Party Transactions The Company had previously entered into a management services agreement with the Sponsors pursuant to which they had agreed to provide it with management and consulting services and financial and other advisory services. Pursuant to such agreement, the Sponsors received an annual management fee of $5.0 million and reimbursement of out-of- pocket expenses incurred in connection with the provision of such services. Such amounts were classified as selling and administrative expenses within the consolidated statements of operations. The management services agreement included customary indemnification and provisions in favor of the Sponsors. On July 2, 2013, the Company completed an IPO of its common stock. Using a portion of the net proceeds from the IPO, the Company paid a $24.4 million termination fee to affiliates of the Sponsors in connection with the termination of the management services agreement with such entities that was effective upon completion of the IPO. The Company paid an annual management fee of $2.5 million, $5.0 million and $5.0 million in the years ended December 31, 2013, 2012 and 2011, respectively. 16. Segment Information Segment information is presented in accordance with a “management approach,” which designates the internal reporting used by the chief operating decision-maker for making decisions and assessing performance as the source of the Company's reportable segments. The Company's segments are organized in a manner consistent with which separate financial information is available and evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance. The Company has two reportable segments: Corporate, which is comprised primarily of business customers, and Public, which is comprised of government entities and education and healthcare institutions. The Company also has two other operating segments, CDW Advanced Services and Canada, which do not meet the reportable segment quantitative thresholds and, accordingly, are combined together as “Other.” The Company has centralized logistics and headquarters functions that provide services to the segments. The logistics function includes purchasing, distribution and fulfillment services to support both the Corporate and Public segments. As a result, costs and intercompany charges associated with the logistics function are fully allocated to both of these segments based on a percent of sales. The centralized headquarters function provides services in areas such as accounting, information technology, marketing, legal and coworker services. Headquarters' function costs that are not allocated to the segments are included under the heading of “Headquarters” in the tables below. Depreciation expense is included in Headquarters as it is not allocated among segments or used in measuring segment performance. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 93 IPO- and secondary-offering related expenses primarily relating to coworker compensation were included within operating segment results for the year ended December 31, 2013. See Note 9 for additional discussion of IPO- and secondary-offering related expenses. The Company allocates resources to and evaluates performance of its segments based on net sales, income (loss) from operations and Adjusted EBITDA, a non-GAAP measure as defined in the Company's credit agreements. However, the Company has concluded that income (loss) from operations is the more useful measure in terms of discussion of operating results, as it is a GAAP measure. Segment information for total assets and capital expenditures is not presented, as such information is not used in measuring segment performance or allocating resources between segments. Selected Segment Financial Information The following table presents information about the Company’s segments for the years ended December 31, 2013, 2012 and 2011: (in millions)Corporate Public Other Headquarters Total 2013: Net sales $5,960.1 $4,164.5 $644.0 $—$10,768.6 Income (loss) from operations 363.3 246.5 27.2 (128.4)508.6 Depreciation and amortization expense (97.3)(44.0)(8.6)(58.3)(208.2) IPO- and secondary-offering related expenses (26.4)(14.4)(3.6)(30.6)(75.0) 2012: Net sales $5,512.8 $4,023.0 $592.4 $—$10,128.2 Income (loss) from operations 349.0 246.7 18.6 (103.7)510.6 Depreciation and amortization expense (97.6)(44.0)(9.3)(59.3)(210.2) IPO- and secondary-offering related expenses ————— 2011: Net sales $5,334.4 $3,757.2 $510.8 $—$9,602.4 Income (loss) from operations 331.6 233.3 17.5 (111.7)470.7 Depreciation and amortization expense (97.4)(43.9)(8.7)(54.9)(204.9) IPO- and secondary-offering related expenses ————— Major Customers, Geographic Areas, and Product Mix Net sales to the federal government were $764.4 million, $964.7 million and $953.6 million and accounted for approximately 7%, 10% and 10% of total net sales in 2013, 2012 and 2011, respectively. Net sales to customers outside of the U.S., primarily in Canada, were approximately 4% of the Company's total net sales in 2013, 2012 and 2011. Approximately 1% and 2% of the Company’s long-lived assets were located outside of the U.S. as of December 31, 2013 and 2012, respectively. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 94 The following table presents net sales by major category for the years ended December 31, 2013, 2012 and 2011. Categories are based upon internal classifications. Amounts for the years ended December 31, 2012 and 2011 have been reclassified for certain changes in individual product classifications to conform to the presentation for the year ended December 31, 2013. Year EndedDecember 31, 2013 Year EndedDecember 31, 2012 Year EndedDecember 31, 2011 Dollars inMillions Percentageof Total NetSales Dollars inMillions Percentageof Total NetSales Dollars inMillions Percentageof Total NetSales Notebooks/Mobile Devices $1,706.0 15.8%$1,470.1 14.5%$1,336.9 13.9% NetComm Products 1,489.1 13.8 1,351.1 13.3 1,237.7 12.9 Enterprise and Data Storage(Including Drives)998.1 9.3 979.4 9.7 929.9 9.7 Other Hardware 4,173.3 38.8 4,068.8 40.2 3,988.3 41.5 Software 1,994.7 18.5 1,849.4 18.3 1,767.2 18.4 Services 327.1 3.0 284.6 2.8 254.3 2.6 Other (1)80.3 0.8 124.8 1.2 88.1 1.0 Total net sales $10,768.6 100.0%$10,128.2 100.0%$9,602.4 100.0% (1) Includes items such as delivery charges to customers and certain commission revenue. 17. Supplemental Guarantor Information As described in Note 7, the Senior Secured Notes, Senior Subordinated Notes and Senior Notes are guaranteed by Parent and each of CDW LLC’s direct and indirect, 100% owned, domestic subsidiaries (the “Guarantor Subsidiaries”). All guarantees by Parent and Guarantor Subsidiaries are joint and several, and full and unconditional; provided that each guarantee by the Guarantor Subsidiaries is subject to certain customary release provisions contained in the indentures governing the Senior Secured Notes, Senior Subordinated Notes and Senior Notes. CDW LLC’s Canada subsidiary (the “Non-Guarantor Subsidiary”) does not guarantee the debt obligations. CDW LLC and CDW Finance Corporation, as co-issuers, are 100% owned by Parent, and each of the Guarantor Subsidiaries and the Non-Guarantor Subsidiary is 100% owned by CDW LLC. The following tables set forth condensed consolidating balance sheets as of December 31, 2013 and 2012, consolidating statements of operations for the years ended December 31, 2013, 2012 and 2011, condensed consolidating statements of comprehensive income for the years ended December 31, 2013, 2012 and 2011, and condensed consolidating statements of cash flows for the years ended December 31, 2013, 2012 and 2011, in accordance with Rule 3-10 of Regulation S-X. The consolidating financial information includes the accounts of CDW Corporation (the “Parent Guarantor”), which has no independent assets or operations, the accounts of CDW LLC (the “Subsidiary Issuer”), the combined accounts of the Guarantor Subsidiaries, the accounts of the Non-Guarantor Subsidiary, and the accounts of CDW Finance Corporation (the “Co-Issuer”) for the periods indicated. The information was prepared on the same basis as the Company’s consolidated financial statements. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 95 Condensed Consolidating Balance Sheet December 31, 2013 (in millions)ParentGuarantor SubsidiaryIssuer GuarantorSubsidiaries Non-GuarantorSubsidiary Co-Issuer ConsolidatingAdjustments Consolidated Assets Current assets: Cash and cash equivalents $—$196.5 $—$14.0 $—$(22.4)$188.1 Accounts receivable, net ——1,375.9 75.1 ——1,451.0 Merchandise inventory ——378.9 3.1 ——382.0 Miscellaneous receivables —49.9 91.0 5.4 ——146.3 Prepaid expenses and other —10.7 33.4 5.1 —(3.1)46.1 Total current assets —257.1 1,879.2 102.7 —(25.5)2,213.5 Property and equipment, net —69.7 59.6 1.8 ——131.1 Goodwill —751.9 1,439.0 29.4 ——2,220.3 Other intangible assets, net —338.5 982.8 6.7 ——1,328.0 Deferred financing costs, net —30.1 ————30.1 Other assets 4.9 1.4 0.1 0.9 —(5.7)1.6 Investment in and advances to subsidiaries 706.8 2,909.4 ———(3,616.2)— Total assets $711.7 $4,358.1 $4,360.7 $141.5 $—$(3,647.4)$5,924.6 Liabilities and Shareholders’Equity Current liabilities: Accounts payable-trade $—$21.4 $637.3 $26.5 $—$(22.4)$662.8 Accounts payable- inventory financing ——256.6 ———256.6 Current maturities of long- term debt —45.4 ————45.4 Deferred revenue ——89.9 4.9 ——94.8 Accrued expenses —163.5 175.1 7.5 —(3.1)343.0 Total current liabilities —230.3 1,158.9 38.9 —(25.5)1,402.6 Long-term liabilities: Debt —3,205.8 ————3,205.8 Deferred income taxes —178.3 388.4 1.6 —(4.8)563.5 Other liabilities —36.9 3.6 1.4 —(0.9)41.0 Total long-term liabilities —3,421.0 392.0 3.0 —(5.7)3,810.3 Total shareholders’ equity 711.7 706.8 2,809.8 99.6 —(3,616.2)711.7 Total liabilities andshareholders' equity $711.7 $4,358.1 $4,360.7 $141.5 $—$(3,647.4)$5,924.6 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 96 Condensed Consolidating Balance Sheet December 31, 2012 (in millions)ParentGuarantor SubsidiaryIssuer GuarantorSubsidiaries Non-GuarantorSubsidiary Co-Issuer ConsolidatingAdjustments Consolidated Assets Current assets: Cash and cash equivalents $—$48.0 $—$9.8 $—$(19.9)$37.9 Accounts receivable, net ——1,217.7 67.3 ——1,285.0 Merchandise inventory ——313.2 1.4 ——314.6 Miscellaneous receivables —61.7 82.0 4.8 ——148.5 Deferred income taxes —8.7 5.5 (0.1)——14.1 Prepaid expenses and other —10.1 24.4 0.1 ——34.6 Total current assets —128.5 1,642.8 83.3 —(19.9)1,834.7 Property and equipment, net —73.9 66.2 2.6 ——142.7 Goodwill —749.4 1,428.5 31.4 ——2,209.3 Other intangible assets, net —348.6 1,121.7 8.2 ——1,478.5 Deferred financing costs, net —53.2 ————53.2 Other assets 5.4 1.1 0.4 0.6 —(5.9)1.6 Investment in and advances to subsidiaries 131.1 2,946.0 ———(3,077.1)— Total assets $136.5 $4,300.7 $4,259.6 $126.1 $—$(3,102.9)$5,720.0 Liabilities and Shareholders'Equity Current liabilities: Accounts payable-trade $—$16.5 $500.3 $21.7 $—$(19.9)$518.6 Accounts payable- inventory financing ——249.2 ———249.2 Current maturities of long- term debt —40.0 ————40.0 Deferred revenue ——57.8 ———57.8 Accrued expenses —139.3 157.4 5.9 ——302.6 Total current liabilities —195.8 964.7 27.6 —(19.9)1,168.2 Long-term liabilities: Debt —3,731.0 ————3,731.0 Deferred income taxes —188.1 440.0 1.7 —(5.5)624.3 Accrued interest —8.0 ————8.0 Other liabilities —46.7 4.0 1.7 —(0.4)52.0 Total long-term liabilities —3,973.8 444.0 3.4 —(5.9)4,415.3 Total shareholders’ equity 136.5 131.1 2,850.9 95.1 —(3,077.1)136.5 Total liabilities andshareholders’ equity $136.5 $4,300.7 $4,259.6 $126.1 $—$(3,102.9)$5,720.0 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 97 Consolidating Statement of Operations Year Ended December 31, 2013 (in millions)ParentGuarantor SubsidiaryIssuer GuarantorSubsidiaries Non-GuarantorSubsidiary Co-Issuer ConsolidatingAdjustments Consolidated Net sales $—$—$10,293.3 $475.3 $—$—$10,768.6 Cost of sales ——8,592.1 416.2 ——9,008.3 Gross profit ——1,701.2 59.1 ——1,760.3 Selling and administrative expenses 24.4 103.9 957.3 35.3 ——1,120.9 Advertising expense ——126.8 4.0 ——130.8 (Loss) income from operations (24.4)(103.9)617.1 19.8 ——508.6 Interest (expense) income, net —(250.6)0.2 0.3 ——(250.1) Net loss on extinguishments oflong-term debt —(64.0)————(64.0) Management fee —4.3 —(4.3)——— Other (expense) income, net —(0.5)1.2 0.3 ——1.0 (Loss) income before income taxes (24.4)(414.7)618.5 16.1 ——195.5 Income tax benefit (expense)9.2 142.2 (209.5)(4.6)——(62.7) (Loss) income before equity inearnings of subsidiaries (15.2)(272.5)409.0 11.5 ——132.8 Equity in earnings of subsidiaries 148.0 420.5 ———(568.5)— Net income $132.8 $148.0 $409.0 $11.5 $—$(568.5)$132.8 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 98 Consolidating Statement of Operations Year Ended December 31, 2012 (in millions)ParentGuarantor SubsidiaryIssuer GuarantorSubsidiaries Non-GuarantorSubsidiary Co-Issuer ConsolidatingAdjustments Consolidated Net sales $—$—$9,683.0 $445.2 $—$—$10,128.2 Cost of sales ——8,071.5 387.1 ——8,458.6 Gross profit ——1,611.5 58.1 ——1,669.6 Selling and administrative expenses —103.7 891.6 34.2 ——1,029.5 Advertising expense ——125.1 4.4 ——129.5 (Loss) income from operations —(103.7)594.8 19.5 ——510.6 Interest (expense) income, net —(308.0)0.4 0.2 ——(307.4) Net loss on extinguishments oflong-term debt —(17.2)————(17.2) Management fee —3.8 —(3.8)——— Other income (expense), net ——0.2 (0.1)——0.1 (Loss) income before income taxes —(425.1)595.4 15.8 ——186.1 Income tax benefit (expense)—210.6 (272.6)(5.1)——(67.1) (Loss) income before equity inearnings of subsidiaries —(214.5)322.8 10.7 ——119.0 Equity in earnings of subsidiaries 119.0 333.5 ———(452.5)— Net income $119.0 $119.0 $322.8 $10.7 $—$(452.5)$119.0 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 99 Consolidating Statement of Operations Year Ended December 31, 2011 (in millions)ParentGuarantor SubsidiaryIssuer GuarantorSubsidiaries Non-GuarantorSubsidiary Co-Issuer ConsolidatingAdjustments Consolidated Net sales $—$—$9,222.4 $380.0 $—$—$9,602.4 Cost of sales ——7,688.8 330.1 ——8,018.9 Gross profit ——1,533.6 49.9 ——1,583.5 Selling and administrative expenses —111.7 849.2 29.2 ——990.1 Advertising expense ——119.0 3.7 ——122.7 (Loss) income from operations —(111.7)565.4 17.0 ——470.7 Interest (expense) income, net —(324.5)0.2 0.1 ——(324.2) Net loss on extinguishments oflong-term debt —(118.9)————(118.9) Management fee —9.2 —(9.2)——— Other income (expense), net —0.4 0.5 (0.2)——0.7 (Loss) income before income taxes —(545.5)566.1 7.7 ——28.3 Income tax benefit (expense)—215.1 (222.4)(3.9)——(11.2) (Loss) income before equity inearnings of subsidiaries —(330.4)343.7 3.8 ——17.1 Equity in earnings of subsidiaries 17.1 347.5 ———(364.6)— Net income $17.1 $17.1 $343.7 $3.8 $—$(364.6)$17.1 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 100 Condensed Consolidating Statement of Comprehensive Income Year Ended December 31, 2013 (in millions)ParentGuarantor SubsidiaryIssuer GuarantorSubsidiaries Non-GuarantorSubsidiary Co-Issuer ConsolidatingAdjustments Consolidated Comprehensive income $126.1 $141.3 $409.0 $4.8 $—$(555.1)$126.1 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 101 Condensed Consolidating Statement of Comprehensive Income Year Ended December 31, 2012 (in millions)ParentGuarantor SubsidiaryIssuer GuarantorSubsidiaries Non-GuarantorSubsidiary Co-Issuer ConsolidatingAdjustments Consolidated Comprehensive income $121.5 $121.5 $322.8 $13.2 $—$(457.5)$121.5 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 102 Condensed Consolidating Statement of Comprehensive Income Year Ended December 31, 2011 (in millions)ParentGuarantor SubsidiaryIssuer GuarantorSubsidiaries Non-GuarantorSubsidiary Co-Issuer ConsolidatingAdjustments Consolidated Comprehensive income $17.2 $17.2 $343.7 $2.0 $—$(362.9)$17.2 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 103 Condensed Consolidating Statement of Cash Flows Year Ended December 31, 2013 (in millions)ParentGuarantor SubsidiaryIssuer GuarantorSubsidiaries Non-GuarantorSubsidiary Co-Issuer ConsolidatingAdjustments Consolidated Net cash (used in) provided by operating activities $(15.2)$(130.3)$508.8 $5.5 $—$(2.5)$366.3 Cash flows from investing activities: Capital expenditures —(40.8)(6.2)(0.1)——(47.1) Net cash used in investing activities —(40.8)(6.2)(0.1)——(47.1) Cash flows from financing activities: Proceeds from borrowings under revolving credit facility —63.0 ————63.0 Repayments of borrowings under revolving credit facility —(63.0)————(63.0) Repayments of long-term debt —(51.1)————(51.1) Proceeds from issuance of long-term debt —1,535.2 ————1,535.2 Payments to extinguish long- term debt —(2,047.4)————(2,047.4) Payment of debt financing costs —(6.1)————(6.1) Net change in accounts payable-inventory financing ——7.4 ———7.4 Payment of incentive compensation plan withholding taxes —(4.0)(19.6)(0.5)——(24.1) Net proceeds from issuance of common shares 424.7 —————424.7 Dividends paid (7.3)—————(7.3) Advances to/from affiliates (402.2)892.6 (490.4)———— Other financing activities —0.4 ————0.4 Net cash provided by (used in) financing activities 15.2 319.6 (502.6)(0.5)——(168.3) Effect of exchange rate changes on cash and cash equivalents ———(0.7)——(0.7) Net increase in cash and cash equivalents —148.5 —4.2 —(2.5)150.2 Cash and cash equivalents – beginning of period —48.0 —9.8 —(19.9)37.9 Cash and cash equivalents – end of period $—$196.5 $—$14.0 $—$(22.4)$188.1 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 104 Condensed Consolidating Statement of Cash Flows Year Ended December 31, 2012 (in millions)ParentGuarantor SubsidiaryIssuer GuarantorSubsidiaries Non-GuarantorSubsidiary Co-Issuer ConsolidatingAdjustments Consolidated Net cash (used in) provided by operating activities $—$(204.3)$514.2 $1.3 $—$6.2 $317.4 Cash flows from investing activities: Capital expenditures —(27.0)(14.0)(0.4)——(41.4) Premium payments on interest rate cap agreements —(0.3)————(0.3) Net cash used in investing activities —(27.3)(14.0)(0.4)——(41.7) Cash flows from financing activities: Proceeds from borrowings under revolving credit facility —289.0 ————289.0 Repayments of borrowings under revolving credit facility —(289.0)————(289.0) Repayments of long-term debt —(201.0)————(201.0) Proceeds from issuance of long-term debt —135.7 ————135.7 Payments to extinguish long- term debt —(243.2)————(243.2) Payment of debt financing costs —(2.1)————(2.1) Net change in accounts payable-inventory financing ——(29.5)———(29.5) Advances to/from affiliates —486.0 (486.5)0.5 ——— Other financing activities —2.1 ————2.1 Net cash provided by (used in) financing activities —177.5 (516.0)0.5 ——(338.0) Effect of exchange rate changes on cash and cash equivalents ———0.3 ——0.3 Net (decrease) increase in cash and cash equivalents —(54.1)(15.8)1.7 —6.2 (62.0) Cash and cash equivalents – beginning of period —102.1 15.8 8.1 —(26.1)99.9 Cash and cash equivalents – end of period $—$48.0 $—$9.8 $—$(19.9)$37.9 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 105 Condensed Consolidating Statement of Cash Flows Year Ended December 31, 2011 (in millions)ParentGuarantor SubsidiaryIssuer GuarantorSubsidiaries Non-GuarantorSubsidiary Co-Issuer ConsolidatingAdjustments Consolidated Net cash (used in) provided by operating activities $—$(93.8)$327.5 $(0.3)$—$(18.7)$214.7 Cash flows from investing activities: Capital expenditures —(33.4)(10.6)(1.7)——(45.7) Cash settlements on interest rate swap agreements —(6.6)————(6.6) Premium payments on interest rate cap agreements —(3.7)————(3.7) Net cash used in investing activities —(43.7)(10.6)(1.7)——(56.0) Cash flows from financingactivities: Proceeds from borrowings under revolving credit facility —1,295.0 ————1,295.0 Repayments of borrowings under revolving credit facility —(1,483.2)————(1,483.2) Repayments of long-term debt —(132.0)————(132.0) Proceeds from issuance of long-term debt —1,175.0 ————1,175.0 Payments to extinguish long- term debt —(1,175.0)————(1,175.0) Payment of debt financing costs —(26.3)————(26.3) Net change in accounts payable-inventory financing ——250.5 ———250.5 Advances to/from affiliates —552.6 (552.7)0.1 ——— Other financing activities —0.6 ————0.6 Net cash provided by (used in) financing activities —206.7 (302.2)0.1 ——(95.4) Effect of exchange rate changes on cash and cash equivalents ——————— Net increase (decrease) in cash and cash equivalents —69.2 14.7 (1.9)—(18.7)63.3 Cash and cash equivalents – beginning of period —32.9 1.1 10.0 —(7.4)36.6 Cash and cash equivalents – end of period $—$102.1 $15.8 $8.1 $—$(26.1)$99.9 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 106 18. Selected Quarterly Financial Results (unaudited) (in millions, except per-share amounts)2013 First Quarter Second Quarter Third Quarter Fourth Quarter Net Sales Detail: Corporate: Medium/Large $1,146.2 $1,271.4 $1,203.4 $1,281.6 Small Business 257.7 266.0 262.4 271.4 Total Corporate 1,403.9 1,537.4 1,465.8 1,553.0 Public: Government 252.3 295.7 375.3 327.3 Education 232.2 420.6 513.4 282.8 Healthcare 362.3 366.3 355.9 380.4 Total Public 846.8 1,082.6 1,244.6 990.5 Other 161.0 159.3 153.9 169.8 Net sales $2,411.7 $2,779.3 $2,864.3 $2,713.3 Gross profit $402.0 $451.6 $458.4 $448.3 Income from operations (1)$120.1 $153.6 $92.9 $142.0 Net income (loss) (1)$28.3 $46.7 $(2.2)$60.0 Net income (loss) per common share (1) (2): Basic $0.19 $0.32 $(0.01)$0.35 Diluted $0.19 $0.32 $(0.01)$0.35 (in millions, except per-share amounts)2012 First Quarter Second Quarter Third Quarter Fourth Quarter Net Sales Detail: Corporate: Medium/Large $1,089.6 $1,124.7 $1,055.7 $1,178.5 Small Business 273.2 269.7 257.1 264.3 Total Corporate 1,362.8 1,394.4 1,312.8 1,442.8 Public: Government 262.6 318.0 408.6 404.9 Education 221.7 349.5 394.7 226.4 Healthcare 333.3 372.9 360.4 370.0 Total Public 817.6 1,040.4 1,163.7 1,001.3 Other 138.8 149.9 146.8 156.9 Net sales $2,319.2 $2,584.7 $2,623.3 $2,601.0 Gross profit $384.6 $426.9 $432.7 $425.4 Income from operations $103.6 $136.4 $139.7 $130.9 Net income $10.9 $36.8 $38.0 $33.3 Net income per common share (2): Basic $0.08 $0.25 $0.26 $0.23 Diluted $0.07 $0.25 $0.26 $0.23 (1) The third quarter of 2013 included pre-tax IPO-related charges of $74.1 million. See Note 9 for additional discussion of the IPO. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 107 (2) Basic and diluted net income (loss) per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted per share information may not equal annual basic and diluted net income (loss) per share. 19. Subsequent Events The Company redeemed $30.0 million and $20.0 million aggregate principal amounts of Senior Subordinated Notes on January 22, 2014 and February 21, 2014, respectively. The redemption prices were 104.178% of the principal amounts redeemed plus $1.0 million and $0.9 million in accrued and unpaid interest to the date of each redemption, respectively. Following these redemptions, $42.5 million aggregate principal amount of the Senior Subordinated Notes remain outstanding. In connection with these redemptions, the Company expects to record a loss on extinguishment of long-term debt of $2.7 million in the consolidated statement of operations during the first quarter of 2014. This loss represents $2.1 million in redemption premiums and $0.6 million for the write-off of a portion of the remaining deferred financing costs related to the Senior Subordinated Notes. On February 13, 2014, the Company announced that its board of directors declared a cash dividend on the Company's common stock of $0.0425 per share. The dividend will be paid on March 10, 2014 to all stockholders of record as of the close of business on February 25, 2014. Future dividends will be subject to the approval of the Company's board of directors. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 108 SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS Years ended December 31, 2013, 2012 and 2011 (in millions) Balance atBeginningof Period Charged toCosts andExpenses Deductions Balance atEnd ofPeriod Allowance for doubtful accounts: Year Ended December 31, 2013 $5.4 $2.8 $(2.8)$5.4 Year Ended December 31, 2012 5.4 3.9 (3.9)5.4 Year Ended December 31, 2011 5.0 3.6 (3.2)5.4 Reserve for sales returns: Year Ended December 31, 2013 $4.4 $35.0 $(34.3)$5.1 Year Ended December 31, 2012 4.5 33.2 (33.3)4.4 Year Ended December 31, 2011 3.2 32.0 (30.7)4.5 Table of Contents 109 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, has concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective in recording, processing, summarizing, and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act, and that information is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely discussions regarding required disclosure. Management’s Annual Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements and can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2013. Management based this assessment on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control — Integrated Framework (1992 framework).” Based on its assessment, management concluded that, as of December 31, 2013, the Company’s internal control over financial reporting is effective. Ernst & Young LLP, independent registered public accounting firm, has audited the consolidated financial statements of the Company and the Company's internal control over financial reporting and has included their reports herein. Changes in Internal Control over Financial Reporting There were no changes in the Company’s internal control over financial reporting during the fiscal quarter ended December 31, 2013 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Table of Contents 110 Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of CDW Corporation We have audited CDW Corporation and subsidiaries’ internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) (the COSO criteria). CDW Corporation and subsidiaries’ management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, CDW Corporation and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of CDW Corporation and subsidiaries as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income, shareholders’ equity (deficit) and cash flows for each of the three years in the period ended December 31, 2013 of CDW Corporation and subsidiaries and our report dated March 5, 2014 expressed an unqualified opinion thereon. /s/ Ernst & Young LLP Chicago, Illinois March 5, 2014 Table of Contents 111 Item 9B. Other Information None. Table of Contents 112 PART III Item 10. Directors, Managers, Executive Officers and Corporate Governance We have adopted The CDW Way Code, our code of business conduct and ethics, that is applicable to all of our coworkers. Additionally, within The CDW Way Code is a Financial Integrity Code of Ethics that sets forth an even higher standard applicable to our executives, officers, members of our internal disclosure committee and all managers and above in our finance department. A copy of this code is available on our corporate website at www.cdw.com. If we make any substantive amendments to this code or grant any waiver from a provision to our chief executive officer, principal financial officer or principal accounting officer, we will disclose the nature of such amendment or waiver on our website or in a report on Form 8- K. See Part I - “Executive Officers” for information about our executive officers, which is incorporated by reference in this Item 10. Other information required under this Item 10 is incorporated herein by reference to our definitive proxy statement for our 2014 annual meeting of stockholders on May 22, 2014 (“2014 proxy statement”), which we will file with the SEC on or before 120 days after our 2013 fiscal year-end. Item 11. Executive Compensation Information required under this Item 11 is incorporated herein by reference to the 2014 proxy statement. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information required under this Item 12 is incorporated herein by reference to the 2014 proxy statement. Item 13. Certain Relationships and Related Transactions, and Director Independence Information required under this Item 13 is incorporated herein by reference to the 2014 proxy statement. Item 14. Principal Accountant Fees and Services Information required under this Item 14 is incorporated herein by reference to the 2014 proxy statement. Table of Contents 113 PART IV Item 15. Exhibits and Financial Statement Schedules (a) Financial Statements and Schedules The following documents are filed as part of this report: (1) Consolidated Financial Statements: Page (2) Financial Statement Schedules: Page All other schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements or notes thereto. (b) Exhibits The information required by this Item is set forth on the exhibit index that follows the signature page of this report. Table of Contents Report of Independent Registered Public Accounting Firm 62 Consolidated Balance Sheets as of December 31, 2013 and 2012 63 Consolidated Statements of Operations for the years ended December 31, 2013, 2012 and 2011 64 Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2012 and 2011 65 Consolidated Statements of Shareholders’ Equity (Deficit) for the years ended December 31, 2013, 2012 and 2011 66 Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011 67 Notes to Consolidated Financial Statements 68 Schedule II – Valuation and Qualifying Accounts 108 114 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CDW CORPORATION Date:March 5, 2014 By:/s/ Thomas E. Richards Thomas E. Richards Chairman, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Thomas E. Richards Chairman, President and Chief Executive Officer(principal executive officer) and Director March 5, 2014 Thomas E. Richards /s/ Ann E. Ziegler Senior Vice President and Chief Financial Officer(principal financial officer) March 5, 2014 Ann E. Ziegler /s/ Virginia L. Seggerman Vice President and Controller(principal accounting officer) March 5, 2014 Virginia L. Seggerman /s/ Steven W. Alesio Director March 5, 2014 Steven W. Alesio /s/ Barry K. Allen Director March 5, 2014 Barry K. Allen /s/ Benjamin D. Chereskin Director March 5, 2014 Benjamin D. Chereskin /s/ Glenn M. Creamer Director March 5, 2014 Glenn M. Creamer /s/ Michael J. Dominguez Director March 5, 2014 Michael J. Dominguez /s/ Paul J. Finnegan Director March 5, 2014 Paul J. Finnegan /s/ David W. Nelms Director March 5, 2014 David W. Nelms /s/ Robin P. Selati Director March 5, 2014 Robin P. Selati /s/ Donna F. Zarcone Director March 5, 2014 Donna F. Zarcone Table of Contents 115 EXHIBIT INDEX ExhibitNumber Description 3.1 Fifth Amended and Restated Certificate of Incorporation of CDW Corporation, previously filed as Exhibit 3.1 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 3.2 Amended and Restated By-Laws of CDW Corporation, previously filed as Exhibit 3.2 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 3.3 Articles of Organization of CDW LLC, previously filed as Exhibit 3.3 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.4 Amended and Restated Limited Liability Company Agreement of CDW LLC, previously filed as Exhibit 3.4 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.5 Certificate of Incorporation of CDW Finance Corporation, previously filed as Exhibit 3.5 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.6 By-Laws of CDW Finance Corporation, previously filed as Exhibit 3.6 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.7 Amended and Restated Articles of Incorporation of CDW Technologies, Inc., previously filed as Exhibit 3.7 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.8 Amended and Restated By-Laws of CDW Technologies, Inc., previously filed as Exhibit 3.8 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.9 Articles of Organization of CDW Direct, LLC, previously filed as Exhibit 3.9 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.10 Amended and Restated Limited Liability Company Agreement of CDW Direct, LLC, previously filed as Exhibit 3.10 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.11 Articles of Organization of CDW Government LLC, previously filed as Exhibit 3.11 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.12 Amended and Restated Limited Liability Company Agreement of CDW Government LLC, previously filed as Exhibit 3.12 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.13 Articles of Incorporation of CDW Logistics, Inc., previously filed as Exhibit 3.13 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.14 By-Laws of CDW Logistics, Inc., previously filed as Exhibit 3.14 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 4.1 Specimen Common Stock Certificate, previously filed as Exhibit 4.1 with CDW Corporation’s Amendment No. 3 to Form S-1 filed on June 25, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 4.2 Senior Secured Note Indenture, dated as of December 17, 2010, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.1 with CDW Corporation's Form 8-K filed on December 21, 2010 and incorporated herein by reference. Table of Contents 116 ExhibitNumber Description 4.3 Senior Secured Note Supplemental Indenture, dated as of March 29, 2011, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.1 with CDW Corporation's Form 8-K filed on March 30, 2011 and incorporated herein by reference. 4.4 Second Senior Secured Note Supplemental Indenture, dated as of May 10, 2012, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.1 with CDW Corporation's Form 8-K filed on May 11, 2012 and incorporated herein by reference. 4.5 Form of Senior Secured Note (included as Exhibit A to Exhibit 4.1), previously filed as Exhibit 4.2 with CDW Corporation's Form 8-K filed on December 21, 2010 and incorporated herein by reference. 4.6 Senior Note Indenture, dated as of April 13, 2011, between CDW Escrow Corporation and U.S. Bank National Association as trustee, previously filed as Exhibit 4.1 with CDW Corporation's Form 8-K filed on April 14, 2011 and incorporated herein by reference. 4.7 Senior Note Supplemental Indenture, dated as of April 13, 2011, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.2 with CDW Corporation's Form 8-K filed on April 14, 2011 and incorporated herein by reference. 4.8 Second Senior Note Supplemental Indenture, dated as of May 20, 2011, by and among CDW LLC, CDW Finance Corporation, CDW Escrow Corporation, the guarantors party thereto and U.S. Bank National Association as Trustee, previously filed as Exhibit 4.1 with CDW Corporation's Form 8-K filed on May 23, 2011 and incorporated herein by reference. 4.9 Third Senior Note Supplemental Indenture, dated as of February 17, 2012, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and U.S. Bank National Association as Trustee, previously filed as Exhibit 4.5 with CDW Corporation's Form 8-K filed on February 17, 2012 and incorporated herein by reference. 4.10 Fourth Senior Note Supplemental Indenture, dated as of May 10, 2012, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.3 with CDW Corporation's Form 8-K filed on May 11, 2012 and incorporated herein by reference. 4.11 Form of Senior Note (included as Exhibit A to Exhibit 4.5), previously filed as Exhibit 4.3 with CDW Corporation's Form 8-K filed on April 14, 2011 and incorporated herein by reference. 4.12 Senior Notes Registration Rights Agreement, dated as of February 17, 2012, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and Barclays Capital Inc. as initial purchaser, previously filed as Exhibit 4.7 with CDW Corporation's Form 8-K filed on February 17, 2012 and incorporated herein by reference. 4.13 Senior Subordinated Exchange Note Indenture, dated as of October 10, 2008, by and among CDW Corporation, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.6 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 4.14 Senior Subordinated Exchange Note Supplemental Indenture, dated as of May 10, 2010, by and among CDW LLC, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.7 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 4.15 Second Senior Subordinated Exchange Note Supplemental Indenture, dated as of August 23, 2010, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.8 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 4.16 Third Senior Subordinated Exchange Note Supplemental Indenture, dated as of May 10, 2012, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.2 with CDW Corporation's Form 8-K filed on May 11, 2012 and incorporated herein by reference. Table of Contents 117 ExhibitNumber Description 4.17 Form of Fixed Rate Senior Subordinated Exchange Note due 2017 (included as Exhibit B to Exhibit 4.12), previously filed as Exhibit 4.10 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 4.18 Form of Global Fixed Rate Senior Subordinated Exchange Note due 2017, Series B, previously filed as Exhibit 4.11 with CDW Corporation's Form 10-K for the fiscal year ended December 31, 2010 and incorporated herein by reference. 10.1 Revolving Loan Credit Agreement, dated as of June 24, 2011, by and among CDW LLC, the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent, GE Commercial Distribution Finance Corporation, as floorplan funding agent, and the joint lead arrangers, joint bookrunners, co-collateral agents and other agents party thereto, previously filed as Exhibit 10.1 with CDW Corporation's Amendment No. 1 to Form S-4 filed on September 26, 2011 (Reg. No. 333-175597) and incorporated herein by reference. 10.2 Term Loan Agreement, dated as of April 29, 2013, by and among CDW LLC, the lenders from time to time party thereto, Barclays Bank PLC, as administrative agent and collateral agent, and the joint lead arrangers, joint bookrunners, co-syndication agents and co-documentation agents party thereto, previously filed as Exhibit 10.1 with CDW Corporation’s Form 8-K filed on May 1, 2013 and incorporated herein by reference. 10.3 First Amendment to Term Loan Agreement, dated as of May 30, 2013, by and among CDW LLC, the lenders from time to time party thereto, and Barclays Bank PLC, as administrative agent and collateral agent, previously filed as Exhibit 10.3 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 10.4 Incremental Amendment, dated as of July 31, 2013, by and among CDW LLC, the lenders party thereto and Barclays Bank PLC, as administrative agent, previously filed as Exhibit 10.1 with CDW Corporation’s Form 8-K filed on August 1, 2013 and incorporated herein by reference. 10.5 Third Amendment to the Term Loan Agreement, dated as of September 12, 2013, by and among CDW LLC, the lenders from time to time party thereto and Barclays Bank PLC, as administrative agent and collateral agent, previously filed as Exhibit 10.2 with CDW Corporation's Form 10-Q filed on November 7, 2013 and incorporated herein by reference. 10.6 Second Amended and Restated Guarantee and Collateral Agreement, dated April 29, 2013, by and among CDW LLC, the guarantors party thereto and Barclays Bank PLC, as collateral agent, previously filed as Exhibit 10.2 with CDW Corporation’s Form 8-K filed on May 1, 2013 and incorporated herein by reference. 10.7 Management Services Agreement, dated as of October 12, 2007, by and between CDW Corporation, Madison Dearborn Partners V-B, L.P. and Providence Equity Partners L.L.C., previously filed as Exhibit 10.9 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 10.8 Termination Agreement, dated as of June 12, 2013, by and among CDW Corporation, Madison Dearborn Partners V-B, L.P. and Providence Equity Partners L.L.C., previously filed as Exhibit 10.6 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 10.9 Registration Agreement, dated as of October 12, 2007, by and among VH Holdings, Inc., CDW Holdings LLC, Madison Dearborn Capital Partners V-A, L.P., Madison Dearborn Capital Partners V-C, L.P., Madison Dearborn Partners V Executive-A, L.P., Providence Equity Partners VI L.P., Providence Equity Partners VI- A L.P., and the other securityholders party thereto, previously filed as Exhibit 10.10 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 10.10* Withdrawal from Registration Agreement, dated as of November 12, 2013, by and between CDW Corporation and Paul S. Shain. 10.11* Withdrawal from Registration Agreement, dated as of November 20, 2013, by and among CDW Corporation, James R. Shanks and BOS Holdings, LLC. 10.12§ CDW Holdings LLC 2007 Incentive Equity Plan, adopted as of October 12, 2007, previously filed as Exhibit 10.11 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. Table of Contents 118 ExhibitNumber Description 10.13§Form of CDW Holdings LLC Class A Common Unit Purchase and Exchange Agreement under the CDW Holdings LLC 2007 Incentive Equity Plan (executed by Thomas E. Richards, John A. Edwardson, Dennis G. Berger, Douglas E. Eckrote, Christine A. Leahy, Jonathan J. Stevens and Ann E. Ziegler), previously filed as Exhibit 10.12 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 10.14§ Form of CDW Holdings LLC Class A Common Unit Purchase and Exchange Agreement under the CDW Holdings LLC 2007 Incentive Equity Plan (executed by Neal J. Campbell, Christina M. Corley, Christina V. Rother and Matthew A. Troka and to be used for certain future investors), previously filed as Exhibit 10.13 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 10.15§ Form of CDW Holdings LLC Class B Common Unit Grant Agreement under the CDW Holdings LLC 2007 Incentive Equity Plan (executed by Thomas E. Richards, John A. Edwardson, Dennis G. Berger, Douglas E. Eckrote, Christine A. Leahy, Jonathan J. Stevens and Ann E. Ziegler), previously filed as Exhibit 10.12 with CDW Corporation's Form 10-K filed on March 8, 2013 and incorporated herein by reference. 10.16§ Form of CDW Holdings LLC Class B Common Unit Grant Agreement under the CDW Holdings LLC 2007 Incentive Equity Plan (executed by Neal J. Campbell, Christina M. Corley, Christina V. Rother and Matthew A. Troka and to be used for certain future grantees), previously filed as Exhibit 10.13 with CDW Corporation's Form 10-K filed on March 8, 2013 and incorporated herein by reference. 10.17§ Form of Compensation Protection Agreement (executed by Dennis G. Berger, Douglas E. Eckrote, Christine A. Leahy, Jonathan J. Stevens and Ann E. Ziegler), previously filed as Exhibit 10.18 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 10.18§ CDW Compensation Protection Plan, adopted as of December 10, 2002 and amended and restated effective as of January 1, 2009 (applicable to Neal J. Campbell, Christina M. Corley, Christina V. Rother and Matthew A. Troka), previously filed as Exhibit 10.19 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 10.19§ First Amendment to CDW Compensation Protection Plan, adopted as of December 10, 2002 and amended and restated effective as of January 1, 2009, dated as of January 3, 2012, previously filed as Exhibit 10.18 with CDW Corporation's Form 10-K filed on March 9, 2012 and incorporated herein by reference. 10.20§ Form of Noncompetition Agreement under the Compensation Protection Agreement, previously filed as Exhibit 10.20 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 10.21§ Form of Noncompetition Agreement under the CDW Compensation Protection Plan, previously filed as Exhibit 10.21 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 10.22§ CDW Restricted Debt Unit Plan, adopted as of March 10, 2010, previously filed as Exhibit 10.22 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 10.23§ Form of CDW Restricted Debt Unit Grant Notice and Agreement (executed by Thomas E. Richards, Dennis G. Berger, Douglas E. Eckrote, Christine A. Leahy, Jonathan J. Stevens and Ann E. Ziegler), previously filed as Exhibit 10.23 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 10.24§ Form of CDW Restricted Debt Unit Grant Notice and Agreement (executed by Neal J. Campbell, Christina M. Corley, Christina V. Rother and Matthew A. Troka and to be used for certain future grantees), previously filed as Exhibit 10.24 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 10.25§ Senior Management Incentive Plan, as amended and restated effective January 1, 2010, previously filed as Exhibit 10.1 with CDW Corporation's Form 8-K filed on November 15, 2010 and incorporated herein by reference. 10.26§Amended and Restated Compensation Protection Agreement, dated as of June 30, 2011, by and between CDW LLC and Thomas E. Richards, previously filed as Exhibit 10.3 with CDW Corporation's Form 8-K filed on July 1, 2011 and incorporated herein by reference. Table of Contents 119 ExhibitNumber Description 10.27§Letter Agreement, dated as of September 13, 2011, by and between CDW Direct, LLC and Christina M. Corley, previously filed as Exhibit 10.31 with CDW Corporation's Form 10-K filed on March 9, 2012 and incorporated herein by reference. 10.28§Form of CDW Holdings LLC (Director) Class A Common Unit Purchase Agreement (executed by Steven W. Alesio, Barry K. Allen, Benjamin D. Chereskin and Chereskin Dynasty Trust and Donna F. Zarcone), previously filed as Exhibit 10.32 with CDW Corporation's Form 10-K filed on March 8, 2013 and incorporated herein by reference. 10.29§Form of Indemnification Agreement by and between CDW Corporation and its directors and officers, previously filed as Exhibit 10.32 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 10.30 Stockholders Agreement, dated as of June 10, 2013, by and among CDW Corporation, Madison Dearborn Capital Partners V-A, L.P., Madison Dearborn Capital Partners V-C, L.P., Madison Dearborn Capital Partners V Executive-A, L.P., Providence Equity Partners VI L.P., Providence Equity Partners VI-A L.P. and the other securityholders party thereto, previously filed as Exhibit 10.33 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 10.31§CDW Corporation 2013 Senior Management Incentive Plan, previously filed as Exhibit 10.34 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 10.32§CDW Corporation 2013 Long-Term Incentive Plan, previously filed as Exhibit 10.35 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 10.33§CDW Corporation Coworker Stock Purchase Plan, previously filed as Exhibit 10.36 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 10.34§Form of CDW Corporation Option Award Notice and Stock Option Agreement (executed by Thomas E. Richards), previously filed as Exhibit 10.37 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 10.35§Form of CDW Corporation Option Award Notice and Stock Option Agreement (executed by Neal J. Campbell and Christina M. Corley), previously filed as Exhibit 10.38 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 10.36§Form of CDW Corporation Restricted Stock Award Notice and Restricted Stock Award Agreement (executed by Thomas E. Richards, Dennis G. Berger, Douglas E. Eckrote, Christine A. Leahy, Jonathan J. Stevens and Ann E. Ziegler), previously filed as Exhibit 10.12 with CDW Corporation’s Form 10-Q filed on August 12, 2013 and incorporated herein by reference. 10.37§Form of CDW Corporation Restricted Stock Award Notice and Restricted Stock Award Agreement (executed by Neal J. Campbell, Christina M. Corley, Christina V. Rother and Matthew A. Troka), previously filed as Exhibit 10.13 with CDW Corporation’s Form 10-Q filed on August 12, 2013 and incorporated herein by reference. 10.38§CDW Amended and Restated Restricted Debt Unit Plan, previously filed as Exhibit 10.3 with CDW Corporation’s Form 10-Q filed on November 7, 2013 and incorporated herein by reference. 12.1* Computation of ratio of earnings to fixed charges. 21.1 List of subsidiaries, previously filed as Exhibit 21.1 with CDW Corporation's Form S-4 filed on April 13, 2012 (Reg. No. 333-180715) and incorporated herein by reference. 23.1*Consent of Ernst & Young LLP. 31.1* Certification of Chief Executive Officer pursuant to Rule 15d-14(a) under the Securities Exchange Act of 1934. Table of Contents 120 ExhibitNumber Description 31.2* Certification of Chief Financial Officer pursuant to Rule 15d-14(a) under the Securities Exchange Act of 1934. 32.1** Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350. 32.2** Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350. 101.INS*XBRL Instance Document 101.SCH*XBRL Taxonomy Extension Schema Document 101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF*XBRL Taxonomy Extension Definition Linkbase Document 101.LAB*XBRL Taxonomy Extension Label Linkbase Document 101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document ________________ * Filed herewith ** These items are furnished and not filed. § A management contract or compensatory arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K. Table of Contents CDW CORP FORM 10-K(Annual Report) Filed 02/26/15 for the Period Ending 12/31/14 Address 200 N MILWAUKEE AVE VERNON HILLS, IL 60061 Telephone 8474656000 CIK 0001402057 Symbol CDW SIC Code 5961 - Catalog and Mail-Order Houses Fiscal Year 12/31 http://www.edgar-online.com © Copyright 2015, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use. Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) For the fiscal year ended December 31, 2014 or For the transition period from to Commission File Number 001-35985 (847) 465-6000 (Registrant’s telephone number, including area code) None (Former name, former address and former fiscal year, if changed since last report) ____________________________________________ Securities registered pursuant to Section 12(b) of the Act: Securities registered pursuant to Section 12(g) of the Act: None ____________________________________________ Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one): FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 CDW CORPORATION (Exact name of registrant as specified in its charter) Delaware 26-0273989 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 200 N. Milwaukee Avenue Vernon Hills, Illinois 60061 (Address of principal executive offices) (Zip Code) Title of each class: Name of each exchange on which registered Common stock, par value $0.01 per share NASDAQ Global Select Market Large accelerated filer Accelerated filer Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company Table of Contents The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2014 , the last business day of the registrant’s most recently completed second fiscal quarter, was $2,762.3 million , based on the per share closing sale price of $31.88 on that date. As of February 20, 2015 , there were 172,275,656 shares of common stock, $0.01 par value, outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive proxy statement for use in connection with its 2015 Annual Meeting of Shareholders, to be filed not later than 120 days after December 31, 2014 , are incorporated by reference into Part III of this report. CDW CORPORATION AND SUBSIDIARIES ANNUAL REPORT ON FORM 10-K Year Ended December 31, 2014 TABLE OF CONTENTS 2 Item Page PART I Item 1. Business 4 Item 1A. Risk Factors 9 Item 1B. Unresolved Staff Comments 20 Item 2. Properties 20 Item 3. Legal Proceedings 21 Item 4. Mine Safety Disclosures 21 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 25 Item 6. Selected Financial Data 27 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 33 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 57 Item 8. Financial Statements and Supplementary Data 58 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 107 Item 9A. Controls and Procedures 107 Item 9B. Other Information 109 PART III Item 10. Directors, Executive Officers and Corporate Governance 110 Item 11. Executive Compensation 110 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 110 Item 13. Certain Relationships and Related Transactions, and Director Independence 110 Item 14. Principal Accountant Fees and Services 110 PART IV Item 15. Exhibits and Financial Statement Schedules 111 SIGNATURES 112 Table of Contents FORWARD-LOOKING STATEMENTS This report contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact included in this report are forward-looking statements. These statements relate to analyses and other information, which are based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to our future prospects, developments and business strategies. We claim the protection of The Private Securities Litigation Reform Act of 1995 for all forward-looking statements in this report. These forward-looking statements are identified by the use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will” and similar terms and phrases, including references to assumptions. However, these words are not the exclusive means of identifying such statements. Although we believe that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot assure you that we will achieve those plans, intentions or expectations. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected. Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under the section entitled “Risk Factors” included elsewhere in this report. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements contained in the section entitled “Risk Factors” included elsewhere in this report as well as other cautionary statements that are made from time to time in our other Securities and Exchange Commission ("SEC") filings and public communications. You should evaluate all forward-looking statements made in this report in the context of these risks and uncertainties. We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this report are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. 3 Table of Contents PART I Item 1. Business Our Company CDW is a Fortune 500 company and a leading provider of integrated information technology (“IT”) solutions in the U.S. and Canada. We help our customer base of approximately 250,000 small, medium and large business, government, education and healthcare customers by delivering critical solutions to their increasingly complex IT needs. Our broad array of offerings ranges from discrete hardware and software products to integrated IT solutions such as mobility, security, data center optimization, cloud computing, virtualization and collaboration. We are technology "agnostic," with a product portfolio that includes over 100,000 products from more than 1,000 brands. We provide our products and solutions through sales force and service delivery teams consisting of nearly 4,600 coworkers, including more than 1,800 field sellers, highly- skilled technology specialists and advanced service delivery engineers. We are a leading U.S. sales channel partner for many original equipment manufacturers (“OEMs”) and software publishers (collectively, our “vendor partners”), whose products we sell or include in the solutions we offer. We believe we are an important extension of our vendor partners' sales and marketing capabilities, providing them with a cost-effective way to reach customers and deliver a consistent brand experience through our established end-market coverage and extensive customer access. We provide value to our customers by simplifying the complexities of technology across design, selection, procurement, integration and management. Our goal is to have our customers, regardless of their size, view us as an indispensable extension of their IT staffs. We seek to achieve this goal by providing our customers with superior service through our large and experienced sales force and service delivery teams. Our multi-brand offering approach enables us to identify the products or combination of products that best address each customer's specific organizational IT requirements and to evolve our offerings as new technologies develop. We believe we offer the following value proposition to our customers and our vendor partners: Our customers include private sector businesses many of which employ fewer than 5,000 employees, government agencies and educational and healthcare institutions. We serve our customers through channel-specific sales teams and service delivery teams with extensive technical skills and knowledge of the specific markets they serve. This market segmentation allows us to customize our offerings and to provide enhanced expertise in designing and implementing IT solutions for our customers. We currently have five dedicated customer channels: medium/large business, small business, government, education and healthcare, each of which generated nearly $1 billion or more in net sales in 2014 . The scale and diversity of our customer channels provide us with multiple avenues for growth and a balanced customer base to weather economic and technology cycles. 4 Our value proposition to our customers Our value proposition to our vendor partners Broad selection of products and multi-branded IT solutions Value-added services with integration capabilities Highly-skilled specialists and engineers Solutions across a very broad IT landscape Access to approximately 250,000 customers throughout the U.S. and Canada Large and established customer channels Strong distribution and implementation capabilities Value-added solutions and marketing programs that generate end-user demand Table of Contents The following table provides information regarding our reportable segments and our customer channels: For further information on our segments, including financial results, see Note 17 to the accompanying audited consolidated financial statements included elsewhere in this report. We offer more than 1,000 brands, from well-established companies such as APC, Apple, Cisco, EMC, Google, Hewlett-Packard, IBM, Lenovo, Microsoft, NetApp, Samsung, Symantec and VMware to emerging vendor partners such as Aerohive Networks, Box, Inc., Drobo, Jive, Nimble Storage, Nutanix, and Ruckus. In 2014 , we generated over $1 billion of revenue for each of four of our vendor partners and over $100 million of revenue for each of 12 other vendor partners. We have received the highest level of certification from major vendor partners such as Cisco, EMC and Microsoft, which reflects the extensive product and solution knowledge and capabilities that we bring to our customers' IT challenges. These certifications also provide us with access to favorable pricing, tools and resources, including vendor incentive programs, which we use to provide additional value to our customers. Our vendor partners also regularly recognize us with top awards and select us to develop and grow new customer solutions. History CDW was founded in 1984. In 2003, we purchased selected U.S. assets and the Canadian operations of Micro Warehouse, which extended our growth platform into Canada. In 2006, we acquired Berbee Information Networks Corporation, a regional provider of technology products, solutions and customized engineering services in advanced technologies primarily across Cisco, IBM and Microsoft portfolios. This acquisition increased our capabilities in customized engineering services and managed services. On October 12, 2007, CDW Corporation, an Illinois corporation, was acquired through a merger transaction by an entity controlled by investment funds affiliated with Madison Dearborn Partners, LLC and Providence Equity Partners L.L.C. (the “Acquisition”). CDW Corporation continued as the surviving corporation and same legal entity after the Acquisition, but became a wholly owned subsidiary of VH Holdings, Inc., a Delaware corporation. On December 31, 2009, CDW Corporation merged into CDWC LLC, an Illinois limited liability company owned by VH Holdings, Inc., with CDWC LLC as the surviving entity. This change had no impact on our operations or management. On December 31, 2009, CDWC LLC was renamed CDW LLC (“CDW LLC”). On August 17, 2010, VH Holdings, Inc. was renamed CDW Corporation (“Parent”), a Delaware corporation. Throughout this report, the terms “the Company” and “CDW” refer to Parent and its 100% owned subsidiaries. Prior to July 2, 2013, the date of our initial public offering (“IPO”), Parent was owned directly by CDW Holdings LLC ("CDW Holdings"), a company controlled by investment funds affiliated with Madison Dearborn Partners, LLC and Providence Equity Partners L.L.C. (the "Sponsors"), certain other co-investors and certain members of CDW management. Before the IPO, Madison Dearborn Partners, LLC and Providence Equity Partners L.L.C. owned 46.0% and 40.6% of our common stock, respectively. After the IPO and through subsequent secondary offerings in fourth quarter of 2013 and during 2014, the Sponsors' ownership has significantly decreased. As of December 31, 2014, the Sponsors own 15.5% and 13.7% of our common stock, respectively. 5 Corporate Segment Public Segment Customer Channels Medium/Large Business Small Business Government Education Healthcare Other Target Customers 100 - 5,000 employees 10 - 100 employees Various federal, state and local agencies Higher education and K-12 Hospitals, ambulatory service providers and long-term care facilities Advanced services customers plus Canada 2014 Net Sales (in billions) $5.5 $1.0 $1.5 $1.8 $1.6 $0.7 Table of Contents On July 2, 2013, Parent completed the IPO of its common stock. In connection with the IPO, CDW Holdings distributed all of its shares of Parent's common stock to its members in June 2013 in accordance with the members' respective membership interests and was subsequently dissolved in August 2013. See Note 9 to the accompanying audited consolidated financial statements included elsewhere in this report for additional discussion of the IPO. On November 10, 2014, we completed the acquisition of a 35% non-controlling equity interest in Kelway TopCo Limited ("Kelway"), a UK-based IT solutions provider, which has global supply chain relationships that enable it to conduct business in more than 100 countries. This investment strengthens our ability to provide a more comprehensive solution to our customers and enhances our ability to serve our existing multi-national customers. Our Market We operate in the U.S. and Canadian IT markets, which are large and growing markets. According to IDC, the overall U.S. IT market generated approximately $675 billion in sales in 2014 . We believe our addressable market in the U.S. in the indirect sales channel represents more than $215 billion in annual sales and for the year ended December 31, 2014 , our U.S. net sales of $11.5 billion represented approximately 5% of that highly diverse and fragmented market. According to IDC, the overall Canadian IT market generated more than $50 billion in sales in 2014 . We believe our addressable market in Canada in the indirect sales channel represents more than $11 billion in annual sales and for the year ended December 31, 2014, our net sales of $532 million in Canada represented approximately 5% of that market. We believe we have the largest market share in our addressable market, with our 2014 net sales exceeding the cumulative North American net sales of our four largest publicly traded sales channel competitors, based upon publicly available information for those companies. New technologies, including cloud, virtualization and mobility, coupled with the resulting increase in demand for data as well as aging infrastructure, are increasingly requiring businesses and institutions to seek integrated solutions to their IT needs. We expect this trend to continue for the foreseeable future, with end- user demand for business efficiency and productivity driving future IT spending growth. Our Offerings Our offerings range from discrete hardware and software products and services to complex integrated solutions that include one or more of these elements. We believe our customers increasingly view technology purchases as integrated solutions rather than discrete product and service categories and we estimate t hat approximately 47% of our net sales in 2014 came from sales of product categories and services typically associated with solutions. Our hardware products include notebooks/mobile devices (including tablets), network communications, enterprise and data storage, video monitors, printers, desktop computers and servers. Our software products include application suites, security, virtualization, operating systems, network management and Software as a Service (“SaaS”) offerings. We also provide a full suite of value-added-services, which range from basic installation, warranty and repair services to custom configuration, data center and network implementation services, as well as managed services that include Infrastructure as a Service (“IaaS”) offerings. We also offer a variety of integrated solutions, such as: • Mobility : We assist our customers with the selection, procurement and integration of mobile security software, hardware devices such as smartphones, tablets and notebooks, and cellular wireless activation systems. We also provide mobile device management applications with policy and security management capabilities across a variety of mobile operating systems and platforms. • Security : We assess our customers' security needs and provide them with threat prevention tools in order to protect their networks, servers and applications, such as anti-virus, anti-spam, content filtering, intrusion prevention, firewall and virtual private network services, and network access control. We also design and implement data loss prevention solutions, using data monitoring and encryption across a wide array of devices to ensure the security of customer information, personal employee information and research and development data. • Data Center Optimization : We help our customers evaluate their data centers for convergence and optimization opportunities. Our data center optimization solutions consist of server virtualization, physical server consolidation, data storage management and energy-efficient power and cooling systems. • Cloud Computing : We provide our customers with a broad portfolio of cloud-based solutions, which are technology delivered as a service. Our cloud offerings include: Infrastructure as a Service (IaaS), which delivers compute, networking, storage, and data center capabilities via the cloud; Software as a Service (SaaS), which connects users to cloud-based software applications; and Platform as a Service (PaaS), which enables development and ongoing maintenance of cloud-based solutions. We provide public cloud solutions which reside off customer premises on a public (shared) infrastructure, and private cloud solutions, which reside on customer premises. We also offer hybrid cloud solutions that deliver the benefits of both public and private solutions. Our migration, integration and managed 6 Table of Contents services offerings help our customers simplify cloud adoption, as well as the ongoing management of cloud solutions across the entire IT lifecycle. Dedicated Cloud Client Executives work with our customers to architect cloud solutions that meet their organizational, technology and financial objectives. • Virtualization : We design and implement server, storage and desktop virtualization solutions. Virtualization enables our customers to efficiently utilize hardware resources by running multiple, independent, virtual operating systems on a single computer and multiple virtual servers simultaneously on a single server. Virtualization also can separate a desktop environment and associated application software from the hardware device that is used to access it, and provides employees with remote desktop access. Our specialists assist customers with the steps of implementing virtualization solutions, including evaluating network environments, deploying shared storage options and licensing platform software. • Collaboration : We provide our customers with communication tools that allow employees to share knowledge, ideas and information among each other and with clients and partners effectively and quickly. Our collaboration solutions unite communications and applications via the integration of products that facilitate the use of multiple enterprise communication methods including email, instant messaging, presence, social media, voice, video, hardware, software and services. We also host cloud-based collaboration solutions. While we believe customers increasingly view technology purchases as solutions rather than discrete product and service categories, the following table shows our net sales by major category, based upon our internal category classifications. Our Customers We provide integrated IT solutions to approximately 250,000 small, medium and large business, government, education and healthcare customers throughout the U.S. and Canada. Sales to the U.S. federal government, which are diversified across multiple agencies and departments, collectively accounted for approximately 7% , 7% and 10% of total net sales in 2014, 2013 and 2012, respectively. However, there are several independent purchasing decision-makers across these agencies and departments. Excluding these sales to the federal government, we are not reliant on any one customer, as our next five largest customers cumulatively comprised approximately 3% of our net sales in 2014 . Inventory Management We utilize our IT systems to manage our inventory in a cost-efficient manner, resulting in a rapid-turn inventory model. We generally only stock items that have attained a minimum sales volume. 7 Year Ended December 31, 2014 Year Ended December 31, 2013 (1) Year Ended December 31, 2012 (1) Dollars in Millions Percentage of Total Net Sales Dollars in Millions Percentage of Total Net Sales Dollars in Millions Percentage of Total Net Sales Notebooks/Mobile Devices $ 2,352.3 19.5 % $ 1,698.4 15.8 % $ 1,462.8 14.4 % NetComm Products 1,615.9 13.4 1,486.3 13.8 1,351.5 13.3 Enterprise and Data Storage (Including Drives) 1,024.3 8.5 999.2 9.3 981.5 9.7 Other Hardware 4,549.2 37.6 4,178.5 38.8 4,075.7 40.3 Software (2) 2,076.7 17.2 1,993.1 18.5 1,877.7 18.5 Services 371.4 3.1 332.7 3.1 285.0 2.8 Other (3) 84.7 0.7 80.4 0.7 94.0 1.0 Total net sales $ 12,074.5 100.0 % $ 10,768.6 100.0 % $ 10,128.2 100.0 % (1) Amounts have been reclassified for changes in individual product classifications to conform to the presentation for the year ended December 31, 2014. (2) The decline in software as a percentage of total net sales is primarily driven by a higher proportion of revenue recorded on a net basis, including SaaS. (3) Includes items such as delivery charges to customers and certain commission revenue. Table of Contents Our distribution process is highly automated. Once a customer order is received and credit approved, orders are automatically routed to one of our distribution centers for picking and shipping as well as configuration and imaging services. We operate two distribution centers: a 450,000 square foot facility in Vernon Hills, Illinois, and a 513,000 square foot facility in North Las Vegas, Nevada. We ship almost 37 million units annually on an aggregate basis from our two distribution centers. We believe that the location of our distribution centers allows us to efficiently ship products throughout the U.S. and provide timely access to our principal distributors. In addition, in the event of weather-related or other disruptions at one of our distribution centers, we are able to shift order processing and fulfillment from one center to the other quickly and efficiently, enabling us to continue to ship products in a timely manner. We believe that competitive sources of supply are available in substantially all of the product categories we offer. We continue to improve the productivity of our distribution centers as measured by key performance indicators such as units shipped per hour worked and bin accuracy. We also have drop-shipment arrangements with many of our OEMs and wholesale distributors, which permit us to offer products to our customers without having to take physical delivery at either of our distribution centers. These arrangements generally represent approximately 40% to 50% of total net sales, including approximately 15% to 20% related to electronic delivery for software licenses. Information Technology Systems We maintain customized IT and unified communication systems that enhance our ability to provide prompt, efficient and expert service to our customers. In addition, these systems enable centralized management of key functions, including purchasing, inventory management, billing and collection of accounts receivable, sales and distribution. Our systems provide us with thorough, detailed and real-time information regarding key aspects of our business. This capability helps us to continuously enhance productivity, ship customer orders quickly and efficiently, respond appropriately to industry changes and provide high levels of customer service. We believe that our websites, which provide electronic order processing and advanced tools, such as order tracking, reporting and asset management, make it easy for customers to transact business with us and ultimately strengthen our customer relationships. Product Procurement We may purchase all or only some of the products that our vendor partners offer for resale to our customers or for inclusion in the solutions we offer. Each vendor partner agreement provides for specific terms and conditions, which may include one or more of the following: product return privileges, price protection policies, purchase discounts and vendor incentive programs, such as purchase or sales rebates and cooperative advertising reimbursements. We also purchase software from major software publishers for resale to our customers or for inclusion in the solutions we offer. Our agreements with software publishers allow the end-user customer to acquire software or licensed products and services. In addition to purchasing products directly from our vendor partners, we purchase products from wholesale distributors for resale to our customers or for inclusion in the solutions we offer. These wholesale distributors provide logistics management and supply-chain services for us, as well as for our vendor partners. For the year ended December 31, 2014 , we purchased 54% of the products we sold as discrete products or as components of a solution directly from our vendor partners and the remaining 46% from wholesale distributors. Purchases from our three largest wholesale distributors, Tech Data, SYNNEX and Ingram Micro each represented 9% of our total purchases. Sales of products manufactured by Apple, Cisco, EMC, Hewlett-Packard, Lenovo and Microsoft, whether purchased directly from these vendor partners or from a wholesale distributor, represented in the aggregate 54% of our net sales in 2014 . Sales of products manufactured by Hewlett-Packard and Cisco represented 18% and 14% , of our 2014 net sales, respectively. Competition The market for technology products and services is highly competitive. Competition is based on the ability to tailor specific solutions to customer needs, quality and breadth of product and service offerings, knowledge and expertise of sales force, customer service, price, product availability, speed of delivery and credit availability. Our competition includes: 8 • resellers such as Dimension Data, ePlus, Insight Enterprises, PC Connection, PCM, Presidio, Softchoice, World Wide Technology and many smaller resellers; • manufacturers who sell directly to customers, such as Dell, Hewlett-Packard and Apple; • large service providers and system integrators, such as IBM, Accenture, Hewlett-Packard and Dell; • e-tailers such as Amazon, Newegg, and TigerDirect.com; • cloud providers such as AT&T, Amazon Web Services and Box; and Table of Contents We expect the competitive landscape in which we compete to continue to change as new technologies are developed. While innovation can help our business as it creates new offerings for us to sell, it can also disrupt our business model and create new and stronger competitors. For a discussion of the risks associated with competition, see “Risk Factors” included elsewhere in this report. Marketing We market the CDW brand to both national and local audiences using a variety of channels that include online, broadcast, print, social and other media. This promotion is supported by integrated communication efforts that target decision-makers, influencers and the general public using a combination of news releases, case studies, media interviews and speaking opportunities. We also market to current and prospective customers through integrated marketing programs that include behaviorally targeted email, print, online media, events and sponsorships, as well as broadcast media. As a result of our relationships with our vendor partners, a significant portion of our advertising and marketing expenses are reimbursed through cooperative advertising reimbursement programs. These programs are at the discretion of our vendor partners and are typically tied to sales or purchasing volumes or other commitments to be met by us within a specified period of time. We believe that our national scale and analytical techniques that measure the efficacy of our marketing programs differentiate us from our competitors. Coworkers As of December 31, 2014 , we employed 7,211 coworkers, none of whom is covered by collective bargaining agreements. We consider our coworker relations to be good. Intellectual Property The CDW trademark and certain variations thereon are registered or subject to pending trademark applications in the U.S., Canada and certain other jurisdictions. We believe our trademarks have significant value and are important factors in our marketing programs. In addition, we own registrations for domain names, including cdw.com and cdwg.com, for certain of our primary trademarks. We also have unregistered copyrights in our website content. Item 1A. Risk Factors There are many factors that affect our business, results of operations and cash flows, some of which are beyond our control. The following is a description of some important factors that may cause our actual results of operations and cash flows in future periods to differ materially from those currently expected or desired. Risks Related to Our Business General economic conditions could negatively affect technology spending by our customers and put downward pressure on prices, which may have an adverse impact on our business, results of operations or cash flows. Weak economic conditions generally, sustained uncertainty about global economic conditions, U.S. federal government spending cuts and the impact of new government programs, or a tightening of credit markets could cause our customers and potential customers to postpone or reduce spending on technology products or services or put downward pressure on prices, which could have an adverse effect on our business, results of operations or cash flows. Our financial performance could be adversely affected by decreases in spending on technology products and services by our Public segment customers. Our sales to our Public segment customers are impacted by government spending policies, budget priorities and revenue levels. Although our sales to the federal government are diversified across multiple agencies and departments, they collectively accounted for approximately 7% of 2014 net sales. An adverse change in government spending policies (including ongoing budget cuts at the federal level), budget priorities or revenue levels could cause our Public segment customers to reduce their purchases or to terminate or not renew their contracts with us, which could adversely affect our business, results of operations or cash flows. For example, in 2013, as a result of sequestration and related budget uncertainty and the partial shutdown of the federal government for 16 days, we experienced significantly reduced Federal sales in our Public segment. Our business depends on our vendor partner relationships and the availability of their products. 9 • retailers (including their e-commerce activities) such as Staples and Office Depot. Table of Contents We purchase products for resale from vendor partners, which include OEMs and software publishers, and wholesale distributors. For the year ended December 31, 2014 , we purchased approximately 54% of the products we sold directly from vendor partners and the remaining amount from wholesale distributors. We are authorized by vendor partners to sell all or some of their products via direct marketing activities. Our authorization with each vendor partner is subject to specific terms and conditions regarding such things as sales channel restrictions, product return privileges, price protection policies, purchase discounts and vendor partner programs and funding, including purchase rebates, sales volume rebates, purchasing incentives and cooperative advertising reimbursements. However, we do not have any long-term contracts with our vendor partners and many of these arrangements are terminable upon notice by either party. A reduction in vendor partner programs or funding or our failure to timely react to changes in vendor partner programs or funding could have an adverse effect on our business, results of operations or cash flows. In addition, a reduction in the amount of credit granted to us by our vendor partners could increase our need for, and the cost of, working capital and could have an adverse effect on our business, results of operations or cash flows, particularly given our substantial indebtedness. From time to time, vendor partners may terminate or limit our right to sell some or all of their products or change the terms and conditions or reduce or discontinue the incentives that they offer us. For example, there is no assurance that, as our vendor partners continue to sell directly to end users and through resellers, they will not limit or curtail the availability of their products to solutions providers like us. Any such termination or limitation or the implementation of such changes could have a negative impact on our business, results of operations or cash flows. Although we purchase from a diverse vendor base, in 2014 , products we purchased from distributors Tech Data, SYNNEX and Ingram Micro each represented 9% of our total purchases. In addition, sales of Apple, Cisco, EMC, Hewlett-Packard, Lenovo and Microsoft products comprise a substantial portion of our sales, representing approximately 54% of net sales in 2014 . Sales of products manufactured by Hewlett- Packard and Cisco represented approximately 18% and 14% , respectively, of our 2014 net sales. The loss of, or change in business relationship with, any of these or any other key vendor partners, the diminished availability of their products, or backlogs for their products leading to manufacturer allocation, could reduce the supply and increase the cost of products we sell and negatively impact our competitive position. Additionally, the relocation of key distributors utilized in our purchasing model could increase our need for, and the cost of, working capital and have an adverse effect on our business, results of operations or cash flows. Further, the sale, spin-off or combination of any of our vendor partners and/or certain of their business units, including any such sale to or combination with a vendor with whom we do not currently have a commercial relationship or whose products we do not sell, could have an adverse impact on our business, results of operations or cash flows. Our sales are dependent on continued innovations in hardware, software and services offerings by our vendor partners and the competitiveness of their offerings, and our ability to partner with new and emerging technology providers. The technology industry is characterized by rapid innovation and the frequent introduction of new and enhanced hardware, software and services offerings, such as cloud-based solutions, including SaaS, IaaS and PaaS. We have been and will continue to be dependent on innovations in hardware, software and services offerings, as well as the acceptance of those innovations by customers. A decrease in the rate of innovation, or the lack of acceptance of innovations by customers, could have an adverse effect on our business, results of operations or cash flows. In addition, if we are unable to keep up with changes in technology and new hardware, software and services offerings, for example by providing the appropriate training to our account managers, sales technology specialists and engineers to enable them to effectively sell and deliver such new offerings to customers, our business, results of operations or cash flows could be adversely affected. We also are dependent upon our vendor partners for the development and marketing of hardware, software and services to compete effectively with hardware, software and services of vendors whose products and services we do not currently offer or that we are not authorized to offer in one or more customer channels. In addition, our success is dependent on our ability to develop relationships with and sell hardware, software and services from new emerging vendors and vendors that we have not historically represented in the marketplace. To the extent that a vendor's offering that is highly in demand is not available to us for resale in one or more customer channels, and there is not a competitive offering from another vendor that we are authorized to sell in such customer channels, or we are unable to develop relationships with new technology providers or companies that we have not historically represented, our business, results of operations or cash flows could be adversely impacted. Substantial competition could reduce our market share and significantly harm our financial performance. Our current competition includes: 10 Table of Contents We expect the competitive landscape in which we compete to continue to change as new technologies are developed. While innovation can help our business as it creates new offerings for us to sell, it can also disrupt our business model and create new and stronger competitors. For instance, while cloud-based solutions present an opportunity for us, cloud-based solutions and technologies that deliver technology solutions as a service could increase the amount of sales directly to customers rather than through solutions providers like us, or could reduce the amount of hardware we sell, leading to a reduction in our sales and/or profitability. In addition, some of our hardware and software vendor partners sell, and could intensify their efforts to sell, their products directly to our customers. Moreover, traditional OEMs have increased their services capabilities through mergers and acquisitions with service providers, which could potentially increase competition in the market to provide comprehensive technology solutions to customers. If any of these trends becomes more prevalent, it could adversely affect our business, results of operations or cash flows. We focus on offering a high level of service to gain new customers and retain existing customers. To the extent we face increased competition to gain and retain customers, we may be required to reduce prices, increase advertising expenditures or take other actions which could adversely affect our business, results of operations or cash flows. Additionally, some of our competitors may reduce their prices in an attempt to stimulate sales, which may require us to reduce prices. This would require us to sell a greater number of products to achieve the same level of net sales and gross profit. If such a reduction in prices occurs and we are unable to attract new customers and sell increased quantities of products, our sales growth and profitability could be adversely affected. The success of our business depends on the continuing development, maintenance and operation of our information technology systems. Our success is dependent on the accuracy, proper utilization and continuing development of our information technology systems, including our business systems, such as our sales, customer management, financial and accounting, marketing, purchasing, warehouse management, e-commerce and mobile systems, as well as our operational platforms, including voice and data networks and power systems. The quality and our utilization of the information generated by our information technology systems, and our success in implementing new systems and upgrades, affects, among other things, our ability to: The integrity of our information technology systems is vulnerable to disruption due to forces beyond our control. While we have taken steps to protect our information technology systems from a variety of threats, including computer viruses, malware, phishing, social engineering, unauthorized access and other malicious attacks, both internal and external, and human error, there can be no guarantee that those steps will be effective. Furthermore, although we have redundant systems at a separate location to back up our primary systems, there can be no assurance that these redundant systems will operate properly if and when required. Any disruption to or infiltration of our information technology systems could significantly harm our business and results of operations. Breaches of data security could adversely impact our business. 11 • resellers, such as Dimension Data, ePlus, Insight Enterprises, PC Connection, PCM, Presidio, Softchoice, World Wide Technology and many smaller resellers; • manufacturers who sell directly to customers, such as Dell, Hewlett-Packard and Apple; • large service providers and system integrators, such as IBM, Accenture, Hewlett-Packard and Dell; • e-tailers, such as Amazon, Newegg and TigerDirect.com; • cloud providers, such as AT&T, Amazon Web Services and Box; and • retailers (including their e-commerce activities), such as Staples and Office Depot. • conduct business with our customers, including delivering services and solutions to them; • manage our inventory and accounts receivable; • purchase, sell, ship and invoice our hardware and software products and provide and invoice our services efficiently and on a timely basis; and • maintain our cost-efficient operating model while scaling our business. Table of Contents Our business involves the storage and transmission of proprietary information and sensitive or confidential data, including personal information of coworkers, customers and others. In addition, we operate data centers for our customers which host their technology infrastructure and may store and transmit both business-critical data and confidential information. In connection with our services business, our coworkers also have access to our customers' confidential data and other information. We have privacy and data security policies in place that are designed to prevent security breaches; however, as newer technologies evolve, we could be exposed to increased risk of breaches in security. Breaches in security could expose us, our customers or other individuals to a risk of public disclosure, loss or misuse of this information, resulting in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information, as well as the loss of existing or potential customers and damage to our brand and reputation. In addition, the cost and operational consequences of implementing further data protection measures could be significant. Such breaches, costs and consequences could adversely affect our business, results of operations or cash flows. The failure to comply with our Public segment contracts or applicable laws and regulations could result in, among other things, termination, fines or other liabilities, and changes in procurement regulations could adversely impact our business, results of operations or cash flows. Revenues in our Public segment are derived from sales to governmental entities, educational institutions and healthcare customers, through various contracts and open market sales of products and services. Sales to Public segment customers are highly regulated. Noncompliance with contract provisions, government procurement regulations or other applicable laws or regulations (including but not limited to the False Claims Act and the Medicare and Medicaid Anti-Kickback Statute) could result in civil, criminal and administrative liability, including substantial monetary fines or damages, termination of government contracts or other Public segment customer contracts, and suspension, debarment or ineligibility from doing business with the government and other customers in the Public segment. In addition, contracts in the Public segment are generally terminable at any time for convenience of the contracting agency or group purchasing organization (“GPO”) or upon default. Furthermore, our inability to enter into or retain contracts with GPOs may threaten our ability to sell to customers in those GPOs and compete. The effect of any of these possible actions could adversely affect our business, results of operations or cash flows. In addition, the adoption of new or modified procurement regulations and other requirements may increase our compliance costs and reduce our gross margins, which could have a negative effect on our business, results of operations or cash flows. If we fail to provide high-quality services to our customers, or if our third-party service providers fail to provide high-quality services to our customers, our reputation, business, results of operations or cash flows could be adversely affected. Our service offerings include field services, managed services, warranties, configuration services, partner services and telecom services. Additionally, we deliver and manage mission critical software, systems and network solutions for our customers. We also offer certain services, such as implementation and installation services and repair services, to our customers through various third-party service providers engaged to perform these services on our behalf. If we or our third-party service providers fail to provide high quality services to our customers or such services result in a disruption of our customers' businesses, this could, among other things, result in legal claims and proceedings and liability. Moreover, as we expand our services and solutions business, we may be exposed to additional operational, regulatory and other risks. We also could incur liability for failure to comply with the rules and regulations applicable to the new services and solutions we provide to our customers. If any of the foregoing were to occur, our reputation with our customers, our brand and our business, results of operations or cash flows could be adversely affected. If we lose any of our key personnel, or are unable to attract and retain the talent required for our business, our business could be disrupted and our financial performance could suffer. Our success is heavily dependent upon our ability to attract, develop, engage and retain key personnel to manage and grow our business, including our key executive, management, sales, services and technical coworkers. Our future success will depend to a significant extent on the efforts of Thomas E. Richards, our Chairman and Chief Executive Officer, as well as the continued service and support of our other executive officers. Our future success also will depend on our ability to retain our customer-facing coworkers, who have been given critical CDW knowledge regarding, and the opportunity to develop strong relationships with, many of our customers. In addition, as we seek to expand our offerings of value-added services and solutions, our success will even more heavily depend on attracting and retaining highly skilled technology specialists and engineers, for whom the market is extremely competitive. Our inability to attract, develop and retain key personnel could have an adverse effect on our relationships with our vendor partners and customers and adversely affect our ability to expand our offerings of value-added services and solutions. Moreover, our inability to train our sales, services and technical personnel effectively to meet the rapidly changing technology 12 Table of Contents needs of our customers could cause a decrease in the overall quality and efficiency of such personnel. Such consequences could adversely affect our business, results of operations or cash flows. The interruption of the flow of products from suppliers could disrupt our supply chain. A significant portion of the products we sell are manufactured or purchased by our vendor partners outside of the U.S., primarily in Asia. Political, social or economic instability in Asia, or in other regions in which our vendor partners purchase or manufacture the products we sell, could cause disruptions in trade, including exports to the U.S. Other events that could also cause disruptions to our supply chain include: We cannot predict whether the countries in which the products we sell are purchased or manufactured, or may be purchased or manufactured in the future, will be subject to new or additional trade restrictions or sanctions imposed by the U.S. or foreign governments, including the likelihood, type or effect of any such restrictions. Trade restrictions, including new or increased tariffs or quotas, embargoes, sanctions, safeguards and customs restrictions against the products we sell, as well as foreign labor strikes and work stoppages or boycotts, could increase the cost or reduce the supply of product available to us and adversely affect our business, results of operations or cash flows. In addition, our exports are subject to regulations and noncompliance with these requirements could have a negative effect on our business, results of operations or cash flows. A natural disaster or other adverse occurrence at one of our primary facilities or customer data centers could damage our business. Substantially all of our corporate, warehouse and distribution functions are located at our Vernon Hills, Illinois facilities and our second distribution center in North Las Vegas, Nevada. If the warehouse and distribution equipment at one of our distribution centers were to be seriously damaged by a natural disaster or other adverse occurrence, we could utilize the other distribution center or third-party distributors to ship products to our customers. However, this may not be sufficient to avoid interruptions in our service and may not enable us to meet all of the needs of our customers and would cause us to incur incremental operating costs. In addition, we operate three customer data centers and numerous sales offices which may contain both business-critical data and confidential information of our customers. A natural disaster or other adverse occurrence at any of the customer data centers or at any of our major sales offices could negatively impact our business, results of operations or cash flows. We are heavily dependent on commercial delivery services. We generally ship hardware products to our customers by FedEx, United Parcel Service and other commercial delivery services and invoice customers for delivery charges. If we are unable to pass on to our customers future increases in the cost of commercial delivery services, our profitability could be adversely affected. Additionally, strikes, inclement weather, natural disasters or other service interruptions by such shippers could adversely affect our ability to deliver products on a timely basis. We are exposed to accounts receivable and inventory risks. We extend credit to our customers for a significant portion of our net sales, typically on 30-day payment terms. We are subject to the risk that our customers may not pay for the products they have purchased, or may pay at a slower rate than we have historically experienced, the risk of which is heightened during periods of economic downturn or uncertainty or, in the case of Public segment customers, during periods of budget constraints. We are also exposed to inventory risks as a result of the rapid technological changes that affect the market and pricing for the products we sell. We seek to minimize our inventory exposure through a variety of inventory management procedures and policies, including our rapid- turn inventory model, as well as vendor price protection and product return programs. However, if we were unable to maintain our rapid-turn inventory model, if there were unforeseen product developments that 13 • the imposition of additional trade law provisions or regulations; • the imposition of additional duties, tariffs and other charges on imports and exports; • foreign currency fluctuations; • natural disasters or other adverse occurrences at, or affecting, any of our suppliers' facilities; • restrictions on the transfer of funds; • the financial instability or bankruptcy of manufacturers; and • significant labor disputes, such as strikes. Table of Contents created more rapid obsolescence or if our vendor partners were to change their terms and conditions, our inventory risks could increase. We also from time to time take advantage of cost savings associated with certain opportunistic bulk inventory purchases offered by our vendor partners or we may decide to carry high inventory levels of certain products that have limited or no return privileges due to customer demand or request. These bulk purchases could increase our exposure to inventory obsolescence. We could be exposed to additional risks if we continue to make strategic investments or acquisitions or enter into alliances. We may continue to pursue transactions, including strategic investments, acquisitions or alliances, in an effort to extend or complement our existing business. These types of transactions involve numerous business risks, including finding suitable transaction partners and negotiating terms that are acceptable to us, the diversion of management's attention from other business concerns, extending our product or service offerings into areas in which we have limited experience, entering into new geographic markets, the potential loss of key coworkers or business relationships and successfully integrating acquired businesses, any of which could adversely affect our operations. In addition, our financial results could be adversely affected by financial adjustments required by accounting principles generally accepted in the United States of America (“GAAP”) in connection with these types of transactions where significant goodwill or intangible assets are recorded. To the extent the value of goodwill or identifiable intangible assets with indefinite lives becomes impaired, we may be required to incur material charges relating to the impairment of those assets. Our future operating results may fluctuate significantly. We may experience significant variations in our future quarterly results of operations. These fluctuations may cause the market price of our common stock to be volatile and may result from many factors, including the condition of the technology industry in general, shifts in demand and pricing for hardware, software and services and the introduction of new products or upgrades. Our operating results are also highly dependent on our level of gross profit as a percentage of net sales. Our gross profit percentage fluctuates due to numerous factors, some of which may be outside of our control, including general macroeconomic conditions; pricing pressures; changes in product costs from our vendor partners; the availability of price protection, purchase discounts and incentive programs from our vendor partners; changes in product, order size and customer mix; the risk of some items in our inventory becoming obsolete; increases in delivery costs that we cannot pass on to customers; and general market and competitive conditions. In addition, our cost structure is based, in part, on anticipated sales and gross margins. Therefore, we may not be able to adjust our cost structure quickly enough to compensate for any unexpected sales or gross margin shortfall, and any such inability could have an adverse effect on our business, results of operations or cash flows. We are exposed to risks from legal proceedings and audits. We are party to various legal proceedings that arise in the ordinary course of our business, which include commercial, employment, tort and other litigation. We are subject to intellectual property infringement claims against us in the ordinary course of our business, either because of the products and services we sell or the business systems and processes we use to sell such products and services, in the form of cease-and-desist letters, licensing inquiries, lawsuits and other communications and demands. In our industry, such intellectual property claims have become more frequent as the complexity of technological products and the intensity of competition in our industry have increased. Increasingly, many of these assertions are brought by non-practicing entities whose principal business model is to secure patent licensing revenue, but we may also be subject to suits from inventors, competitors or other patent holders who may seek licensing revenue, lost profits and/or an injunction preventing us from engaging in certain activities, including selling certain products and services. Because of our significant sales to governmental entities, we also are subject to audits by federal, state and local authorities. We also are subject to audits by various vendor partners and large customers, including government agencies, relating to purchases and sales under various contracts. In addition, we are subject to indemnification claims under various contracts. Current and future litigation, infringement claims, governmental proceedings, audits or indemnification claims that we face may result in substantial costs and expenses and significantly divert the attention of our management regardless of the outcome. In addition, current and future litigation, infringement claims, governmental proceedings, audits or indemnification claims could lead to increased costs or interruptions of our normal business operations. Litigation, infringement claims, governmental proceedings, audits or indemnification claims involve uncertainties and the eventual outcome of any litigation, 14 Table of Contents infringement claim, governmental proceeding, audit or indemnification claim could adversely affect our business, results of operations or cash flows. Failure to comply with the laws and regulations applicable to our operations could adversely impact our business, results of operations or cash flows. Our operations are subject to numerous U.S. and foreign laws and regulations in a number of areas including, but not limited to, areas of labor and employment, advertising, e-commerce, tax, import and export requirements, anti-corruption, data privacy requirements, anti- competition, and environmental, health, and safety. Compliance with these laws, regulations and similar requirements may be onerous and expensive, and they may be inconsistent from jurisdiction to jurisdiction, further increasing the cost of compliance and doing business, and the risk of noncompliance. We have implemented policies and procedures designed to help ensure compliance with applicable laws and regulations, but there can be no guarantee against coworkers, contractors, or agents violating such laws and regulations or our policies and procedures. We have significant deferred cancellation of debt income. As a result of a 2009 debt modification, we realized $395.5 million of cancellation of debt income (“CODI”). We made an election under Code Section 108(i) to defer this CODI from taxable income, pursuant to which we are also required to defer certain original issue discount (“OID”) deductions as they accrue. As of December 31, 2013, we had deferred approximately $114.5 million of OID deductions. Starting in 2014, we were required to include the deferred CODI and the deferred OID into taxable income ratably over a five-year period ending in 2018. Because we have more CODI than the aggregate of our deferred OID on the relevant remaining debt instruments, we will have a future cash tax liability associated with our significant deferred CODI. We have reflected the associated cash tax liability in our deferred taxes for financial accounting purposes. All of our deferred CODI will be accelerated into current taxable income if, prior to 2018, we engage in a so-called “impairment transaction” and the gross value of our assets immediately afterward is less than 110% of the sum of our total liabilities and the tax on the net amount of our deferred CODI and OID (the “110% test”) as determined under the applicable Treasury Regulations. An “impairment transaction” is any transaction that impairs our ability to pay the tax on our deferred CODI, and includes dividends or distributions with respect to our equity and charitable contributions, in each case in a manner that is not consistent with our historical practice within the meaning of the applicable Treasury Regulations. Prior to 2018, our willingness to pay dividends or make distributions with respect to our equity could be adversely affected if, at the time, we do not meet the 110% test and, as a result, the payment of a dividend or the making of a distribution would accelerate the tax payable with respect to our deferred CODI. We believe that, based on our interpretation of applicable Treasury Regulations, the gross value of our assets exceeds 110% of the sum of our total liabilities and the tax on the net amount of our deferred CODI and OID as of the filing date of this Annual Report on Form 10-K. However, we cannot assure you that this will continue to be true in the future. Risks Related to Our Indebtedness We have a substantial amount of indebtedness, which could have important consequences to our business. We have a substantial amount of indebtedness. As of December 31, 2014 , we had $3.2 billion of total long-term debt outstanding, as defined by GAAP, and $332.1 million of obligations outstanding under our inventory financing agreements, and the ability to borrow an additional $935.6 million under our senior secured asset-based revolving credit facility (the “Revolving Loan”). Our substantial indebtedness could have important consequences, including the following: 15 • making it more difficult for us to satisfy our obligations with respect to our indebtedness; • requiring us to dedicate a substantial portion of our cash flow from operations to debt service payments on our and our subsidiaries' debt, which reduces the funds available for working capital, capital expenditures, acquisitions and other general corporate purposes; • requiring us to comply with restrictive covenants in our senior credit facilities and indentures, which limit the manner in which we conduct our business; • making it more difficult for us to obtain vendor financing from our vendor partners, including original equipment manufacturers and software publishers; • limiting our flexibility in planning for, or reacting to, changes in the industry in which we operate; Table of Contents Restrictive covenants under our senior credit facilities and, to varying degrees, our indentures may adversely affect our operations and liquidity. Our senior credit facilities and, to varying degrees, our indentures contain, and any future indebtedness of ours may contain, various covenants that limit our ability to, among other things: As a result of these covenants, we are limited in the manner in which we conduct our business and we may be unable to engage in favorable business activities or finance future operations or capital needs. A breach of any of these covenants or any of the other restrictive covenants would result in a default under our senior credit facilities. Upon the occurrence of an event of default under our senior credit facilities, the lenders: The acceleration of amounts outstanding under our senior credit facilities would likely trigger an event of default under our existing indentures. If we were unable to repay those amounts, the lenders under our senior credit facilities could proceed against the collateral granted to them to secure our borrowings thereunder. We have pledged a significant portion of our assets as collateral under our senior credit facilities. If the lenders under our senior credit facilities accelerate the repayment of borrowings, we cannot assure you that we will have sufficient assets to repay our senior credit facilities and our other indebtedness or the ability to borrow sufficient funds to refinance such indebtedness. Even if we were able to obtain new financing, it may not be on commercially reasonable terms, or terms that are acceptable to us. In addition, under our Revolving Loan, we are permitted to borrow an aggregate amount of up to $1,250.0 million. However, our ability to borrow under our Revolving Loan is limited by a borrowing base and a liquidity condition. The borrowing base at any time equals the sum of up to 85% of CDW LLC and its subsidiary guarantors’ eligible accounts receivable (net of accounts reserves) (up to 30% of such eligible accounts receivable which can consist of federal government accounts receivable) plus the lesser of (i) 75% of CDW LLC and its subsidiary guarantors’ eligible inventory (valued at cost and net of inventory reserves) and (ii) the product of 85% multiplied by the net orderly liquidation value percentage multiplied by eligible inventory (valued at cost and net of inventory reserves), less reserves (other than accounts reserves and inventory 16 • placing us at a competitive disadvantage compared to any of our less-leveraged competitors; • increasing our vulnerability to both general and industry-specific adverse economic conditions; and • limiting our ability to obtain additional debt or equity financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements and increasing our cost of borrowing. • incur or guarantee additional debt; • pay dividends or make distributions to holders of our capital stock or to make certain other restricted payments or investments; • repurchase or redeem capital stock; • make loans, capital expenditures or investments or acquisitions; • receive dividends or other payments from our subsidiaries; • enter into transactions with affiliates; • create liens; • merge or consolidate with other companies or transfer all or substantially all of our assets; • transfer or sell assets, including capital stock of subsidiaries; and • prepay, repurchase or redeem debt. • will not be required to lend any additional amounts to us; • could elect to declare all borrowings outstanding thereunder, together with accrued and unpaid interest and fees, to be due and payable; or • could require us to apply all of our available cash to repay these borrowings. Table of Contents reserves). The borrowing base in effect as of December 31, 2014 was $1,253.4 million , and therefore, did not restrict our ability to borrow under our Revolving Loan as of that date. Our ability to borrow under our Revolving Loan is also limited by a minimum liquidity condition, which provides that, if excess cash availability is less than the lesser of (i) $125.0 million and (ii) the greater of (A) 10% of the borrowing base and (B) $100.0 million, the lenders are not required to lend any additional amounts under our Revolving Loan unless the consolidated fixed charge coverage ratio (as defined in the credit agreement for our Revolving Loan) is at least 1.0 to 1.0. Moreover, our Revolving Loan provides discretion to the agent bank acting on behalf of the lenders to impose additional availability reserves, which could materially impair the amount of borrowings that would otherwise be available to us. We cannot assure you that the agent bank will not impose such reserves or, were it to do so, that the resulting impact of this action would not materially and adversely impair our liquidity. We will be required to generate sufficient cash to service our indebtedness and, if not successful, we may be forced to take other actions to satisfy our obligations under our indebtedness. Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. Our outstanding long-term debt will impose significant cash interest payment obligations on us and, accordingly, we will have to generate significant cash flow from operating activities to fund our debt service obligations. We cannot assure you that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources” included elsewhere in this report. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional debt or equity capital, restructure or refinance our indebtedness, or revise or delay our strategic plan. We cannot assure you that we would be able to take any of these actions, that these actions would be successful and permit us to meet our scheduled debt service obligations or satisfy our capital requirements, or that these actions would be permitted under the terms of our existing or future debt agreements, including our senior credit facilities and indentures. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. Our senior credit facilities and the indenture governing our 8.5% Senior Notes due 2019 ("2019 Senior Notes") restrict our ability to dispose of assets and use the proceeds from the disposition. We may not be able to consummate those dispositions or to obtain the proceeds which we could realize from them and these proceeds may not be adequate to meet any debt service obligations then due. Furthermore, the Sponsors have no obligation to provide us with debt or equity financing. If we cannot make scheduled payments on our debt, we will be in default and, as a result: Despite our indebtedness levels, we and our subsidiaries may be able to incur substantially more debt, including secured debt. This could further increase the risks associated with our leverage. We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of our senior credit facilities and indentures do not fully prohibit us or our subsidiaries from doing so. To the extent that we incur additional indebtedness or such other obligations, the risks associated with our substantial indebtedness described above, including our possible inability to service our debt, will increase. As of December 31, 2014 , we had approximately $935.6 million available for additional borrowing under our Revolving Loan after taking into account borrowing base limitations (net of $2.1 million of issued and undrawn letters of credit and $332.1 million of reserves related to our floorplan sub-facility). Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly. Certain of our borrowings, primarily borrowings under our senior credit facilities, are at variable rates of interest and expose us to interest rate risk. As of December 31, 2014 , we had $1,513.5 million of variable rate debt outstanding. If interest rates increase above 1% per annum, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income would decrease. Although we have entered into interest rate cap 17 • our debt holders could declare all outstanding principal and interest to be due and payable; • the lenders under our senior credit facilities could foreclose against the assets securing the borrowings from them and the lenders under our term loan facility could terminate their commitments to lend us money; and • we could be forced into bankruptcy or liquidation. Table of Contents agreements on our term loan facility to reduce interest rate volatility, we cannot assure you we will be able to enter into interest rate cap agreements in the future on acceptable terms or that such caps or the caps we have in place now will be effective. Risks Related to Ownership of Our Common Stock Our common stock price may be volatile and may decline regardless of our operating performance, and holders of our common stock could lose a significant portion of their investment. The market price for our common stock may be volatile. Our stockholders may not be able to resell their shares of common stock at or above the price at which they purchased such shares, due to fluctuations in the market price of our common stock, which may be caused by a number of factors, many of which we cannot control, including the risk factors described in this Annual Report on Form 10-K and the following: In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies, including companies in our industry. In the past, securities class action litigation has followed periods of market volatility. If we were involved in securities litigation, we could incur substantial costs, and our resources and the attention of management could be diverted from our business. The Sponsors have influence over significant corporate activities and their interests may not align with yours. Madison Dearborn beneficially owns approximately 15.5% of our common stock and Providence Equity beneficially owns approximately 13.7% of our common stock as of February 20, 2015. As a result of their ownership, each Sponsor, so long as it holds a sizable portion of our outstanding common stock, will have substantial voting power with respect to matters submitted to a vote of stockholders. In addition, so long as each Sponsor has representation on our board of directors, it will have the ability to exercise influence over decision-making with respect to our business direction and policies. Matters over which each of the Sponsors may, directly or indirectly, exercise influence include: Under our amended and restated certificate of incorporation, each Sponsor and its affiliates do not have any obligation to present to us, and each Sponsor may separately pursue, corporate opportunities of which it becomes aware, even if those opportunities are ones that we would have pursued if granted the opportunity. 18 • changes in financial estimates by any securities analysts who follow our common stock, our failure to meet these estimates or failure of securities analysts to initiate or maintain coverage of our common stock; • downgrades by any securities analysts who follow our common stock; • future sales of our common stock by our officers, directors and significant stockholders, including the Sponsors; • market conditions or trends in our industry or the economy as a whole; • investors’ perceptions of our prospects; • announcements by us or our competitors of significant contracts, acquisitions, joint ventures or capital commitments; • changes in key personnel; and • our limited public float in light of the Sponsors’ beneficial ownership of a majority of our common stock, which may result in the trading of relatively small quantities of shares by our stockholders having a disproportionate positive or negative influence on the market price of our common stock. • the election of our board of directors and the appointment and removal of our officers; • mergers and other business combination transactions, including proposed transactions that would result in our stockholders receiving a premium price for their shares; • other acquisitions or dispositions of businesses or assets; • incurrence of indebtedness and the issuance of equity securities; • repurchase of stock and payment of dividends; and • the issuance of shares to management under our equity incentive plans. Table of Contents Future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price. Sales of substantial amounts of our common stock in the public market, or the perception that these sales could occur, could adversely affect the price of our common stock and could impair our ability to raise capital through the sale of additional shares. As of February 20, 2015, there were 172,275,656 shares of our common stock outstanding. The shares of our common stock sold in our initial public offering and in registered secondary offerings are freely tradable without restriction under the Securities Act of 1933, as amended (the “Securities Act”), except that any shares of our common stock that may be acquired by our directors, executive officers and other affiliates, as that term is defined in the Securities Act, may be sold only in compliance with certain volume limitations and other restrictions of Rule 144 under the Securities Act. The remaining shares of our common stock, to the extent not previously sold pursuant to an exemption from registration, will continue to be “restricted securities” within the meaning of Rule 144 under the Securities Act and subject to certain restrictions on resale. Restricted securities may be sold in the public market only if they are registered under the Securities Act or are sold pursuant to an exemption from registration such as Rule 144 under the Securities Act. As of February 20, 2015, the holders of approximately 53,000,000 shares of our common stock will continue to have the right to require us to register the sales of such shares under the Securities Act, under the terms of an agreement between us and the holders. In the future, we may also issue our securities in connection with investments or acquisitions. The number of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of our common stock. Anti-takeover provisions in our charter documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable. Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of the Company more difficult without the approval of our board of directors. These provisions: Our amended and restated certificate of incorporation also contains a provision that provides us with protections similar to Section 203 of the Delaware General Corporation Law, and will prevent us from engaging in a business combination with a person who acquires at least 15% of our common stock for a period of three years from the date such person acquired such common stock, unless board or stockholder approval is obtained prior to the acquisition. These anti-takeover provisions and other provisions under Delaware law could discourage, delay or prevent a transaction involving a change in control of the Company, even if doing so would benefit our stockholders. These provisions could also discourage proxy contests and make it more difficult for our stockholders to elect directors of their choosing and to cause us to take other corporate actions our stockholders desire. 19 • authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock; • establish a classified board of directors so that not all members of our board of directors are elected at one time; • generally prohibit stockholder action by written consent, requiring all stockholder actions be taken at a meeting of our stockholders; • provide that special meetings of the stockholders can only be called by or at the direction of (i) our board of directors pursuant to a written resolution adopted by the affirmative vote of the majority of the total number of directors that the Company would have if there were no vacancies; • establish advance notice requirements for nominations for elections to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; and • provide that our board of directors is expressly authorized to make, alter or repeal our amended and restated bylaws. Table of Contents Conflicts of interest may arise because some of our directors are principals of our largest stockholders. Paul Finnegan and Robin Selati, who are principals of Madison Dearborn, and Glenn Creamer and Michael Dominguez, who are managing directors of Providence Equity, serve on our board of directors. As of February 20, 2015, Madison Dearborn and Providence Equity each continue to hold a sizable portion of our outstanding common stock. The Sponsors and the entities respectively controlled by them may hold equity interests in entities that directly or indirectly compete with us, and companies in which they currently invest may begin competing with us. As a result of these relationships, when conflicts arise between the interests of Madison Dearborn or Providence Equity, on the one hand, and of other stockholders, on the other hand, these directors may not be disinterested. Although our directors and officers have a duty of loyalty to us under Delaware law and our amended and restated certificate of incorporation, transactions that we enter into in which a director or officer has a conflict of interest are generally permissible so long as (1) the material facts relating to the director’s or officer’s relationship or interest as to the transaction are disclosed to our board of directors and a majority of our disinterested directors approves the transaction, (2) the material facts relating to the director’s or officer’s relationship or interest as to the transaction are disclosed to our stockholders and a majority of our disinterested stockholders approve the transaction or (3) the transaction is otherwise fair to us. Our amended and restated certificate of incorporation also provides that any principal, officer, member, manager and/or employee of a Sponsor or any entity that controls, is controlled by or under common control with a Sponsor (other than us or any company that is controlled by us) or a Sponsor-managed investment fund will not be required to offer any transaction opportunity of which they become aware to us and could take any such opportunity for themselves or offer it to other companies in which they have an investment, unless such opportunity is offered to them solely in their capacities as our directors. We cannot assure you that we will continue to pay dividends on our common stock or repurchase any of our common stock under our share repurchase program, and our indebtedness and certain tax considerations could limit our ability to continue to pay dividends on, or make share repurchases of, our common stock. If we do not continue to pay dividends, you may not receive any return on investment unless you are able to sell your common stock for a price greater than your purchase price. We expect to continue to pay a cash dividend on our common stock of $0.0675 per share per quarter, or $0.27 per share per annum. Any determination to pay dividends in the future will be at the discretion of our board of directors. Any determination to pay dividends on, or repurchase, shares of our common stock in the future will depend upon our results of operations, financial condition, business prospects, capital requirements, contractual restrictions, including those under our senior credit facilities and indentures, any potential indebtedness we may incur, restrictions imposed by applicable law, tax considerations and other factors our board of directors deems relevant. In addition, our ability to pay dividends on, or repurchase, shares of our common stock will be limited by restrictions on our ability to pay dividends or make distributions to our stockholders and on the ability of our subsidiaries to pay dividends or make distributions to us, in each case, under the terms of our current and any future agreements governing our indebtedness. There can be no assurance that we will continue to pay a dividend at the current rate or at all or that we will repurchase shares of our common stock. If we do not pay dividends in the future, realization of a gain on your investment will depend entirely on the appreciation of the price of our common stock, which may never occur. See “--Risks Related to Our Business--We have significant deferred cancellation of debt income” for a discussion of certain tax considerations that could affect our willingness to pay dividends in the future . We are a holding company and rely on dividends, distributions and other payments, advances and transfers of funds from our subsidiaries to meet our obligations. We are a holding company that does not conduct any business operations of our own. As a result, we are largely dependent upon cash dividends and distributions and other transfers from our subsidiaries to meet our obligations. The agreements governing the indebtedness of our subsidiaries impose restrictions on our subsidiaries’ ability to pay dividends or other distributions to us. The deterioration of the earnings from, or other available assets of, our subsidiaries for any reason could also limit or impair their ability to pay dividends or other distributions to us. Item 1B. Unresolved Staff Comments None. Item 2. Properties As of December 31, 2014 , we owned or leased a total of 2.3 million square feet of space throughout the U.S. and Canada. We own two properties: a combined office and a 450,000 square foot distribution center in Vernon Hills, Illinois, and a 513,000 square foot distribution center in North Las Vegas, Nevada. In addition, we conduct sales, services and administrative activities in various leased locations throughout the U.S. and Canada, including data centers in Madison, Wisconsin and Minneapolis, Minnesota. 20 Table of Contents We believe that our facilities are well maintained, suitable for our business and occupy sufficient space to meet our operating needs. As part of our normal business, we regularly evaluate sales center performance and site suitability. Leases covering our currently occupied leased properties expire at varying dates, generally within the next ten years. We anticipate no difficulty in retaining occupancy through lease renewals, month-to-month occupancy or replacing the leased properties with equivalent properties. We believe that suitable additional or substitute leased properties will be available as required. Item 3. Legal Proceedings We are party to various legal proceedings that arise in the ordinary course of our business, which include commercial, intellectual property, employment, tort and other litigation matters. We are also subject to audit by federal, state and local authorities, and by various partners, group purchasing organizations and customers, including government agencies, relating to purchases and sales under various contracts. In addition, we are subject to indemnification claims under various contracts. From time to time, certain of our customers file voluntary petitions for reorganization or liquidation under the U.S. bankruptcy laws. In such cases, certain pre-petition payments received by us could be considered preference items and subject to return to the bankruptcy administrator. As of December 31, 2014 , we do not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for these proceedings and matters, if any, has been incurred. However, the ultimate resolutions of these proceedings and matters are inherently unpredictable. As such, our financial condition and results of operations could be adversely affected in any particular period by the unfavorable resolution of one or more of these proceedings or matters. Item 4. Mine Safety Disclosures Not applicable. 21 Table of Contents Executive Officers Thomas E. Richards serves as our Chairman, President and Chief Executive Officer, as a member of our board of directors and as a manager of CDW LLC. Mr. Richards has served as our President and Chief Executive Officer since October 2011 and was named Chairman on January 1, 2013. From September 2009 to October 2011, Mr. Richards served as our President and Chief Operating Officer. Prior to joining CDW, Mr. Richards held leadership positions with Qwest Communications International Inc. ("Qwest"), a broadband Internet-based communications company. From 2008 to 2009, he served as Executive Vice President and Chief Operating Officer, where he was responsible for the day-to-day operation and performance of Qwest, and before assuming that role, was the Executive Vice President of the Business Markets Group from 2005 to 2008. Mr. Richards also has served as Chairman and Chief Executive Officer of Clear Communications Corporation and as Executive Vice President of Ameritech Corporation. Mr. Richards serves as a board member of Junior Achievement of Chicago, Rush University Medical Center and the University of Pittsburgh. Mr. Richards also is a member of the Economic Club of Chicago and the Executives’ Club of Chicago. Mr. Richards is a graduate of the University of Pittsburgh where he earned a bachelor’s degree and a graduate of Massachusetts Institute of Technology where he earned a Master of Science in Management as a Sloan Fellow. Dennis G. Berger serves as our Senior Vice President and Chief Coworker Services Officer. Mr. Berger joined CDW in September 2005 as Vice President-Coworker Services. In January 2007, he was named Senior Vice President and Chief Coworker Services Officer. Mr. Berger is responsible for leading CDW’s programs in coworker learning and development, benefits, compensation, performance management, coworker relations and talent acquisition. Prior to joining CDW, he served as Vice President of Human Resources at PepsiAmericas, a beverage company, from 2002 to 2005. Mr. Berger has also held human resources positions of increasing responsibility at Pepsi Bottling Group, Inc., Pepsico, Inc. and GTE Corporation. Mr. Berger serves on the board of directors of Glenwood Academy, Anti- Defamation League of Chicago and Skills for Chicagoland’s Future. Mr. Berger is a graduate of Northeastern University where he earned a bachelor’s degree and a graduate of John M. Olin School of Business at Washington University in St. Louis where he earned a Master of Business Administration. Neal J. Campbell serves as our Senior Vice President and Chief Marketing Officer. Mr. Campbell joined CDW in January 2011, and is responsible for the strategy and development of CDW’s advertising, public relations, channel marketing, marketing intelligence and research, merchandising, microsites, creative services and direct marketing content, along with relationship marketing, corporate communications and e- commerce initiatives including content development, online marketing and e-procurement. Prior to joining CDW, Mr. Campbell served as Chief Executive Officer of TrafficCast, a provider of real-time and predictive traffic information to Google, Yahoo and others from 2008 to 2011. From 2006 to 2008, he served as Executive Vice President and General Manager-Strategic Marketing and Next Generation Products for ISCO International, a manufacturer of wireless telecommunications components. Mr. Campbell also spent 17 years with Motorola, most recently as Vice President and General Manager, GSM Portfolio Marketing and Planning for the company’s mobile device business. He currently serves as a board member of TrafficCast and Junior Achievement of Chicago, and is on the Executive Advisory Council of Bradley University. Mr. Campbell is a graduate of Bradley University where he earned a bachelor’s degree and a graduate of Northwestern University’s Kellogg School of Management where he earned a Master of Business Administration. Christina M. Corley serves as our Senior Vice President of Corporate Sales and is responsible for managing all aspects of our corporate sales force, including sales force strategy, structure, goals, operations, revenue generation and training and development. Prior to joining CDW in September 2011, Ms. Corley served as President and Chief Operating Officer of Zones, Inc., a provider of IT products and solutions, from 2006 to 2011. She served as Executive Vice President of Purchasing and Operations for Zones, Inc. from April 2005 to October 2006. She served as President of Corporate PC Source (“CPCS”), a 22 Name Age Position Thomas E. Richards 60 Chairman, President and Chief Executive Officer, and Director Dennis G. Berger 50 Senior Vice President and Chief Coworker Services Officer Neal J. Campbell 53 Senior Vice President and Chief Marketing Officer Christina M. Corley 47 Senior Vice President - Corporate Sales Douglas E. Eckrote 50 Senior Vice President - Strategic Solutions and Services Christine A. Leahy 50 Senior Vice President, General Counsel and Corporate Secretary Christina V. Rother 51 Senior Vice President - Public and Advanced Technology Sales Jonathan J. Stevens 45 Senior Vice President - Operations and Chief Information Officer Matthew A. Troka 44 Senior Vice President - Product and Partner Management Ann E. Ziegler 56 Senior Vice President and Chief Financial Officer Table of Contents wholly owned subsidiary of Zones, Inc., from March 2003 to April 2005. Prior to its acquisition by Zones, Inc., Ms. Corley served as Chief Executive Officer of CPCS from 1999 to 2003. Ms. Corley began her career in sales and marketing, holding various positions at IBM, Dataflex and VisionTek. She currently serves as a board member of the Boys and Girls Club of Chicago. Ms. Corley is a graduate of the University of Illinois at Urbana-Champaign where she earned a bachelor’s degree and a graduate of Northwestern University’s Kellogg School of Management where she earned a Master of Business Administration in management and strategy. Douglas E. Eckrote serves as our Senior Vice President of Strategic Solutions and Services and is responsible for our technology specialist teams focusing on servers and storage, unified communications, security, wireless, power and cooling, networking, software licensing and mobility solutions. He also holds responsibility for CDW Canada, Inc. Mr. Eckrote joined CDW in 1989 as an account manager. Mr. Eckrote was appointed Director of Operations in 1996, Vice President of Operations in 1999 and Senior Vice President of Purchasing in April 2001. In October 2001, he was named Senior Vice President of Purchasing and Operations. He was named Senior Vice President of Operations, Services and Canada in 2006 and assumed his current role in 2009. Prior to joining CDW, Eckrote worked in outside sales for Arrow Electronics and Cintas Uniform Company. From 2003 to 2009, Mr. Eckrote served on the board of directors of the Make-A-Wish Foundation of Illinois, completing the last two years as board chair, and served on the Make-A-Wish Foundation of America National Chapter Performance Committee from 2009-2014. Mr. Eckrote also served on the board of directors of the Center for Enriched Living from 2002-2011, serving as Vice President from 2004-2005, President from 2006-2008, board emeritus from 2009-2011 and currently serves as a trustee. Mr. Eckrote is a graduate of Purdue University where he earned a bachelor’s degree and a graduate of Northwestern University’s Kellogg School of Management where he earned an Executive Master of Business Administration. Christine A. Leahy serves as our Senior Vice President, General Counsel and Corporate Secretary and is responsible for our legal, corporate governance, enterprise risk management and ethics and compliance functions. She also is responsible for our international strategy and serves on the board of directors of Kelway, a UK-based technology solutions provider in which CDW has a minority investment. Ms. Leahy joined CDW in January 2002. Prior to that, Ms. Leahy served as a corporate partner in the Chicago office of Sidley Austin LLP where she specialized in mergers and acquisitions, strategic counseling, corporate governance and securities law. Ms. Leahy serves on the board of trustees of Children’s Home and Aid. Ms. Leahy is a graduate of Brown University where she earned a bachelor’s degree and a graduate of Boston College Law School where she earned her Juris Doctor. She also completed the CEO Perspective and Women’s Director Development Programs at Northwestern University’s Kellogg School of Management. Christina V. Rother serves as our Senior Vice President of Public and Advanced Technology Sales and is responsible for managing all aspects of our public sector and advanced technology sales forces, including sales force strategy, structure, goals, operations, revenue generation and training and development. Ms. Rother joined CDW in 1991 as an account manager. In 2002, she was appointed Vice President for Education and State and Local Sales. In 2005, she was chosen to lead our newly formed healthcare sales team. Beginning in 2006, Ms. Rother has held various positions ranging from Group Vice President of CDW Government LLC, President of CDW Government LLC and Senior Vice President of Sales. In September 2011, Ms. Rother assumed her current role as Senior Vice President of Public and Advanced Technology Sales. Prior to joining CDW, Ms. Rother held a number of sales positions with technology companies including Laser Computers and Price Electronics. Ms. Rother currently serves as chair of the board of directors of the Make-A-Wish Foundation of Illinois. Ms. Rother is a graduate of the University of Illinois at Chicago where she earned a bachelor’s degree. Jonathan J. Stevens serves as our Senior Vice President of Operations and Chief Information Officer. Mr. Stevens joined CDW in June 2001 as Vice President-Information Technology, was named Chief Information Officer in January 2002 and Vice President-International and Chief Information Officer from 2005 until December 2006. In January 2007, he was named Senior Vice President and Chief Information Officer and assumed his current role in November 2009. Mr. Stevens is responsible for the strategic direction of our information technology. Additionally, he holds responsibility for our distribution centers, transportation, facilities, customer relations and operational excellence practices. Prior to joining CDW, Mr. Stevens served as regional technology director for Avanade, an international technology integration company formed through a joint venture between Microsoft and Accenture from 2000 to 2001. Prior to that, Mr. Stevens was a principal with Microsoft Consulting Services and led an information technology group for a corporate division of AT&T/NCR. He currently serves on the board of directors of SingleWire Software, LLC and Northeast Illinois Council: Boy Scouts of America. Mr. Stevens is a graduate of the University of Dayton where he earned a bachelor’s degree. Matthew A. Troka serves as our Senior Vice President of Product and Partner Management. Mr. Troka is responsible for managing our relationships with all of our vendor partners. In addition, he directs the day-to-day operations of our purchasing department. Mr. Troka joined CDW in 1992 as an account manager and became a sales manager in 1995. From 1998 to 2001, he served as Corporate Sales Director. From 2001 to 2004, Mr. Troka was Senior Director of Purchasing. From 2004 to 2006, Mr. Troka served as Vice President of Purchasing. From 2006 to 2011, Mr. Troka was Vice President of Product and Partner Management. On March 3, 2011, Mr. Troka was elected Senior Vice President of Product and Partner Management. 23 Table of Contents Mr. Troka serves as a member of the board of directors of Encompass Championship Charities. Mr. Troka is a graduate of the University of Illinois where he earned a bachelor’s degree. Ann E. Ziegler joined CDW in April 2008 as Senior Vice President and Chief Financial Officer. Prior to joining CDW, Ms. Ziegler spent 15 years at Sara Lee Corporation (“Sara Lee”), a global consumer goods company, in a number of executive roles including finance, mergers and acquisitions, strategy and general management positions in both U.S. and international businesses. Most recently, from 2005 until April 2008, Ms. Ziegler served as Chief Financial Officer and Senior Vice President of Administration for Sara Lee Food and Beverage. Prior to joining Sara Lee, Ms. Ziegler was a corporate attorney at Skadden, Arps, Slate, Meagher & Flom. Ms. Ziegler serves on the board of directors of Hanesbrands, Inc, Groupon, Inc., and the board of governors of the Smart Museum of Art at the University of Chicago. During the previous five years, Ms. Ziegler also served on the board of directors of Unitrin, Inc. Ms. Ziegler is a graduate of The College of William and Mary where she earned a bachelor’s degree and a graduate of the University of Chicago Law School where she earned her Juris Doctor. 24 Table of Contents PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock has been listed on the NASDAQ Global Select Market since June 27, 2013 under the symbol “CDW.” Prior to that date, there was no public market for our common stock. Shares sold in our initial public offering ("IPO") were priced at $17.00 per share on June 26, 2013. The following table sets forth the ranges of high and low sales prices per share of our common stock as reported on the NASDAQ Global Select Market and the cash dividends per share of common stock declared for the periods indicated. Holders As of February 20, 2015 , there were 71 holders of record of our common stock. The number of beneficial stockholders is substantially greater than the number of holders of record because a portion of our common stock is held through brokerage firms. Dividends On February 10, 2015 , we announced that our board of directors declared a quarterly cash dividend on our common stock of $0.0675 per share. The dividend will be paid on March 10, 2015 to all stockholders of record as of the close of business on February 25, 2015 . We expect to continue to pay quarterly cash dividends on our common stock in the future, but such payments remain at the discretion of our board of directors and will depend upon our results of operations, financial condition, business prospects, capital requirements, contractual restrictions, any potential indebtedness we may incur, restrictions imposed by applicable law, tax considerations and other factors that our board of directors deems relevant. In addition, our ability to pay dividends on our common stock will be limited by restrictions on our ability to pay dividends or make distributions to our stockholders and on the ability of our subsidiaries to pay dividends or make distributions to us, in each case, under the terms of our current and any future agreements governing our indebtedness. For a discussion of our cash resources and needs and restrictions on our ability to pay dividends, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations— Liquidity and Capital Resources” included elsewhere in this report. For additional discussion of restrictions on our ability to pay dividends, see Note 7 to the accompanying audited consolidated financial statements included elsewhere in this report. Issuer Purchases of Equity Securities On November 6, 2014, we announced that the board of directors approved a $500 million share repurchase program, which became effective immediately, under which we may repurchase shares of our common stock in the open market or through privately negotiated transactions, depending on share price, market conditions and other factors. The share repurchase program does not obligate us to repurchase any dollar amount or number of shares, and repurchases may be commenced or 25 Year ended December 31, 2014 High Low Dividends declared per share Fourth quarter $ 36.08 $ 27.59 $ 0.0675 Third quarter $ 33.80 $ 30.07 $ 0.0425 Second quarter $ 32.41 $ 26.70 $ 0.0425 First quarter $ 27.53 $ 22.72 $ 0.0425 Year ended December 31, 2013 High Low Dividends declared per share Fourth quarter $ 23.56 $ 20.50 $ 0.0425 Third quarter $ 24.51 $ 18.26 $ — Second quarter (beginning June 27, 2013) $ 19.17 $ 17.38 $ — Table of Contents suspended from time to time without prior notice. As of the date of this filing, no shares have been repurchased under the share repurchase program. Stock Performance Graph The information contained in this Stock Performance Graph section shall not be deemed to be "soliciting material" or "filed" or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934. The following graph compares the cumulative total shareholder return, calculated on a dividend reinvested basis, on $100.00 invested at the opening of the market on June 27, 2013, the date our common stock first traded on the NASDAQ Global Select Market, through and including the market close on December 31, 2014, with the cumulative total return for the same time period of the same amount invested in the S&P MidCap 400 index and a peer group index. Our peer group index for 2014 consists of the following companies: Accenture plc, Anixter International, Inc., Arrow Electronics, Inc., Avnet, Inc., CGI Group Inc., Genuine Parts Company, Henry Schein, Inc., Insight Enterprises, Inc., Owens & Minor, Inc., Patterson Companies, Inc., SYNNEX Corporation, United Stationers Inc., W.W. Grainger, Inc. and Wesco International, Inc. This peer group was selected based on a review of publicly available information about these companies and our determination that they met one or more of the following criteria: (i) similar size in terms of revenue and/or enterprise value (one-third to three times our revenue or enterprise value); (ii) operates in a business-to-business distribution environment; (iii) members of the technology industry; (iv) similar customers ( i.e. , business, government, healthcare, and education); (v) companies that provide services and/or solutions; and (vi) similar EBITDA and gross margins. Shareholder returns over the indicated period are based on historical data and should not be considered indicative of future shareholder returns. 26 Table of Contents Recent Sales of Unregistered Securities None. Use of Proceeds from Registered Securities None. Item 6. Selected Financial Data The selected financial data set forth below are not necessarily indicative of the results of future operations and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited consolidated financial statements and the related notes included elsewhere in this report. We have derived the selected financial data presented below as of December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013, and 2012 from our audited consolidated financial statements and related notes, which are included elsewhere in this report. The selected financial data as of December 31, 2011 and December 31, 2010 have been derived from our audited consolidated financial statements as of and for those periods, which are not included in this report. The following are some of the items affecting comparability of the selected financial data for the periods presented: 27 June 27, 2013 December 31, 2013 December 31, 2014 CDW Corp $ 100 $ 138 $ 208 S&P MidCap 400 index 100 118 130 CDW Peers 100 113 147 Table of Contents 28 • During the years ended December 31, 2014, 2013, 2012, and 2011, we recorded net losses on extinguishments of long-term debt of $90.7 million , $64.0 million , $17.2 million , and $118.9 million , respectively. The losses represented the difference between the amount paid upon extinguishment, including call premiums and expenses paid to the debt holders and agents, and the net carrying amount of the extinguished debt, adjusted for a portion of the unamortized deferred financing costs. Refer to Note 7 to the accompanying audited consolidated financial statements included elsewhere in this report for additional information on long-term debt. • During the year ended December 31, 2013, we recorded IPO- and secondary-offering related expenses of $75.0 million. Refer to Note 9 to the accompanying audited consolidated financial statements included elsewhere in this report for additional information on the IPO- and secondary-offering related expenses. Table of Contents 29 Years Ended December 31, (dollars and shares in millions, except per share amounts) 2014 2013 2012 2011 2010 Statement of Operations Data: Net sales $ 12,074.5 $ 10,768.6 $ 10,128.2 $ 9,602.4 $ 8,801.2 Cost of sales 10,153.2 9,008.3 8,458.6 8,018.9 7,410.4 Gross profit 1,921.3 1,760.3 1,669.6 1,583.5 1,390.8 Selling and administrative expenses 1,110.3 1,120.9 1,029.5 990.1 932.1 Advertising expense 138.0 130.8 129.5 122.7 106.0 Income from operations 673.0 508.6 510.6 470.7 352.7 Interest expense, net (197.3 ) (250.1 ) (307.4 ) (324.2 ) (391.9 ) Net (loss) gain on extinguishments of long-term debt (90.7 ) (64.0 ) (17.2 ) (118.9 ) 2.0 Other income, net 2.7 1.0 0.1 0.7 0.2 Income (loss) before income taxes 387.7 195.5 186.1 28.3 (37.0 ) Income tax (expense) benefit (142.8 ) (62.7 ) (67.1 ) (11.2 ) 7.8 Net income (loss) $ 244.9 $ 132.8 $ 119.0 $ 17.1 $ (29.2 ) Net income (loss) per common share: Basic $1.44 $0.85 $0.82 $0.12 $(0.20) Diluted $1.42 $0.84 $0.82 $0.12 $(0.20) Weighted-average common shares outstanding: Basic 170.6 156.6 145.1 144.8 144.4 Diluted 172.8 158.7 145.8 144.9 144.4 Balance Sheet Data (at period end): Cash and cash equivalents $ 344.5 $ 188.1 $ 37.9 99.9 $ 36.6 Working capital 985.4 810.9 666.5 538.1 675.4 Total assets 6,099.9 5,924.6 5,720.0 5,967.7 5,943.8 Total debt and capitalized lease obligations (1) 3,190.0 3,251.2 3,771.0 4,066.0 4,290.0 Total shareholders’ equity (deficit) 936.5 711.7 136.5 (7.3 ) (43.5 ) Other Financial Data: Capital expenditures $ 55.0 $ 47.1 $ 41.4 45.7 $ 41.5 Depreciation and amortization 207.9 208.2 210.2 204.9 209.4 Gross profit as a percentage of net sales 15.9 % 16.3 % 16.5 % 16.5 % 15.8 % Ratio of earnings to fixed charges (2) 2.9 1.8 1.6 1.1 (a) EBITDA (3) $ 792.9 $ 653.8 $ 703.7 557.4 $ 564.3 Adjusted EBITDA (3) 907.0 808.5 766.6 717.3 601.8 Non-GAAP net income (4) 409.9 314.3 247.1 198.8 85.7 Statement of Cash Flows Data: Net cash provided by (used in): Operating activities $ 435.0 $ 366.3 $ 317.4 $ 214.7 $ 423.7 Investing activities (164.8 ) (47.1 ) (41.7 ) (56.0 ) (125.4 ) Financing activities (112.0 ) (168.3 ) (338.0 ) (95.4 ) (350.1 ) (1) Excludes borrowings of $332.1 million , $256.6 million , $249.2 million , $278.7 million and $28.2 million , as of December 31, 2014, 2013, 2012, 2011, and 2010, respectively, under our inventory financing agreements. We do not include these borrowings in total debt because we have not in the past incurred, and in the future do not expect to incur, any interest expense or late fees under these agreements. Table of Contents We have included a reconciliation of EBITDA and Adjusted EBITDA in the table below. Both EBITDA and Adjusted EBITDA are considered non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. We believe that EBITDA and Adjusted EBITDA provide helpful information with respect to our operating performance and cash flows including our ability to meet our future debt service, capital expenditures and working capital requirements. Adjusted EBITDA also provides helpful information as it is the primary measure used in certain financial covenants contained in our credit agreements. The following unaudited table sets forth reconciliations of net income (loss) to EBITDA and EBITDA to Adjusted EBITDA for the periods presented: 30 (2) For purposes of calculating the ratio of earnings to fixed charges, earnings consist of earnings before income taxes minus income from equity investments plus distributed income from equity investments and fixed charges. Fixed charges consist of interest expense and the portion of rental expense we believe is representative of the interest component of rental expense. (a) For the year ended December 31, 2010, earnings available for fixed charges were inadequate to cover fixed charges by $37.0 million. (3) EBITDA is defined as consolidated net income (loss) before interest expense, income tax expense (benefit), depreciation, and amortization. Adjusted EBITDA, which is a measure defined in our credit agreements, is calculated by adjusting EBITDA for certain items of income and expense including (but not limited to) the following: (a) non-cash equity-based compensation; (b) goodwill impairment charges; (c) sponsor fees; (d) certain consulting fees; (e) debt-related legal and accounting costs; (f) equity investment income and losses; (g) certain severance and retention costs; (h) gains and losses from the early extinguishment of debt; (i) gains and losses from asset dispositions outside the ordinary course of business; and (j) non-recurring, extraordinary or unusual gains or losses or expenses. Years Ended December 31, (in millions) 2014 2013 2012 2011 2010 Net income (loss) $ 244.9 $ 132.8 $ 119.0 $ 17.1 $ (29.2 ) Depreciation and amortization 207.9 208.2 210.2 204.9 209.4 Income tax expense (benefit) 142.8 62.7 67.1 11.2 (7.8 ) Interest expense, net 197.3 250.1 307.4 324.2 391.9 EBITDA 792.9 653.8 703.7 557.4 564.3 Non-cash equity-based compensation 16.4 8.6 22.1 19.5 11.5 Sponsor fees — 2.5 5.0 5.0 5.0 Consulting and debt-related professional fees — 0.1 0.6 5.1 15.1 Net loss (gain) on extinguishments of long-term debt 90.7 64.0 17.2 118.9 (2.0 ) Litigation, net (i) (0.9 ) (4.1 ) 4.3 — — IPO- and secondary-offering related expenses 1.4 75.0 — — — Other adjustments (ii) 6.5 8.6 13.7 11.4 7.9 Adjusted EBITDA $ 907.0 $ 808.5 $ 766.6 $ 717.3 $ 601.8 (i) Relates to unusual, non-recurring litigation matters. (ii) Other adjustments primarily include certain retention costs and equity investment income. Table of Contents The following unaudited table sets forth a reconciliation of EBITDA to net cash provided by operating activities for the periods presented: 31 Years Ended December 31, (in millions) 2014 2013 2012 2011 2010 EBITDA $ 792.9 $ 653.8 $ 703.7 $ 557.4 $ 564.3 Depreciation and amortization (207.9 ) (208.2 ) (210.2 ) (204.9 ) (209.4 ) Income tax (expense) benefit (142.8 ) (62.7 ) (67.1 ) (11.2 ) 7.8 Interest expense, net (197.3 ) (250.1 ) (307.4 ) (324.2 ) (391.9 ) Net income (loss) 244.9 132.8 119.0 17.1 (29.2 ) Depreciation and amortization 207.9 208.2 210.2 204.9 209.4 Equity-based compensation expense 16.4 46.6 22.1 19.5 11.5 Amortization of deferred financing costs, debt premium, and debt discount, net 6.4 8.8 13.6 15.7 18.0 Deferred income taxes (89.1 ) (48.7 ) (56.3 ) (10.2 ) (4.3 ) Allowance for doubtful accounts 0.3 — — 0.4 (1.3 ) Realized loss on interest rate swap agreements — — — 2.8 51.5 Net loss (gain) on extinguishments of long-term debt 90.7 64.0 17.2 118.9 (2.0 ) Income from equity investments (1.2 ) — — — — Changes in assets and liabilities (41.8 ) (47.1 ) (9.4 ) (158.3 ) 165.3 Other non-cash items 0.5 1.7 1.0 3.9 4.8 Net cash provided by operating activities $ 435.0 $ 366.3 $ 317.4 $ 214.7 $ 423.7 Table of Contents 32 (4) Non-GAAP net income is considered a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. We believe that non-GAAP net income provides meaningful information regarding our operating performance and our prospects for the future. This supplemental measure excludes, among other things, charges related to the amortization of acquisition-related intangibles, non-cash equity-based compensation and gains and losses from the early extinguishment of debt. The following unaudited table sets forth a reconciliation of net income (loss) to non-GAAP net income for the periods presented: Years Ended December 31, (in millions) 2014 2013 2012 2011 2010 Net income (loss) $ 244.9 $ 132.8 $ 119.0 $ 17.1 $ (29.2 ) Amortization of intangibles (i) 161.2 161.2 163.7 165.7 166.8 Non-cash equity-based compensation 16.4 8.6 22.1 19.5 11.5 Litigation, net (ii) (0.6 ) (6.3 ) — — — Net loss on extinguishments of long-term debt 90.7 64.0 17.2 118.9 (2.0 ) Interest expense adjustment related to extinguishments of long-term debt (iii) (1.1 ) (7.5 ) (3.3 ) (19.4 ) (0.7 ) IPO- and secondary-offering related expenses (iv) 1.4 75.0 — — — Debt-related refinancing costs (v) — — — 3.8 5.6 Aggregate adjustment for income taxes (vi) (103.0 ) (113.5 ) (71.6 ) (106.8 ) (66.3 ) Non-GAAP net income $ 409.9 $ 314.3 $ 247.1 $ 198.8 $ 85.7 (i) Includes amortization expense for acquisition-related intangible assets, primarily customer relationships and trade names. (ii) Relates to unusual, non-recurring litigation matters. (iii) Reflects adjustments to interest expense resulting from debt extinguishments. Represents the difference between interest expense previously recognized under the effective interest method and actual interest paid. (iv) IPO- and secondary-offering related expenses consist of the following: (in millions) Years Ended December 31, 2014 2013 Acceleration charge for certain equity awards and related employer payroll taxes $ — $ 40.7 RDU Plan cash retention pool accrual — 7.5 Management services agreement termination fee — 24.4 Other expenses 1.4 2.4 IPO- and secondary-offering related expenses $ 1.4 $ 75.0 (v) Represents fees and costs expensed related to the December 2010 and March 2011 amendments to our prior senior secured term loan facility. (vi) Based on a normalized effective tax rate of 39.0%. Table of Contents Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Unless otherwise indicated or the context otherwise requires, as used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the terms “we,” “us,” “the Company,” “our,” “CDW” and similar terms refer to CDW Corporation and its subsidiaries. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the audited consolidated financial statements and the related notes included elsewhere in this report. This discussion contains forward-looking statements that are subject to numerous risks and uncertainties. Actual results may differ materially from those contained in any forward- looking statements. See “Forward-Looking Statements” above. Overview CDW is a Fortune 500 company and a leading provider of integrated information technology (“IT”) solutions in the U.S. and Canada. We help our customer base of approximately 250,000 small, medium and large business, government, education and healthcare customers by delivering critical solutions to their increasingly complex IT needs. Our broad array of offerings ranges from discrete hardware and software products to integrated IT solutions such as mobility, security, data center optimization, cloud computing, virtualization and collaboration. We are technology "agnostic," with a product portfolio that includes more than 100,000 products from more than 1,000 brands. We provide our products and solutions through sales force and service delivery teams consisting of nearly 4,600 coworkers, including more than 1,800 field sellers, highly-skilled technology specialists and advanced service delivery engineers. We are a leading U.S. sales channel partner for many original equipment manufacturers (“OEMs”) and software publishers (collectively, our “vendor partners”), whose products we sell or include in the solutions we offer. We believe we are an important extension of our vendor partners' sales and marketing capabilities, providing them with a cost-effective way to reach customers and deliver a consistent brand experience through our established end-market coverage and extensive customer access. We have two reportable segments: Corporate, which is comprised primarily of private sector business customers, and Public, which is comprised of government agencies and education and healthcare institutions. Our Corporate segment is divided into a medium/large business customer channel, primarily serving customers with more than 100 employees, and a small business customer channel, primarily serving customers with up to 100 employees. We also have three other operating segments, CDW Advanced Services, Canada and Kelway TopCo Limited ("Kelway"), which do not meet the reportable segment quantitative thresholds and, accordingly, are combined together as “Other.” In November 2014, we acquired a 35% non-controlling equity interest in Kelway. See Note 15 to the accompanying audited consolidated financial statements included elsewhere in this report for additional details. The CDW Advanced Services business consists primarily of customized engineering services delivered by technology specialists and engineers, and managed services that include Infrastructure as a Service (“IaaS”) offerings. Revenues from the sale of hardware, software, custom configuration and third-party provided services are recorded within our Corporate and Public segments. We may sell all or only select products that our vendor partners offer. Each vendor partner agreement provides for specific terms and conditions, which may include one or more of the following: product return privileges, price protection policies, purchase discounts and vendor incentive programs, such as purchase or sales rebates and cooperative advertising reimbursements. We also resell software for major software publishers. Our agreements with software publishers allow the end-user customer to acquire software or licensed products and services. In addition to helping our customers determine the best software solutions for their needs, we help them manage their software agreements, including warranties and renewals. A significant portion of our advertising and marketing expenses is reimbursed through cooperative advertising reimbursement programs with our vendor partners. These programs are at the discretion of our vendor partners and are typically tied to sales or purchasing volumes or other commitments to be met by us within a specified period of time. Trends and Key Factors Affecting our Financial Performance We believe the following trends may have an important impact on our financial performance: 33 • Our Public segment sales are impacted by government spending policies, budget priorities and revenue levels. An adverse change in any of these factors could cause our Public segment customers to reduce their purchases or to terminate or not renew contracts with us, which could adversely affect our business, results of operations or cash flows. Although our sales to the federal government are diversified across multiple Table of Contents agencies and departments, they collectively accounted for approximately 7% , 7% and 10% of our net sales for the years ended December 31, 2014, 2013 and 2012, respectively. In 2013, and through the second quarter of 2014, Public segment results were impacted by the combined and residual negative effects of sequestration, the partial shutdown of the federal government in 2013 and federal government budget uncertainty. However, with the finalization of federal budget allocations in early 2014, we began to see improvement in federal sales in the second quarter of 2014. The momentum continued through the third quarter of 2014 in conjunction with the federal fiscal year-end. This recovery continued into the fourth quarter of 2014 in connection with increased customer confidence that a federal budget for 2015 would be in place. Key Business Metrics Our management monitors a number of financial and non-financial measures and ratios on a regular basis in order to track the progress of our business and make adjustments as necessary. We believe that the most important of these measures and ratios include average daily sales, gross margin, operating margin, net income, Non-GAAP net income, net income per diluted share, Non-GAAP net income per diluted share, EBITDA and Adjusted EBITDA, return on invested capital, cash and cash equivalents, cash flow, net working capital, cash conversion cycle (defined to be days of sales outstanding in accounts receivable plus days of supply in inventory minus days of purchases outstanding in accounts payable, based on a rolling three-month average), debt levels including available credit and leverage ratios, sales per coworker and coworker turnover. These measures and ratios are compared to standards or objectives set by management, so that actions can be taken, as necessary, in order to achieve the standards and objectives. Non-GAAP net income, Non-GAAP net income per diluted share and Adjusted EBITDA are non- GAAP financial measures. We believe these measures provide helpful information with respect to the company’s operating performance and cash flows including our ability to meet our future debt service, capital expenditures, dividend payments, and working capital requirements. Adjusted EBITDA also provides helpful information as it is the primary measure used in certain financial covenants contained in our senior credit facilities. See "Selected Financial Data" included elsewhere in this report for the definitions of Non-GAAP net income and Adjusted EBITDA and reconciliations to net income. 34 • An important factor affecting our ability to generate sales and achieve our targeted operating results is the impact of general economic conditions on our customers’ willingness to spend on information technology. While macroeconomic uncertainty drove a cautious approach to customer spending in the early part of 2013, uncertainty began to dissipate in the back half of 2013 and continued to dissipate throughout 2014. Our sales to small business customers increased in 2014 as a result of the improvement in the macroeconomic environment. We will continue to closely monitor macroeconomic conditions during 2015. Uncertainties related to potential reductions in government spending, requirements associated with implementation of the Affordable Care Act, potential changes in tax and regulatory policy, weakening consumer and business confidence or increased unemployment could result in reduced or deferred spending on information technology products and services by our customers and result in increased competitive pricing pressures. • We believe that our customers’ transition to more complex technology solutions will continue to be an important growth area for us in the future. However, because the market for technology products and services is highly competitive, our success at capitalizing on this transition will be based on our ability to tailor specific solutions to customer needs, the quality and breadth of our product and service offerings, the knowledge and expertise of our sales force, price, product availability and speed of delivery. In 2014, market dynamics, including client device refresh and digital testing needs for K-12 students, drove customer demand for transactional products, primarily client devices, which include notebooks/mobile devices and desktops. Our diverse product suite of more than 100,000 products from over 1,000 leading and emerging brands and efficient, distribution capabilities enabled us to capitalize on this demand. While sales growth for transactional products was strong during the year, growth in solutions-focused products, including netcomm and software, also contributed to the increase in net sales during 2014. We expect the demand for client devices to moderate in 2015, both from the client device refresh slowing and a wind- down in preparation for digital testing requirements. Table of Contents The results of certain key business metrics are as follows: Results of Operations Year Ended December 31, 2014 Compared to Year Ended December 31, 2013 The following table presents our results of operations, in dollars and as a percentage of net sales, for the years ended December 31, 2014 and 2013 : 35 (dollars in millions) Years Ended December 31, 2014 2013 2012 Net sales $ 12,074.5 $ 10,768.6 $ 10,128.2 Gross profit 1,921.3 1,760.3 1,669.6 Income from operations 673.0 508.6 510.6 Net income 244.9 132.8 119.0 Non-GAAP net income 409.9 314.3 247.1 Adjusted EBITDA 907.0 808.5 766.6 Average daily sales 47.5 42.4 39.9 Net debt (defined as total debt minus cash and cash equivalents) 2,845.5 3,063.1 3,733.1 Cash conversion cycle (in days) (1) 21 23 24 (1) Cash conversion cycle is defined as days of sales outstanding in accounts receivable plus days of supply in inventory minus days of purchases outstanding in accounts payable, based on a rolling three-month average. The prior periods have been revised to conform to the current definition. Year Ended December 31, 2014 Year Ended December 31, 2013 Dollars in Millions Percentage of Net Sales Dollars in Millions Percentage of Net Sales Net sales $ 12,074.5 100.0 % $ 10,768.6 100.0 % Cost of sales 10,153.2 84.1 9,008.3 83.7 Gross profit 1,921.3 15.9 1,760.3 16.3 Selling and administrative expenses 1,110.3 9.2 1,120.9 10.4 Advertising expense 138.0 1.1 130.8 1.2 Income from operations 673.0 5.6 508.6 4.7 Interest expense, net (197.3 ) (1.6 ) (250.1 ) (2.3 ) Net loss on extinguishments of long-term debt (90.7 ) (0.8 ) (64.0 ) (0.6 ) Other income, net 2.7 — 1.0 — Income before income taxes 387.7 3.2 195.5 1.8 Income tax expense (142.8 ) (1.2 ) (62.7 ) (0.6 ) Net income $ 244.9 2.0 % $ 132.8 1.2 % Table of Contents Net sales The following table presents our net sales by segment, in dollars and as a percentage of total net sales, and the year-over-year dollar and percentage change in net sales for the years ended December 31, 2014 and 2013 : The following table presents our net sales by customer channel for our Corporate and Public segments and the year-over-year dollar and percentage change in net sales for the years ended December 31, 2014 and 2013 . Net sales of $150.1 million for the year ended December 31, 2013 have been reclassified from the small business customer channel to the medium/large customer channel to conform to the current period presentation. Total net sales in 2014 increased $1,305.9 million , or 12.1% , to $12,074.5 million , compared to $10,768.6 million in 2013 . There were 254 selling days for both the years ended December 31, 2014 and 2013 . The increase in total net sales was primarily the result of continued growth in transactional products driven by notebooks/mobile devices and desktop computers as customers across all channels refreshed their client devices and K-12 customers continued to prepare for digital testing requirements, and the addition of more than 140 customer-facing coworkers, the majority in pre- and post-sale technical positions such as technical specialists and service delivery roles. Growth in solutions-focused products, including netcomm and software, also contributed to the increase in net sales during 2014 . Corporate segment net sales in 2014 increased $515.4 million , or 8.6% , compared to 2013 , driven by sales growth in the medium/large customer channel. Within our Corporate segment, net sales to medium/large customers increased $432.7 million , or 8.6% , between years primarily due to customers refreshing their client devices and making continued investments in technology infrastructure and a continued focus on seller productivity. This increase was led by growth in notebooks/mobile devices, netcomm products, software, and desktop computers. Net sales to small business customers increased $82.7 million , or 9.1% , between years, driven by growth in notebooks/mobile devices and desktop computers due to customers refreshing their client devices. Public segment net sales in 2014 increased $714.9 million , or 17.2% , between years, driven by strong performance across all channels. In 2013, and through the second quarter of 2014, Public segment results were impacted by the combined and residual negative effects of sequestration, the partial shutdown of the federal government in 2013 and federal government budget uncertainty. However, with the finalization of federal budget allocations in early 2014, we began to see improvement in federal sales in the second quarter of 2014 and saw continued momentum through the third quarter of 2014 in conjunction with 36 Years Ended December 31, 2014 2013 Dollars in Millions Percentage of Total Net Sales Dollars in Millions Percentage of Total Net Sales Dollar Change Percent Change (1) Corporate $ 6,475.5 53.6 % $ 5,960.1 55.3 % $ 515.4 8.6 % Public 4,879.4 40.4 4,164.5 38.7 714.9 17.2 Other 719.6 6.0 644.0 6.0 75.6 11.7 Total net sales $ 12,074.5 100.0 % $ 10,768.6 100.0 % $ 1,305.9 12.1 % (1) There were 254 selling days in both the years ended December 31, 2014 and 2013 . (dollars in millions) Years Ended December 31, 2014 2013 Dollar Change Percent Change Corporate: Medium / Large $ 5,485.4 $ 5,052.7 $ 432.7 8.6 % Small Business 990.1 907.4 82.7 9.1 Total Corporate $ 6,475.5 $ 5,960.1 $ 515.4 8.6 % Public: Government $ 1,449.4 $ 1,250.6 $ 198.8 15.9 % Education 1,824.0 1,449.0 375.0 25.9 Healthcare 1,606.0 1,464.9 141.1 9.6 Total Public $ 4,879.4 $ 4,164.5 $ 714.9 17.2 % Table of Contents the federal fiscal year-end. This recovery continued into the fourth quarter of 2014 in connection with increased customer confidence that a federal budget for 2015 would be in place. Net sales to government customers increased $198.8 million , or 15.9% . The increase in net sales to the federal government was led by increases in sales of notebooks/mobile devices and desktop computers. The increase in net sales to state/local government customers was led by growth in sales of notebooks/mobile devices, netcomm products, enterprise storage, and software due to a continued focus on public safety solutions. Net sales to education customers increased $375.0 million , or 25.9% , between years, led by growth in net sales to K-12 customers, reflecting increased sales of notebooks/mobile devices to support digital testing requirements. Net sales to healthcare customers increased $141.1 million , or 9.6% , between periods, driven by growth in netcomm products, notebook/mobile devices, and desktop computers. Gross profit Gross profit increased $161.0 million , or 9.1% , to $1,921.3 million in 2014 , compared to $1,760.3 million in 2013 . As a percentage of total net sales, gross profit decreased 40 basis points to 15.9% during 2014 , down from 16.3% in 2013 . Gross profit margin was negatively impacted 30 basis points by unfavorable price/mix changes within product margin, as transactional product categories such as notebooks/mobile devices and desktops experienced a higher rate of net sales growth than our overall net sales growth, accompanied by continuing product margin compression in these product categories. Additionally, we experienced an unfavorable impact of 10 basis points from vendor funding in 2014. Although vendor funding dollars increased, it represented a lower percentage of net sales in 2014 compared to 2013 . Vendor funding includes purchase discounts, volume rebates and cooperative advertising. The gross profit margin may fluctuate based on various factors, including vendor incentive and inventory price protection programs, cooperative advertising funds classified as a reduction of cost of sales, product mix, net service contract revenue, commission revenue, pricing strategies, market conditions and other factors, any of which could result in changes in gross profit margins. Selling and administrative expenses Selling and administrative expenses decreased $10.6 million , or 0.9% , to $1,110.3 million in 2014 , compared to $1,120.9 million in 2013 . The overall decrease was largely driven by the absence of $74.3 million in costs incurred during 2013 related to the completion of our IPO. This decrease was partially offset by an increase of $31.4 million, or 14.3%, of certain coworker costs between years which was primarily due to higher compensation consistent with increased coworker count and attainment-based compensation accruals tied to annual performance. Total coworker count was 7,211, up 244 from 6,967 at December 31, 2013 . In addition, sales payroll, including sales commissions and other variable compensation costs, increased $18.6 million, or 3.9% between years, consistent with higher sales and gross profit. Further offsetting the decrease in selling and administrative expenses was an increase in long-term compensation expense and equity compensation expense of $7.2 million during 2014. As a percentage of total net sales, selling and administrative expenses decreased 120 basis points to 9.2% in 2014 , down from 10.4% in 2013 . The decrease in selling and administrative expenses as a percentage of net sales was largely driven by a decline of 70 basis points in costs related to the IPO in 2013 . Sales payroll as a percentage of net sales also decreased 30 basis points during 2014 reflecting the lower cost to serve transactional sales compared to solutions-focused sales, consistent with our variable compensation cost structure. Advertising expense Advertising expense increase d $7.2 million , or 5.5% , to $138.0 million in 2014 , compared to $130.8 million in 2013 . As a percentage of net sales, advertising expense remained relatively consistent at 1.1% in 2014 , compared to 1.2% in 2013 . The dollar increase in advertising expense was due to a continued focus on advertising our solutions and products, which reinforces our reputation as a leading IT solutions provider. 37 Table of Contents Income from operations The following table presents income from operations by segment, in dollars and as a percentage of net sales, and the year-over-year percentage change in income from operations for the years ended December 31, 2014 and 2013 : * Not meaningful Income from operations was $673.0 million in 2014 , an increase of $164.4 million , or 32.3% , compared to $508.6 million in 2013 . The increase in income from operations was driven by higher net sales and gross profit and the absence of IPO-related costs. Total operating margin percentage increased 90 basis points to 5.6% in 2014 , from 4.7% in 2013 . Operating margin percentage benefited from the decrease in selling and administrative expenses as a percentage of net sales, which was driven by the absence of $74.3 million in costs related to our IPO in 2013, and was partially offset by a decrease in gross profit margin. Corporate segment income from operations was $439.8 million in 2014 , an increase of $76.5 million , or 21.1% , compared to $363.3 million in 2013 . This increase was primarily driven by higher net sales and gross profit. Corporate segment operating margin percentage increased 70 basis points to 6.8% in 2014 , from 6.1% in 2013 . Operating margin percentage benefited from the decrease in selling and administrative expenses as a percentage of net sales, which was driven by the absence of costs related to our IPO in 2013, and was partially offset by a decrease in gross profit margin. Public segment income from operations was $313.2 million in 2014 , an increase of $66.7 million , or 27.1% , compared to $246.5 million in 2013 . This increase was primarily driven by higher net sales and gross profit. Public segment operating margin percentage increased 50 basis points to 6.4% in 2014 , from 5.9% in 2013 . Operating margin percentage benefited from the decrease in selling and administrative expenses as a percentage of net sales, which was driven by the absence of costs related to our IPO in 2013, and was partially offset by a decrease in gross profit margin. Interest expense, net At December 31, 2014 , our outstanding long-term debt totaled $3,190.0 million , compared to $3,251.2 million at December 31, 2013 . We reduced our long-term debt during 2014 through refinancing activities to redeem our higher interest debt. Net interest expense in 2014 was $197.3 million , a decrease of $52.8 million compared to $250.1 million in 2013 . This decrease was primarily due to lower debt balances and effective interest rates for 2014 compared to 2013 as a result of debt repayments and refinancing activities completed during 2014 and 2013 . See "Liquidity and Capital Resources" below for a description of the significant debt refinancings in 2014. Net loss on extinguishments of long-term debt During 2014, we recorded a net loss on extinguishments of long-term debt of $90.7 million compared to $64.0 million in 2013. In December 2014, we redeemed $541.4 million aggregate principal amount of the 2019 Senior Notes. We recorded a loss on extinguishment of debt of $36.9 million , representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs and unamortized premium. 38 Year Ended December 31, 2014 Year Ended December 31, 2013 Dollars in Millions Operating Margin Percentage Dollars in Millions Operating Margin Percentage Percent Change in Income from Operations Segments: (1) Corporate $ 439.8 6.8 % $ 363.3 6.1 % 21.1 % Public 313.2 6.4 246.5 5.9 27.1 Other 32.9 4.6 27.2 4.2 20.9 Headquarters (2) (112.9 ) nm* (128.4 ) nm* 12.0 Total income from operations $ 673.0 5.6 % $ 508.6 4.7 % 32.3 % (1) Segment income (loss) from operations includes the segment’s direct operating income (loss) and allocations for Headquarters’ costs, allocations for income and expenses from logistics services, certain inventory adjustments and volume rebates and cooperative advertising from vendors. (2) Includes certain Headquarters’ function costs that are not allocated to the segments. Table of Contents In September 2014, we redeemed $234.7 million aggregate principal amount of the 2019 Senior Notes. We recorded a loss on extinguishment of debt of $22.1 million , representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs and unamortized premium. In August 2014, we redeemed all of the remaining $325.0 million aggregate principal amount of the 8.0% Senior Secured Notes due 2018 ("Senior Secured Notes"). We recorded a loss on extinguishment of debt of $23.7 million , representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for the remaining unamortized deferred financing costs. In June 2014, we entered into the Senior Secured Asset-Based Revolving Credit Facility ("Revolving Loan"), a new five-year $1,250.0 million senior secured asset-based revolving credit facility. The Revolving Loan replaces our previous revolving loan credit facility that was to mature on June 24, 2016. In connection with the termination of the previous facility, we recorded a loss on extinguishment of long-term debt of $0.4 million , representing a write-off of a portion of unamortized deferred financing costs. In May 2014, we redeemed all of the remaining $42.5 million aggregate principal amount of the 12.535% Senior Subordinated Exchange Notes due 2017 ("Senior Subordinated Notes"). We recorded a loss on extinguishment of long-term debt of $2.2 million , representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for the remaining unamortized deferred financing costs. In March 2014, we repurchased $25.0 million aggregate principal amount of the 2019 Senior Notes. We recorded a loss on extinguishment of long-term debt of $2.7 million , representing the difference between the repurchase price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs. In January and February 2014, we redeemed $50.0 million aggregate principal amounts of the Senior Subordinated Notes. We recorded a loss on extinguishment of long-term debt of $2.7 million , representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs. In October 2013, we redeemed $155.0 million aggregate principal amount of the Senior Subordinated Notes. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $8.5 million , representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs. In August 2013, we redeemed $324.0 million aggregate principal amount of the Senior Subordinated Notes. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $24.6 million , representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs. In July 2013, we redeemed $175.0 million aggregate principal amount of the Senior Secured Notes. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $16.7 million , representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs. In April 2013, we entered into a new seven-year, $1,350.0 million aggregate principal amount Senior Secured Term Loan Facility ("Term Loan"). Substantially all of the proceeds were used to repay the $1,299.5 million outstanding aggregate principal amount of the prior senior secured term loan facility. In connection with this refinancing, we recorded a loss on extinguishment of long-term debt of $10.3 million , representing a write-off of the remaining unamortized deferred financing costs related to the prior senior secured term loan facility. In March 2013, we redeemed $50.0 million aggregate principal amount of the Senior Subordinated Notes. We recorded a loss on extinguishment of long-term debt of $3.9 million , representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs. 39 Table of Contents Income tax expense Income tax expense was $142.8 million in 2014 , compared to $62.7 million in 2013 . The effective income tax rate, expressed by calculating income tax expense or benefit as a percentage of income before income taxes, was 36.8% and 32.1% for 2014 and 2013 , respectively. For 2014 , the effective tax rate differed from the U.S. federal statutory rate primarily due to state income taxes, including current year state income tax credits. For 2013 , the effective tax rate differed from the U.S. federal statutory rate primarily due to state income taxes, including current year state income tax credits and an adjustment to deferred state income taxes due to changes in apportionment factors. The higher effective tax rate for 2014 as compared to 2013 was primarily attributable to the favorable impact of changes in state tax apportionment factors had on deferred state income taxes in 2013 and a lower rate impact of state income tax credits due to the increase in income before income taxes in 2014. Net income Net income was $244.9 million in 2014 , compared to $132.8 million in 2013 . Significant factors and events causing the net changes between the periods are discussed above. Non-GAAP net income Non-GAAP net income was $409.9 million for the year ended December 31, 2014 , an increase of $95.6 million , or 30.4% , compared to $314.3 million for the year ended December 31, 2013 . We have included a reconciliation of Non-GAAP net income for the years ended December 31, 2014 and 2013 below. Non-GAAP net income excludes, among other things, charges related to the amortization of acquisition-related intangible assets, non-cash equity-based compensation, and gains and losses from the early extinguishment of debt. Non-GAAP net income is considered a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. We believe that Non-GAAP net income provides helpful information with respect to our operating performance and cash flows including our ability to meet our future debt service, capital expenditures and working capital requirements. 40 Table of Contents Adjusted EBITDA Adjusted EBITDA was $907.0 million for the year ended December 31, 2014 , an increase of $98.5 million , or 12.2% , compared to $808.5 million for the year ended December 31, 2013 . As a percentage of net sales, Adjusted EBITDA was 7.5% for both the years ended December 31, 2014 and 2013 . We have included a reconciliation of EBITDA and Adjusted EBITDA for the years ended December 31, 2014 and 2013 in the tables below. EBITDA is defined as consolidated net income before interest expense, income tax expense, depreciation and amortization. Adjusted EBITDA, which is a measure defined in our credit agreements, means EBITDA adjusted for certain items which are described in the table below. Both EBITDA and Adjusted EBITDA are considered non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. We believe that EBITDA and Adjusted EBITDA provide helpful information with respect to our operating performance and cash flows including our ability to meet our future debt service, capital expenditures and working capital requirements. Adjusted EBITDA also provides helpful information as it is the primary measure used in certain financial covenants contained in our credit agreements. 41 (in millions) Years Ended December 31, 2014 2013 Net income $ 244.9 $ 132.8 Amortization of intangibles (1) 161.2 161.2 Non-cash equity-based compensation 16.4 8.6 Litigation, net (2) (0.6 ) (6.3 ) Net loss on extinguishments of long-term debt 90.7 64.0 Interest expense adjustment related to extinguishments of long-term debt (3) (1.1 ) (7.5 ) IPO- and secondary-offering related expenses (4) 1.4 75.0 Aggregate adjustment for income taxes (5) (103.0 ) (113.5 ) Non-GAAP net income $ 409.9 $ 314.3 (1) Includes amortization expense for acquisition-related intangible assets, primarily customer relationships and trade names. (2) Relates to unusual, non-recurring litigation matters. (3) Reflects adjustments to interest expense resulting from debt extinguishments. Represents the difference between interest expense previously recognized under the effective interest method and actual interest paid. (4) IPO- and secondary-offering related expenses consist of the following: (in millions) Years Ended December 31, 2014 2013 Acceleration charge for certain equity awards and related employer payroll taxes $ — $ 40.7 RDU Plan cash retention pool accrual — 7.5 Management services agreement termination fee — 24.4 Other expenses 1.4 2.4 IPO- and secondary-offering related expenses $ 1.4 $ 75.0 (5) Based on a normalized effective tax rate of 39.0%. Table of Contents The following table sets forth a reconciliation of EBITDA to net cash provided by operating activities for the years ended December 31, 2014 and 2013 . 42 (in millions) Years Ended December 31, 2014 2013 Net income $ 244.9 $ 132.8 Depreciation and amortization 207.9 208.2 Income tax expense 142.8 62.7 Interest expense, net 197.3 250.1 EBITDA 792.9 653.8 Adjustments: Non-cash equity-based compensation 16.4 8.6 Sponsor fee — 2.5 Net loss on extinguishments of long-term debt 90.7 64.0 Litigation, net (1) (0.9 ) (4.1 ) IPO- and secondary-offering related expenses (2) 1.4 75.0 Other adjustments (3) 6.5 8.7 Total adjustments 114.1 154.7 Adjusted EBITDA $ 907.0 $ 808.5 (1) Relates to unusual, non-recurring litigation matters. (2) As defined under Non-GAAP net income above. (3) Other adjustments primarily include certain retention costs and equity investment income. Years Ended December 31, (in millions) 2014 2013 EBITDA $ 792.9 $ 653.8 Depreciation and amortization (207.9 ) (208.2 ) Income tax expense (142.8 ) (62.7 ) Interest expense, net (197.3 ) (250.1 ) Net income 244.9 132.8 Depreciation and amortization 207.9 208.2 Equity-based compensation expense 16.4 46.6 Deferred income taxes (89.1 ) (48.7 ) Amortization of deferred financing costs, debt premium, and debt discount, net 6.4 8.8 Net loss on extinguishments of long-term debt 90.7 64.0 Other (0.4 ) 1.7 Changes in assets and liabilities (41.8 ) (47.1 ) Net cash provided by operating activities $ 435.0 $ 366.3 Table of Contents Year Ended December 31, 2013 Compared to Year Ended December 31, 2012 The following table presents our results of operations, in dollars and as a percentage of net sales, for the years ended December 31, 2013 and 2012: Net sales The following table presents our net sales by segment, in dollars and as a percentage of total net sales, and the year-over-year dollar and percentage change in net sales for the years ended December 31, 2013 and 2012: 43 Year Ended December 31, 2013 Year Ended December 31, 2012 Dollars in Millions Percentage of Net Sales Dollars in Millions Percentage of Net Sales Net sales $ 10,768.6 100.0 % $ 10,128.2 100.0 % Cost of sales 9,008.3 83.7 8,458.6 83.5 Gross profit 1,760.3 16.3 1,669.6 16.5 Selling and administrative expenses 1,120.9 10.4 1,029.5 10.2 Advertising expense 130.8 1.2 129.5 1.3 Income from operations 508.6 4.7 510.6 5.0 Interest expense, net (250.1 ) (2.3 ) (307.4 ) (3.0 ) Net loss on extinguishments of long-term debt (64.0 ) (0.6 ) (17.2 ) (0.2 ) Other income, net 1.0 — 0.1 — Income before income taxes 195.5 1.8 186.1 1.8 Income tax expense (62.7 ) (0.6 ) (67.1 ) (0.7 ) Net income $ 132.8 1.2 % $ 119.0 1.1 % Years Ended December 31, 2013 2012 Dollars in Millions Percentage of Total Net Sales Dollars in Millions Percentage of Total Net Sales Dollar Change Percent Change (1) Corporate $ 5,960.1 55.3 % $ 5,512.8 54.4 % $ 447.3 8.1 % Public 4,164.5 38.7 4,023.0 39.7 141.5 3.5 Other 644.0 6.0 592.4 5.9 51.6 8.7 Total net sales $ 10,768.6 100.0 % $ 10,128.2 100.0 % $ 640.4 6.3 % (1) There were 254 selling days in both the years ended December 31, 2013 and 2012. Table of Contents The following table presents our net sales by customer channel for our Corporate and Public segments and the year-over-year dollar and percentage change in net sales for the years ended December 31, 2013 and 2012. Net sales of $150.1 million and $124.2 million for the years ended December 31, 2013 and 2012 have been reclassified from the small business customer channel to the medium/large customer channel to conform to the 2014 presentation. Total net sales in 2013 increased $640.4 million , or 6.3% , to $10,768.6 million , compared to $10,128.2 million in 2012. There were 254 selling days for both the years ended December 31, 2013 and 2012. The increase in total net sales was primarily the result of growth in hardware and software, a more tenured sales force, a continued focus on seller productivity across all areas of the organization and the addition of nearly 120 customer-facing coworkers, the majority in pre- and post-sale technical positions such as technical specialists and service delivery roles. Our total net sales growth for the year ended December 31, 2013 reflected growth in notebooks/mobile devices, netcomm products and software. Software gains were driven by growth in security, document management software and network management software, partially offset by a decline in application suites. Corporate segment net sales in 2013 increased $447.3 million , or 8.1% , compared to 2012, driven by sales growth in the medium/large customer channel. Within our Corporate segment, net sales to medium/large customers increased 10.5% between years primarily due to certain of these customers increasing their IT spending, a more tenured sales force, a continued focus on seller productivity and additional customer- facing coworkers, the majority in pre- and post-sale technical positions such as technical specialists and service delivery roles. This increase was led by unit volume growth in netcomm products and growth in notebooks/mobile devices and software. Partially offsetting the growth in the medium/large customer channel was a 3.5% decline in net sales to small business customers, due to certain of these customers taking a more cautious approach to spending as macroeconomic and regulatory uncertainty impacted decision-making. This decrease was led by unit volume declines in notebooks/mobile devices, partially offset by growth in netcomm products. Public segment net sales in 2013 increased $141.5 million , or 3.5% , between years, driven by strong performance in the education customer channel. Net sales to education customers increased $256.7 million , or 21.5% , between years, led by growth in net sales to K-12 customers, reflecting increased sales of notebooks/mobile devices to support new standardized digital testing requirements that will take effect in 2014. Net sales to government customers decreased $143.5 million , or 10.3% , in 2013 compared to 2012 due to reductions and delays in federal government spending following sequestration, uncertainty over future budget negotiations and the partial shutdown of the federal government. The government customer channel net sales decline was led by decreases in sales of enterprise storage and notebooks/mobile devices, partially offset by growth in software. Net sales to healthcare customers increased $28.3 million , or 2.0% , between years, driven by growth in notebooks/mobile devices and desktop computers. Gross profit Gross profit increased $90.7 million , or 5.4% , to $1,760.3 million in 2013, compared to $1,669.6 million in 2012. As a percentage of total net sales, gross profit decreased 20 basis points to 16.3% in 2013, down from 16.5% in 2012. Gross profit margin was negatively impacted 30 basis points by unfavorable price/mix changes within product margin, as we experienced product margin compression in transactional product categories such as desktops and notebooks. Partially offsetting this decrease was an increase of 10 basis points due to a higher mix of net service contract revenue. Net service contract revenue, including items such as third-party services and warranties, has a positive impact on gross profit margin as our cost paid to the vendor or third-party service provider is recorded as a reduction to net sales, resulting in net sales being equal to the gross profit on the transaction. 44 (in millions) Years Ended December 31, 2013 2012 Dollar Change Percent Change Corporate: Medium / Large $ 5,052.7 $ 4,572.7 $ 480.0 10.5 % Small Business 907.4 940.1 (32.7 ) (3.5 ) Total Corporate $ 5,960.1 $ 5,512.8 $ 447.3 8.1 % Public: Government $ 1,250.6 $ 1,394.1 $ (143.5 ) (10.3 )% Education 1,449.0 1,192.3 256.7 21.5 Healthcare 1,464.9 1,436.6 28.3 2.0 Total Public $ 4,164.5 $ 4,023.0 $ 141.5 3.5 % Table of Contents The gross profit margin may fluctuate based on various factors, including vendor incentive and inventory price protection programs, cooperative advertising funds classified as a reduction of cost of sales, product mix, net service contract revenue, commission revenue, pricing strategies, market conditions and other factors, any of which could result in changes in gross profit margins. Selling and administrative expenses Selling and administrative expenses increased $91.3 million , or 8.9% , to $1,120.9 million in 2013, compared to $1,029.5 million in 2012. As a percentage of total net sales, selling and administrative expenses increased 20 basis points to 10.4% in 2013, up from 10.2% in 2012. Sales payroll, including sales commissions and other variable compensation costs, increased $28.9 million, or 6.4%, between years, consistent with higher sales and gross profit. Additionally, selling and administrative expenses for 2013 included IPO- and secondary-offering related expenses of $75.0 million, as follows: We did not record any IPO- or secondary-offering related expenses during 2012. Partially offsetting these increases in 2013 was the favorable resolution of a class action legal proceeding in which we were a claimant, which reduced selling and administrative expenses by $10.4 million in 2013 compared to 2012. Total coworker count increased by 163 coworkers, from 6,804 at December 31, 2012, to 6,967 at December 31, 2013. Advertising expense Advertising expense increased $1.3 million , or 0.9% , to $130.8 million in 2013, compared to $129.5 million in 2012. As a percentage of net sales, advertising expense was 1.2% in 2013, compared to 1.3% in 2012. The dollar increase in advertising expense was due to a continued focus on advertising our solutions and products, which reinforces our reputation as a leading IT solutions provider. Income from operations The following table presents income from operations by segment, in dollars and as a percentage of net sales, and the year-over-year percentage change in income from operations for the years ended December 31, 2013 and 2012: * Not meaningful 45 • Pre-tax charges of $36.7 million related to the acceleration of the expense recognition for certain equity awards and $4.0 million for the related employer payroll taxes. See Note 10 of the accompanying audited consolidated financial statements for additional discussion of the impact of the IPO on our equity awards. • A pre-tax charge of $24.4 million related to the payment of a termination fee to affiliates of the Sponsors in connection with the termination of the management services agreement with such entities. • A pre-tax charge of $7.5 million related to compensation expense in connection with the Restricted Debt Unit Plan. See Note 12 of the accompanying audited consolidated financial statements for additional discussion of this charge. • Other IPO- and secondary-offering related expenses of $2.4 million. Year Ended December 31, 2013 Year Ended December 31, 2012 Dollars in Millions Operating Margin Percentage Dollars in Millions Operating Margin Percentage Percent Change in Income from Operations Segments: (1) Corporate $ 363.3 6.1 % $ 349.0 6.3 % 4.1 % Public 246.5 5.9 246.7 6.1 (0.1 ) Other 27.2 4.2 18.6 3.1 46.3 Headquarters (2) (128.4 ) nm* (103.7 ) nm* (23.8 ) Total income from operations $ 508.6 4.7 % $ 510.6 5.0 % (0.4 )% (1) Segment income (loss) from operations includes the segment’s direct operating income (loss) and allocations for Headquarters’ costs, allocations for logistics services, certain inventory adjustments, and volume rebates and cooperative advertising from vendors. (2) Includes Headquarters’ function costs that are not allocated to the segments. Table of Contents Income from operations was $508.6 million in 2013, a decrease of $2.0 million, or 0.4% , compared to $510.6 million in 2012. The decrease in income from operations was driven by higher selling and administrative expenses primarily resulting from $75.0 million of IPO- and secondary-offering related expenses recorded during 2013, mostly offset by higher net sales and gross profit. Total operating margin percentage decreased 30 basis points to 4.7% in 2013, from 5.0% in 2012. Operating margin percentage was negatively impacted by the increase in selling and administrative expenses as a percentage of net sales and gross profit margin compression, partially offset by a decrease in advertising expense as a percentage of net sales. Corporate segment income from operations was $363.3 million in 2013, an increase of $14.3 million, or 4.1% , compared to $349.0 million in 2012. Corporate segment operating margin percentage decreased 20 basis points to 6.1% in 2013, from 6.3% in 2012. Results for 2013 included $26.4 million of IPO- and secondary-offering related expenses, which reduced Corporate segment operating margin by 40 basis points. Higher sales and gross profit dollars offset the effect of IPO- and secondary-offering related expenses on income from operations for 2013. Public segment income from operations was $246.5 million in 2013, a decrease of $0.2 million, or 0.1%, compared to $246.7 million in 2012. Public segment operating margin percentage decreased 20 basis points to 5.9% in 2013, from 6.1% in 2012. Results for 2013 included $14.4 million of IPO- and secondary-offering related expenses, which reduced Public segment operating margin by 30 basis points. Higher sales and gross profit dollars nearly offset the effect of IPO- and secondary-offering related expenses on income from operations for 2013. Interest expense, net At December 31, 2013 , our outstanding long-term debt totaled $3,251.2 million, compared to $3,771.0 million at December 31, 2012. We reduced long-term debt throughout the year primarily through the use of a portion of the net proceeds from the IPO and cash flows provided by operating activities. Net interest expense in 2013 was $250.1 million , a decrease of $57.3 million compared to $307.4 million in 2012. This decrease was primarily due to lower debt balances and effective interest rates for 2013 compared to 2012 as a result of debt repayments and refinancing activities completed during 2012 and 2013. Net loss on extinguishments of long-term debt During 2013 , we recorded a net loss on extinguishments of long-term debt of $64.0 million compared to $17.2 million in 2012 . In October 2013, we redeemed $155.0 million aggregate principal amount of the Senior Subordinated Notes. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $8.5 million, representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs. In August 2013, we redeemed $324.0 million aggregate principal amount of the Senior Subordinated Notes. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $24.6 million, representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs. In July 2013, we redeemed $175.0 million aggregate principal amount of the Senior Secured Notes. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $16.7 million, representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs. In April 2013, we entered into a new seven-year, $1,350.0 million aggregate principal amount Term Loan. Substantially all of the proceeds were used to repay the $1,299.5 million outstanding aggregate principal amount of the prior senior secured term loan facility. In connection with this refinancing, we recorded a loss on extinguishment of long-term debt of $10.3 million, representing a write-off of the remaining unamortized deferred financing costs related to the prior senior secured term loan facility. In March 2013, we redeemed $50.0 million aggregate principal amount of the Senior Subordinated Notes. We recorded a loss on extinguishment of long-term debt of $3.9 million, representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs. In December 2012, we redeemed $100.0 million aggregate principal amount of the Senior Subordinated Notes. We recorded a loss on extinguishment of long-term debt of $7.8 million representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs. 46 Table of Contents In February and March 2012, we purchased or redeemed the remaining $129.0 million of 11.0% Senior Exchange Notes due 2015 and 11.5%/12.25% Senior PIK Election Exchange Notes due 2015 (together, the "Senior Notes due 2015"), funded with the issuance of an additional $130.0 million of Senior Notes due 2019. As a result, we recorded a loss on extinguishment of long-term debt of $9.4 million, representing the difference between the purchase or redemption price of the Senior Notes due 2015 and the net carrying amount of the purchased debt, adjusted for the remaining unamortized deferred financing costs. Income tax expense Income tax expense was $62.7 million in 2013 , compared to $67.1 million in 2012 . The effective income tax rate was 32.1% and 36.0% for 2013 and 2012 , respectively. For 2013 , the effective tax rate differed from the U.S. federal statutory rate primarily due to state income taxes, including current year state income tax credits and an adjustment to deferred state income taxes due to changes in apportionment factors. For 2012 , the effective tax rate differed from the U.S. federal statutory rate primarily due to favorable adjustments to state tax credits which were partially offset by the unfavorable impact of adjustments to deferred state income taxes due to changes in state tax laws and non-deductible expenses, primarily equity- based compensation and meals and entertainment. The lower effective tax rate for 2013 as compared to 2012 was primarily driven by the favorable impact of adjustments to deferred state income taxes due to changes in state tax apportionment factors and lower non-deductible expenses. Net income Net income was $132.8 million in 2013, compared to $119.0 million in 2012. Significant factors and events causing the net changes between the periods are discussed above. Non-GAAP net income Non-GAAP net income was $314.3 million for the year ended December 31, 2013, an increase of $67.2 million , or 27.2% , compared to $247.1 million for the year ended December 31, 2012. We have included a reconciliation of Non-GAAP net income for the years ended December 31, 2013 and 2012 below. Non-GAAP net income excludes, among other things, charges related to the amortization of acquisition-related intangibles, non-cash equity-based compensation, IPO- and secondary-offering related expenses and gains and losses from the early extinguishment of debt. Non-GAAP net income is considered a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. We believe that Non-GAAP net income provides helpful information with respect to our operating performance and cash flows including our ability to meet our future debt service, capital expenditures and working capital requirements. 47 Table of Contents Adjusted EBITDA Adjusted EBITDA was $808.5 million in 2013, an increase of $41.9 million, or 5.5%, compared to $766.6 million in 2012. As a percentage of net sales, Adjusted EBITDA was 7.5% and 7.6% in 2013 and 2012, respectively. We have included a reconciliation of EBITDA and Adjusted EBITDA for 2013 and 2012 in the table below. EBITDA is defined as consolidated net income before interest expense, income tax expense, depreciation and amortization. Adjusted EBITDA, which is a measure defined in our credit agreements, means EBITDA adjusted for certain items which are described in the table below. Both EBITDA and Adjusted EBITDA are considered non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. We believe that EBITDA and Adjusted EBITDA provide helpful information with respect to our operating performance and cash flows including our ability to meet our future debt service, capital expenditures and working capital requirements. Adjusted EBITDA also provides helpful information as it is the primary measure used in certain financial covenants contained in our credit agreements. 48 (in millions) Years Ended December 31, 2013 2012 Net income $ 132.8 $ 119.0 Amortization of intangibles (1) 161.2 163.7 Non-cash equity-based compensation 8.6 22.1 Litigation, net (2) (6.3 ) — Net loss on extinguishments of long-term debt 64.0 17.2 Interest expense adjustment related to extinguishments of long-term debt (3) (7.5 ) (3.3 ) IPO- and secondary-offering related expenses (4) 75.0 — Aggregate adjustment for income taxes (5) (113.5 ) (71.6 ) Non-GAAP net income $ 314.3 $ 247.1 (1) Includes amortization expense for acquisition-related intangible assets, primarily customer relationships and trade names. (2) Relates to unusual, non-recurring litigation matters. (3) Reflects adjustments to interest expense resulting from debt extinguishments. Represents the difference between interest expense previously recognized under the effective interest method and actual interest paid. (4) IPO- and secondary-offering related expenses consist of the following: (in millions) Years Ended December 31, 2013 2012 Acceleration charge for certain equity awards and related employer payroll taxes $ 40.7 $ — RDU Plan cash retention pool accrual 7.5 — Management services agreement termination fee 24.4 — Other expenses 2.4 — IPO- and secondary-offering related expenses $ 75.0 $ — (5) Based on a normalized effective tax rate of 39.0%. Table of Contents The following table sets forth a reconciliation of EBITDA to net cash provided by operating activities for the years ended December 31, 2013 and 2012. Seasonality While we have not historically experienced significant seasonality throughout the year, sales in our Corporate segment, which primarily serves private sector business customers, are typically higher in the fourth quarter than in other quarters due to customers spending their remaining technology budget dollars at the end of the year. Additionally, sales in our Public segment have historically been higher in the third quarter than in other quarters primarily due to the buying patterns of the federal government and education customers. (in millions) Years Ended December 31, 2013 2012 Net income $ 132.8 $ 119.0 Depreciation and amortization 208.2 210.2 Income tax expense 62.7 67.1 Interest expense, net 250.1 307.4 EBITDA 653.8 703.7 Adjustments: Non-cash equity-based compensation 8.6 22.1 Sponsor fee 2.5 5.0 Consulting and debt-related professional fees 0.1 0.6 Net loss on extinguishments of long-term debt 64.0 17.2 Litigation, net (1) (4.1 ) 4.3 IPO- and secondary-offering related expenses (2) 75.0 — Other adjustments (3) 8.6 13.7 Total adjustments 154.7 62.9 Adjusted EBITDA $ 808.5 $ 766.6 (1) Relates to unusual, non-recurring litigation matters. (2) As defined under Non-GAAP net income above. (3) Other adjustments primarily include certain retention costs and equity investment income. Years Ended December 31, (in millions) 2013 2012 EBITDA $ 653.8 $ 703.7 Depreciation and amortization (208.2 ) (210.2 ) Income tax expense (62.7 ) (67.1 ) Interest expense, net (250.1 ) (307.4 ) Net income 132.8 119.0 Depreciation and amortization 208.2 210.2 Equity-based compensation expense 46.6 22.1 Deferred income taxes (48.7 ) (56.3 ) Amortization of deferred financing costs, debt premium, and debt discount, net 8.8 13.6 Net loss on extinguishments of long-term debt 64.0 17.2 Other 1.7 1.0 Changes in assets and liabilities (47.1 ) (9.4 ) Net cash provided by operating activities $ 366.3 $ 317.4 Liquidity and Capital Resources 49 Table of Contents Overview We finance our operations and capital expenditures through a combination of internally generated cash from operations and from borrowings under our senior secured asset-based revolving credit facility. We believe that our current sources of funds will be sufficient to fund our cash operating requirements for the next year. In addition, we believe that, in spite of the uncertainty of future macroeconomic conditions, we have adequate sources of liquidity and funding available to meet our longer-term needs. However, there are a number of factors that may negatively impact our available sources of funds. The amount of cash generated from operations will be dependent upon factors such as the successful execution of our business plan and general economic conditions. Long-Term Debt Activities During the year ended December 31, 2014, we had significant debt refinancings. In connection with these refinancings, we recorded a loss on extinguishment of long-term debt of $90.7 million in our consolidated statement of operations for the year ended December 31, 2014. See Note 7 to the accompanying audited consolidated financial statements included elsewhere in this report for additional details. Share Repurchase Program On November 6, 2014, we announced that our Board of Directors approved a $500 million share repurchase program effective immediately under which we may repurchase shares of our common stock in the open market or through privately negotiated transactions, depending on share price, market conditions and other factors. The share repurchase program does not obligate us to repurchase any dollar amount or number of shares, and repurchases may be commenced or suspended from time to time without prior notice. As of the date of this filing, no shares have been repurchased under the share repurchase program. Dividends A summary of 2014 dividend activity for our common stock is shown below: On February 10, 2015, we announced that our board of directors declared a quarterly cash dividend on our common stock of $0.0675 per share. The dividend will be paid on March 10, 2015 to all stockholders of record as of the close of business on February 25, 2015. The payment of any future dividends will be at the discretion of our board of directors and will depend upon our results of operations, financial condition, business prospects, capital requirements, contractual restrictions, any potential indebtedness we may incur, restrictions imposed by applicable law, tax considerations and other factors that our board of directors deems relevant. In addition, our ability to pay dividends on our common stock will be limited by restrictions on our ability to pay dividends or make distributions to our stockholders and on the ability of our subsidiaries to pay dividends or make distributions to us, in each case, under the terms of our current and any future agreements governing our indebtedness. Cash Flows 50 Dividend Amount Declaration Date Record Date Payment Date $0.0425 February 12, 2014 February 25, 2014 March 10, 2014 $0.0425 May 8, 2014 May 27, 2014 June 10, 2014 $0.0425 July 31, 2014 August 25, 2014 September 10, 2014 $0.0675 November 6, 2014 November 25, 2014 December 10, 2014 Table of Contents Cash flows from operating, investing and financing activities were as follows: Operating Activities Net cash provided by operating activities for 2014 increased $68.7 million compared to 2013 . Net income adjusted for the impact of non-cash items such as depreciation and amortization, equity-based compensation expense and net loss on extinguishments of long-term debt was $476.8 million during 2014 , compared to $413.4 million during 2013 . The increase in cash of $63.4 million reflected stronger operating results in 2014 compared to 2013 . Net changes in assets and liabilities reduced cash by $41.8 million in 2014 compared to a reduction of $47.1 million in 2013 , resulting in a change of $5.3 million between periods. The decrease in inventory balances year over year contributed to a $111.7 million increase in cash flows which was primarily due to the timing of inventory receipts and earlier than expected inventory shipments at the end of 2014 due to accelerated customer roll-outs. Partially offsetting the increase in cash flows from inventory was a decline in cash inflows from accounts payable of $102.4 million driven by the timing of inventory receipts at the end of 2014 versus 2013. Net cash provided by operating activities for 2013 increased $48.9 million compared to 2012. Net income adjusted for the impact of non-cash items such as depreciation and amortization, equity-based compensation expense and net loss on extinguishments of long-term debt was $413.4 million during 2013, compared to $326.8 million during 2012, an increase of $86.6 million. The increase in cash of $86.6 million reflected stronger operating results in 2013 compared to 2012. Net changes in assets and liabilities reduced cash by $47.1 million in 2013 compared to a reduction of $9.4 million in 2012, resulting in a change of $37.7 million between periods. While changes in assets and liabilities were relatively flat during 2012, during 2013, accounts receivable and accounts payable balances decreased and increased cash by $170.8 million and $146.1 million, respectively, primarily as a result of accelerated sales growth during the final month of 2013. Merchandise inventory also increased during 2013 to support strong sales order volume near the end of 2013. 51 (in millions) Years Ended December 31, 2014 2013 2012 Net cash provided by (used in): Operating activities $ 435.0 $ 366.3 $ 317.4 Investing activities (164.8 ) (47.1 ) (41.7 ) Net change in accounts payable - inventory financing 75.5 7.4 (29.5 ) Other financing activities (187.5 ) (175.7 ) (308.5 ) Financing activities (112.0 ) (168.3 ) (338.0 ) Effect of exchange rate changes on cash and cash equivalents (1.8 ) (0.7 ) 0.3 Net increase (decrease) in cash and cash equivalents $ 156.4 $ 150.2 $ (62.0 ) Table of Contents In order to manage our working capital and operating cash needs, we monitor our cash conversion cycle, defined as days of sales outstanding in accounts receivable plus days of supply in inventory minus days of purchases outstanding in accounts payable, based on a rolling three-month average. The following table presents the components of our cash conversion cycle: The cash conversion cycle decreased to 21 days at December 31, 2014 compared to 23 days at December 31, 2013, primarily driven by improvement in DSO. The decline in DSO was primarily driven by improved collections and early payments from certain customers. Additionally, the timing of inventory receipts at the end of 2014 had a favorable impact on DIO and an unfavorable impact on DPO. The cash conversion cycle decreased to 23 days at December 31, 2013 compared to 24 days at December 31, 2012. The increase in DSO was primarily driven by an increase in receivables for third-party services such as software assurance and warranties. These services have an unfavorable impact on DSO as the receivable is recognized on the balance sheet on a gross basis while the corresponding sales amount in the statement of operations is recorded on a net basis. The DPO increase was primarily due to an increase in payables for third-party services, which offsets the related increase in DSO discussed above. These services have a favorable impact on DPO as the payable is recognized on the balance sheet without a corresponding cost of sales in the statement of operations because the cost paid to the vendor or third-party service provider is recorded as a reduction to net sales. The timing of quarter-end payments also had a favorable impact on DPO at December 31, 2013. Investing Activities Net cash used in investing activities increased $117.7 million in 2014 compared to 2013 . We paid $86.8 million in the fourth quarter of 2014 to acquire a 35% non-controlling interest in Kelway. Additionally, capital expenditures increased $7.9 million to $55.0 million from $47.1 million for 2014 and 2013 , respectively, primarily for improvements to our information technology systems during both years. Net cash used in investing activities increased $5.4 million in 2013 compared to 2012. Capital expenditures were $47.1 million and $41.4 million for 2013 and 2012, respectively, primarily for improvements to our information technology systems during both years. Financing Activities Net cash used in financing activities decreased $56.3 million in 2014 compared to 2013 . The decrease was primarily driven by several debt refinancing transactions during each period and our July 2013 IPO, which generated net proceeds of $424.7 million after deducting underwriting discounts, expenses and transaction costs. The net impact of our debt transactions resulted in cash outflows of $161.3 million and $569.4 million during 2014 and 2013 , respectively, as cash was used in each period to reduce our total long-term debt. See Note 7 to the accompanying audited consolidated financial statements included elsewhere in this report for a description of the debt transactions impacting each period. Net cash used in financing activities decreased $169.7 million in 2013 compared to 2012. The decrease was primarily driven by various debt transactions during each period and our July 2013 IPO, which generated net proceeds of $424.7 million after deducting underwriting discounts, expenses and transaction costs. The net impact of our debt transactions resulted 52 (in days) December 31, 2014 2013 2012 Days of sales outstanding (DSO) (1) 42 44 42 Days of supply in inventory (DIO) (2) 13 14 14 Days of purchases outstanding (DPO) (3) (34 ) (35 ) (32 ) Cash conversion cycle 21 23 24 (1) Represents the rolling three-month average of the balance of trade accounts receivable, net at the end of the period divided by average daily net sales for the same three-month period. Also incorporates components of other miscellaneous receivables. (2) Represents the rolling three-month average of the balance of inventory at the end of the period divided by average daily cost of goods sold for the same three-month period. The prior period has been revised to conform to the current definition. (3) Represents the rolling three-month average of the combined balance of accounts payable-trade, excluding cash overdrafts, and accounts payable-inventory financing at the end of the period divided by average daily cost of goods sold for the same three-month period. Table of Contents in cash outflows of $569.4 million and $310.6 million during 2013 and 2012, respectively, as cash was used in each period to reduce our total long-term debt. Long-Term Debt and Financing Arrangements As of December 31, 2014, we had total indebtedness of $ 3.2 billion , of which $1.5 billion was secured indebtedness. At December 31, 2014, we were in compliance with the covenants under our various credit agreements and indentures. Under the indenture governing the 8.5% Senior Notes due 2019, which contains the most restrictive restricted payment provisions in our various credit agreements and indentures, we are generally restricted from paying dividends and making other restricted payments. For the purpose of determining restricted payment capacity, consolidated net income or loss includes certain adjustments that are defined in the applicable indenture. At December 31, 2014, the amount of cumulative consolidated net income free of restrictions under our credit agreements and indentures was $230.3 million . See Note 7 to the accompanying audited consolidated financial statements included elsewhere in this report for further details regarding our debt and each of the transactions described below. During the year ended December 31, 2014, the following events occurred with respect to our debt structure: Inventory Financing Agreements We have entered into agreements with certain financial intermediaries to facilitate the purchase of inventory from various suppliers under certain terms and conditions. These amounts are classified separately as accounts payable-inventory financing on the consolidated balance sheets. We do not incur any interest expense associated with these agreements as balances are paid when they are due. See Note 5 to the accompanying audited consolidated financial statements included elsewhere in this report for further details. Contractual Obligations We have future obligations under various contracts relating to debt and interest payments, operating leases and asset retirement obligations. The following table presents our estimated future payments under contractual obligations that existed as of December 31, 2014, based on undiscounted amounts. 53 • On January 22, 2014 and February 21, 2014, we redeemed $30.0 million and $20.0 million aggregate principal amounts of the 12.535% Senior Subordinated Exchange Notes due 2017, respectively. • On March 20, 2014, we repurchased and subsequently canceled $25.0 million aggregate principal amount of the 8.5% Senior Notes due 2019 from an affiliate of Providence Equity in a privately-negotiated transaction on an arms’ length basis. • On May 9, 2014, we redeemed all of the remaining $42.5 million aggregate principal amount of the 12.535% Senior Subordinated Exchange Notes due 2017. • On June 6, 2014, we entered into a new five-year $1,250.0 million senior secured asset-based revolving credit facility which will mature on June 6, 2019. • On August 5, 2014, we completed the issuance of $600.0 million aggregate principal amount of 6.0% Senior Notes due 2022 which will mature on August 15, 2022. • On September 5, 2014, we redeemed all of the remaining $325.0 million aggregate principal amount of the 12.535% Senior Subordinated Exchange Notes due 2017, plus accrued and unpaid interest through the date of redemption. • On September 5, 2014, we redeemed $234.7 million aggregate principal amount of the 8.5% Senior Notes due 2019, plus accrued and unpaid interest through the date of redemption. • On December 1, 2014, we completed the issuance of $575.0 million principal amount of 5.5% Senior Notes due 2024 which will mature on December 1, 2024. • On December 31, 2014, we redeemed $541.4 million aggregate principal amount of the 8.5% Senior Notes due 2019, plus accrued and unpaid interest through the date of redemption. Table of Contents Off-Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. Inflation Inflation has not had a material impact on our operating results. We generally have been able to pass along price increases to our customers, though certain economic factors and technological advances in recent years have tended to place downward pressure on pricing. We also have been able to generally offset the effects of inflation on operating costs by continuing to emphasize productivity improvements and by accelerating our overall cash conversion cycle. There can be no assurances, however, that inflation would not have a material impact on our sales or operating costs in the future. Commitments and Contingencies The information set forth in Note 14 to the accompanying audited consolidated financial statements included in Part II, Item 8 of this Form 10-K is incorporated herein by reference. Critical Accounting Policies and Estimates The preparation of financial statements in accordance with GAAP requires management to make use of certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. In Note 1 to the accompanying audited consolidated financial statements, we include a discussion of the significant accounting policies used in the preparation of our consolidated financial statements. We believe the following are the most critical accounting policies and estimates that include significant judgments used in the preparation of our financial statements. We consider an accounting policy or estimate to be critical if it requires assumptions to be made that were uncertain at the time they were made, and if changes in these assumptions could have a material impact on our financial condition or results of operations. 54 (in millions) Payments Due by Period Total < 1 year 1-3 years 4-5 years > 5 years Term Loan (1) $ 1,767.8 $ 64.4 $ 127.3 $ 125.3 $ 1,450.8 Senior Notes due 2019 (2) 696.6 42.8 85.7 568.1 — Senior Notes due 2022 (2) 889.0 37.0 72.0 72.0 708.0 Senior Notes due 2024 (2) 891.3 31.6 63.3 63.3 733.1 Operating leases (3) 127.5 19.1 31.4 26.4 50.6 Asset retirement obligations (4) 0.5 — 0.5 — — Total $ 4,372.7 $ 194.9 $ 380.2 $ 855.1 $ 2,942.5 (1) Includes future principal and cash interest payments on long-term borrowings through scheduled maturity dates. Interest payments for variable rate debt were calculated using interest rates as of December 31, 2014. Excluded from these amounts are the amortization of debt issuance and other costs related to indebtedness. (2) Includes future principal and cash interest payments on long-term borrowings through scheduled maturity dates. Interest on the Senior Notes is calculated using the stated interest rates. Excluded from these amounts are the amortization of debt issuance and other costs related to indebtedness. (3) Includes the minimum lease payments for non-cancelable leases of properties and equipment used in our operations. Additionally, included in these amounts are future minimum lease payments commencing in the fourth quarter of 2016 that relate to a new lease entered into in December 2014 for our future headquarters in Lincolnshire, Illinois. Also reflected in these amounts is the future expiration of two leases in the first quarter of 2016 for facilities currently in use by us which we plan to consolidate into the new headquarters location and accordingly, these leases will not be renewed. (4) Represent commitments to return property subject to operating leases to original condition upon lease termination. Table of Contents Revenue Recognition We are a primary distribution channel for a large group of vendors and suppliers, including OEMs, software publishers and wholesale distributors. We record revenue from sales transactions when title and risk of loss are passed to our customer, there is persuasive evidence of an arrangement for sale, delivery has occurred and/or services have been rendered, the sales price is fixed or determinable, and collectability is reasonably assured. Our shipping terms typically specify F.O.B. destination, at which time title and risk of loss have passed to the customer. Revenues from the sales of hardware products and software products and licenses are generally recognized on a gross basis with the selling price to the customer recorded as sales and the acquisition cost of the product recorded as cost of sales. These items can be delivered to customers in a variety of ways, including (i) as physical product shipped from our warehouse, (ii) via drop-shipment by the vendor or supplier, or (iii) via electronic delivery for software licenses. At the time of sale, we record an estimate for sales returns and allowances based on historical experience. Our vendor partners warrant most of the products we sell. We leverage drop-shipment arrangements with many of our vendors and suppliers to deliver products to our customers without having to physically hold the inventory at our warehouses, thereby increasing efficiency and reducing costs. We recognize revenue for drop-shipment arrangements on a gross basis upon delivery to the customer with contract terms that typically specify F.O.B. destination. We recognize revenue on a gross basis as the principal in the transaction because we are the primary obligor in the arrangement, we assume inventory risk if the product is returned by the customer, we set the price of the product charged to the customer, we assume credit risk for the amounts invoiced, and we work closely with our customers to determine their hardware and software specifications. These arrangements generally represent approximately 40% to 50% of total net sales, including approximately 15% to 20% related to electronic delivery for software licenses. Revenue from professional services is either recognized as provided for services billed at an hourly rate or recognized using a proportional performance model for services provided at a fixed fee. Revenue from cloud computing solutions including Software as a Service ("SaaS") and Infrastructure as a Service ("IaaS") arrangements, as well as data center services such as managed and remote managed services, server co-location, internet connectivity and data backup and storage, is recognized over the period service is provided. We also sell certain products for which we act as an agent. Products in this category include the sale of third-party services, warranties, software assurance (“SA”) and third-party hosted SaaS and IaaS arrangements. SA is a product that allows customers to upgrade, at no additional cost, to the latest technology if new applications are introduced during the period that the SA is in effect. These sales do not meet the criteria for gross sales recognition, and thus are recognized on a net basis at the time of sale. Under net sales recognition, the cost paid to the vendor or third-party service provider is recorded as a reduction to sales, resulting in net sales being equal to the gross profit on the transaction. Our larger customers are offered the opportunity by certain of our vendors to purchase software licenses and SA under enterprise agreements (“EAs”). Under EAs, customers are considered to be compliant with applicable license requirements for the ensuing year, regardless of changes to their employee base. Customers are charged an annual true-up fee for changes in the number of users over the year. With most EAs, our vendors will transfer the license and bill the customer directly, paying resellers such as us an agency fee or commission on these sales. We record these fees as a component of net sales as earned and there is no corresponding cost of sales amount. In certain instances, we bill the customer directly under an EA and account for the individual items sold based on the nature of the item. Our vendors typically dictate how the EA will be sold to the customer. From time to time, we sell some of our products and services as part of bundled contract arrangements containing multiple deliverables, which may include a combination of the products and services. For each deliverable that represents a separate unit of accounting, total arrangement consideration is allocated based upon the relative selling prices of each element. The allocated arrangement consideration is recognized as revenue in accordance with the principles described above. Selling prices are determined by using vendor specific objective evidence (“VSOE”) if it exists. Otherwise, selling prices are determined using third party evidence (“TPE”). If neither VSOE or TPE is available, we use our best estimate of selling prices. We record freight billed to our customers as net sales and the related freight costs as a cost of sales. Deferred revenue includes (1) payments received from customers in advance of providing the product or performing services, and (2) amounts deferred if other conditions of revenue recognition have not been met. We perform an analysis of the estimated number of days of sales in-transit to customers at the end of each period based on a weighted- average analysis of commercial delivery terms that includes drop-shipment arrangements. This analysis is the basis upon which we estimate the amount of sales in-transit at the end of the period and adjust revenue and the related costs 55 Table of Contents to reflect only what has been received by the customer. Changes in delivery patterns may result in a different number of business days used in making this adjustment and could have a material impact on our revenue recognition for the period. Inventory Valuation Inventory is valued at the lower of cost or market value. Cost is determined using a weighted-average cost method. Price protection is recorded when earned as a reduction to the cost of inventory. We decrease the value of inventory for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value, based upon an aging analysis of the inventory on hand, specifically known inventory-related risks, and assumptions about future demand and market conditions. If future demand or actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required. Vendor Programs We receive incentives from certain of our vendors related to cooperative advertising allowances, volume rebates, bid programs, price protection and other programs. These incentives generally relate to written agreements with specified performance requirements with the vendors and are recorded as adjustments to cost of sales or inventory, depending on the nature of the incentive. Vendors may change the terms of some or all of these programs, which could have an impact on our results of operations. We record receivables from vendors related to these programs when the amounts are probable and reasonably estimable. Some programs are based on the achievement of specific targets, and we base our estimates on information provided by our vendors and internal information to assess our progress toward achieving those targets. If actual performance does not match our estimates, we may be required to adjust our receivables. We record reserves for vendor receivables for estimated losses due to vendors’ inability to pay or rejections by vendors of claims; however, if actual collections differ from our estimates, we may incur additional losses that could have a material impact on gross margin and operating income. Goodwill and Other Intangible Assets Goodwill is not amortized but is subject to periodic testing for impairment at the reporting unit level. Our reporting units used to assess potential goodwill impairment are the same as our operating segments. We are required to perform an evaluation of goodwill on an annual basis or more frequently if circumstances indicate a potential impairment. The annual test for impairment is conducted as of December 1. We have the option of performing a qualitative assessment of a reporting unit's fair value from the last quantitative assessment to determine if it is more likely than not that the reporting unit's goodwill is impaired or performing a quantitative assessment by comparing a reporting unit's estimated fair value to its carrying amount. Under the quantitative assessment, testing for impairment of goodwill is a two-step process. The first step compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of reporting unit goodwill with the carrying amount of that goodwill to determine the amount of impairment loss. Fair value of a reporting unit is determined by using a weighted combination of an income approach and a market approach, as this combination is considered the most indicative of the reporting units’ fair value in an orderly transaction between market participants. Under the income approach, we determine fair value based on estimated future cash flows of a reporting unit, discounted by an estimated weighted- average cost of capital, which reflects the overall level of inherent risk of a reporting unit and the rate of return an outside investor would expect to earn. Under the market approach, we utilize valuation multiples derived from publicly available information for peer group companies to provide an indication of how much a knowledgeable investor in the marketplace would be willing to pay for a company. We have weighted the income approach and the market approach at 75% and 25%, respectively. Determining the fair value of a reporting unit (and the allocation of that fair value to individual assets and liabilities within the reporting unit to determine the implied fair value of goodwill in the event a step two analysis is required) is judgmental in nature and requires the use of significant estimates and assumptions. These estimates and assumptions include primarily, but are not limited to, discount rate, terminal growth rate, selection of appropriate peer group companies and control premium applied, and forecasts of revenue growth rates, gross margins, operating margins, and working capital requirements. The allocation requires analysis to determine the fair value of assets and liabilities including, among others, customer relationships, trade names, and property and equipment. Any changes in the judgments, estimates, or assumptions used could produce significantly different results. Although we believe our assumptions are reasonable, actual results may vary significantly and may expose us to material impairment charges in the future. Intangible assets include customer relationships, trade names, internally developed software and other intangibles. Intangible assets with determinable lives are amortized on a straight-line basis over the estimated useful lives of the assets. The cost of software developed or obtained for internal use is capitalized and amortized on a straight-line basis over the estimated useful life of the software. These intangible assets are reviewed for impairment whenever events or changes in circumstances 56 Table of Contents indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s carrying amount over its fair value. Allowance for Doubtful Accounts We record an allowance for doubtful accounts related to trade accounts receivable for estimated losses resulting from the inability of our customers to make required payments. We take into consideration historical loss experience, the overall quality of the receivable portfolio and specifically identified customer risks. If actual collections of customer receivables differ from our estimates, additional allowances may be required which could have an impact on our results of operations. Income Taxes Deferred income taxes are provided to reflect the differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements using enacted tax rates in effect for the year in which the differences are expected to reverse. We perform an evaluation of the realizability of our deferred tax assets on a quarterly basis. This evaluation requires us to use estimates and make assumptions and considers all positive and negative evidence and factors, such as the scheduled reversal of temporary differences, the mix of earnings in the jurisdictions in which we operate, and prudent and feasible tax planning strategies. We account for unrecognized tax benefits based upon our assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. We report a liability for unrecognized tax benefits resulting from unrecognized tax benefits taken or expected to be taken in a tax return and recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense. Recent Accounting Pronouncements The information set forth in Note 2 to the accompanying audited consolidated financial statements included in Part II, Item 8 of this Form 10-K is incorporated herein by reference. Subsequent Events The information set forth in Note 20 to the accompanying audited consolidated financial statements included in Part II, Item 8 of this Form 10-K is incorporated herein by reference. Item 7A. Quantitative and Qualitative Disclosures of Market Risks Our market risks relate primarily to changes in interest rates. The interest rates on borrowings under our senior secured asset-based revolving credit facility and our senior secured term loan facility are floating and, therefore, are subject to fluctuations. In order to manage the risk associated with changes in interest rates on borrowings under our senior secured term loan facility, we have entered into interest rate derivative agreements to economically hedge a portion of the cash flows associated with the facility. Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate fluctuations. W e utilize interest rate caps for the purpose of limiting current and future exposure to interest rate risk on our floating-rate debt under the senior secured term loan facility. As of December 31, 2014 we have ten interest rate cap agreements in effect through January 14, 2015 with a combined notional amount of $1,150.0 million which entitled the Company to payments from the counterparty of the amount, if any, by which three-month LIBOR exceeds a weighted average rate of 2.4% during the agreement period. During the year ended December 31, 2014 , we entered into 14 additional interest rate cap agreements with a combined notional amount of $1,000.0 million . These interest rate cap agreements have not been designated as cash flow hedges of interest rate risk for GAAP accounting purposes. The entire $1,000.0 million notional amount entitles us to payments from the counterparty of the amount, if any, by which three-month LIBOR exceeds 2.0% during the agreement period. The interest rate cap agreements are effective from January 14, 2015 through January 14, 2017. See Note 7 to the accompanying audited consolidated financial statements included elsewhere in this report for additional details. See “Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Contractual Obligations” for information on cash flows, interest rates and maturity dates of our debt obligations. 57 Table of Contents Item 8. Financial Statements and Supplementary Data Index to Consolidated Financial Statements 58 Page Report of Independent Registered Public Accounting Firm 59 Consolidated Balance Sheets as of December 31, 2014 and 2013 60 Consolidated Statements of Operations for the years ended December 31, 2014, 2013 and 2012 61 Consolidated Statements of Comprehensive Income for the years ended December 31, 2014, 2013 and 2012 62 Consolidated Statements of Shareholders’ Equity (Deficit) for the years ended December 31, 2014, 2013 and 2012 63 Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012 64 Notes to Consolidated Financial Statements 65 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of CDW Corporation We have audited the accompanying consolidated balance sheets of CDW Corporation and subsidiaries as of December 31, 2014 and 2013, and the related consolidated statements of operations, comprehensive income, shareholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 2014. Our audits also included the financial statement schedule listed in the Index at Item 15(a)(2). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of CDW Corporation and subsidiaries at December 31, 2014 and 2013, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2014, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), CDW Corporation and subsidiaries’ internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 26, 2015 expressed an unqualified opinion thereon. 59 /s/ Ernst & Young LLP Chicago, Illinois February 26, 2015 Table of Contents The accompanying notes are an integral part of the consolidated financial statements. CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in millions, except per-share amounts) December 31, 2014 2013 Assets Current assets: Cash and cash equivalents $ 344.5 $ 188.1 Accounts receivable, net of allowance for doubtful accounts of $5.7 and $5.4, respectively 1,561.1 1,451.0 Merchandise inventory 337.5 382.0 Miscellaneous receivables 155.6 146.3 Prepaid expenses and other 54.7 46.1 Total current assets 2,453.4 2,213.5 Property and equipment, net 137.2 131.1 Equity investments 86.7 — Goodwill 2,217.6 2,220.3 Other intangible assets, net 1,168.8 1,328.0 Deferred financing costs, net 33.0 30.1 Other assets 3.2 1.6 Total assets $ 6,099.9 $ 5,924.6 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable-trade $ 704.0 $ 662.8 Accounts payable-inventory financing 332.1 256.6 Current maturities of long-term debt 15.4 45.4 Deferred revenue 81.3 94.8 Accrued expenses: Compensation 130.1 112.2 Interest 28.1 31.8 Sales taxes 29.1 29.2 Advertising 34.0 33.2 Income taxes 0.2 6.3 Other 113.7 130.3 Total current liabilities 1,468.0 1,402.6 Long-term liabilities: Debt 3,174.6 3,205.8 Deferred income taxes 475.0 563.5 Other liabilities 45.8 41.0 Total long-term liabilities 3,695.4 3,810.3 Commitments and contingencies (Note 14) Shareholders’ equity: Preferred shares, $0.01 par value, 100.0 shares authorized, and no shares issued or outstanding for both periods — — Common shares, $0.01 par value, 1,000.0 shares authorized; 172.2 and 172.0 shares issued, respectively; 172.2 and 172.0 shares outstanding, respectively 1.7 1.7 Paid-in capital 2,711.9 2,688.1 Accumulated deficit (1,760.5 ) (1,971.8 ) Accumulated other comprehensive loss (16.6 ) (6.3 ) Total shareholders’ equity 936.5 711.7 Total liabilities and shareholders’ equity $ 6,099.9 $ 5,924.6 60 Table of Contents The accompanying notes are an integral part of the consolidated financial statements. 61 CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per-share amounts) Years Ended December 31, 2014 2013 2012 Net sales $ 12,074.5 $ 10,768.6 $ 10,128.2 Cost of sales 10,153.2 9,008.3 8,458.6 Gross profit 1,921.3 1,760.3 1,669.6 Selling and administrative expenses 1,110.3 1,120.9 1,029.5 Advertising expense 138.0 130.8 129.5 Income from operations 673.0 508.6 510.6 Interest expense, net (197.3 ) (250.1 ) (307.4 ) Net loss on extinguishments of long-term debt (90.7 ) (64.0 ) (17.2 ) Other income, net 2.7 1.0 0.1 Income before income taxes 387.7 195.5 186.1 Income tax expense (142.8 ) (62.7 ) (67.1 ) Net income $ 244.9 $ 132.8 $ 119.0 Net income per common share: Basic $ 1.44 $ 0.85 $ 0.82 Diluted $ 1.42 $ 0.84 $ 0.82 Weighted-average number of common shares outstanding: Basic 170.6 156.6 145.1 Diluted 172.8 158.7 145.8 Cash dividends declared per common share $ 0.1950 $ 0.0425 $ — Table of Contents The accompanying notes are an integral part of the consolidated financial statements. 62 CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) Years Ended December 31, 2014 2013 2012 Net income $ 244.9 $ 132.8 $ 119.0 Foreign currency translation adjustment (net of tax benefit of $0.5 million, $0 million, and $0 million, respectively) (10.3 ) (6.7 ) 2.5 Other comprehensive (loss) income (10.3 ) (6.7 ) 2.5 Comprehensive income $ 234.6 $ 126.1 $ 121.5 Table of Contents The accompanying notes are an integral part of the consolidated financial statements. 63 CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT) (in millions) Preferred Stock Common Stock Shares Amount Shares Amount Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive (Loss) Income Total Shareholders’ (Deficit) Equity Balance at December 31, 2011 — $ — 144.9 $ 1.4 $ 2,184.7 $ (2,191.3 ) $ (2.1 ) $ (7.3 ) Equity-based compensation expense — — — — 22.1 — — 22.1 Investment from CDW Holdings LLC — — — — 2.8 — — 2.8 Repurchase of common shares — — — — — (0.7 ) — (0.7 ) Accrued charitable contribution related to the MPK Coworker Incentive Plan II, net of tax — — 0.3 — (1.4 ) — — (1.4 ) Net income — — — — — 119.0 — 119.0 Incentive compensation plan units withheld for taxes — — — — (0.5 ) — — (0.5 ) Foreign currency translation adjustment — — — — — — 2.5 2.5 Balance at December 31, 2012 — $ — 145.2 $ 1.4 $ 2,207.7 $ (2,073.0 ) $ 0.4 $ 136.5 Equity-based compensation expense — — — — 46.6 — — 46.6 Issuance of common shares — — 26.8 0.3 424.4 — — 424.7 Repurchase of common shares — — — — — (0.2 ) — (0.2 ) Dividends declared — — — — — (7.3 ) (7.3 ) Reclassification to goodwill for accrued charitable contributions — — — — 9.4 — — 9.4 Incentive compensation plan units withheld for taxes — — — — — (24.1 ) — (24.1 ) Net income — — — — — 132.8 — 132.8 Foreign currency translation adjustment — — — — — — (6.7 ) (6.7 ) Balance at December 31, 2013 — $ — 172.0 $ 1.7 $ 2,688.1 $ (1,971.8 ) $ (6.3 ) $ 711.7 Equity-based compensation expense — — — — 16.4 — — 16.4 Stock options exercised — — — — 1.3 — — 1.3 Excess tax benefits from equity-based compensation — — — — 0.3 — — 0.3 Coworker stock purchase plan — — 0.2 — 5.8 — — 5.8 Dividends declared — — — — — (33.6 ) — (33.6 ) Net income — — — — — 244.9 — 244.9 Foreign currency translation adjustment — — — — — — (10.3 ) (10.3 ) Balance at December 31, 2014 — $ — 172.2 $ 1.7 $ 2,711.9 $ (1,760.5 ) $ (16.6 ) $ 936.5 Table of Contents CDW CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Years Ended December 31, 2014 2013 2012 Cash flows from operating activities: Net income $ 244.9 $ 132.8 $ 119.0 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 207.9 208.2 210.2 Equity-based compensation expense 16.4 46.6 22.1 Deferred income taxes (89.1 ) (48.7 ) (56.3 ) Allowance for doubtful accounts 0.3 — — Amortization of deferred financing costs, debt premium, and debt discount, net 6.4 8.8 13.6 Net loss on extinguishments of long-term debt 90.7 64.0 17.2 Income from equity investments (1.2 ) — — Other 0.5 1.7 1.0 Changes in assets and liabilities: Accounts receivable (117.6 ) (170.8 ) (10.4 ) Merchandise inventory 44.2 (67.5 ) 7.1 Other assets (18.7 ) (10.1 ) (3.8 ) Accounts payable-trade 43.7 146.1 0.8 Other current liabilities 1.7 64.1 (2.1 ) Long-term liabilities 4.9 (8.9 ) (1.0 ) Net cash provided by operating activities 435.0 366.3 317.4 Cash flows from investing activities: Capital expenditures (55.0 ) (47.1 ) (41.4 ) Payment for equity investment (86.8 ) — — Payment of accrued charitable contribution related to the MPK Coworker Incentive Plan II (20.9 ) — — Premium payments on interest rate cap agreements (2.1 ) — (0.3 ) Net cash used in investing activities (164.8 ) (47.1 ) (41.7 ) Cash flows from financing activities: Proceeds from borrowings under revolving credit facility — 63.0 289.0 Repayments of borrowings under revolving credit facility — (63.0 ) (289.0 ) Repayments of long-term debt (15.4 ) (51.1 ) (201.0 ) Proceeds from issuance of long-term debt 1,175.0 1,535.2 135.7 Payments to extinguish long-term debt (1,299.0 ) (2,047.4 ) (243.2 ) Payments of debt financing costs (21.9 ) (6.1 ) (2.1 ) Investment from CDW Holdings LLC, net — — 2.8 Net change in accounts payable-inventory financing 75.5 7.4 (29.5 ) Proceeds from issuance of common shares — 424.7 — Proceeds from stock option exercises 1.3 — — Proceeds from Coworker Stock Purchase Plan 5.8 — — Dividends paid (33.6 ) (7.3 ) — Excess tax benefits from equity-based compensation 0.3 0.6 — Payment of incentive compensation plan withholding taxes — (24.1 ) — Repurchase of common shares — (0.2 ) (0.7 ) Net cash used in financing activities (112.0 ) (168.3 ) (338.0 ) Effect of exchange rate changes on cash and cash equivalents (1.8 ) (0.7 ) 0.3 Net increase (decrease) in cash and cash equivalents 156.4 150.2 (62.0 ) Cash and cash equivalents – beginning of period 188.1 37.9 99.9 Cash and cash equivalents – end of period $ 344.5 $ 188.1 $ 37.9 Supplementary disclosure of cash flow information: The accompanying notes are an integral part of the consolidated financial statements. 64 Interest paid $ (195.8 ) $ (267.6 ) $ (302.7 ) Taxes paid, net of taxes refunded $ (241.2 ) $ (82.5 ) $ (123.2 ) Non-cash investing and financing activities: Capital expenditures accrued in accounts payable-trade $ 0.6 $ 0.2 $ 0.5 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Description of Business CDW Corporation ("Parent") is a Fortune 500 company and a leading provider of integrated information technology (“IT”) solutions to small, medium and large business, government, education and healthcare customers in the U.S. and Canada. The Company's offerings range from discrete hardware and software products to integrated IT solutions such as mobility, security, data center optimization, cloud computing, virtualization and collaboration. Throughout this report, the terms “the Company” and “CDW” refer to Parent and its 100% owned subsidiaries. Parent has two 100% owned subsidiaries, CDW LLC and CDW Finance Corporation. CDW LLC is an Illinois limited liability company that, together with its 100% owned subsidiaries, holds all material assets and conducts all business activities and operations of the Company. On August 6, 2010, CDW Finance Corporation, a Delaware corporation, was formed for the sole purpose of acting as co- issuer of certain debt obligations as described in Note 18 and does not hold any material assets or engage in any business activities or operations. CDW Corporation was previously owned directly by CDW Holdings LLC ("CDW Holdings"), a company controlled by investment funds affiliated with Madison Dearborn Partners, LLC ("Madison Dearborn") and Providence Equity Partners L.L.C. ("Providence Equity," and together with Madison Dearborn, the "Sponsors"), certain other co-investors and certain members of CDW management. On July 2, 2013, Parent completed an initial public offering ("IPO") of its common stock. In connection with the IPO, CDW Holdings distributed all of its shares of Parent's common stock to its members in June 2013 in accordance with the members’ respective membership interests and was subsequently dissolved in August 2013. See Note 9 for additional discussion of the IPO. Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Principles of Consolidation The accompanying consolidated financial statements include the accounts of Parent and its 100% owned subsidiaries. All intercompany transactions and accounts are eliminated in consolidation. Use of Estimates The preparation of the consolidated financial statements in accordance with GAAP requires management to make use of certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reported periods. The Company bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include all deposits in banks and short-term (original maturities of three months or less), highly liquid investments that are readily convertible to known amounts of cash and are so near maturity that there is insignificant risk of changes in value due to interest rate changes. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and typically do not bear interest. The Company provides allowances for doubtful accounts related to accounts receivable for estimated losses resulting from the inability of its customers to make required payments. The Company takes into consideration the overall quality of the receivable portfolio along with specifically-identified customer risks. 65 1. Description of Business and Summary of Significant Accounting Policies Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Merchandise Inventory Inventory is valued at the lower of cost or market value. Cost is determined using a weighted-average cost method. Price protection is recorded when earned as a reduction to the cost of inventory. The Company decreases the value of inventory for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value, based upon an aging analysis of the inventory on hand, specifically known inventory-related risks, and assumptions about future demand and market conditions. Miscellaneous Receivables Miscellaneous receivables generally consist of amounts due from vendors. The Company receives incentives from vendors related to cooperative advertising allowances, volume rebates, bid programs, price protection and other programs. These incentives generally relate to written vendor agreements with specified performance requirements and are recorded as adjustments to cost of sales or inventory, depending on the nature of the incentive. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. The Company calculates depreciation expense using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of their useful lives or the initial lease term. Expenditures for major renewals and improvements that extend the useful life of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. The following table shows estimated useful lives of property and equipment: The Company has asset retirement obligations associated with commitments to return property subject to operating leases to its original condition upon lease termination. The Company’s asset retirement liability was $0.5 million as of December 31, 2014 and 2013. Equity Investments If the Company is not required to consolidate its investment in another entity because it does not have control, the Company uses the equity method if it (i) can exercise significant influence over the other entity and (ii) holds common stock of the other entity. Under the equity method, investments are carried at cost, plus or minus the Company’s share of equity in the increases and decreases in the investee’s net assets after the date of acquisition and adjustments for basis differences. The Company’s share of the net income or loss of equity method investees is included in other income, net in the consolidated statements of operations. Goodwill and Other Intangible Assets The Company is required to perform an evaluation of goodwill on an annual basis or more frequently if circumstances indicate a potential impairment. The annual test for impairment is conducted as of December 1. The Company’s reporting units used to assess potential goodwill impairment are the same as its operating segments. The Company has the option of performing a qualitative assessment of a reporting unit's fair value from the last quantitative assessment to determine if it is more likely than not that the reporting unit's goodwill is impaired or performing a quantitative assessment by comparing a reporting unit's estimated fair value to its carrying amount. Under the quantitative assessment, testing for impairment of goodwill is a two-step process. The first step compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of reporting unit goodwill with the carrying amount of that goodwill to determine the amount of impairment loss. Fair value of a reporting unit is determined by using a weighted combination of an income approach and a market approach, as this combination is considered the most indicative of the Company’s fair value in an orderly transaction between market participants. This assessment uses significant 66 Classification Estimated Useful Lives Machinery and equipment 5 to 10 years Building and leasehold improvements 5 to 25 years Computer and data processing equipment 3 to 5 years Computer software 3 to 5 years Furniture and fixtures 5 to 10 years Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS accounting judgments, estimates and assumptions. Any changes in the judgments, estimates or assumptions used could produce significantly different results. During the years ended December 31, 2014, 2013 and 2012 , the Company concluded its goodwill was not impaired. See Note 4 for more information on the Company’s evaluations of goodwill for impairment. Intangible assets with determinable lives are amortized on a straight-line basis over their respective estimated useful lives. The cost of computer software developed or obtained for internal use is capitalized and amortized on a straight-line basis over the estimated useful life of the software. These intangible assets are reviewed for impairment when indicators are present using undiscounted cash flows. The Company uses the undiscounted cash flows, excluding interest charges, to assess the recoverability of the carrying value of such assets. To the extent carrying value exceeds the undiscounted cash flows, an impairment loss is recorded based upon the excess of the carrying value over fair value. In addition, each quarter, the Company evaluates whether events and circumstances warrant a revision to the remaining estimated useful life of each of these intangible assets. If the Company were to determine that a change to the remaining estimated useful life of an intangible asset was necessary, then the remaining carrying amount of the intangible asset would be amortized prospectively over that revised remaining useful life. During the years ended December 31, 2014, 2013 and 2012 , no impairment existed with respect to the Company’s intangible assets with determinable lives and no significant changes to the remaining useful lives were necessary. The following table shows estimated useful lives of definite-lived intangible assets: Deferred Financing Costs Deferred financing costs, such as underwriting, financial advisory, professional fees and other similar fees are capitalized and recognized in interest expense over the estimated life of the related debt instrument using the effective interest method or straight-line method, as applicable. Derivatives The Company has entered into interest rate cap agreements for the purpose of economically hedging its exposure to fluctuations in interest rates. These derivatives are recorded at fair value in the Company’s consolidated balance sheets. The Company’s interest rate cap agreements are not designated as cash flow hedges of interest rate risk. Changes in fair value of the derivatives are recorded directly to interest expense in the Company’s consolidated statements of operations. Fair Value Measurements Fair value is defined under GAAP as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy has been established for valuation inputs to prioritize the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: Level 1 – observable inputs such as quoted prices for identical instruments traded in active markets. Level 2 – inputs are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models and similar techniques. 67 Classification Estimated Useful Lives Customer relationships 11 to 14 years Trade name 20 years Internally developed software 3 to 5 years Other 1 to 10 years Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Accumulated Other Comprehensive (Loss) Income Foreign currency translation adjustments are included in shareholders’ equity under accumulated other comprehensive (loss) income. The components of accumulated other comprehensive (loss) income are as follows: Revenue Recognition The Company is a primary distribution channel for a large group of vendors and suppliers, including original equipment manufacturers (“OEMs”), software publishers and wholesale distributors. The Company records revenue from sales transactions when title and risk of loss are passed to the customer, there is persuasive evidence of an arrangement for sale, delivery has occurred and/or services have been rendered, the sales price is fixed or determinable, and collectability is reasonably assured. The Company's shipping terms typically specify F.O.B. destination, at which time title and risk of loss have passed to the customer. Revenues from the sales of hardware products and software products and licenses are generally recognized on a gross basis with the selling price to the customer recorded as sales and the acquisition cost of the product recorded as cost of sales. These items can be delivered to customers in a variety of ways, including (i) as physical product shipped from the Company's warehouse, (ii) via drop- shipment by the vendor or supplier, or (iii) via electronic delivery for software licenses. At the time of sale, the Company records an estimate for sales returns and allowances based on historical experience. The Company's vendor partners warrant most of the products the Company sells. The Company leverages drop-shipment arrangements with many of its vendors and suppliers to deliver products to its customers without having to physically hold the inventory at its warehouses, thereby increasing efficiency and reducing costs. The Company recognizes revenue for drop-shipment arrangements on a gross basis upon delivery to the customer with contract terms that typically specify F.O.B. destination. Revenue from professional services is either recognized as provided for services billed at an hourly rate or recognized using a proportional performance model for services provided at a fixed fee. Revenue from cloud computing solutions including Software as a Service ("SaaS") and Infrastructure as a Service ("IaaS") arrangements, as well as data center services such as managed and remote managed services, server co-location, internet connectivity and data backup and storage, is recognized over the period service is provided. The Company also sells certain products for which it acts as an agent. Products in this category include the sale of third-party services, warranties, software assurance (“SA”) and third-party hosted SaaS and IaaS arrangements. SA is a product that allows customers to upgrade, at no additional cost, to the latest technology if new applications are introduced during the period that the SA is in effect. These sales do not meet the criteria for gross sales recognition, and thus are recognized on a net basis at the time of sale. Under net sales recognition, the cost paid to the vendor or third-party service provider is recorded as a reduction to sales, resulting in net sales being equal to the gross profit on the transaction. The Company's larger customers are offered the opportunity by certain of its vendors to purchase software licenses and SA under enterprise agreements (“EAs”). Under EAs, customers are considered to be compliant with applicable license requirements for the ensuing year, regardless of changes to their employee base. Customers are charged an annual true-up fee for changes in the number of users over the year. With most EAs, the Company's vendors will transfer the license and bill the customer directly, paying resellers such as the Company an agency fee or commission on these sales. The Company records these fees as a component of net sales as earned and there is no corresponding cost of sales amount. In certain instances, the Company bills the customer directly under an EA and accounts for the individual items sold based on the nature of the item. The Company's vendors typically dictate how the EA will be sold to the customer. From time to time, the Company sells some of its products and services as part of bundled contract arrangements containing multiple deliverables, which may include a combination of products and services. For each deliverable that represents a separate unit of accounting, total arrangement consideration is allocated based upon the relative selling 68 (in millions) December 31, 2014 2013 2012 Foreign currency translation adjustment $ (16.6 ) $ (6.3 ) $ 0.4 Accumulated other comprehensive (loss) income $ (16.6 ) $ (6.3 ) $ 0.4 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS prices of each element. The allocated arrangement consideration is recognized as revenue in accordance with the principles described above. Selling prices are determined by using vendor specific objective evidence (“VSOE”) if it exists. Otherwise, selling prices are determined using third party evidence (“TPE”). If neither VSOE or TPE is available, the Company uses its best estimate of selling prices. The Company records freight billed to its customers as net sales and the related freight costs as a cost of sales. Deferred revenue includes (1) payments received from customers in advance of providing the product or performing services, and (2) amounts deferred if other conditions of revenue recognition have not been met. The Company performs an analysis of the estimated number of days of sales in-transit to customers at the end of each period based on a weighted-average analysis of commercial delivery terms that includes drop-shipment arrangements. This analysis is the basis upon which the Company estimates the amount of sales in-transit at the end of the period and adjusts revenue and the related costs to reflect only what has been received by the customer. Changes in delivery patterns may result in a different number of business days used in making this adjustment and could have a material impact on the Company's revenue recognition for the period. Sales Taxes Sales tax amounts collected from customers for remittance to governmental authorities are presented on a net basis in the Company’s consolidated statements of operations. Advertising Advertising costs are generally charged to expense in the period incurred. Cooperative reimbursements from vendors are recorded in the period the related advertising expenditure is incurred. The Company classifies vendor consideration as a reduction to cost of sales. Equity-Based Compensation The Company measures all equity-based payments using a fair-value-based method and records compensation expense over the requisite service period using the straight-line method in its consolidated financial statements. Estimated forfeiture rates have been developed based upon historical experience. Interest Expense Interest expense is typically recognized in the period incurred at the applicable interest rate in effect. For increasing-rate debt, the Company determines the periodic interest cost using the effective interest method over the estimated outstanding term of the debt. The difference between interest expense recorded and cash interest paid is reflected as short-term or long-term accrued interest in the Company’s consolidated balance sheets. Foreign Currency Translation The Company’s functional currency is the U.S. dollar. The functional currency of the Company’s Canadian subsidiary is the local currency, the Canadian dollar. The functional currency of the Company's equity investment in Kelway TopCo Limited ("Kelway") is the local currency, the British pound sterling. Assets and liabilities of the Canadian subsidiary and the Company’s share of assets and liabilities in Kelway are translated at the spot rate in effect at the applicable reporting date and the consolidated results of operations of the Canadian subsidiary and the Company’s share of the net income or loss of Kelway are translated at the average exchange rates in effect during the applicable period. The resulting foreign currency translation adjustment is recorded as accumulated other comprehensive (loss) income, which is reflected as a separate component of shareholders’ equity. Income Taxes Deferred income taxes are provided to reflect the differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company performs an evaluation of the realizability of deferred tax assets on a quarterly basis. This evaluation requires management to make use of estimates and assumptions and considers all positive and negative evidence and factors, such as the scheduled reversal of temporary differences, the mix of earnings in the jurisdictions in which the Company operates, and prudent and feasible tax planning strategies. 69 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company accounts for unrecognized tax benefits based upon its assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. The Company reports a liability for unrecognized tax benefits resulting from unrecognized tax benefits taken or expected to be taken in a tax return and recognizes interest and penalties, if any, related to its unrecognized tax benefits in income tax expense. Stock Compensation - Performance Share Awards In June 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2014-12, “Compensation - Stock Compensation,” which amended the standard on how to account for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. Under this ASU, a performance target that could be achieved after the requisite service period is required to be treated as a performance condition that affects the vesting of the award and should not be reflected in estimating the fair value of the award at the grant date. This ASU is effective for the first quarter of 2016 with early adoption permitted. The Company already accounts for performance shares utilizing the method outlined by this ASU and is not impacted by the new standard. Revenue Recognition In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers," which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition standard. This ASU is effective for the Company for the first quarter of 2017 and early adoption is not permitted. This ASU allows for either a full retrospective adoption approach or a modified retrospective adoption approach. The Company is currently evaluating the impact that this ASU will have on its consolidated financial position, results of operations and cash flows. Property and equipment consisted of the following: During 2014, 2013 and 2012, the Company recorded disposals of $32.0 million , $7.9 million and $12.2 million , respectively, to remove assets that were no longer in use from property and equipment. The Company recorded a pre-tax loss of $0.1 million , $0.0 million and $0.1 million in 2014, 2013 and 2012, respectively, for certain disposed assets that were not fully depreciated. Depreciation expense for the years ended December 31, 2014, 2013 and 2012 was $25.8 million , $27.2 million and $32.0 million , respectively. As described in Note 1, the Company is required to perform an evaluation of goodwill on an annual basis or more frequently if circumstances indicate a potential impairment. The annual test for impairment is conducted as of December 1. The Company’s reporting units used to assess potential goodwill impairment are the same as its operating segments. The Company has two reportable segments: Corporate, which is comprised primarily of business customers, 70 2. Recent Accounting Pronouncements 3. Property and Equipment (in millions) December 31, 2014 2013 Land $ 27.7 $ 27.7 Machinery and equipment 54.3 53.0 Building and leasehold improvements 105.1 104.8 Computer and data processing equipment 65.6 61.2 Computer software 10.6 30.9 Furniture and fixtures 21.7 21.6 Construction in progress 24.7 10.9 Property and equipment 309.7 310.1 Less: accumulated depreciation 172.5 179.0 Property and equipment, net $ 137.2 $ 131.1 4. Goodwill and Other Intangible Assets Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS and Public, which is comprised of government entities and education and healthcare institutions. The Company also has three other operating segments, CDW Advanced Services, Canada, and Kelway, which do not meet the reportable segment quantitative thresholds and, accordingly, are combined together as “Other” for segment reporting purposes. The Company has the option of performing a qualitative assessment of a reporting unit's fair value from the last quantitative assessment to determine if it is more likely than not that the reporting unit's goodwill is impaired or performing a quantitative assessment by comparing a reporting unit's estimated fair value to its carrying amount. Under the quantitative assessment, testing for impairment of goodwill is a two-step process. The first step compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of reporting unit goodwill with the carrying amount of that goodwill to determine the amount of impairment loss. Fair value of a reporting unit is determined by using a weighted combination of an income approach and a market approach, as this combination is considered the most indicative of the Company’s fair value in an orderly transaction between market participants. Under the income approach, the Company determined fair value based on estimated future cash flows of a reporting unit, discounted by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of a reporting unit and the rate of return an outside investor would expect to earn. Under the market approach, the Company utilized valuation multiples derived from publicly available information for guideline companies to provide an indication of how much a knowledgeable investor in the marketplace would be willing to pay for a company. The valuation multiples were applied to the reporting units. Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates, gross margins, operating margins, discount rates and future market conditions, among others. December 1, 2014 Evaluation The Company performed its annual evaluation of goodwill as of December 1, 2014 by utilizing a quantitative assessment for all reporting units. All reporting units passed the first step of the goodwill evaluation (with the fair value exceeding the carrying value by 169% , 147% , 276% and 78% for the Corporate, Public, Canada and CDW Advanced Services reporting units, respectively) and, accordingly, the Company was not required to perform the second step of the goodwill evaluation. To determine the fair value of the reporting units, the Company used a 75% / 25% weighting of the income approach and market approach, respectively. Under the income approach, the Company estimated future cash flows of each reporting unit based on internally generated forecasts for the remainder of 2014 and the next six years. The Company used a 3.5% long-term assumed consolidated annual revenue growth rate for periods after the six-year forecast. The estimated future cash flows for the Corporate and Public reporting units were discounted at 9.0% ; cash flows for the Canada and CDW Advanced Services reporting units were discounted at 9.3% and 11.5% , respectively, based on the future growth rates assumed in the discounted cash flows. Discount rates utilized during the 2014 goodwill evaluation declined compared to those used in 2013 as a result of the market performance of the Company's common stock and a lower equity risk premium with the exception of CDW Advanced Services. The discount rate for CDW Advanced Services increased to account for additional forecast risk. December 1, 2013 Evaluation The Company performed its annual evaluation of goodwill as of December 1, 2013 by utilizing a quantitative assessment for all reporting units. All reporting units passed the first step of the goodwill evaluation (with the fair value exceeding the carrying value by 107% , 82% , 167% and 168% for the Corporate, Public, Canada and CDW Advanced Services reporting units, respectively) and, accordingly, the Company was not required to perform the second step of the goodwill evaluation. To determine the fair value of the reporting units, the Company used a 75% / 25% weighting of the income approach and market approach, respectively. Under the income approach, the Company estimated future cash flows of each reporting unit based on internally generated forecasts for the remainder of 2013 and the next six years. The Company used a 3.5% long-term assumed consolidated annual revenue growth rate for periods after the six-year forecast. The estimated future cash flows for the Corporate and Public reporting units were discounted at 10.0% ; cash flows for the Canada and CDW Advanced Services reporting units were discounted at 10.3% and 10.5% , respectively, based on the future growth rates assumed in the discounted cash flows. Discount rates utilized during the 2013 goodwill evaluation declined compared to those used in 2012 as a result of the market performance of the Company's common stock and a lower equity risk premium. December 1, 2012 Evaluation 71 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company performed its annual evaluation of goodwill as of December 1, 2012 by utilizing a quantitative assessment for all reporting units. All reporting units passed the first step of the goodwill evaluation (with the fair value exceeding the carrying value by 49% , 44% , 104% and 17% for the Corporate, Public, Canada and CDW Advanced Services reporting units, respectively) and, accordingly, the Company was not required to perform the second step of the goodwill evaluation. To determine the fair value of the reporting units, the Company used a 75% / 25% weighting of the income approach and market approach, respectively. Under the income approach, the Company estimated future cash flows of each reporting unit based on internally generated forecasts for the remainder of 2012 and the next six years. The Company used a 3.5% long-term assumed consolidated annual revenue growth rate for periods after the six-year forecast. The estimated future cash flows for the Corporate and Public reporting units were discounted at 11.5% ; cash flows for the Canada and CDW Advanced Services reporting units were discounted at 11.8% and 12.0% , respectively, based on the future growth rates assumed in the discounted cash flows. The following table presents the change in goodwill by segment for the years ended December 31, 2014 and 2013 : 72 (in millions) Corporate Public Other (1) Consolidated Balances as of December 31, 2012: Goodwill $ 2,794.4 $ 1,261.4 $ 107.3 $ 4,163.1 Accumulated impairment charges (1,571.4 ) (354.1 ) (28.3 ) (1,953.8 ) $ 1,223.0 $ 907.3 $ 79.0 $ 2,209.3 2013 Activity: Translation adjustment $ — $ — $ (2.1 ) $ (2.1 ) Contingent consideration (2) 8.8 4.0 0.3 13.1 $ 8.8 $ 4.0 $ (1.8 ) $ 11.0 Balances as of December 31, 2013: Goodwill $ 2,803.2 $ 1,265.4 $ 105.5 $ 4,174.1 Accumulated impairment charges (1,571.4 ) (354.1 ) (28.3 ) (1,953.8 ) $ 1,231.8 $ 911.3 $ 77.2 $ 2,220.3 2014 Activity: Translation adjustment $ — $ — $ (2.7 ) $ (2.7 ) $ — $ — $ (2.7 ) $ (2.7 ) Balances as of December 31, 2014: Goodwill $ 2,803.2 $ 1,265.4 $ 102.8 $ 4,171.4 Accumulated impairment charges (1,571.4 ) (354.1 ) (28.3 ) (1,953.8 ) $ 1,231.8 $ 911.3 $ 74.5 $ 2,217.6 (1) Other is comprised of CDW Advanced Services, Canada, and Kelway reporting units. There is no goodwill attributable to the Kelway reporting unit. (2) During 2013, the Company recorded a $13.1 million net-of-tax addition to goodwill in connection with the settlement of the MPK Coworker Incentive Plan II and related charitable contribution. The charitable contribution was accounted for as additional purchase price (goodwill) in accordance with pre-2009 business combinations accounting guidance. See Note 10 for additional discussion of this transaction. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table presents a summary of intangible assets at December 31, 2014 and 2013 : During 2014, the Company recorded disposals of $41.7 million to remove fully amortized internally developed software assets that were no longer in use from intangible assets. Amortization expense related to intangible assets for the years ended December 31, 2014, 2013 and 2012 was $182.1 million , $181.0 million and $178.2 million , respectively. Estimated future amortization expense related to intangible assets for the next five years is as follows: The Company has entered into agreements with certain financial intermediaries to facilitate the purchase of inventory from various suppliers under certain terms and conditions, as described below. These amounts are classified separately as accounts payable-inventory financing on the accompanying consolidated balance sheets. The Company does not incur any interest expense associated with these agreements as balances are paid when they are due. The following table presents the amounts included in accounts payable-inventory financing: As described in Note 7, in June 2014, the Company entered into a new senior secured asset-based revolving credit facility, which incorporates the previous inventory floorplan sub-facility and, among other changes, removes the $400.0 million limit on the size of the floorplan sub-facility. In connection with the floorplan sub-facility, the Company maintains an inventory financing agreement on an unsecured basis with a financial intermediary to facilitate 73 (in millions) December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 1,859.7 $ 1,012.1 $ 847.6 Trade name 421.0 152.0 269.0 Internally developed software 110.1 58.9 51.2 Other 3.2 2.2 1.0 Total $ 2,394.0 $ 1,225.2 $ 1,168.8 December 31, 2013 Customer relationships $ 1,860.8 $ 872.8 $ 988.0 Trade name 421.0 130.9 290.1 Internally developed software 128.5 79.8 48.7 Other 3.1 1.9 1.2 Total $ 2,413.4 $ 1,085.4 $ 1,328.0 (in millions) Years ending December 31, 2015 $ 180.7 2016 172.8 2017 167.1 2018 160.4 2019 158.9 5. Inventory Financing Agreements (in millions) December 31, 2014 2013 Revolving Loan inventory financing agreement $ 330.1 $ 256.1 Other inventory financing agreements 2.0 0.5 Accounts payable-inventory financing $ 332.1 $ 256.6 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS the purchase of inventory from this vendor (the “Revolving Loan inventory financing agreement”). Amounts outstanding under the Revolving Loan inventory financing agreement are unsecured and non-interest bearing. The Company also maintains other inventory financing agreements with financial intermediaries to facilitate the purchase of inventory from certain vendors. At December 31, 2014 and 2013 , amounts owed under other inventory financing agreements of $2.0 million and $0.5 million , respectively, were collateralized by the inventory purchased under these financing agreements and a second lien on the related accounts receivable. The Company is obligated under various non-cancelable operating lease agreements for office facilities that generally provide for minimum rent payments and a proportionate share of operating expenses and property taxes and include certain renewal and expansion options. For the years ended December 31, 2014, 2013 and 2012 , rent expense under these lease arrangements was $21.4 million , $20.7 million and $22.4 million , respectively. Future minimum lease payments are as follows: (1) Included in these amounts are future minimum lease payments commencing in the fourth quarter of 2016 that relate to a new lease entered into in December 2014 for the Company’s future headquarters in Lincolnshire, Illinois. Also reflected in these amounts is the future expiration of two leases in the first quarter of 2016 for facilities currently in use by the Company which the Company plans to consolidate into the new headquarters location and accordingly, these leases will not be renewed. Long-term debt was as follows: (1) Interest rate at December 31, 2014 . At December 31, 2014 , the Company was in compliance with the covenants under its various credit agreements and indentures as described below. Under the indenture governing the 8.5% Senior Notes due 2019, which contains the 6. Lease Commitments (in millions) Years ending December 31, 2015 $ 19.1 2016 15.3 2017 16.1 2018 13.6 2019 12.8 Thereafter 50.6 Total future minimum lease payments (1) $ 127.5 7. Long-Term Debt (dollars in millions) December 31, Interest Rate (1) 2014 2013 Senior secured asset-based revolving credit facility —% $ — $ — Senior secured term loan facility 3.25 % 1,513.5 1,528.9 Unamortized discount on senior secured term loan facility (3.7 ) (4.4 ) Senior secured notes due 2018 —% — 325.0 Senior notes due 2019 8.5 % 503.9 1,305.0 Unamortized premium on senior notes due 2019 1.3 4.2 Senior notes due 2022 6.0 % 600.0 — Senior notes due 2024 5.5 % 575.0 — Senior subordinated notes due 2017 —% — 92.5 Total long-term debt 3,190.0 3,251.2 Less current maturities of long-term debt (15.4 ) (45.4 ) Long-term debt, excluding current maturities $ 3,174.6 $ 3,205.8 74 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS most restrictive restricted payment provisions in the Company’s various credit agreements and indentures, CDW LLC and its restricted subsidiaries are generally restricted from paying dividends and making other restricted payments. For the purpose of determining restricted payment capacity, consolidated net income or loss includes certain adjustments that are defined in the applicable indenture. At December 31, 2014 , the amount of cumulative consolidated net income free of restrictions under the credit agreements and indentures ("Restricted Payment Capacity") was $230.3 million . Senior Secured Asset-Based Revolving Credit Facility (“Revolving Loan”) At December 31, 2014 , the Company had no outstanding borrowings under the Revolving Loan, $2.1 million of undrawn letters of credit and $312.3 million reserved related to the floorplan sub-facility. On June 6, 2014, the Company entered into the Revolving Loan, a new five-year $1,250.0 million senior secured asset-based revolving credit facility, with the facility being available to the Company for borrowings, issuance of letters of credit and floorplan financing for certain vendor products. The Revolving Loan matures on June 6, 2019, subject to an acceleration provision discussed below. The Revolving Loan replaces the Company’s previous revolving loan credit facility that was to mature on June 24, 2016. The Revolving Loan (i) increases the overall revolving credit facility capacity available to the Company from $900.0 million to $1,250.0 million , (ii) increases the maximum aggregate amount of increases that may be made to the revolving credit facility from $200.0 million to $300.0 million , (iii) maintains a maturity acceleration provision based upon excess cash availability whereby the Revolving Loan may mature 45 days prior to the final maturity of any then outstanding senior debt if excess cash availability does not exceed the outstanding borrowings of the subject maturing debt at the time of the test plus $150.0 million , (iv) decreases the fee on the unused portion of the revolving credit facility from either 37.5 or 50 basis points, depending on the amount of utilization, to 25 basis points, (v) decreases the applicable interest rate margin by 50 basis points, and (vi) amends the existing inventory floorplan sub-facility as discussed below. In connection with the termination of the previous facility, the Company recorded a loss on extinguishment of long-term debt of $0.4 million in the consolidated statement of operations for the year ended December 31, 2014 , representing a write-off of a portion of unamortized deferred financing costs. Fees of $6.4 million related to the Revolving Loan were capitalized as deferred financing costs and are being amortized over the five-year term of the facility on a straight-line basis. The Revolving Loan incorporates the previous inventory floorplan sub-facility and related Revolving Loan inventory financing agreement while removing the previous $400.0 million limit on the size of the floorplan sub-facility and the in-transit reserve of 15% of open orders. At December 31, 2014 , the financial intermediary reported an outstanding balance of $312.3 million under the Revolving Loan inventory financing agreement. The amount included on the Company's consolidated balance sheet as of December 31, 2014 as accounts payable-inventory financing related to the Revolving Loan inventory financing agreement of $330.1 million includes a $17.8 million accrual for amounts in transit. Borrowings under the Revolving Loan bear interest at a variable interest rate plus an applicable margin. The interest rate margin is based on one of two indices, either (i) LIBOR, or (ii) the Alternate Base Rate (“ABR”) with the ABR being the greater of (a) the prime rate, (b) the federal funds effective rate plus 50 basis points or (c) the one-month LIBOR plus 1.00% . The applicable margin varies ( 1.50% to 2.00% for LIBOR borrowings and 0.50% to 1.00% for ABR borrowings) depending upon average daily excess cash availability under the agreement evidencing the Revolving Loan and is subject to a reduction of 0.25% if, and for as long as, CDW LLC's corporate credit rating from Standard & Poor’s Rating Services is BB or better and CDW LLC's corporate family rating from Moody’s Investors Service, Inc. is Ba3 or better (in each case with stable or better outlook). Under the new Revolving Loan, the Company is permitted to borrow an aggregate amount of $1,250.0 million ; however, its ability to borrow under the Revolving Loan is limited by a borrowing base. The borrowing base is (a) the sum of the products of the applicable advance rates on eligible accounts receivable and on eligible inventory as defined in the agreement less (b) any reserves. At December 31, 2014 , the borrowing base was $1,253.4 million based on the amount of eligible inventory and accounts receivable balances as of November 30, 2014. The Company could have borrowed up to an additional $935.6 million under the Revolving Loan at December 31, 2014 . The ability to borrow under the Revolving Loan also remains limited by a minimum liquidity condition which provides that, if excess cash availability is less than the lesser of (i) $125.0 million and (ii) the greater of (A) 10.0% of the borrowing base and (B) $100.0 million , the lenders are not required to lend any additional amounts under the Revolving Loan unless the consolidated fixed charge coverage ratio (as described in the agreement evidencing the Revolving Loan) is at least 1.00 to 1.00 . 75 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CDW LLC is the borrower under the Revolving Loan. All obligations under the Revolving Loan are guaranteed by Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries. Borrowings under the Revolving Loan are collateralized by a first priority interest in inventory (excluding inventory collateralized under the inventory floorplan arrangements as described in Note 5), deposits, and accounts receivable, and a second priority interest in substantially all other assets. The Revolving Loan contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or consolidations, or engage in certain transactions with affiliates. The Revolving Loan also includes maintenance of a minimum average daily excess cash availability requirement. Should the Company fall below the minimum average daily excess cash availability requirement for five consecutive business days, the Company becomes subject to a fixed charge coverage ratio until such time as the daily excess cash availability requirement is met for 30 consecutive business days. Senior Secured Term Loan Facility On April 29, 2013, the Company entered into a seven-year, $1,350.0 million aggregate principal amount senior secured term loan facility (the "Term Loan"). The Term Loan was issued at a price that was 99.75% of par, which resulted in a discount of $3.4 million . Substantially all of the proceeds from the Term Loan were used to repay the $1,299.5 million outstanding aggregate principal amount of the prior senior secured term loan facility (the "Prior Term Loan Facility"). In connection with this refinancing, the Company recorded a loss on extinguishment of long-term debt of $10.3 million in the consolidated statement of operations for the year ended December 31, 2013. This loss represented a write-off of the remaining unamortized deferred financing costs related to the Prior Term Loan Facility. On July 31, 2013, the Company borrowed an additional $190.0 million aggregate principal amount under the Term Loan at a price that was 99.25% of par, which resulted in a discount of $1.4 million . Such proceeds were used to redeem a portion of outstanding Senior Subordinated Notes. The discounts are reported on the consolidated balance sheet as a reduction to the face amount of the Term Loan and are being amortized to interest expense over the term of the related debt. Fees of $6.1 million related to the Term Loan were capitalized as deferred financing costs and are being amortized over the term of the facility using the effective interest method. The Company is required to pay quarterly principal installments equal to 0.25% of the original principal amount of the Term Loan, with the remaining principal amount payable on the maturity date of April 29, 2020. The quarterly principal installment payments commenced during the quarter ended June 30, 2013. At December 31, 2014 , the outstanding principal amount of the Term Loan was $1,513.5 million , excluding $3.7 million in unamortized discount. Borrowings under the Term Loan bear interest at either (a) the alternate base rate ("ABR") plus a margin or (b) LIBOR plus a margin; provided that for the purposes of the Term Loan, LIBOR shall not be less than 1.00% per annum at any time ("LIBOR Floor"). The margin is based upon a net leverage ratio as defined in the agreement governing the Term Loan, ranging from 1.25% to 1.50% for ABR borrowings and 2.25% to 2.50% for LIBOR borrowings. The total net leverage ratio was 3.1 at December 31, 2014 . An interest rate of 3.25% , LIBOR Floor plus a 2.25% margin, was in effect during the three-month period ended December 31, 2014 . In order to manage the risk associated with changes in interest rates on borrowings under the Term Loan, the Company has entered into interest rate cap agreements. The Company had ten interest rate cap agreements in effect through January 14, 2015 with a combined notional amount of $1,150.0 million which entitled the Company to payments from the counterparty of the amount, if any, by which three-month LIBOR exceeds a weighted average rate of 2.4% during the agreement period. The fair value of these interest rate cap agreements was zero at both December 31, 2014 and 2013. In connection with the expiration of the ten interest rate cap agreements noted above, during the year ended December 31, 2014 , the Company entered into 14 additional interest rate cap agreements with a combined notional amount of $1,000.0 million . Under these agreements, the Company made premium payments totaling $2.1 million to the counterparties in exchange for the right to receive payments equal to the amount, if any, by which three-month LIBOR exceeds 2.0% during the agreement period. These interest rate cap agreements are effective from January 14, 2015 through January 14, 2017. The fair value of these interest rate cap agreements was $1.7 million at December 31, 2014 . The Company's interest rate cap agreements have not been designated as cash flow hedges of interest rate risk for GAAP accounting purposes. The interest rate cap agreements are recorded at fair value on the Company’s 76 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS consolidated balance sheet in Other Assets each period, with changes in fair value recorded directly to interest expense in the Company’s consolidated statements of operations. The fair value of the Company’s interest rate cap agreements is classified as Level 2 in the fair value hierarchy. The valuation of the interest rate cap agreements is derived by using a discounted cash flow analysis on the expected cash receipts that would occur if variable interest rates rise above the strike rates of the caps. This analysis reflects the contractual terms of the interest rate cap agreements, including the period to maturity, and uses observable market-based inputs, including LIBOR curves and implied volatilities. The Company also incorporates insignificant credit valuation adjustments to appropriately reflect the respective counterparty’s nonperformance risk in the fair value measurements. The counterparty credit spreads are based on publicly available credit information obtained from a third party credit data provider. See Note 20 for a description of the interest rate cap agreements entered into during the first quarter of 2015. On January 30, 2013, the Company made an optional prepayment of $40.0 million aggregate principal amount outstanding under the Prior Term Loan Facility. The optional prepayment satisfied the excess cash flow payment provision of the Prior Term Loan Facility with respect to the year ended December 31, 2012. CDW LLC is the borrower under the Term Loan. All obligations under the Term Loan are guaranteed by Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries. The Term Loan is collateralized by a second priority interest in substantially all inventory (excluding inventory collateralized under the inventory floorplan arrangements as described in Note 5), deposits, and accounts receivable, and by a first priority interest in substantially all other assets. The Term Loan contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or consolidations, or engage in certain transactions with affiliates. 8.0% Senior Secured Notes due 2018 (“Senior Secured Notes”) At December 31, 2014 , there were no outstanding Senior Secured Notes. On August 5, 2014, the proceeds from the issuance of the 2022 Senior Notes discussed below, along with cash on hand, were deposited with the trustee to redeem all of the remaining $325.0 million aggregate principal amount of the Senior Secured Notes at a redemption price of 106.061% of the principal amount redeemed, plus accrued and unpaid interest through the date of redemption. On the same date, the indenture governing the Senior Secured Notes was satisfied and discharged. The redemption date was September 5, 2014. In connection with this redemption, the Company recorded a loss on extinguishment of long-term debt of $23.7 million in the consolidated statement of operations for the year ended December 31, 2014 , which was comprised of $4.0 million for the write-off of the unamortized deferred financing fees, a redemption premium of $13.0 million and a make-whole interest payment of $6.7 million . On July 2, 2013, the Company used a portion of the net proceeds from the IPO to redeem $175.0 million aggregate principal amount of Senior Secured Notes. The redemption price of the Senior Secured Notes was 108.0% of the principal amount redeemed, plus $0.7 million of accrued and unpaid interest to the date of redemption. The Company used cash on hand to pay such accrued and unpaid interest. In connection with this redemption, the Company recorded a loss on extinguishment of long-term debt of $16.7 million in the consolidated statement of operations for the year ended December 31, 2013. This loss represented $14.0 million in redemption premium and $2.7 million for the write-off of a portion of the remaining deferred financing costs related to the Senior Secured Notes. 8.5% Senior Notes due 2019 (“2019 Senior Notes”) At December 31, 2014 , the outstanding principal amount of 2019 Senior Notes was $503.9 million , excluding $1.3 million in unamortized premium. The 2019 Senior Notes mature on April 1, 2019. 77 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS On December 1, 2014, the proceeds from the issuance of the 2024 Senior Notes discussed below, along with cash on hand, were deposited with the trustee to redeem $541.4 million aggregate principal amount of the 2019 Senior Notes at a redemption price of 106.202% of the principal amount redeemed, plus accrued and unpaid interest through the date of redemption. The redemption date was December 31, 2014. In connection with this redemption, the Company recorded a loss on extinguishment of long-term debt of $36.9 million in the consolidated statement of operations for the year ended December 31, 2014 , which was comprised of $4.7 million for the write-off of a portion of the unamortized deferred financing fees, a redemption premium of $23.0 million , and a make-whole interest payment of $10.6 million , partially offset by $1.4 million for the write-off of a portion of the unamortized premium. On August 5, 2014, the proceeds from the issuance of the 2022 Senior Notes discussed below, along with cash on hand, were deposited with the trustee to redeem $234.7 million aggregate principal amount of the 2019 Senior Notes at a redemption price of 108.764% of the principal amount redeemed, plus accrued and unpaid interest through the date of redemption. The redemption date was September 5, 2014. In connection with this redemption, the Company recorded a loss on extinguishment of long-term debt of $22.1 million in the consolidated statement of operations for the year ended December 31, 2014 , which was comprised of $2.2 million for the write-off of a portion of the unamortized deferred financing fees, a redemption premium of $10.0 million , and a make-whole interest payment of $10.6 million , partially offset by $0.7 million for the write-off of a portion of the unamortized premium. On March 20, 2014, the Company repurchased and subsequently canceled $25.0 million aggregate principal amount of the 2019 Senior Notes from an affiliate of Providence Equity in a privately negotiated transaction on an arms' length basis at a price of 109.75% of the principal amount. Cash on hand was used to fund the repurchase of $25.0 million aggregate principal amount, $2.4 million of repurchase premium and $1.0 million in accrued and unpaid interest to the date of repurchase. In connection with this repurchase, the Company recorded a loss on extinguishment of long-term debt of $2.7 million in the Company's consolidated statement of operations for the year ended December 31, 2014 . This loss represented $2.4 million in repurchase premium and $0.3 million for the write-off of a portion of the unamortized deferred financing costs related to the 2019 Senior Notes. CDW LLC and CDW Finance Corporation are the co-issuers of the 2019 Senior Notes. Obligations under the 2019 Senior Notes are guaranteed on an unsecured senior basis by Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries. The 2019 Senior Note indenture contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or consolidations, or engage in certain transactions with affiliates. The 2019 Senior Notes do not contain any financial covenants. 6.0% Senior Notes due 2022 ("2022 Senior Notes") On August 5, 2014, CDW LLC and CDW Finance Corporation, as co-issuers, completed the issuance of $600.0 million aggregate principal amount of 2022 Senior Notes at par. Fees of $8.0 million related to the 2022 Senior Notes were capitalized as deferred financing costs and are being amortized over the term of the notes on a straight-line basis. The 2022 Senior Notes will mature on August 15, 2022 and bear interest at a rate of 6.00% per annum, payable semi-annually on February 15 and August 15 of each year. The first interest payment date was February 15, 2015. CDW LLC and CDW Finance Corporation are the co-issuers of the 2022 Senior Notes and the obligations under the notes are guaranteed by Parent and each of CDW LLC's direct and indirect, wholly owned, domestic subsidiaries. The 2022 Senior Notes indenture contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries to enter into sale and lease-back transactions, incur additional secured indebtedness, and create liens. The indenture governing the 2022 Senior Notes does not contain any financial covenants. 5.5% Senior Notes due 2024 ("2024 Senior Notes") On December 1, 2014, CDW LLC and CDW Finance Corporation, as co-issuers, completed the issuance of $575.0 million aggregate principal amount of 2024 Senior Notes at par. Fees of $7.5 million related to the 2024 Senior Notes were capitalized as deferred financing costs and are being amortized over the term of the notes on a straight-line basis. The 2024 Senior Notes will mature on December 1, 2024 and bear interest at a rate of 5.50% per annum, payable semi-annually on June 1 and December 1 of each year. The first interest payment date will be June 1, 2015. 78 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CDW LLC and CDW Finance Corporation are the co-issuers of the 2024 Senior Notes and the obligations under the notes are guaranteed by Parent and each of CDW LLC's direct and indirect, wholly owned, domestic subsidiaries. The 2024 Senior Notes indenture contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries to enter into sale and lease-back transactions, incur additional secured indebtedness, and create liens. The indenture governing the 2024 Senior Notes does not contain any financial covenants. 12.535% Senior Subordinated Exchange Notes due 2017 (“Senior Subordinated Notes”) At December 31, 2014 , there were no outstanding Senior Subordinated Notes. On May 9, 2014, the Company redeemed all of the remaining $42.5 million aggregate principal amount of Senior Subordinated Notes at a redemption price that was 104.178% of the principal amount redeemed. Cash on hand was used to fund the redemption of $42.5 million aggregate principal amount, $1.8 million in redemption premium and $0.4 million in accrued and unpaid interest to the date of redemption. In connection with this redemption, the Company recorded a loss on extinguishment of long-term debt of $2.2 million in the consolidated statement of operations for the year ended December 31, 2014 . This loss represented $1.8 million in redemption premium and $0.4 million for the write-off of the remaining deferred financing costs related to the Senior Subordinated Notes. On January 22, 2014 and February 21, 2014, the Company redeemed $30.0 million and $20.0 million aggregate principal amounts of Senior Subordinated Notes, respectively, at redemption prices that were 104.178% of the principal amounts redeemed. Cash on hand was used to fund the redemptions of $50.0 million aggregate principal amount, $2.1 million in redemption premiums and $1.9 million in aggregate accrued and unpaid interest to the dates of redemption. In connection with these redemptions, the Company recorded a loss on extinguishment of long-term debt of $2.7 million in the consolidated statement of operations for the year ended December 31, 2014 . This loss represented $2.1 million in redemption premiums and $0.6 million for the write-off of a portion of the remaining deferred financing costs related to the Senior Subordinated Notes. On October 18, 2013, the Company redeemed $155.0 million aggregate principal amount of Senior Subordinated Notes at a redemption price that was 104.178% of the principal amount redeemed. A combination of cash on hand and the net proceeds from the sale of shares of common stock related to the underwriters' exercise in full of the overallotment option granted to them in connection with the IPO, in the amount of $56.0 million , was used to fund the redemption of $155.0 million aggregate principal amount, $6.5 million of redemption premium and $0.2 million in accrued and unpaid interest to the date of redemption. See Note 9 for additional discussion of the underwriters' overallotment option. In connection with this redemption, the Company recorded a loss on extinguishment of long- term debt of $8.5 million in the Company's consolidated statement of operations for the year ended December 31, 2013. This loss represented $6.5 million in redemption premium and $2.0 million for the write-off of a portion of the remaining unamortized deferred financing costs related to the Senior Subordinated Notes. On August 1, 2013, the Company redeemed $324.0 million aggregate principal amount of Senior Subordinated Notes at a redemption price that was 106.268% of the principal amount redeemed. The Company used a portion of the net proceeds from the IPO to redeem $146.0 million aggregate principal amount of Senior Subordinated Notes and incremental borrowings of $190.0 million under the Term Loan to redeem $178.0 million aggregate principal amount of Senior Subordinated Notes. The Company used cash on hand to pay $12.0 million of accrued and unpaid interest to the date of redemption. In connection with this redemption, the Company recorded a loss on extinguishment of long-term debt of $24.6 million in the consolidated statement of operations for the year ended December 31, 2013. This loss represented $20.3 million in redemption premium and $4.3 million for the write-off of a portion of the remaining deferred financing costs related to the Senior Subordinated Notes. On March 8, 2013, the Company redeemed $50.0 million aggregate principal amount of Senior Subordinated Notes at a redemption price that was 106.268% of the principal amount redeemed. Cash on hand was used to fund the redemption of $50.0 million aggregate principal amount, $3.1 million of redemption premium and $2.5 million in accrued and unpaid interest to the date of redemption. In connection with this redemption, the Company recorded a loss on extinguishment of long-term debt of $3.9 million in the Company's consolidated statement of operations for the year ended December 31, 2013. This loss represented $3.1 million in redemption premium and $0.8 million for the write-off of a portion of the remaining unamortized deferred financing costs related to the Senior Subordinated Notes. 79 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Long-Term Debt Maturities As of December 31, 2014 , the maturities of long-term debt were as follows: Fair Value The fair value of the Company's long-term debt instruments at December 31, 2014 was $3,208.7 million . The fair value of the 2019 Senior Notes, the 2022 Senior Notes, and the 2024 Senior Notes was estimated using quoted market prices for identical assets or liabilities that are traded in over-the-counter secondary markets that are not considered active. The fair value of the Term Loan was estimated using dealer quotes for identical assets or liabilities in markets that are not considered active. Consequently, the Company's long-term debt is classified as Level 2 within the fair value hierarchy. At December 31, 2014 , the carrying value of the Company's long-term debt was $3,192.4 million , excluding $1.3 million in unamortized premium and $3.7 million in unamortized discount. Deferred Financing Costs The following table summarizes the deferred financing costs activity for the years ended December 31, 2014 and 2013 : As of December 31, 2014 and December 31, 2013 , the weighted-average remaining life of unamortized deferred financing costs was 6.6 and 4.9 years, respectively. Income before income taxes was taxed under the following jurisdictions: 80 (in millions) Years ending December 31, 2015 $ 15.4 2016 — 2017 — 2018 — 2019 503.9 Thereafter 2,673.1 $ 3,192.4 (in millions) December 31, 2014 2013 Beginning balance $ 30.1 $ 53.2 Additional costs capitalized 21.9 6.1 Recognized in interest expense (6.4 ) (9.1 ) Write-off of unamortized deferred financing costs (12.6 ) (20.1 ) Ending balance $ 33.0 $ 30.1 8. Income Taxes (in millions) Years Ended December 31, 2014 2013 2012 Domestic $ 366.6 $ 179.4 $ 170.3 Foreign 21.1 16.1 15.8 Total $ 387.7 $ 195.5 $ 186.1 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Components of income tax expense (benefit) consisted of the following: The reconciliation between the statutory tax rate expressed as a percentage of income before income taxes and the effective tax rate is as follows: The tax effect of temporary differences that give rise to the net deferred income tax liability is presented below: 81 (in millions) Years Ended December 31, 2014 2013 2012 Current: Federal $ 206.8 $ 96.7 $ 110.3 State 19.3 10.1 8.0 Foreign 5.8 4.6 5.1 Total current 231.9 111.4 123.4 Deferred: Domestic (89.0 ) (48.6 ) (56.2 ) Foreign (0.1 ) (0.1 ) (0.1 ) Total deferred (89.1 ) (48.7 ) (56.3 ) Income tax expense $ 142.8 $ 62.7 $ 67.1 (dollars in millions) Years Ended December 31, 2014 2013 2012 Statutory federal income tax rate $ 135.7 35.0 % $ 68.4 35.0 % $ 65.1 35.0 % State taxes, net of federal effect 6.5 1.6 (5.0 ) (2.6 ) 0.4 0.2 Equity-based compensation 1.1 0.3 1.5 0.7 5.7 3.1 Effect of rates different than statutory (1.9 ) (0.5 ) (1.4 ) (0.7 ) (1.4 ) (0.8 ) Other 1.4 0.4 (0.8 ) (0.3 ) (2.7 ) (1.5 ) Effective tax rate $ 142.8 36.8 % $ 62.7 32.1 % $ 67.1 36.0 % (in millions) December 31, 2014 2013 Deferred Tax Assets: Deferred interest $ 32.9 $ 43.5 State net operating loss and credit carryforwards, net 18.8 21.1 Payroll and benefits 27.0 16.2 Rent 5.5 6.4 Accounts receivable 6.3 5.4 Equity compensation plans 6.5 1.6 Trade credits 1.5 1.5 Other 5.0 7.1 Total deferred tax assets 103.5 102.8 Deferred Tax Liabilities: Software and intangibles 425.3 486.2 Deferred income 116.2 145.5 Property and equipment 22.5 25.0 Other 15.3 11.6 Total deferred tax liabilities 579.3 668.3 Deferred tax asset valuation allowance — — Net deferred tax liability $ 475.8 $ 565.5 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company has state income tax net operating loss carryforwards of $124.0 million , which will expire at various dates from 2015 through 2033 and state tax credit carryforwards of $19.6 million , which expire at various dates from 2016 through 2019. The Company has not provided for U.S. federal income taxes or tax benefits on the undistributed earnings of its international subsidiary because such earnings are reinvested and it is currently intended that they will continue to be reinvested indefinitely. At December 31, 2014 , the Company has not provided for federal income taxes on earnings of approximately $66.6 million from its international subsidiary. The Company had no unrecognized tax benefits at December 31, 2014, 2013 and 2012 . In the ordinary course of business, the Company is subject to review by domestic and foreign taxing authorities, including the Internal Revenue Service (“IRS”). In general, the Company is no longer subject to audit by the IRS for tax years through 2010 and state, local or foreign taxing authorities for tax years through 2009. Various other taxing authorities are in the process of auditing income tax returns of the Company and its subsidiaries. The Company does not anticipate that any adjustments from the audits would have a material impact on its consolidated financial position, results of operations or cash flows. The Company accrues net interest and penalties related to unrecognized tax benefits in income tax expense in its consolidated statements of operations. For the years ended December 31, 2014, 2013 and 2012 , the Company had no liability recorded for the payment of interest and penalties on unrecognized tax benefits and did not recognize any such interest and penalty expense. The Company declared and paid cash dividends per common share during the periods presented as follows: See Note 20 for a discussion of the dividend declared during the first quarter of 2015. Future dividends will be subject to the approval of the Company's Board of Directors and will depend upon the Company’s results of operations, financial condition, business prospects, capital requirements, contractual restrictions, any potential indebtedness the Company may incur, restrictions imposed by applicable law, tax considerations and other factors that the Company’s Board of Directors deems relevant. In addition, the Company’s ability to pay dividends on its common stock will be limited by restrictions on the ability of subsidiaries to pay dividends or make distributions to the Company, in each case, under the terms of certain current and future agreements governing the Company’s indebtedness. On November 6, 2014, the Company announced that its Board of Directors approved a $500.0 million share repurchase program effective immediately under which the Company may repurchase shares of its common stock in the open market or through privately negotiated transactions, depending on share price, market conditions and other factors. The share repurchase program does not obligate the Company to repurchase any dollar amount or number of shares, and repurchases may be commenced or suspended from time to time without prior notice. As of the date of this filing, no shares have been repurchased under the share repurchase program. On January 1, 2014, the first offering period under the Company's Coworker Stock Purchase Plan (the “CSPP”) commenced. The CSPP provides the opportunity for eligible coworkers to acquire shares of the Company's common 82 9. Shareholders' Equity (in millions, except per share amounts) Dividends Per Share Amount 2014: First Quarter $ 0.0425 $ 7.3 Second Quarter 0.0425 7.3 Third Quarter 0.0425 7.3 Fourth Quarter 0.0675 11.7 2013: First Quarter $ — $ — Second Quarter — — Third Quarter — — Fourth Quarter 0.0425 7.3 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS stock at a 5% discount from the closing market price on the final day of the offering period. There is no compensation expense associated with the CSPP. On July 2, 2013, the Company completed an IPO of 23,250,000 shares of common stock. On July 31, 2013, the Company completed the sale of an additional 3,487,500 shares of common stock to the underwriters of the IPO pursuant to the underwriters' July 26, 2013 exercise in full of the overallotment option granted to them in connection with the IPO. Such shares were registered under the Securities Act of 1933, as amended, pursuant to the Company's Registration Statement on Form S-1, which was declared effective by the SEC on June 26, 2013. The shares of common stock are listed on the NASDAQ Global Select Market under the symbol “CDW.” The Company's shares of common stock were sold to the underwriters at a price of $17.00 per share in the IPO and upon the exercise of the overallotment option, which together generated aggregate net proceeds of $424.7 million to the Company after deducting underwriting discounts, expenses and transaction costs. The Company has completed the following secondary public offerings, whereby certain selling stockholders sold shares of common stock to the underwriters. The Company did not receive any proceeds from these sales of shares. (1) Under each underwriting agreement, the selling stockholders granted the underwriters an option, exercisable for thirty days, to purchase up to the additional amount of shares noted. (2) The option to purchase additional shares was not exercised in connection with the September 2014 secondary offering. The following pre-tax IPO-related expenses and secondary-offering-related expenses were included within selling and administrative expenses in the consolidated statements of operations for the years ended December 31, 2014 and 2013, respectively. (1) See Note 10 for additional discussion of the impact of the IPO on the Company's equity awards. (2) See Note 12 for additional discussion of this transaction. (3) Represents the payment of a termination fee to affiliates of the Sponsors in connection with the termination of the management services agreement with such entities. (4) Other expenses include secondary-offering expenses of $1.4 million and $0.6 million for the years ended December 31, 2014 and 2013, respectively. 83 Secondary Offering Shares Completion Date of Secondary Offering Overallotment Shares (1) Completion Date of Overallotment Shares Secondary Offering Expenses (in millions) 15,000,000 11/19/2013 2,250,000 12/18/2013 $ 0.6 10,000,000 3/12/2014 1,500,000 3/12/2014 $ 0.4 15,000,000 5/28/2014 2,250,000 6/4/2014 $ 0.5 15,000,000 9/8/2014 (2) — — $ 0.3 15,000,000 12/8/2014 2,250,000 12/8/2014 $ 0.2 (in millions) Year Ended December 31, 2014 2013 Acceleration charge for certain equity awards and related employer payroll taxes (1) $ — $ 40.7 RDU Plan cash retention pool accrual (2) — 7.5 Management services agreement termination fee (3) — 24.4 Other expenses (4) 1.4 2.4 IPO- and secondary-offering-related expenses $ 1.4 $ 75.0 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In June 2013, the Company’s Board of Directors and the Company's sole shareholder at that time, CDW Holdings, approved the reclassification of the Company’s Class A common shares and Class B common shares into a single class of common shares and a 143.0299613 -for-1 stock split, effective immediately. The par value of the common shares was maintained at $0.01 per share. All references to common shares and per share amounts in the accompanying consolidated financial statements have been adjusted to reflect the reclassification and stock split on a retroactive basis. In June 2013, the Company amended and restated its certificate of incorporation to authorize the issuance of 100,000,000 shares of preferred stock with a par value of $0.01 . No shares of preferred stock have been issued or are outstanding as of December 31, 2014. Additionally, the amended and restated certificate of incorporation increased the number of authorized common shares to 1,000,000,000 . The 2013 Long-Term Incentive Plan (“2013 LTIP”) provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, bonus stock and performance awards. The maximum aggregate number of shares that may be issued under the 2013 LTIP is 11,700,000 shares of the Company's common stock, in addition to the 3,798,508 shares of restricted stock granted in exchange for unvested Class B Common Units in connection with the Company's IPO, as discussed below. As of December 31, 2014, 7,541,891 shares were available for issuance under the 2013 LTIP which was approved by the Company's pre-IPO shareholders. Authorized but unissued shares are reserved for issuance in connection with equity-based awards. The following table summarizes equity-based compensation expense, which is included in selling and administrative expenses, for the years ended December 31, 2014, 2013 and 2012 : The total unrecognized compensation cost related to nonvested awards was $28.9 million at December 31, 2014 and is expected to be recognized over a weighted-average period of 2.3 years. Stock Options During the year ended December 31, 2014 , the Company granted 1,245,513 stock options under the 2013 LTIP. These options vest annually over three years and have a contractual term of 10 years. The exercise price of a stock option is equal to the fair value of a share of the Company's common stock on the date of the grant. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options granted. The Black-Scholes option pricing model incorporates various assumptions including volatility, expected term, risk-free interest rates and dividend yields. The weighted-average assumptions used to value the stock options granted during the years ended December 31, 2014 and 2013 are presented below. 84 10. Equity-Based Compensation (in millions) Year Ended December 31, 2014 2013 (1) 2012 (2) Equity-based compensation expense $ 16.4 $ 46.6 $ 22.1 Income tax benefit (5.1 ) (16.5 ) (2.3 ) Total (net of tax) $ 11.3 $ 30.1 $ 19.8 (1) Includes pre-tax expense of $36.7 million related to the accelerated vesting of certain equity awards granted prior to our IPO. All unvested awards granted pursuant to the MPK Coworker Incentive Plan II (the “MPK Plan”) vested in connection with the IPO as discussed further below in the section labeled "MPK II Units." (2) Includes pre-tax expense of $6.6 million in connection with the modification of Class B Common Unit awards granted pursuant to the CDW Holdings LLC 2007 Incentive Equity Plan to the Company’s former Chief Executive Officer, as discussed further below in the section labeled "Class B Common Units." Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table summarizes the Company's stock option activity for the year ended December 31, 2014 : The total intrinsic value of stock options exercised during the years ended December 31, 2014 and 2013 was $1.0 million and zero , respectively. Restricted Stock Units ("RSUs") Restricted stock units represent the right to receive unrestricted shares of the Company's stock at the time of vesting. RSUs generally cliff-vest at the end of four years. The following table summarizes the Company's RSU activity for the year ended December 31, 2014 : 85 Year Ended December 31, 2014 2013 Weighted-average grant date fair value $ 7.23 $ 4.75 Weighted-average volatility (1) 30.00 % 35.00 % Weighted-average risk-free rate (2) 1.77 % 1.58 % Dividend yield 0.70 % 1.00 % Expected term (in years) (3) 6.0 5.4 (1) Based upon an assessment of the two-year, five-year and implied volatility for the Company’s selected peer group, adjusted for the Company’s leverage. (2) Based on a composite U.S. Treasury rate. (3) Calculated using the simplified method. The simplified method defines the expected term as the average of the option’s contractual term and the option’s weighted-average vesting period. The Company utilizes this method as it has limited historical stock option data that is sufficient to derive a reasonable estimate of the expected stock option term. Options Number of Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (years) Aggregate Intrinsic Value (millions) Outstanding at January 1, 2014 1,280,255 $17.00 Granted 1,245,513 24.40 Forfeited/Expired (31,209 ) 21.33 Exercised (73,487 ) 17.00 Outstanding at December 31, 2014 2,421,072 $20.75 8.3 $34.9 Exercisable at December 31, 2014 576,963 $17.00 7.2 $10.5 Vested and expected to vest at December 31, 2014 2,378,364 $20.74 8.3 $34.3 Number of Units Weighted-Average Grant-Date Fair Value Nonvested at January 1, 2014 1,351,572 $ 17.04 Granted 25,895 24.29 Vested/Settled (5,984 ) 17.00 Forfeited (126,781 ) 17.04 Nonvested at December 31, 2014 1,244,702 $ 17.19 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The weighted-average grant date fair value of RSUs granted during the year ended December 31, 2014 and 2013 was $24.29 and $17.03 , respectively. The aggregate fair value of RSUs that vested during the years ended December 31, 2014 and 2013 , was $0.2 million and zero , respectively. Performance Share Units ("PSUs") During the year ended December 31, 2014 , the Company granted 417,784 PSUs under the 2013 LTIP which cliff-vest on December 31, 2016. The percentage of shares that shall vest will range from 0% to 200% of the number of PSUs granted based on the Company's performance against a cumulative adjusted free cash flow measure and cumulative non-GAAP net income per diluted share measure over a three-year performance period. The weighted-average grant-date fair value of the PSUs granted during the period was $24.40 per unit. During the year ended December 31, 2014 , 6,204 PSUs were forfeited at a weighted-average grant-date fair value of $24.29 . As of December 31, 2014 , 411,580 PSUs were outstanding at a weighted-average grant date fair value of $24.40 . No units vested during the year ended December 31, 2014. Restricted Stock In connection with the IPO, CDW Holdings distributed all of its shares of the Company's common stock to its existing members in accordance with their respective membership interests. Common stock received by holders of Class B Common Units in connection with the distribution is subject to any vesting provisions previously applicable to the holder's Class B Common Units. Class B Common Unit holders received 3,798,508 shares of restricted stock with respect to Class B Common Units that had not yet vested at the time of the distribution. For the year ended December 31, 2014 , 2,321,973 shares of such restricted stock vested/settled and 9,546 shares were forfeited. As of December 31, 2014 , 260,514 shares of restricted stock were outstanding. The aggregate fair value of restricted stock that vested during the years ended December 31, 2014 and 2013 was $68.6 million and $26.7 million , respectively. Pre-IPO Equity Awards Prior to the IPO, the Company had the following equity-based compensation plans in place: Class B Common Units The Board of Managers of CDW Holdings adopted the CDW Holdings LLC 2007 Incentive Equity Plan (the “Plan”) for coworkers, managers, consultants and advisors of the Company and its subsidiaries. The Plan permitted a committee designated by the Board of Managers of CDW Holdings (the “Committee”) to grant or sell to any participant Class A Common Units or Class B Common Units of CDW Holdings in such quantity, at such price, on such terms and subject to such conditions that were consistent with the Plan and as established by the Committee. The Class B Common Units that were granted vested daily on a pro rata basis between the date of grant and the fifth anniversary thereof and were subject to repurchase by, with respect to vested units, or forfeiture to, with respect to unvested units, the Company upon the coworker's separation from service as was set forth in each holder’s Class B Common Unit Grant Agreement. On June 30, 2011, the Board of Managers approved the terms of a modified Class B Common Unit grant agreement with the Company's former Chief Executive Officer, who retired as the Company's Chief Executive Officer effective October 1, 2011 but continued to serve as Chairman of the Board through December 31, 2012. As a result of this modification, the Company recorded incremental equity- based compensation expense of $6.6 million during the year ended December 31, 2012. The grant date fair value of Class B Common Unit grants was calculated using the Option-Pricing Method. This method considered Class A Common Units and Class B Common Units as call options on the total equity value, giving consideration to liquidation preferences and conversion of the preferred units. Such Class A Common Units and Class B Common Units were modeled as call options that gave their owners the right, but not the obligation, to buy the underlying equity value at a predetermined (or exercise) price. Class B Common Units were considered to be call options with a claim on equity value at an exercise price equal to the remaining value immediately after the Class A Common Units and Class B Common Units with a lower participation threshold were liquidated. The Option-Pricing Method is highly sensitive to key assumptions, such as the volatility assumption. As such, the use of this method can be applied when the range of possible future outcomes is difficult to predict. 86 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table summarizes the assumptions and resulting fair value of the Class B Common Unit grants for the years ended December 31, 2013 and 2012: MPK II Units Contemporaneous with the Acquisition, the Company agreed with Michael P. Krasny, CDW Corporation founder, former chairman and CEO and significant selling shareholder, to establish the MPK Plan for the benefit of all of the coworkers of the Company other than members of senior management who received incentive equity awards under the Plan. The MPK Plan established an “account” for each eligible participant which was notionally credited with a number of Class A Common Units of CDW Holdings LLC on October 15, 2007, the day the plan was established. The notional units credited to participants' accounts were to cliff-vest at the end of ten years, subject to acceleration upon the occurrence of certain events. Notional units granted under the MPK Plan were valued on the grant date at $1,000 per unit, the fair value equivalent of the Class A Common Units at the time the awards were granted. On July 2, 2013, the Company completed an IPO of its common shares. Under the terms of the MPK Plan, vesting accelerated for all unvested units upon completion of the IPO. The Company recorded a pre-tax charge of $36.7 million for compensation expense related to the acceleration of the expense recognition for MPK Plan units in the year ended December 31, 2013. In connection with the completion of the IPO, the Company distributed common stock to each participant and withheld the number of shares of common stock equal to the required tax withholding for each participant. The Company paid required withholding taxes of $24.0 million to federal, state and foreign taxing authorities. This amount is reported as a financing activity in the consolidated statement of cash flows and as an increase to accumulated deficit in the consolidated statement of shareholders' equity for the year ended December 31, 2013. In addition, the Company paid $4.0 million of employer payroll taxes that are included as an operating activity in the consolidated statement of cash flows for the year ended December 31, 2013. The following table sets forth a summary of pre-IPO equity plan activity for the year ended December 31, 2013 : In connection with the establishment of the MPK Plan, the Company agreed to make charitable contributions in amounts equal to the net income tax benefits derived from payouts to participants under the MPK Plan (net of any 87 Years Ended December 31, Assumptions 2013 2012 Weighted-average grant date fair value $ 119.00 $ 125.65 Weighted-average volatility (1) 65.50 % 65.26 % Weighted-average risk-free rate (2) 0.18 % 0.19 % Dividend yield 0.00 % 0.00 % (1) Based upon an assessment of the two-year, five-year and implied volatility for the Company’s selected peer group, adjusted for the Company’s leverage. (2) Based on a composite U.S. Treasury rate. Class B Common Units MPK Plan Units Outstanding at January 1, 2013 216,483 66,137 Granted 400 — Forfeited (860 ) (2,228 ) Converted/Settled (1) (216,023 ) (63,909 ) Outstanding at December 31, 2013 — — Vested at December 31, 2013 — — (1) As discussed above, the Class B Common Units and MPK Plan Units were converted/settled into shares of the Company's common stock upon completion of the IPO. The converted Class B Common Units, to the extent unvested at the time of the IPO, relate to the grants of restricted stock disclosed above. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS related employer payroll tax costs). The contributions of these amounts are due by March 15 of the calendar year following the year in which the Company realizes the benefits of the deductions. This arrangement has been accounted for as contingent consideration. Pre- 2009 business combinations were accounted for under a former accounting standard which, among other aspects, precluded the recognition of certain contingent consideration as of the business combination date. Instead, under the former accounting standard, contingent consideration is accounted for as additional purchase price (goodwill) at the time the contingency is resolved. As of December 31, 2013, the Company accrued $20.9 million related to this arrangement within other current liabilities, as the Company realized the tax benefit of the compensation deductions during the 2013 tax year. The Company made the related cash contribution during the first quarter of 2014. The numerator for both basic and diluted earnings per share is net income. The denominator for basic earnings per share is the weighted-average number of common shares outstanding during the period. The 2013 denominator was impacted by the common shares issued during both the IPO and the underwriters' exercise in full of the overallotment option granted to them in connection with the IPO. Because such common shares were issued on July 2, 2013 and July 31, 2013, respectively, they are only partially reflected in the 2013 denominator. Such shares are fully reflected in the 2014 denominator. See Note 9 for additional discussion of the IPO. The dilutive effect of outstanding restricted stock, restricted stock units, stock options, Coworker Stock Purchase Plan units and MPK Plan units is reflected in the denominator for diluted earnings per share using the treasury stock method. The following is a reconciliation of basic shares to diluted shares: There was an insignificant amount of potential common shares excluded from diluted earnings per share for the years ended December 31, 2014, 2013 and 2012, as their inclusion would have had an anti-dilutive effect. On March 10, 2010, in connection with the Company’s purchase of $28.5 million principal amount of its outstanding senior subordinated debt, the Company established the Restricted Debt Unit Plan (the “RDU Plan”), an unfunded nonqualified deferred compensation plan. The total number of RDUs that could be granted under the RDU Plan was 28,500 . As of December 31, 2014 , 28,500 RDUs were outstanding. RDUs vested daily on a pro rata basis over the three -year period from January 1, 2012 (or, if later, the date of hire or the date of a subsequent RDU grant) through December 31, 2014. All outstanding RDUs were vested as of December 31, 2014. Participants have no rights to the underlying debt. The total amount of compensation available to be paid under the RDU Plan was initially to be based on two components, a principal component and an interest component. The principal component credits the RDU Plan with a notional amount equal to the $28.5 million face value of the Senior Subordinated Notes (the "Debt Pool"), together with certain redemption premium equivalents as noted below. The interest component credited the RDU Plan with amounts equal to the interest that would have been earned on the Debt Pool from March 10, 2010 through maturity on October 12, 2017, except as discussed below. Interest amounts for 2010 and 2011 were deferred until 2012, and thereafter, interest amounts were paid to participants semi-annually on the interest payment due dates. The Company used a portion of the IPO proceeds together with incremental borrowings to redeem $324.0 million of the total Senior Subordinated Notes outstanding on August 1, 2013. In connection with the IPO and the partial redemption of the Senior Subordinated Notes, the Company amended the RDU Plan to increase the retentive value of the plan. In accordance with the original terms of the RDU Plan, the principal component of the RDUs converted to a cash-denominated pool upon the redemption of the Senior Subordinated Notes. In addition, the Company added $0.1 88 11. Earnings Per Share Years Ended December 31, (in millions) 2014 2013 2012 Weighted-average shares - basic 170.6 156.6 145.1 Effect of dilutive securities 2.2 2.1 0.7 Weighted-average shares - diluted 172.8 158.7 145.8 12. Deferred Compensation Plan Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS million and $1.4 million to the principal component in the years ended December 31, 2014 and 2013, respectively, as redemption premium equivalents in accordance with the terms of the RDU plan. Under the terms of the amended RDU Plan, upon the partial redemption of outstanding Senior Subordinated Notes, the RDUs ceased to accrue the proportionate related interest component credits. The amended RDU Plan provides participants the opportunity to share on a pro rata basis in cash retention pools payable to participants who satisfy certain retention requirements. The aggregate amount of the retention pools was determined to be $15.0 million based upon the amount of interest component credits that would have been allocated to the RDU Plan if the Senior Subordinated Notes had remained outstanding from August 1, 2013 through maturity. The Company recorded a pre-tax charge of $7.5 million in the year ended December 31, 2013 for payment of the first cash retention pool. The second cash retention pool payment is expected to be made to participants who remain employed through December 31, 2015 in the first quarter of 2016. Participants continued to accrue an interest component credit for the proportionate amount of Senior Subordinated Notes while outstanding, payable on the aforementioned semi-annual due dates; such payments, however, will be deducted from the second retention pool payment amount of $7.5 million . Unrecognized compensation expense as of December 31, 2014 of approximately $5 million is expected to be recognized through 2015 and approximately $3 million in 2016 through 2017. Payments under the RDU Plan may be impacted if certain significant events occur or circumstances change that would impact the financial condition or structure of the Company. Compensation expense of $8.8 million , $16.8 million , and $8.4 million related to the RDU Plan was recognized in the years ended December 31, 2014, 2013 and 2012 , respectively. At December 31, 2014 and 2013 , the Company had $30.4 million and $21.8 million of liabilities related to the RDU Plan recorded on the consolidated balance sheets, respectively. Payment of the principal component of the RDU Plan is expected to be made on October 12, 2017, unless accelerated due to a sale of the Company. The Company has a profit sharing plan that includes a salary reduction feature established under the Internal Revenue Code Section 401 (k) covering substantially all coworkers. Company contributions to the profit sharing plan are made in cash and determined at the discretion of the Board of Directors. For the years ended December 31, 2014, 2013 and 2012 , the amounts charged to expense for this plan totaled $21.9 million , $17.3 million and $14.6 million , respectively. The Company is party to various legal proceedings that arise in the ordinary course of its business, which include commercial, intellectual property, employment, tort and other litigation matters. The Company is also subject to audit by federal, state and local authorities, and by various partners, group purchasing organizations and customers, including government agencies, relating to purchases and sales under various contracts. In addition, the Company is subject to indemnification claims under various contracts. From time to time, certain customers of the Company file voluntary petitions for reorganization or liquidation under the U.S. bankruptcy laws. In such cases, certain pre-petition payments received by the Company could be considered preference items and subject to return to the bankruptcy administrator. As of December 31, 2014, the Company does not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for these proceedings and matters, if any, has been incurred. However, the ultimate resolutions of these proceedings and matters are inherently unpredictable. As such, the Company’s financial condition and results of operations could be adversely affected in any particular period by the unfavorable resolution of one or more of these proceedings or matters. On November 10, 2014 , the Company acquired a 35% non-controlling interest in Kelway, a UK-based IT solutions provider, which has global supply chain relationships that enable it to conduct business in over 100 countries. The Company paid $86.8 million to acquire its ownership interest in Kelway, with the option to purchase the remaining 65% between June 2015 and June 2017. The Company accounts for its investment in Kelway using the equity method. As of December 31, 2014 , the amount assigned to goodwill and definite-lived intangible assets related to the 89 13. Profit Sharing and 401(k) Plan 14. Commitments and Contingencies 15. Equity Investments Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Company's 35% non-controlling equity investment in Kelway was $119.2 million , which represented the excess of the purchase price plus liabilities assumed less tangible assets acquired. The Company had previously entered into a management services agreement with the Sponsors pursuant to which they had agreed to provide it with management and consulting services and financial and other advisory services. Pursuant to such agreement, the Sponsors received an annual management fee of $5.0 million and reimbursement of out-of-pocket expenses incurred in connection with the provision of such services. Such amounts were classified as selling and administrative expenses within the consolidated statements of operations. The management services agreement included customary indemnification and provisions in favor of the Sponsors. On July 2, 2013, the Company completed an IPO of its common stock. Using a portion of the net proceeds from the IPO, the Company paid a $24.4 million termination fee to affiliates of the Sponsors in connection with the termination of the management services agreement with such entities that was effective upon completion of the IPO. The Company paid an annual management fee of $2.5 million and $5.0 million in the years ended December 31, 2013 and 2012, respectively. There was no management fee paid for the year ended December 31, 2014. On March 20, 2014, the Company repurchased and subsequently canceled $25.0 million aggregate principal amount of the 2019 Senior Notes from an affiliate of Providence Equity. See Note 7 for additional information related to this transaction. Segment information is presented in accordance with a “management approach,” which designates the internal reporting used by the chief operating decision-maker for making decisions and assessing performance as the source of the Company's reportable segments. The Company's segments are organized in a manner consistent with which separate financial information is available and evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance. The Company has two reportable segments: Corporate, which is comprised primarily of business customers, and Public, which is comprised of government entities and education and healthcare institutions. The Company also has three other operating segments, CDW Advanced Services, Canada and Kelway, which do not meet the reportable segment quantitative thresholds and, accordingly, are combined together as “Other.” In November 2014, the Company acquired a 35% non-controlling equity interest in Kelway. See Note 15 for additional information on Kelway. The Company has centralized logistics and headquarters functions that provide services to the segments. The logistics function includes purchasing, distribution and fulfillment services to support both the Corporate and Public segments. As a result, costs and intercompany charges associated with the logistics function are fully allocated to both of these segments based on a percent of sales. The centralized headquarters function provides services in areas such as accounting, information technology, marketing, legal and coworker services. Headquarters' function costs that are not allocated to the segments are included under the heading of “Headquarters” in the tables below. Depreciation expense is included in Headquarters as it is not allocated among segments or used in measuring segment performance. IPO- and secondary-offering related expenses primarily relating to coworker compensation were included within operating segment results for the year ended December 31, 2013. See Note 9 for additional discussion of IPO- and secondary-offering related expenses. The Company allocates resources to and evaluates performance of its segments based on net sales, income (loss) from operations and Adjusted EBITDA, a non-GAAP measure as defined in the Company's credit agreements. However, the Company has concluded that income (loss) from operations is the more useful measure in terms of discussion of operating results, as it is a GAAP measure. Segment information for total assets and capital expenditures is not presented, as such information is not used in measuring segment performance or allocating resources between segments. 90 16. Related Party Transactions 17. Segment Information Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Selected Segment Financial Information The following table presents information about the Company’s segments for the years ended December 31, 2014, 2013 and 2012 : (1) Includes $75.0 million of IPO- and secondary-offering related expenses, as follows: Corporate $26.4 million ; Public $14.4 million ; Other $3.6 million ; and Headquarters $30.6 million . Major Customers, Geographic Areas, and Product Mix Net sales to the federal government were $884.2 million , $764.4 million and $964.7 million and accounted for approximately 7% , 7% and 10% of total net sales in 2014, 2013 and 2012, respectively. Net sales to customers outside of the U.S., primarily in Canada, were approximately 4% of the Company's total net sales in 2014, 2013 and 2012. Approximately 1% of the Company’s long-lived assets were located outside of the U.S. as of December 31, 2014 and 2013. The following table presents net sales by major category for the years ended December 31, 2014, 2013 and 2012 . Categories are based upon internal classifications. Amounts for the years ended December 31, 2013 and 2012 have been reclassified for certain changes in individual product classifications to conform to the presentation for the year ended December 31, 2014 . 91 (in millions) Corporate Public Other Headquarters Total 2014: Net sales $ 6,475.5 $ 4,879.4 $ 719.6 $ — $ 12,074.5 Income (loss) from operations 439.8 313.2 32.9 (112.9 ) 673.0 Depreciation and amortization expense (96.3 ) (43.8 ) (8.8 ) (59.0 ) (207.9 ) 2013: Net sales $ 5,960.1 $ 4,164.5 $ 644.0 $ — $ 10,768.6 Income (loss) from operations (1) 363.3 246.5 27.2 (128.4 ) 508.6 Depreciation and amortization expense (97.3 ) (44.0 ) (8.6 ) (58.3 ) (208.2 ) 2012: Net sales $ 5,512.8 $ 4,023.0 $ 592.4 $ — $ 10,128.2 Income (loss) from operations 349.0 246.7 18.6 (103.7 ) 510.6 Depreciation and amortization expense (97.6 ) (44.0 ) (9.3 ) (59.3 ) (210.2 ) Year Ended December 31, 2014 Year Ended December 31, 2013 Year Ended December 31, 2012 Dollars in Millions Percentage of Total Net Sales Dollars in Millions Percentage of Total Net Sales Dollars in Millions Percentage of Total Net Sales Notebooks/Mobile Devices $ 2,352.3 19.5 % $ 1,698.4 15.8 % $ 1,462.8 14.4 % NetComm Products 1,615.9 13.4 1,486.3 13.8 1,351.5 13.3 Enterprise and Data Storage (Including Drives) 1,024.3 8.5 999.2 9.3 981.5 9.7 Other Hardware 4,549.2 37.6 4,178.5 38.8 4,075.7 40.3 Software 2,076.7 17.2 1,993.1 18.5 1,877.7 18.5 Services 371.4 3.1 332.7 3.1 285.0 2.8 Other (1) 84.7 0.7 80.4 0.7 94.0 1.0 Total net sales $ 12,074.5 100.0 % $ 10,768.6 100.0 % $ 10,128.2 100.0 % (1) Includes items such as delivery charges to customers and certain commission revenue. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The 2019 Senior Notes, the 2022 Senior Notes, and the 2024 Senior Notes are, and, prior to being redeemed in full, the Senior Subordinated Notes and the Senior Secured Notes, were guaranteed by Parent and each of CDW LLC’s direct and indirect, 100% owned, domestic subsidiaries (the “Guarantor Subsidiaries”). All guarantees by Parent and Guarantor Subsidiaries are and were joint and several, and full and unconditional; provided that guarantees by the Guarantor Subsidiaries (i) are subject to certain customary release provisions contained in the indentures governing the 2019 Senior Notes, the 2022 Senior Notes, and the 2024 Senior Notes, and (ii) were subject to certain customary release provisions contained in the indentures governing the Senior Subordinated Notes and the Senior Secured Notes until such indentures were satisfied and discharged in 2014. CDW LLC's Canada subsidiary (the “Non-Guarantor Subsidiary”) does not guarantee the debt obligations. CDW LLC and CDW Finance Corporation, as co-issuers, are 100% owned by Parent, and each of the Guarantor Subsidiaries and the Non-Guarantor Subsidiary is 100% owned by CDW LLC. On May 9, 2014, all of the remaining $42.5 million aggregate principal amount of Senior Subordinated Notes was redeemed in full and the indenture governing the Senior Subordinated Notes was satisfied and discharged. See Note 7 for more information. On August 5, 2014, CDW LLC and CDW Finance Corporation, as co-issuers, completed the issuance of $600.0 million aggregate principal amount of 2022 Senior Notes, which is guaranteed by Parent and the Guarantor Subsidiaries. The proceeds from this issuance, along with cash on hand, were used to redeem all of the remaining $325.0 million aggregate principal amount of the Senior Secured Notes and to redeem $234.7 million aggregate principal amount of the 2019 Senior Notes. The indenture governing the Senior Secured Notes was concurrently satisfied and discharged. See Note 7 for more information. On December 1, 2014, CDW LLC and CDW Finance Corporation, as co-issuers, completed the issuance of $575.0 million aggregate principal amount of 2024 Senior Notes, which is guaranteed by Parent and the Guarantor Subsidiaries. The proceeds from this issuance, along with cash on hand, were used to redeem $541.4 million aggregate principal amount of the 8.5% Senior Notes. See Note 7 for more information. The following tables set forth condensed consolidating balance sheets as of December 31, 2014 and 2013 , consolidating statements of operations for the years ended December 31, 2014, 2013 and 2012 , condensed consolidating statements of comprehensive income for the years ended December 31, 2014, 2013 and 2012 , and condensed consolidating statements of cash flows for the years ended December 31, 2014, 2013 and 2012 , in accordance with Rule 3-10 of Regulation S-X. The consolidating financial information includes the accounts of CDW Corporation (the “Parent Guarantor”), which has no independent assets or operations, the accounts of CDW LLC (the “Subsidiary Issuer”), the combined accounts of the Guarantor Subsidiaries, the accounts of the Non-Guarantor Subsidiary, and the accounts of CDW Finance Corporation (the “Co-Issuer”) for the periods indicated. The information was prepared on the same basis as the Company’s consolidated financial statements. 92 18. Supplemental Guarantor Information Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 93 Condensed Consolidating Balance Sheet December 31, 2014 (in millions) Parent Guarantor Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiary Co-Issuer Consolidating Adjustments Consolidated Assets Current assets: Cash and cash equivalents $ — $ 346.4 $ — $ 24.6 $ — $ (26.5 ) $ 344.5 Accounts receivable, net — — 1,479.1 82.0 — — 1,561.1 Merchandise inventory — — 333.9 3.6 — — 337.5 Miscellaneous receivables — 56.1 93.3 6.2 — — 155.6 Prepaid expenses and other — 11.0 46.0 1.5 — (3.8 ) 54.7 Total current assets — 413.5 1,952.3 117.9 — (30.3 ) 2,453.4 Property and equipment, net — 80.5 55.5 1.2 — — 137.2 Equity investments — 86.7 — — — — 86.7 Goodwill — 751.8 1,439.0 26.8 — — 2,217.6 Other intangible assets, net — 320.0 843.6 5.2 — — 1,168.8 Deferred financing costs, net — 33.0 — — — — 33.0 Other assets 4.3 3.2 0.4 1.4 — (6.1 ) 3.2 Investment in and advances to subsidiaries 932.2 2,784.5 — — — (3,716.7 ) — Total assets $ 936.5 $ 4,473.2 $ 4,290.8 $ 152.5 $ — $ (3,753.1 ) $ 6,099.9 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable-trade $ — $ 23.9 $ 671.9 $ 34.7 $ — $ (26.5 ) $ 704.0 Accounts payable-inventory financing — — 332.1 — — — 332.1 Current maturities of long-term debt — 15.4 — — — — 15.4 Deferred revenue — — 79.9 1.4 — — 81.3 Accrued expenses — 137.8 193.6 7.9 — (4.1 ) 335.2 Total current liabilities — 177.1 1,277.5 44.0 — (30.6 ) 1,468.0 Long-term liabilities: Debt — 3,174.6 — — — — 3,174.6 Deferred income taxes — 146.7 331.3 1.3 — (4.3 ) 475.0 Other liabilities — 42.6 3.7 1.0 — (1.5 ) 45.8 Total long-term liabilities — 3,363.9 335.0 2.3 — (5.8 ) 3,695.4 Total shareholders’ equity 936.5 932.2 2,678.3 106.2 — (3,716.7 ) 936.5 Total liabilities and shareholders' equity $ 936.5 $ 4,473.2 $ 4,290.8 $ 152.5 $ — $ (3,753.1 ) $ 6,099.9 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 94 Condensed Consolidating Balance Sheet December 31, 2013 (in millions) Parent Guarantor Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiary Co-Issuer Consolidating Adjustments Consolidated Assets Current assets: Cash and cash equivalents $ — $ 196.5 $ — $ 14.0 $ — $ (22.4 ) $ 188.1 Accounts receivable, net — — 1,375.9 75.1 — — 1,451.0 Merchandise inventory — — 378.9 3.1 — — 382.0 Miscellaneous receivables — 49.9 91.0 5.4 — — 146.3 Prepaid expenses and other — 10.7 33.4 5.1 — (3.1 ) 46.1 Total current assets — 257.1 1,879.2 102.7 — (25.5 ) 2,213.5 Property and equipment, net — 69.7 59.6 1.8 — — 131.1 Goodwill — 751.9 1,439.0 29.4 — — 2,220.3 Other intangible assets, net — 338.5 982.8 6.7 — — 1,328.0 Deferred financing costs, net — 30.1 — — — — 30.1 Other assets 4.9 1.4 0.1 0.9 — (5.7 ) 1.6 Investment in and advances to subsidiaries 706.8 2,909.4 — — — (3,616.2 ) — Total assets $ 711.7 $ 4,358.1 $ 4,360.7 $ 141.5 $ — $ (3,647.4 ) $ 5,924.6 Liabilities and Shareholders' Equity Current liabilities: Accounts payable-trade $ — $ 21.4 $ 637.3 $ 26.5 $ — $ (22.4 ) $ 662.8 Accounts payable-inventory financing — — 256.6 — — — 256.6 Current maturities of long-term debt — 45.4 — — — — 45.4 Deferred revenue — — 89.9 4.9 — — 94.8 Accrued expenses — 163.5 175.1 7.5 — (3.1 ) 343.0 Total current liabilities — 230.3 1,158.9 38.9 — (25.5 ) 1,402.6 Long-term liabilities: Debt — 3,205.8 — — — — 3,205.8 Deferred income taxes — 178.3 388.4 1.6 — (4.8 ) 563.5 Other liabilities — 36.9 3.6 1.4 — (0.9 ) 41.0 Total long-term liabilities — 3,421.0 392.0 3.0 — (5.7 ) 3,810.3 Total shareholders’ equity 711.7 706.8 2,809.8 99.6 — (3,616.2 ) 711.7 Total liabilities and shareholders’ equity $ 711.7 $ 4,358.1 $ 4,360.7 $ 141.5 $ — $ (3,647.4 ) $ 5,924.6 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 95 Consolidating Statement of Operations Year Ended December 31, 2014 (in millions) Parent Guarantor Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiary Co-Issuer Consolidating Adjustments Consolidated Net sales $ — $ — $ 11,542.3 $ 532.2 $ — $ — $ 12,074.5 Cost of sales — — 9,684.9 468.3 — — 10,153.2 Gross profit — — 1,857.4 63.9 — — 1,921.3 Selling and administrative expenses — 112.8 962.3 35.2 — — 1,110.3 Advertising expense — — 134.0 4.0 — — 138.0 (Loss) income from operations — (112.8 ) 761.1 24.7 — — 673.0 Interest (expense) income, net — (197.7 ) 0.1 0.3 — — (197.3 ) Net loss on extinguishments of long- term debt — (90.7 ) — — — — (90.7 ) Management fee — 3.9 — (3.9 ) — — — Other income, net — 1.2 1.5 — — — 2.7 (Loss) income before income taxes — (396.1 ) 762.7 21.1 — — 387.7 Income tax benefit (expense) — 141.0 (278.1 ) (5.7 ) — — (142.8 ) (Loss) income before equity in earnings of subsidiaries — (255.1 ) 484.6 15.4 — — 244.9 Equity in earnings of subsidiaries 244.9 500.0 — — — (744.9 ) — Net income $ 244.9 $ 244.9 $ 484.6 $ 15.4 $ — $ (744.9 ) $ 244.9 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 96 Consolidating Statement of Operations Year Ended December 31, 2013 (in millions) Parent Guarantor Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiary Co-Issuer Consolidating Adjustments Consolidated Net sales $ — $ — $ 10,293.3 $ 475.3 $ — $ — $ 10,768.6 Cost of sales — — 8,592.1 416.2 — — 9,008.3 Gross profit — — 1,701.2 59.1 — — 1,760.3 Selling and administrative expenses 24.4 103.9 957.3 35.3 — — 1,120.9 Advertising expense — — 126.8 4.0 — — 130.8 (Loss) income from operations (24.4 ) (103.9 ) 617.1 19.8 — — 508.6 Interest (expense) income, net — (250.6 ) 0.2 0.3 — — (250.1 ) Net loss on extinguishments of long- term debt — (64.0 ) — — — — (64.0 ) Management fee — 4.3 — (4.3 ) — — — Other (expense) income, net — (0.5 ) 1.2 0.3 — — 1.0 (Loss) income before income taxes (24.4 ) (414.7 ) 618.5 16.1 — — 195.5 Income tax benefit (expense) 9.2 142.2 (209.5 ) (4.6 ) — — (62.7 ) (Loss) income before equity in earnings of subsidiaries (15.2 ) (272.5 ) 409.0 11.5 — — 132.8 Equity in earnings of subsidiaries 148.0 420.5 — — — (568.5 ) — Net income $ 132.8 $ 148.0 $ 409.0 $ 11.5 $ — $ (568.5 ) $ 132.8 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Consolidating Statement of Operations Year Ended December 31, 2012 (in millions) Parent Guarantor Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiary Co-Issuer Consolidating Adjustments Consolidated Net sales $ — $ — $ 9,683.0 $ 445.2 $ — $ — $ 10,128.2 Cost of sales — — 8,071.5 387.1 — — 8,458.6 Gross profit — — 1,611.5 58.1 — — 1,669.6 Selling and administrative expenses — 103.7 891.6 34.2 — — 1,029.5 Advertising expense — — 125.1 4.4 — — 129.5 (Loss) income from operations — (103.7 ) 594.8 19.5 — — 510.6 Interest (expense) income, net — (308.0 ) 0.4 0.2 — — (307.4 ) Net loss on extinguishments of long- term debt — (17.2 ) — — — — (17.2 ) Management fee — 3.8 — (3.8 ) — — — Other income (expense), net — — 0.2 (0.1 ) — — 0.1 (Loss) income before income taxes — (425.1 ) 595.4 15.8 — — 186.1 Income tax benefit (expense) — 210.6 (272.6 ) (5.1 ) — — (67.1 ) (Loss) income before equity in earnings of subsidiaries — (214.5 ) 322.8 10.7 — — 119.0 Equity in earnings of subsidiaries 119.0 333.5 — — — (452.5 ) — Net income $ 119.0 $ 119.0 $ 322.8 $ 10.7 $ — $ (452.5 ) $ 119.0 97 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Condensed Consolidating Statement of Comprehensive Income Year Ended December 31, 2014 (in millions) Parent Guarantor Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiary Co-Issuer Consolidating Adjustments Consolidated Comprehensive income $ 234.6 $ 234.6 $ 484.6 $ 5.1 $ — $ (724.3 ) $ 234.6 98 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Condensed Consolidating Statement of Comprehensive Income Year Ended December 31, 2013 (in millions) Parent Guarantor Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiary Co-Issuer Consolidating Adjustments Consolidated Comprehensive income $ 126.1 $ 141.3 $ 409.0 $ 4.8 $ — $ (555.1 ) $ 126.1 99 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Condensed Consolidating Statement of Comprehensive Income Year Ended December 31, 2012 (in millions) Parent Guarantor Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiary Co-Issuer Consolidating Adjustments Consolidated Comprehensive income $ 121.5 $ 121.5 $ 322.8 $ 13.2 $ — $ (457.5 ) $ 121.5 100 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 101 Condensed Consolidating Statement of Cash Flows Year Ended December 31, 2014 (in millions) Parent Guarantor Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiary Co-Issuer Consolidating Adjustments Consolidated Net cash (used in) provided by operating activities $ — $ (120.4 ) $ 547.7 $ 11.8 $ — $ (4.1 ) $ 435.0 Cash flows from investing activities: Capital expenditures — (47.9 ) (7.1 ) — — — (55.0 ) Payment for equity investments — (86.8 ) — — — — (86.8 ) Payment of accrued charitable contribution related to the MPK Coworker Incentive Plan II — (20.9 ) — — — — (20.9 ) Premium payments on interest rate cap agreements — (2.1 ) — — — — (2.1 ) Net cash used in investing activities — (157.7 ) (7.1 ) — — — (164.8 ) Cash flows from financing activities: Repayments of long-term debt — (15.4 ) — — — — (15.4 ) Proceeds from issuance of long- term debt — 1,175.0 — — — — 1,175.0 Payments to extinguish long- term debt — (1,299.0 ) — — — — (1,299.0 ) Payment of debt financing costs — (21.9 ) — — — — (21.9 ) Net change in accounts payable- inventory financing — — 75.5 — — — 75.5 Proceeds from stock option exercises — 1.3 — — — — 1.3 Proceeds from Coworker stock purchase plan — 5.8 — — — — 5.8 Dividends paid (33.6 ) — — — — — (33.6 ) Excess tax benefits from equity- based compensation — 0.3 — — — — 0.3 Advances to/from affiliates 33.6 581.9 (616.1 ) 0.6 — — — Net cash provided by (used in) financing activities — 428.0 (540.6 ) 0.6 — — (112.0 ) Effect of exchange rate changes on cash and cash equivalents — — — (1.8 ) — — (1.8 ) Net increase in cash and cash equivalents — 149.9 — 10.6 — (4.1 ) 156.4 Cash and cash equivalents – beginning of period — 196.5 — 14.0 — (22.4 ) 188.1 Cash and cash equivalents – end of period $ — $ 346.4 $ — $ 24.6 $ — $ (26.5 ) $ 344.5 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 102 Condensed Consolidating Statement of Cash Flows Year Ended December 31, 2013 (in millions) Parent Guarantor Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiary Co-Issuer Consolidating Adjustments Consolidated Net cash (used in) provided by operating activities $ (15.2 ) $ (130.3 ) $ 508.8 $ 5.5 $ — $ (2.5 ) $ 366.3 Cash flows from investing activities: Capital expenditures — (40.8 ) (6.2 ) (0.1 ) — — (47.1 ) Net cash used in investing activities — (40.8 ) (6.2 ) (0.1 ) — — (47.1 ) Cash flows from financing activities: Proceeds from borrowings under revolving credit facility — 63.0 — — — — 63.0 Repayments of borrowings under revolving credit facility — (63.0 ) — — — — (63.0 ) Repayments of long-term debt — (51.1 ) — — — — (51.1 ) Proceeds from issuance of long- term debt — 1,535.2 — — — — 1,535.2 Payments to extinguish long- term debt — (2,047.4 ) — — — — (2,047.4 ) Payment of debt financing costs — (6.1 ) — — — — (6.1 ) Net change in accounts payable- inventory financing — — 7.4 — — — 7.4 Payment of incentive compensation plan withholding taxes — (4.0 ) (19.6 ) (0.5 ) — — (24.1 ) Net proceeds from issuance of common shares 424.7 — — — — — 424.7 Dividends paid (7.3 ) — — — — — (7.3 ) Advances to/from affiliates (402.2 ) 892.6 (490.4 ) — — — — Other financing activities — 0.4 — — — — 0.4 Net cash provided by (used in) financing activities 15.2 319.6 (502.6 ) (0.5 ) — — (168.3 ) Effect of exchange rate changes on cash and cash equivalents — — — (0.7 ) — — (0.7 ) Net increase in cash and cash equivalents — 148.5 — 4.2 — (2.5 ) 150.2 Cash and cash equivalents – beginning of period — 48.0 — 9.8 — (19.9 ) 37.9 Cash and cash equivalents – end of period $ — $ 196.5 $ — $ 14.0 $ — $ (22.4 ) $ 188.1 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 103 Condensed Consolidating Statement of Cash Flows Year Ended December 31, 2012 (in millions) Parent Guarantor Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiary Co-Issuer Consolidating Adjustments Consolidated Net cash (used in) provided by operating activities $ — $ (204.3 ) $ 514.2 $ 1.3 $ — $ 6.2 $ 317.4 Cash flows from investing activities: Capital expenditures — (27.0 ) (14.0 ) (0.4 ) — — (41.4 ) Premium payments on interest rate cap agreements — (0.3 ) — — — — (0.3 ) Net cash used in investing activities — (27.3 ) (14.0 ) (0.4 ) — — (41.7 ) Cash flows from financing activities: Proceeds from borrowings under revolving credit facility — 289.0 — — — — 289.0 Repayments of borrowings under revolving credit facility — (289.0 ) — — — — (289.0 ) Repayments of long-term debt — (201.0 ) — — — — (201.0 ) Proceeds from issuance of long- term debt — 135.7 — — — — 135.7 Payments to extinguish long- term debt — (243.2 ) — — — — (243.2 ) Payment of debt financing costs — (2.1 ) — — — — (2.1 ) Net change in accounts payable- inventory financing — — (29.5 ) — — — (29.5 ) Advances to/from affiliates — 486.0 (486.5 ) 0.5 — — — Other financing activities — 2.1 — — — — 2.1 Net cash provided by (used in) financing activities — 177.5 (516.0 ) 0.5 — — (338.0 ) Effect of exchange rate changes on cash and cash equivalents — — — 0.3 — — 0.3 Net (decrease) increase in cash and cash equivalents — (54.1 ) (15.8 ) 1.7 — 6.2 (62.0 ) Cash and cash equivalents – beginning of period — 102.1 15.8 8.1 — (26.1 ) 99.9 Cash and cash equivalents – end of period $ — $ 48.0 $ — $ 9.8 $ — $ (19.9 ) $ 37.9 Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 104 19. Selected Quarterly Financial Results (unaudited) (in millions, except per-share amounts) 2014 First Quarter Second Quarter Third Quarter Fourth Quarter Net Sales Detail: Corporate: Medium/Large $ 1,274.8 $ 1,395.4 $ 1,374.8 $ 1,440.3 Small Business 230.8 260.8 247.9 250.7 Total Corporate 1,505.6 1,656.2 1,622.7 1,691.0 Public: Government 254.2 313.1 441.3 440.8 Education 321.6 527.0 632.8 342.6 Healthcare 394.1 431.5 394.7 385.7 Total Public 969.9 1,271.6 1,468.8 1,169.1 Other 176.8 178.2 174.6 190.0 Net sales $ 2,652.3 $ 3,106.0 $ 3,266.1 $ 3,050.1 Gross profit $ 425.2 $ 496.9 $ 507.3 $ 491.9 Income from operations 135.8 188.2 184.7 164.3 Net income 50.9 86.6 55.6 51.8 Net income per common share (1) : Basic 0.30 0.51 0.33 $ 0.30 Diluted 0.30 0.50 0.32 $ 0.30 (in millions, except per-share amounts) 2013 First Quarter Second Quarter Third Quarter Fourth Quarter Net Sales Detail: Corporate: Medium/Large (2) $ 1,180.5 $ 1,308.5 $ 1,241.3 $ 1,322.3 Small Business (2) 223.4 228.9 224.5 230.7 Total Corporate 1,403.9 1,537.4 1,465.8 1,553.0 Public: Government 252.3 295.7 375.3 327.3 Education 232.2 420.6 513.4 282.8 Healthcare 362.3 366.3 355.9 380.4 Total Public 846.8 1,082.6 1,244.6 990.5 Other 161.0 159.3 153.9 169.8 Net sales $ 2,411.7 $ 2,779.3 $ 2,864.3 $ 2,713.3 Gross profit $ 402.0 $ 451.6 $ 458.4 $ 448.3 Income from operations (3) 120.1 153.6 92.9 142.0 Net income (loss) (3) 28.3 46.7 (2.2 ) 60.0 Net income (loss) per common share (1)(3) : Basic 0.19 0.32 (0.01 ) 0.35 Diluted 0.19 0.32 (0.01 ) 0.35 (1) Basic and diluted net income (loss) per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted per share information may not equal annual basic and diluted net income (loss) per share. Table of Contents CDW CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS During the first quarter of 2015, the Company entered into six interest rate cap agreements with a combined notional amount of $400.0 million . Under the agreements, the Company made premium payments totaling $0.5 million to the counterparties in exchange for the right to receive payments equal to the amount, if any, by which three-month LIBOR exceeds 2.0% during the agreement period. The interest rate cap agreements are effective from January 14, 2015 through January 14, 2017. On February 10, 2015, the Company announced that its board of directors declared a cash dividend on the Company's common stock of $0.0675 per share. The dividend will be paid on March 10, 2015 to all stockholders of record as of the close of business on February 25, 2015. Future dividends will be subject to the approval of the Company's board of directors. 105 (2) Net sales for the corporate channels (medium/large and small business) have been restated for all periods presented above to conform with the new corporate hierarchy presented for first quarter of 2014. (3) The third quarter of 2013 included pre-tax IPO-related charges of $74.1 million . See Note 9 for additional discussion of the IPO. 20. Subsequent Events Table of Contents SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS Years ended December 31, 2014, 2013 and 2012 106 (in millions) Balance at Beginning of Period Charged to Costs and Expenses Deductions Balance at End of Period Allowance for doubtful accounts: Year Ended December 31, 2014 $ 5.4 $ 5.4 $ (5.1 ) $ 5.7 Year Ended December 31, 2013 5.4 2.8 (2.8 ) 5.4 Year Ended December 31, 2012 5.4 3.9 (3.9 ) 5.4 Reserve for sales returns: Year Ended December 31, 2014 $ 5.1 $ 36.2 $ (36.2 ) $ 5.1 Year Ended December 31, 2013 4.4 35.0 (34.3 ) 5.1 Year Ended December 31, 2012 4.5 33.2 (33.3 ) 4.4 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, has concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective in recording, processing, summarizing, and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act, and that information is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely discussions regarding required disclosure. Management’s Annual Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a- 15(f) and 15d-15(f) under the Exchange Act. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements and can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2014. Management based this assessment on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control — Integrated Framework (2013 framework).” Based on its assessment, management concluded that, as of December 31, 2014, the Company’s internal control over financial reporting is effective. Ernst & Young LLP, independent registered public accounting firm, has audited the consolidated financial statements of the Company and the Company's internal control over financial reporting and has included their reports herein. Changes in Internal Control over Financial Reporting There were no changes in the Company’s internal control over financial reporting during the fiscal quarter ended December 31, 2014 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. 107 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of CDW Corporation We have audited CDW Corporation and subsidiaries’ internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). CDW Corporation and subsidiaries’ management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, CDW Corporation and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of CDW Corporation and subsidiaries as of December 31, 2014 and 2013, and the related consolidated statements of operations, comprehensive income, shareholders’ equity (deficit) and cash flows for each of the three years in the period ended December 31, 2014 of CDW Corporation and subsidiaries and our report dated February 26, 2015 expressed an unqualified opinion thereon. 108 /s/ Ernst & Young LLP Chicago, Illinois February 26, 2015 Table of Contents Item 9B. Other Information None. 109 Table of Contents PART III Item 10. Directors, Managers, Executive Officers and Corporate Governance We have adopted The CDW Way Code, our code of business conduct and ethics, that is applicable to all of our coworkers. Additionally, within The CDW Way Code is a Financial Integrity Code of Ethics that sets forth an even higher standard applicable to our executives, officers, members of our internal disclosure committee and all managers and above in our finance department. A copy of this code is available on our corporate website at www.cdw.com . If we make any substantive amendments to this code or grant any waiver from a provision to our chief executive officer, principal financial officer or principal accounting officer, we will disclose the nature of such amendment or waiver on our website or in a report on Form 8-K. See Part I - “Executive Officers” for information about our executive officers, which is incorporated by reference in this Item 10. Other information required under this Item 10 is incorporated herein by reference to our definitive proxy statement for our 2015 annual meeting of stockholders on May 13, 2015 (“2015 proxy statement”), which we will file with the SEC on or before 120 days after our 2014 fiscal year-end. Item 11. Executive Compensation Information required under this Item 11 is incorporated herein by reference to the 2015 proxy statement. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information required under this Item 12 is incorporated herein by reference to the 2015 proxy statement. Item 13. Certain Relationships and Related Transactions, and Director Independence Information required under this Item 13 is incorporated herein by reference to the 2015 proxy statement. Item 14. Principal Accountant Fees and Services Information required under this Item 14 is incorporated herein by reference to the 2015 proxy statement. 110 Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules The following documents are filed as part of this report: All other schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements or notes thereto. The information required by this Item is set forth on the exhibit index that follows the signature page of this report. 111 (a) Financial Statements and Schedules (1) Consolidated Financial Statements: Page Report of Independent Registered Public Accounting Firm 59 Consolidated Balance Sheets as of December 31, 2014 and 2013 60 Consolidated Statements of Operations for the years ended December 31, 2014, 2013 and 2012 61 Consolidated Statements of Comprehensive Income for the years ended December 31, 2014, 2013 and 2012 62 Consolidated Statements of Shareholders’ Equity (Deficit) for the years ended December 31, 2014, 2013 and 2012 63 Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012 64 Notes to Consolidated Financial Statements 65 (2) Financial Statement Schedules: Page Schedule II – Valuation and Qualifying Accounts 106 (b) Exhibits Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. CDW CORPORATION Date: February 26, 2015 By: /s/ Thomas E. Richards Thomas E. Richards Chairman, President and Chief Executive Officer 112 Signature Title Date /s/ Thomas E. Richards Chairman, President and Chief Executive Officer (principal executive officer) and Director February 26, 2015 Thomas E. Richards /s/ Ann E. Ziegler Senior Vice President and Chief Financial Officer (principal financial officer) February 26, 2015 Ann E. Ziegler /s/ Virginia L. Seggerman Vice President and Controller (principal accounting officer) February 26, 2015 Virginia L. Seggerman /s/ Steven W. Alesio Director February 26, 2015 Steven W. Alesio /s/ Barry K. Allen Director February 26, 2015 Barry K. Allen /s/ Benjamin D. Chereskin Director February 26, 2015 Benjamin D. Chereskin /s/ Glenn M. Creamer Director February 26, 2015 Glenn M. Creamer /s/ Michael J. Dominguez Director February 26, 2015 Michael J. Dominguez /s/ Paul J. Finnegan Director February 26, 2015 Paul J. Finnegan /s/ David W. Nelms Director February 26, 2015 David W. Nelms /s/ Robin P. Selati Director February 26, 2015 Robin P. Selati /s/ Donna F. Zarcone Director February 26, 2015 Donna F. Zarcone Table of Contents EXHIBIT INDEX Exhibit Number Description 3.1 Fifth Amended and Restated Certificate of Incorporation of CDW Corporation, previously filed as Exhibit 3.1 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 3.2 Amended and Restated By-Laws of CDW Corporation, previously filed as Exhibit 3.2 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 3.3 Articles of Organization of CDW LLC, previously filed as Exhibit 3.3 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.4 Amended and Restated Limited Liability Company Agreement of CDW LLC, previously filed as Exhibit 3.4 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.5 Certificate of Incorporation of CDW Finance Corporation, previously filed as Exhibit 3.5 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.6 By-Laws of CDW Finance Corporation, previously filed as Exhibit 3.6 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.7 Amended and Restated Articles of Incorporation of CDW Technologies, Inc., previously filed as Exhibit 3.7 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.8 Amended and Restated By-Laws of CDW Technologies, Inc., previously filed as Exhibit 3.8 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.9 Articles of Organization of CDW Direct, LLC, previously filed as Exhibit 3.9 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.10 Amended and Restated Limited Liability Company Agreement of CDW Direct, LLC, previously filed as Exhibit 3.10 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.11 Articles of Organization of CDW Government LLC, previously filed as Exhibit 3.11 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.12 Amended and Restated Limited Liability Company Agreement of CDW Government LLC, previously filed as Exhibit 3.12 113 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 3.13 Articles of Incorporation of CDW Logistics, Inc., previously filed as Exhibit 3.14 with CDW Corporation's Form S-3 filed on July 31, 2014 (Reg. No. 333-197744) and incorporated herein by reference. 3.14 By-Laws of CDW Logistics, Inc., previously filed as Exhibit 3.14 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 4.1 Specimen Common Stock Certificate, previously filed as Exhibit 4.1 with CDW Corporation’s Amendment No. 3 to Form S- 1 filed on June 25, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 4.2 Indenture, dated as of August 5, 2014, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and U.S. Bank National Association, as trustee, previously filed as Exhibit 4.1 with CDW Corporation's Form 8-K filed on August 6, 2014 and incorporated herein by reference. Table of Contents Exhibit Number Description 4.3 Form of 6% Senior Note (included as Exhibit A to Exhibit 4.1), previously filed as Exhibit 4.2 with CDW Corporation's Form 8-K filed on August 6, 2014 and incorporated herein by reference. 4.4 Senior Note Indenture, dated as of April 13, 2011, between CDW Escrow Corporation and U.S. Bank National Association as trustee, previously filed as Exhibit 4.1 with CDW Corporation's Form 8-K filed on April 14, 2011 and incorporated herein by reference. 4.5 Senior Note Supplemental Indenture, dated as of April 13, 2011, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.2 with CDW Corporation's Form 8-K filed on April 14, 2011 and incorporated herein by reference. \ 4.6 Second Senior Note Supplemental Indenture, dated as of May 20, 2011, by and among CDW LLC, CDW Finance Corporation, CDW Escrow Corporation, the guarantors party thereto and U.S. Bank National Association as Trustee, previously filed as Exhibit 4.1 with CDW Corporation's Form 8-K filed on May 23, 2011 and incorporated herein by reference. 4.7 Third Senior Note Supplemental Indenture, dated as of February 17, 2012, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and U.S. Bank National Association as Trustee, previously filed as Exhibit 4.5 with CDW Corporation's Form 8-K filed on February 17, 2012 and incorporated herein by reference. 4.8 Fourth Senior Note Supplemental Indenture, dated as of May 10, 2012, by and among CDW LLC, CDW Finance Corporation, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.3 with CDW Corporation's Form 8-K filed on May 11, 2012 and incorporated herein by reference. 4.9 Form of Senior Note (included as Exhibit A to Exhibit 4.5), previously filed as Exhibit 4.3 with CDW Corporation's Form 8- K filed on April 14, 2011 and incorporated herein by reference. 4.10 Base Indenture, dated as of December 1, 2014, by and among CDW LLC, CDW Finance Corporation, CDW Corporation, the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.1 with CDW Corporation's Form 8-K filed on December 1, 2014 and incorporated herein by reference. 4.11 Supplemental Indenture, dated as of December 1, 2014, by and among CDW LLC, CDW Finance Corporation, CDW Corporation the guarantors party thereto and U.S. Bank National Association as trustee, previously filed as Exhibit 4.2 with CDW Corporation's Form 8-K filed on December 1, 2014 and incorporated herein by reference. 114 4.12 Form of 5.5% Senior Note (included as Exhibit B to Exhibit 4.12), previously filed as Exhibit 4.3 with CDW Corporation's Form 8-K filed on December 1, 2014 and incorporated herein by reference. 10.1 Amended and Restated Revolving Loan Credit Agreement, dated as of June 6, 2014, by and among CDW LLC, the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent, GE Commercial Distribution Finance Corporation, as floorplan funding agent, and the joint lead arrangers, joint bookrunners, co-collateral agents, co-syndication agents and co-documentation agents party thereto, previously filed as Exhibit 10.1 with CDW Corporation's Form 8-K filed on June 9, 2014 (Reg. No. 333-197744) and incorporated herein by reference. 10.2 Term Loan Agreement, dated as of April 29, 2013, by and among CDW LLC, the lenders from time to time party thereto, Barclays Bank PLC, as administrative agent and collateral agent, and the joint lead arrangers, joint bookrunners, co- syndication agents and co-documentation agents party thereto, previously filed as Exhibit 10.1 with CDW Corporation’s Form 8-K filed on May 1, 2013 and incorporated herein by reference. 10.3 First Amendment to Term Loan Agreement, dated as of May 30, 2013, by and among CDW LLC, the lenders from time to time party thereto, and Barclays Bank PLC, as administrative agent and collateral agent, previously filed as Exhibit 10.3 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 10.4 Incremental Amendment, dated as of July 31, 2013, by and among CDW LLC, the lenders party thereto and Barclays Bank PLC, as administrative agent, previously filed as Exhibit 10.1 with CDW Corporation’s Form 8-K filed on August 1, 2013 and incorporated herein by reference. Table of Contents Exhibit Number Description 10.5 Third Amendment to the Term Loan Agreement, dated as of September 12, 2013, by and among CDW LLC, the lenders from time to time party thereto and Barclays Bank PLC, as administrative agent and collateral agent, previously filed as Exhibit 10.2 with CDW Corporation's Form 10-Q filed on November 7, 2013 and incorporated herein by reference. 10.6 Second Amended and Restated Guarantee and Collateral Agreement, dated April 29, 2013, by and among CDW LLC, the guarantors party thereto and Barclays Bank PLC, as collateral agent, previously filed as Exhibit 10.2 with CDW Corporation’s Form 8-K filed on May 1, 2013 and incorporated herein by reference. 10.7 Management Services Agreement, dated as of October 12, 2007, by and between CDW Corporation, Madison Dearborn Partners V-B, L.P. and Providence Equity Partners L.L.C., previously filed as Exhibit 10.9 with CDW Corporation’s Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 10.8 Termination Agreement, dated as of June 12, 2013, by and among CDW Corporation, Madison Dearborn Partners V-B, L.P. and Providence Equity Partners L.L.C., previously filed as Exhibit 10.6 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 10.9 Registration Agreement, dated as of October 12, 2007, by and among VH Holdings, Inc., CDW Holdings LLC, Madison Dearborn Capital Partners V-A, L.P., Madison Dearborn Capital Partners V-C, L.P., Madison Dearborn Partners V Executive-A, L.P., Providence Equity Partners VI L.P., Providence Equity Partners VI-A L.P., and the other securityholders party thereto, previously filed as Exhibit 10.10 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 10.10 Withdrawal from Registration Agreement, dated as of November 12, 2013, by and between CDW Corporation and Paul S. Shain, previously filed as Exhibit 10.10 with CDW Corporation’s Form 10-K filed on March 5, 2014 and incorporated herein by reference. 10.11 Withdrawal from Registration Agreement, dated as of November 20, 2013, by and among CDW Corporation, James R. Shanks and BOS Holdings, LLC, previously filed as Exhibit 10.11 with CDW Corporation’s Form 10-K filed on March 5, 2014 and incorporated herein by reference. 10.12 Withdrawal from Registration Agreement, dated as of August 27, 2014, by and between CDW Corporation, John A. Edwardson and Whispering Pines Capital LLC , previously filed as Exhibit 10.1 with CDW Corporation’s Form 10-Q filed on November 12, 2014 and incorporated herein by reference. 10.13§ Amended and Restated Compensation Protection Agreement, dated as of March 24, 2014, by and among CDW Corporation, CDW LLC and Thomas E. Richards, previously filed as Exhibit 10.1 with CDW Corporation's Form 8-K filed on March 28, 2014 and incorporated herein by reference. 10.14§ Form of Compensation Protection Agreement (executive officers other than Thomas E. Richards), previously filed as Exhibit 115 10.2 with CDW Corporation's Form 8-K filed on March 28, 2014 and incorporated herein by reference. 10.15§ Form of Noncompetition Agreement under the Compensation Protection Agreement, previously filed as Exhibit 10.3 with CDW Corporation's Form 8-K filed on March 28, 2014 and incorporated herein by reference. 10.16§ Letter Agreement, dated as of September 13, 2011, by and between CDW Direct, LLC and Christina M. Corley, previously filed as Exhibit 10.31 with CDW Corporation's Form 10-K filed on March 9, 2012 and incorporated herein by reference. 10.17§ Form of Indemnification Agreement by and between CDW Corporation and its directors and officers, previously filed as Exhibit 10.32 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 10.18 Stockholders Agreement, dated as of June 10, 2013, by and among CDW Corporation, Madison Dearborn Capital Partners V-A, L.P., Madison Dearborn Capital Partners V-C, L.P., Madison Dearborn Capital Partners V Executive-A, L.P., Providence Equity Partners VI L.P., Providence Equity Partners VI-A L.P. and the other securityholders party thereto, previously filed as Exhibit 10.33 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. Table of Contents Exhibit Number Description 10.19§ CDW Corporation 2013 Senior Management Incentive Plan, previously filed as Exhibit 10.34 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 10.20§ CDW Corporation 2013 Long-Term Incentive Plan, previously filed as Exhibit 10.35 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 10.21§ CDW Corporation Coworker Stock Purchase Plan, previously filed as Exhibit 10.36 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 10.22§ Form of CDW Corporation Option Award Notice and Stock Option Agreement (executed by Thomas E. Richards), previously filed as Exhibit 10.37 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 10.23§ Form of CDW Corporation Option Award Notice and Stock Option Agreement (executed by Neal J. Campbell and Christina M. Corley), previously filed as Exhibit 10.38 with CDW Corporation’s Amendment No. 2 to Form S-1 filed on June 14, 2013 (Reg. No. 333-187472) and incorporated herein by reference. 10.24§ Form of CDW Corporation Restricted Stock Award Notice and Restricted Stock Award Agreement (executed by Thomas E. Richards, Dennis G. Berger, Douglas E. Eckrote, Christine A. Leahy, Jonathan J. Stevens and Ann E. Ziegler), previously filed as Exhibit 10.12 with CDW Corporation’s Form 10-Q filed on August 12, 2013 and incorporated herein by reference. 10.25§ Form of CDW Corporation Restricted Stock Award Notice and Restricted Stock Award Agreement (executed by Neal J. Campbell, Christina M. Corley, Christina V. Rother and Matthew A. Troka), previously filed as Exhibit 10.13 with CDW Corporation’s Form 10-Q filed on August 12, 2013 and incorporated herein by reference. 10.26§ CDW Amended and Restated Restricted Debt Unit Plan, previously filed as Exhibit 10.3 with CDW Corporation’s Form 10- Q filed on November 7, 2013 and incorporated herein by reference. 10.27§ Form of CDW Restricted Debt Unit Grant Notice and Agreement (executed by Thomas E. Richards, Dennis G. Berger, Douglas E. Eckrote, Christine A. Leahy, Jonathan J. Stevens and Ann E. Ziegler), previously filed as Exhibit 10.23 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 10.28§ Form of CDW Restricted Debt Unit Grant Notice and Agreement (executed by Neal J. Campbell, Christina M. Corley, Christina V. Rother and Matthew A. Troka and to be used for certain future grantees), previously filed as Exhibit 10.24 with CDW Corporation's Form S-4 filed on September 7, 2010 (Reg. No. 333-169258) and incorporated herein by reference. 10.29§ Form of Stock Option Agreement (executive officers) under the CDW Corporation 2013 Long-Term Incentive Plan, 116 previously filed as Exhibit 10.4 with CDW Corporation’s Form 10-Q filed on May 12, 2014 and incorporated herein by reference. 10.30§ Form of Performance Share Unit Award Agreement (executive officers) under the CDW Corporation 2013 Long-Term Incentive Plan, previously filed as Exhibit 10.5 with CDW Corporation’s Form 10-Q filed on May 12, 2014 and incorporated herein by reference. 10.31§* Form of Performance Share Award Agreement (executive officers) under the CDW Corporation 2013 Long-Term Incentive Plan. 10.32§ Form of Non-Employee Director Restricted Stock Unit Award Agreement under the CDW Corporation 2013 Long-Term Incentive Plan, previously filed as Exhibit 10.6 with CDW Corporation’s Form 10-Q filed on May 12, 2014 and incorporated herein by reference. 12.1* Computation of ratio of earnings to fixed charges. 21.1 List of subsidiaries, previously filed as Exhibit 21.1 with CDW Corporation's Form S-4 filed on April 13, 2012 (Reg. No. 333-180715) and incorporated herein by reference. Table of Contents ________________ 117 Exhibit Number Description 23.1* Consent of Ernst & Young LLP. 31.1* Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934. 31.2* Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934. 32.1** Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350. 32.2** Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350. 101.INS* XBRL Instance Document 101.SCH* XBRL Taxonomy Extension Schema Document 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* XBRL Taxonomy Extension Label Linkbase Document 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document * Filed herewith ** These items are furnished and not filed. § A management contract or compensatory arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K. Exhibit 10.31 CDW CORPORATION 2013 LONG-TERM INCENTIVE PLAN PERFORMANCE SHARE AWARD AGREEMENT CDW Corporation, a Delaware corporation (the “ Company ”), hereby grants to the individual (the “ Holder ”) named in the award notice attached hereto (the “ Award Notice ”) as of the date set forth in the Award Notice (the “ Grant Date ”), pursuant to the provisions of the CDW Corporation 2013 Long-Term Incentive Plan (the “ Plan ”), a performance share award (the “ Award ”) with respect to the number of shares of the Company’s Common Stock, par value $0.01 per share (“ Stock ”), set forth in the Award Notice, upon and subject to the restrictions, terms and conditions set forth in the Plan and this agreement (the “ Agreement ”). Capitalized terms not defined herein shall have the meanings specified in the Plan. 1. Award Subject to Acceptance of Agreement . The Award shall be null and void unless the Holder (a) accepts this Agreement by executing the Award Notice in the space provided therefor and returning an original execution copy of the Award Notice to the Company (or electronically accepting this Agreement within the Holder’s stock plan account with the Company’s stock plan administrator according to the procedures then in effect) and (b) if requested by the Company, executes and returns one or more irrevocable stock powers to facilitate the transfer to the Company (or its assignee or nominee) of all or a portion of the shares subject to the Award, if shares are forfeited pursuant to Section 3 hereof or if required under applicable laws or regulations. As soon as practicable after the Holder has accepted this Agreement and executed such stock power or powers and returned the same to the Company, the Company shall cause to be issued in the Holder’s name the maximum number of shares of Stock subject to the Award. 2. Rights as a Stockholder . The Holder shall have the right to vote the shares of Stock subject to the Award unless and until such shares are forfeited pursuant to Section 3 hereof. As of each date on which the Company pays a cash dividend on the shares of Stock subject to the Award (a “ Dividend Date ”), the dividend shall be used to purchase from the Company a number of shares equal to (i) the product of the total number of shares subject to the Award immediately prior to such Dividend Date multiplied by the dollar amount of the cash dividend paid per share of Stock by the Company on such Dividend Date, divided by (ii) the Fair Market Value of a share of Stock on such Dividend Date. Any such additional shares shall be subject to the same vesting conditions and other terms set forth herein as the shares to which they relate. The shares of Stock subject to the Award may be held by a custodian in book entry form with the restrictions on such shares duly noted or, alternatively, the Company may hold the certificate or certificates representing such shares, in either case until the Award shall have vested, in whole or in part, pursuant to Section 3 hereof. As soon as practicable after shares of Stock shall have vested pursuant to Section 3 hereof, subject to Section 4 hereof, the restrictions shall be removed from those of such shares that are held in book entry form, and the Company shall deliver to the Holder any certificate or certificates representing those of such shares that are held by the Company and destroy or return to the Holder the stock power or powers relating to such shares. Any shares of Stock that do not become vested and are forfeited pursuant to Section 3 shall be transferred to the Company (or its assignee or nominee). Exec Form 1 3. Restriction Period and Vesting . 3.1. Performance-Based Vesting Conditions . Subject to the remainder of this Section 3 , the Stock shall vest pursuant to the terms of this Agreement and the Plan based on the achievement of the performance goals set forth in the Award Notice over the performance period set forth in the Award Notice (the “ Performance Period ”), provided that that the Holder remains in continuous employment with the Company through the end of the Performance Period. Attainment of the performance goals shall be determined and certified by the Committee in writing prior to the vesting of the Award. Any shares of Stock subject to the portion of the Award that does not become vested due to the failure of the Company to achieve the performance goals at the maximum levels of performance shall be forfeited and transferred to the Company (or its assignee or nominee). 3.2. Termination of Employment (a) Termination due to Retirement, Death or Disability . If the Holder’s employment with the Company terminates prior to the end of the Performance Period and prior to a Change in Control by reason of the Holder’s Retirement, death or a termination by the Company due to Disability, the Performance Period shall continue through the last day thereof and the Holder shall be entitled to a prorated Award, provided that the Holder has continuously complied with the Restrictive Covenants. Such prorated Award shall be equal to the number of shares earned at the end of the Performance Period based on the actual performance during the Performance Period multiplied by a fraction, the numerator of which shall equal the number of full months in the Performance Period during which the Holder was employed by the Company and the denominator of which shall equal 36. Attainment of the performance goals shall be determined and certified by the Committee in writing prior to the vesting of the Award. Any shares of Stock subject to the portion of the Award that does not become vested shall be forfeited and transferred to the Company (or its assignee or nominee). (b) Termination other than due to Retirement, Death or Disability . If the Holder’s employment with the Company terminates prior to the end of the Performance Period and prior to a Change in Control by reason of (i) the Company’s termination of the Holder’s employment for any reason other than death or Disability or (ii) the Holder’s resignation for any reason other than Retirement, then the Award shall be immediately forfeited by the Holder and cancelled by the Company. The shares of Stock subject to the Award shall be forfeited and transferred to the Company (or its assignee or nominee). 3.3. Change in Control . (a) Satisfaction of Performance Goals . If a Change in Control occurs prior to the 24-month anniversary of the first day of the Performance Period, the Performance Period shall end as of the date of the Change in Control and the performance goals set forth in Section 3.1 shall be deemed to have been satisfied at the target level. If the Change in Control occurs on or after the 24-month anniversary of the first day of the Performance Period, the Performance Period shall end as of the date of the Change in Control, and the number of shares of Stock earned pursuant to Section 3.1 shall be based on the projected level of performance through the end of the Performance Period, as determined by the Committee prior to the date of the Change in Control based on performance through the date of such determination. If the Change in Control occurs after the date on which the Participant’s employment is terminated by reason of death, Disability or Retirement, pursuant to Section 3.2(a) , the number of shares earned for purposes of such section shall be determined as of the date of the Change in Control in accordance with this Section 3.3(a) and shall be vested as of the date of such Change in Control. Any shares of Stock subject to the 2 portion of the Award that does not become vested shall be forfeited and transferred to the Company (or its assignee or nominee). (b) Vesting of Award Not Assumed . In the event of a Change in Control prior to the end of the Performance Period pursuant to which the Award is not effectively assumed or continued by the surviving or acquiring corporation in such Change in Control (as determined by the Board or Committee, with appropriate adjustments to the number and kind of shares, in each case, that preserve the value of the shares subject to the Award and other material terms and conditions of the outstanding Award as in effect immediately prior to the Change in Control), the Award shall vest as of the date of the Change in Control, based on the performance level determined in accordance with Section 3.3(a) . Any shares of Stock subject to the portion of the Award that does not become vested shall be forfeited and transferred to the Company (or its assignee or nominee). (c) Vesting of Award Assumed . In the event of a Change in Control prior to the end of the Performance Period pursuant to which the Award is effectively assumed or continued by the surviving or acquiring corporation in such Change in Control (as determined by the Board or Committee, with appropriate adjustments to the number and kind of shares, in each case, that preserve the value of the shares subject to the Award and other material terms and conditions of the outstanding Award as in effect immediately prior to the Change in Control) and (i) the Holder remains continuously employed through the end of the Performance Period, (ii) the Company terminates the Holder’s employment without Cause or the Holder resigns for Good Reason within 24 months following such Change in Control and the Holder executes and does not revoke a waiver and release of claims in the form prescribed by the Company within 60 days after the date of such termination or (iii) the Holder’s employment terminates due to death, Disability or Retirement following such Change in Control, in any such case, the Award shall vest based on the performance level determined in accordance with Section 3.3(a ) hereof as of the end of the Performance Period or, if earlier, the Holder’s termination of employment; provided that to the extent that any Required Tax Payments are due prior to such vesting date, the Company shall withhold whole shares of Stock from the number of shares subject to the Award having an aggregate Fair Market Value, determined as of the date on which such withholding obligation arises, equal to the Required Tax Payments, in accordance with Section 6.1 . In the case of a termination pursuant to clause (ii) of this Section 3.3(c) (termination without Cause or resignation for Good Reason), the Award shall vest in full, and in the case of a termination pursuant to clause (iii) of this Section 3.3(c) (death, Disability or Retirement), the Award shall be prorated in accordance with, and subject to the terms of, Section 3.2(a) . If, following a Change in Control, the Holder experiences a termination of employment other than as set forth in this Section 3.3 (c) , the Award shall be immediately forfeited by the Holder and cancelled by the Company. Any shares of Stock subject to the portion of the Award that does not become vested shall be forfeited and transferred to the Company (or its assignee or nominee). 3.4. Definitions . (a) Cause . For purposes of this Award, “ Cause ” shall mean one or more of the following: (A) Holder’s refusal (after written notice and reasonable opportunity to cure) to perform duties properly assigned which are consistent with the scope and nature of Holder's position; (B) Holder’s commission of an act materially and demonstrably detrimental to the financial condition and/or goodwill of the Company or any of its Subsidiaries, which act constitutes gross negligence or willful misconduct in the performance of duties to the Company or any of its Subsidiaries; (C) Holder’s commission of any theft, fraud, act of dishonesty or breach of trust resulting in or intended to result in material personal gain or enrichment of Holder at the direct or indirect expense of the Company or any of its Subsidiaries; (D) Holder’s conviction of, or plea of guilty or nolo contendere to, a felony; (E) Holder’s material violation of 3 any Restrictive Covenant; or (F) Holder’s material and willful violation of the Company’s written policies or of Holder’s statutory or common law duty of loyalty to the Company or its affiliates that in either case is materially injurious to the Company, monetarily or otherwise. No act or failure to act will be considered “willful” (x) unless it is done, or omitted to be done, by Holder in bad faith or without reasonable belief that Holder’s action or omission was in the best interests of the Company or (y) if it is done, or omitted to be done, in reliance on the informed advice of the Company’s outside counsel or independent accountants or at the express direction of the Board. (b) Disability . For purposes of this Award, “ Disability ” shall mean the Holder’s absence from the Holder’s duties with the Company on a full-time basis for at least 180 consecutive days as a result of the Holder’s incapacity due to physical or mental illness, or under such other circumstances as the Committee determines, in its sole discretion, constitute a Disability. (c) Good Reason . For purposes of this Award, “ Good Reason ” shall mean that the Holder resigns from employment with the Company and its Subsidiaries as a result of one or more of the following reasons: (i) the Company reduces the amount of the Holder’s base salary or cash bonus opportunity (it being understood that the Board shall have discretion to set the Company’s and the Holder’s personal performance targets to which the cash bonus will be tied), (ii) the Company adversely changes the Holder’s reporting responsibilities, titles or office as in effect as of the date hereof or reduces his/her position, authority, duties, responsibilities or status materially inconsistent with the positions, authority, duties, responsibilities or status the Holder then holds, (iii) any successor to the Company in any merger, consolidation or transfer of assets does not expressly assume any material obligation of the Company to the Holder under any agreement or plan pursuant to which the Holder receives benefits or rights, or (iv) the Company changes the Holder’s place of work to a location more than fifty (50) miles from the Holder’s present place of work; provided , however , that the occurrence of any such condition shall not constitute Good Reason unless (A) the Holder provides written notice to the Company of the existence of such condition not later than 60 days after the Holder knows or reasonably should know of the existence of such condition, (B) the Company fails to remedy such condition within 30 days after receipt of such notice and (C) the Holder resigns due to the existence of such condition within 60 days after the expiration of the remedial period described in clause (B) hereof. (d) Restrictive Covenant . For purposes of this Award, “ Restrictive Covenant ” shall mean any non- competition, non-solicitation, confidentiality or protection of trade secrets (or similar provision regarding intellectual property) covenant by which Holder is bound under any agreement between Holder and the Company and its Subsidiaries. (e) Retirement . For purposes of this Award, “ Retirement ” shall mean Holder’s termination of employment at a time when (i) the Holder has attained age 55 and (B) the sum of the Holder’s age and years of employment with or service to the Company or its Subsidiaries equals or exceeds 65; provided that such termination occurs at least six months after the Grant Date. 4. Clawback of Proceeds . 4.1. Clawback of Proceeds . This award is subject to the clawback provisions in Section 5.15 of the Plan. In addition, if the Holder materially violates any Restrictive Covenant and such violation occurs on or before the third anniversary of the date of the Holder’s termination of employment: (i) the Award shall be forfeited and (ii) any and all Performance Share Proceeds (as hereinafter defined) shall be immediately due and payable by the Holder to the Company. For purposes of this Section, “ Performance Share Proceeds ” shall mean, with respect to any portion of the Award which becomes 4 vested later than 24 months prior to the date of the Holder’s termination of employment or service with the Company, the Fair Market Value of a share of Common Stock on the date such portion of the Award became vested, multiplied by the number of shares of Common Stock that became vested. The remedy provided by this Section shall be in addition to and not in lieu of any rights or remedies which the Company may have against the Holder in respect of a breach by the Holder of any duty or obligation to the Company. 4.2. Right of Setoff . The Holder agrees that by accepting the Award the Holder authorizes the Company and its affiliates to deduct any amount or amounts owed by the Holder pursuant to this Section 4 from any amounts payable by or on behalf of the Company or any affiliate to the Holder, including, without limitation, any amount payable to the Holder as salary, wages, vacation pay, bonus or the vesting or settlement of the Award or any stock-based award. This right of setoff shall not be an exclusive remedy and the Company’s or an affiliate’s election not to exercise this right of setoff with respect to any amount payable to the Holder shall not constitute a waiver of this right of setoff with respect to any other amount payable to the Holder or any other remedy. 5. Transfer Restrictions and Investment Representation . 5.1. Nontransferability of Award . The Award may not be transferred by the Holder other than by will or the laws of descent and distribution. Except to the extent permitted by the foregoing sentence, the Award may not be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of the Award, the Award and all rights hereunder shall immediately become null and void. 5.2. Investment Representation . The Holder hereby covenants that (a) any sale of any share of Stock acquired upon the vesting of the Award shall be made either pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “ Securities Act ”), and any applicable state securities laws, or pursuant to an exemption from registration under the Securities Act and such state securities laws and (b) the Holder shall comply with all regulations and requirements of any regulatory authority having control of or supervision over the issuance of the shares and, in connection therewith, shall execute any documents which the Committee shall in its sole discretion deem necessary or advisable. 6. Additional Terms and Conditions of Award . 6.1. Withholding Taxes . As a condition precedent to the vesting of the Award and the delivery of the Stock hereunder, at the Company’s discretion either (i) the Holder shall pay to the Company such amount as the Company (or an affiliate) determines is required, under all applicable federal, state, local, foreign or other laws or regulations, to be withheld and paid over as income or other withholding taxes (the “ Required Tax Payments ”) with respect to the Award or (ii) the Company or an affiliate may, in its discretion, deduct any Required Tax Payments from any amount then or thereafter payable by the Company or an affiliate to the Holder, which may include the withholding of whole shares of Stock which would otherwise be delivered to the Holder having an aggregate Fair Market Value, determined as of the date on which such withholding obligation arises, equal to the Required Tax Payments, in either case in accordance with such terms, conditions and procedures that may be prescribed by the Company. Shares of stock withheld may not have a Fair Market Value in excess of the Company’s minimum statutory withholding requirements for the Required Tax Payments; 5 provided, however, that if a fraction of a share of Stock would be required to satisfy the minimum amount of the Required Tax Payments, then the number of shares of Stock to be withheld may be rounded up to the next nearest whole share of Stock. Notwithstanding the foregoing, if the Required Tax Payments are due prior to the date the Company determines the number of shares of Stock that have become vested, the amount of the Required Tax Payments, including the number of shares withheld to pay such Required Tax Payments, may be based on a reasonable estimate of the number of shares that are expected to become vested. No certificate representing a share of Stock shall be delivered until the Required Tax Payments have been satisfied in full. A determination by the Company to satisfy the Required Tax Payments by withholding shares of Stock shall be made by the Committee if the Holder is subject to Section 16 of the Exchange Act. 6.2. Compliance with Applicable Law . The Award is subject to the condition that if the listing, registration or qualification of the shares of Stock subject to the Award upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares hereunder, the shares of Stock subject to the Award shall not be delivered, in whole or in part, unless such listing, registration, qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Company. The Company agrees to use reasonable efforts to effect or obtain any such listing, registration, qualification, consent, approval or other action. 6.3. Award Confers No Rights to Continued Employment . In no event shall the granting of the Award or its acceptance by the Holder, or any provision of the Agreement or the Plan, give or be deemed to give the Holder any right to continued employment by the Company, any Subsidiary or any affiliate of the Company or affect in any manner the right of the Company, any Subsidiary or any affiliate of the Company to terminate the employment of any person at any time. 6.4. Decisions of Board or Committee . The Board or the Committee shall have the right to resolve all questions which may arise in connection with the Award. Any interpretation, determination or other action made or taken by the Board or the Committee regarding the Plan or this Agreement shall be final, binding and conclusive. 6.5. Successors . This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company and any person or persons who shall, upon the death of the Holder, acquire any rights hereunder in accordance with this Agreement or the Plan. 6.6. Notices . All notices, requests or other communications provided for in this Agreement shall be made, if to the Company, to CDW Corporation, Attn: General Counsel, 200 N. Milwaukee Avenue, Vernon Hills, Illinois 60061, and if to the Holder, to the last known mailing address of the Holder contained in the records of the Company. All notices, requests or other communications provided for in this Agreement shall be made in writing either (a) by personal delivery, (b) by facsimile or electronic mail with confirmation of receipt, (c) by mailing in the United States mails or (d) by express courier service. The notice, request or other communication shall be deemed to be received upon personal delivery, upon confirmation of receipt of facsimile or electronic mail transmission or upon receipt by the party entitled thereto if by United States mail or express courier service; provided , however , that if a notice, request or other communication sent to the Company is not received during regular business hours, it shall be deemed to be received on the next succeeding business day of the Company. 6.7. Governing Law . This Agreement, the Award and all determinations made and actions taken pursuant hereto and thereto, to the extent not governed by the laws of the United States, 6 shall be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws. 6.8. Agreement Subject to the Plan . This Agreement is subject to the provisions of the Plan and shall be interpreted in accordance therewith. In the event that the provisions of this Agreement and the Plan conflict, the Plan shall control. The Holder hereby acknowledges receipt of a copy of the Plan. 6.9. Entire Agreement . This Agreement and the Plan constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Holder with respect to the subject matter hereof, and may not be modified adversely to the Holder’s interest except by means of a writing signed by the Company and the Holder. 6.10. Partial Invalidity . The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted. 6.11. Amendment and Waiver . The Company may amend the provisions of this Agreement at any time; provided that an amendment that would adversely affect the Holder’s rights under this Agreement shall be subject to the written consent of the Holder. No course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement. 6.12. Compliance With Section 409A of the Code . This Award is intended to be exempt from Section 409A of the Code, and shall be interpreted and construed accordingly. 7 EXHIBIT 12.1 CDW CORPORATION COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (unaudited) Years ended December 31, (dollars in millions) 2010 2011 2012 2013 2014 Computation of earnings: Income (loss) before income taxes and adjustment for (income) loss from equity investees $ (37.1 ) $ 28.3 $ 185.8 $ 194.9 $ 385.5 Distributed income from equity investees 0.2 0.5 1.2 1.0 1.1 Fixed charges 420.7 324.9 312.4 254.3 202.8 Total earnings $ 383.8 $ 353.7 $ 499.4 $ 450.2 $ 589.4 Computation of fixed charges: Interest expense $ 394.7 $ 302.0 $ 294.4 $ 241.8 $ 191.3 Amortization of deferred financing costs and debt premium 18.0 15.7 13.6 8.8 6.4 Portion of rent expense representative of interest (1) 8.0 7.2 4.4 3.7 5.1 Total fixed charges $ 420.7 $ 324.9 $ 312.4 $ 254.3 $ 202.8 Ratio of earnings to fixed charges (2 ) 1.1 1.6 1.8 2.9 (1) Fixed charges include a reasonable estimation of the interest factor included in rental expense. (2) For the year ended December 31, 2010, earnings available for fixed charges were inadequate to cover fixed charges by $37.0 million. Exhibit 23.1 Consent of Independent Registered Public Accounting Firm We consent to the incorporation by reference in the following Registration Statements: (1) Registration Statement (Form S-3 ASR No. 333-199425) of CDW Corporation, and (2) Registration Statement (Form S-8 No. 333-189622) pertaining to the 2013 Long-Term Incentive Plan and Coworker Stock Purchase Plan of CDW Corporation; of our reports dated February 26, 2015, with respect to the consolidated financial statements and schedule of CDW Corporation and subsidiaries and the effectiveness of internal control over financial reporting of CDW Corporation and subsidiaries included in this Annual Report (Form 10-K) of CDW Corporation for the year ended December 31, 2014. /s/ Ernst & Young LLP Chicago, Illinois February 26, 2015 Exhibit 31.1 CERTIFICATION PURSUANT TO RULE 13a-14(a) or 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934 I, Thomas E. Richards, certify that: 1. I have reviewed this annual report on Form 10-K of CDW Corporation (the "registrant"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. /s/ Thomas E. Richards Thomas E. Richards Chairman, President and Chief Executive Officer CDW Corporation February 26, 2015 Exhibit 31.2 CERTIFICATION PURSUANT TO RULE 13a-14(a) or 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934 I, Ann E. Ziegler, certify that: 1. I have reviewed this annual report on Form 10-K of CDW Corporation (the "registrant"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. /s/ Ann E. Ziegler Ann E. Ziegler Senior Vice President and Chief Financial Officer CDW Corporation February 26, 2015 Exhibit 32.1 CERTIFICATION PURSUANT TO SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE I, Thomas E. Richards, the chief executive officer of CDW Corporation (“CDW”), certify that (i) the Annual Report on Form 10-K for the year ended December 31, 2014 (the “10-K”) of CDW fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the 10-K fairly presents, in all material respects, the financial condition and results of operations of CDW. /s/ Thomas E. Richards Thomas E. Richards Chairman, President and Chief Executive Officer CDW Corporation February 26, 2015 Exhibit 32.2 CERTIFICATION PURSUANT TO SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE I, Ann E. Ziegler, the chief financial officer of CDW Corporation (“CDW”), certify that (i) the Annual Report on Form 10-K for the year ended December 31, 2014 (the “10-K”) of CDW fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the 10-K fairly presents, in all material respects, the financial condition and results of operations of CDW. /s/ Ann E. Ziegler Ann E. Ziegler Senior Vice President and Chief Financial Officer CDW Corporation February 26, 2015 NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-1 Attachment B: Methodology 1. Overall Approach Requirement 1. Offeror shall describe its overall approach to providing solicited services. Include how Offeror plans to meet or exceed requirements of the Scope of Work and Terms and Conditions. Response At CDW, our software business is the single largest category, with sales generating over $3 billion annually. This encompasses both traditional software licensing and subscription-based Software-as- a-Service (SaaS) licensing models. We offer innovative value-added benefits (detailed further in requirement 7) to enhance the procurement process, lower administrative costs, and reduce the risk of noncompliance associate with volume software licensing. To meet—and exceed—the needs of the NASPO ValuePoint contract customers, as delineated in the Scope of Work and Terms and Conditions, CDW•G presents our customizable customer website, dedicated account managers and software licensing specialists, industry-best customer service, a streamlined software-management system, and direct, timely support. CDW•G has proposed changes to the Terms and Conditions that are detailed within Attachment D, per the requirements of Executive Summary. Most of the proposed changes are a direct result of our status as an authorized reseller of licensing, where terms are currently drafted as if the awardee is the publisher. We appreciate the opportunity to discuss further and anticipate a good-faith negotiation. 2. Website Requirement 2. Per Section 3.1.3, the SVAR shall Develop and Maintain Website. Describe the website to be established for a state. Address that website’s functionalities or special features. You may supplement this response with illustrative screen prints (no more than 10) from one of your company’s existing websites. Taking into account the requirements of Section 3.1.3, address at a minimum: Response CDW has over 20 years’ experience in providing customer purchasing solutions on our website. We transact over $2.5 billion dollars in business through our website annually, which puts us in one of the top 10 e-commerce sites in the US. Our website, found at www.cdwg.com, is highly customizable, allowing each agency, department, and workgroup to tailor the site according to their specific needs. Additionally, the CDW•G program manager supporting the contract will create and maintain a contract-specific website, called a Premium Page. This site possesses the same functionalities as our website, with additional links features and contract pricing listed for each available contract item. NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-2 Requirement 2.1 Home page appearance and information; Response The contract’s CDW•G Premium Page requires no login to view, so our account teams and NASPO ValuePoint can easily direct eligible agencies to the site to demonstrate the competitive pricing available. There are a number of customizable features we will tailor to your preferences. Options include links of interest, text and images, related documentation, and the highlighting of specific OEMs and/or software solutions. Items standard to the home page include a quick “Find My Quote” search option and our general sales contact information, as well as providing easy access to our site subpages (e.g., Software, Cloud, Blog, Solutions). CDW•G will provide NASPO ValuePoint customers with access to a free customized Account Center site where they can view quotes, place orders, check status of orders, and track their order history. This site is available by logging into the customer account from either the Premium Page or www.cdwg.com. Requirement 2.2 On-line tutorials; Response We offer online tutorials for use of our website, as well as webinars about popular technology solutions. A high-level Account Center tour and a CDW website tour are available here: www.cdwsiteinfo.com. The site also includes website FAQs; detailed breakdowns of the Account Center functionalities, and a blog featuring new site updates. Within your Account Center, function-specific tutorials and instructions are available for major areas (e.g., catalogs, quotes, order tracking. We house solution-specific tutorials and webinars in the Media Library, with nearly 70 webinars and over 10 different video channels. This easy-to-search library includes a plethora of helpful documentation for users to research, as well. Requirement 2.3 Product catalog (include searchable fields, products to be included, how license information is provided); Response The contract’s Premium Page allows NASPO ValuePoint customers to perform quick product searches and to comparison shop by viewing up to 10 side-by-side product descriptions, with a number of helpful filtering options. Additionally, customers can export the comparison information into a CSV file for reporting needs. Our site includes license information on each product page. This information appears on the comparison tool when selecting the “Technical Specs” option. Licensing details include, but are not limited to, agreement term, category, level, type, licensing program, pricing level, subscription details (when applicable), quantity, and service support (where included). NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-3 Specific to NASPO ValuePoint, users can also view descriptions of the most popular vendor partners’ licensing programs from the software licensing center, eliminating the hassle of downloading data from multiple manufacturer websites and providing a full library of helpful resources to educate on software licensing. To continue with a purchase, users must enter a unique ID and password, at which point eligible entities can quickly track orders and quotes. A key element in expanding contract reach, the website is a trustworthy means of easily choosing and ordering new licenses and products on the contract. Contract pricing continues to be displayed for all items. When authenticated, entities can add additional products from any of their available contracts, all on one order. If a customer does not currently have a CDW•G Account Center and would like to utilize this tool, the registration process is simple, selecting their own login ID and password for their customized site. Site functionality includes the following: Track orders and shipments Connect with your account team Manage applicable purchases and payments Review consistent, contract-compliant pricing Promote IT standards Set shipping preferences and manage contact information Control access to features and information through customer organization The Account Center improves efficacy and efficiency when working with CDW•G, as compared to our competitors. Starting with comparing products, finding compatible accessories, creating custom catalogs, setting authorization levels, and selecting from a number of shipping options, your CDW•G Account Center expands to track agency spending history, manage assets, and create customized reports. Support and assistance is available via the site, through contacting the account manager and/or a customer service rep, as well as placing and reviewing RMA requests. Software Management NASPO ValuePoint users can take advantage of features that make it easy to find, download, activate, and manage software licenses. Discover and analyze Audit software applications running on network Instantly run inventory of software assets Analyze software usage Automatically find all IT assets Monitor network vulnerabilities View comprehensive asset reporting Software filters Quickly narrow purchase options based on current software contract Some publishers available for automatic/web-based features Use Software Keycodes to store keycodes from software licensing purchases Additional Features Track licenses purchased from CDW and other vendor purchases Robust standardized and custom reporting options NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-4 Option to upload license information so you can consolidate software license reports and information Requirement 2.4 Links Response As stated in requirement 2.1, links of interest (e.g., the NASPO ValuePoint primary website, CDW Media Library, etc.) can be tailored to customer preference on the Account Center site. This customization is available at no cost to the user. Requirement 2.5 Downloadable standard reports. Include: o 2.5.1 How information is controlled and sorted (e.g. what information LSCA can access); Response Information can be captured and reported via the Account Center and include (but are not limited to) the following sortable fields: ABB Billing ID Accounting Code Apple Education Account Number Invoice Approval ID Business Area Buyers ID for Billing Buyers ID for Seller Buyers ID for Vendor Capital Budget Number Cost Center Corporation Code Department Code Employee Email Address Employee First Initial Employee ID Number Employee Last Name Employee Phone Number Freight Cost Center Freight GL Account Inventory Cost Center Inventory GL Account Account Unit MW Customer Number Release Number SAP Company Shipping Account Number Selling Division Buying Unit # Staples Internal Customer Number Staples Merchandise Type Code Tax Cost Center Tax GL Account Ticket Number Vendor ID 3rd Party Assigned Order Number Work Request Original Order Price Original Order Quantity The Account Center is set up by customer number, meaning that the LSCA will need to work with the program manager to receive contract-wide reports (see requirement 2.5.2). NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-5 Requirement o 2.5.2 How state Procurement Officer can obtain purchasing profile for Users and volume in State; Response Standard reports are available for download via the Account Center and your account manager, utilizing sortable data fields which can be accessed and viewed by the customer, managed as Preferences. Each site will only show the individual agency, with “roll up” reports for the LSCA performed by the program manager. Each customer (requirement 2.5.3), if set as a subordinate to the main central agency, can roll up to the Procurement Officer (2.5.2). Use easy drag and drop options to customize reports or download data for offline analysis. More information about the types of reporting available to NASPO ValuePoint customers is featured in requirement 5. Through the Account Center, customers will have the ability to coordinate to the individual state’s electronic purchasing system, utilizing our Purchase Authorization System (PAS), streamlining and controlling IT purchases with automated, rules-based approvals and workflows. Requirement o 2.5.3 How an individual User can obtain only their information. Response Our Account Centers are set up by each customer’s CDW•G account number. Agencies access and generate reports that include only the information relevant to their account. The authorized user(s) designated to manage the entity’s account act as administrator and can customize the site to restrict the information available to individual purchases, if desired. Requirement 2.6 How website is monitored, kept current and accurate. Response Once your program manager puts the contract structure into the system, the system updates the contract pricing automatically, as we receive it from our OEM and distributor partners. Our major partners send daily EDI downloads or real-time information directly to our ordering and inventory system. For all quote requests, our AMs use one system to manage the process (from quote to order placement). This system allows us to centrally manage many key functions, including purchasing, inventory management, accounts receivable, sales, and distribution. For general site maintenance, we have an in-house team of over 200 IT personnel to keep our website refreshed quickly, cutting edge, and accurate. Much customer feedback goes into site updates, ensuring our site continues to offer the best features for easing customer procurement needs. For example, our team redesigned the site’s segment-specific homepages in early 2015. The winning designs were a result of a 12-hour hackathon, a 10-day customer beta test, and additional customer feedback. NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-6 We schedule updates during times with the lowest traffic and always notify customer of updates in advance via a site banner and our website’s blog. Our success is reflected in the less-than-six minutes of unplanned downtime in 2014—an uptime exceeding 99.997%. 3. Software Tracking Requirement 3. Describe your Company’s method for tracking software licenses and ensuring that Participating States receive timely notifications of renewals or are advised of volume agreement opportunities or vulnerabilities, etc. Response Software tracking differs from state to state, agency to agency, dependent upon the structuring of procurement practices and information required. For example, if the LSCA is the contract administrator, then the licensing team will provide all necessary information (including licensing cost analysis reports, software entitlements reports, and license history review reporting). If a state is leading the purchasing of licenses, or other agencies are listed as child accounts within our system, then our internal system will generate a license report applicable to each account. For procurement that is more decentralized, reports will be provided directly to the agencies holding the agreement. States can be kept informed of licensing details such as OEM and license name. 3.1 The standard sortable data fields established for these records. Response CDW•G will provide NASPO ValuePoint customers with access to a customized Account Center site where they can view quotes, place orders, check status of orders, and track their order history, where all fields are sortable. The CDW•G Account Center site, customized specifically for each agency, also provides access to each customer’s software purchases and licenses. The Account Center is a proprietary tool made available to CDW•G customers at no cost. Additionally, AMs can handle requests for scheduled or ad hoc reporting. Requirement 3.2 The information tracked on behalf of Participating States. Response CDW•G eases the burden of tracking renewal dates and solution comparisons through the methodical management processes followed by our AMs and licensing specialists, ensuring accuracy of purchased licenses and true up dates (requirement 3.3). Our personalized approach means we know our customers’ systems and offer recommendations tailored to best fit your needs. Your AM assists with understanding the advantages and vulnerabilities of specific solutions and helps negotiate Volume Licensing Agreements (VLAs) with software partners, resulting in substantial time and money saved. See requirement 4.3 for detail on our true up workbook report, available for EA customers. As detailed in requirement 2.3, the Account Center offers multiple tracking options for relevant information and features software management consolidating license information, application audits, and various reporting capabilities. Additionally, knowledgeable licensing experts monitor contract customers’ significant dates and volume plateaus (requirement 3.3), as well as assisting in navigation through software partner customer portals. Reports are details further in requirement 5. NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-7 Requirement 3.3 How reminders of significant dates or volume plateaus are triggered. Include how your Company, as a partner with the Participating State, communicates with the State to ensure no deadlines are missed or opportunities are unexplored. Response Our licensing specialists track the anniversary and expiration dates for each enrollment. CDW•G requires our AMs to send monthly notifications of upcoming annual payments for the three months prior to anniversary date. Account managers and licensing specialists have also made it a best practice to initiate volume license renewal discussions six months prior to expiration. During this process, the CDW•G licensing specialist reviews the licenses on the current agreement and explain any license changes that may impact how they are renewed on the next agreement. Each NASPO ValuePoint member’s dedicated licensing specialist is a customer advocate, focusing on the customer’s existing environment and future plans. This allows them to make licensing recommendations for renewal and work with the AM to create an initial renewal proposal. The customer can review the proposal, make changes, ask questions, and ultimately approve. Once approved, CDW•G prepares the renewal paperwork and provides instructions for completion. Our ability to manage thousands of concurrent publisher contracts has been built on this system and a partnership with us will give NASPO ValuePoint customers the peace of mind that agency renewals will not be missed. CDW•G updates our systems immediately when we receive notifications on products and pricing from publishers. Your software licensing specialist tracks licensing purchases and ensures that NASPO ValuePoint customers have the following: new software version (as appropriate), access to technical support, ongoing audits, reduced risk through compliance, and timely contract renewal. 4. Proof of License Requirement 4. Describe your Company’s method of ensuring a Participating State receives documentation of Proof of License that can be provided to requestors (e.g. auditors, in response to FOIA requests, etc.) 4.1 Describe process for providing Proof of License to a buyer. Provide a sample Proof of License. Response All Proof of License certificates are available electronically or in hard copy after purchase. Proof of license methods differ from publisher to publisher. Usually, purchasers can pull the proof of license directly from the OEM invoice. These serve as proof of ownership in the event of an audit. CDW•G can also provide a proof of license certificate (see the sample) or the OEM purchase automatically or when requested, such as an auditor response to FOIA, etc. Requirement 4.2 Explain method of retaining back-up copies of Proof of License. State how quickly a duplicate copy can be provided. NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-8 Response Our invoices and proof of licenses are available via request to your AM at any point, as they serve as part of our day-to-day business and operational processes. Further, CDW•G has the highest ranking partner status available with our top-tier software manufacturers (and most of the publishers listed as part of this RFP). We also have CDW•G-badged partner specialists and partner-badged resources with permanent desks at our offices. Further, we can leverage our software partner resources—and our own CDW•G resources—to quickly obtain any necessary back-up/duplication documentation a customer may need. Requirement 4.3 Describe how your Company partners with a State to demonstrate accuracy of licensing information to a publisher (aka a “True Up”). Response With CDW•G, the conversation does not end at purchase. As described in requirement 3, Software Tracking, our account managers and licensing specialists are trained to proactively support our customers throughout the life of their software contract. It would be simpler for us to use a completely automated process for the management and renewal of software licenses, as many companies do, but using an automated approach alone results in mistakes and unhappy customers. We prefer to bolster automated elements with consultative touch points. Our licensing specialists are subject matter experts and work proactively with the account managers to manage these contracts. Our methodology described in requirement 3 shows that we start the true-up discussion/process three months prior to a customer’s anniversary date, or earlier (upon request). The true-up process includes a review of what is on the current license agreement. The licensing specialist spends time explaining to the customer what each license means and how it ties back to their environment. Through this discussion, the license specialist gains an understanding of what the current customer’s environment is and is able to compare that to the licensing shown on the current agreement. If a true- up is needed as a result of this discussion, the licensing specialist makes a recommendation on license to purchase. Additionally, if the licensing specialist determines there is a more cost-effective means to license the current environment, they recommend changes to the agreement in order to reflect any potential cost savings. If a customer is anticipating a future project that may result in a true-up and needs to plan further out in advance (for budgetary reasons), the licensing specialist is available to have that discussion and provide budgetary numbers at any time. Lastly, upon request, CDW•G has a true up workbook available for EA customers. The workbook includes reporting around current licensed products and allows the customer to populate their current install quantity. Since the workbook includes true up pricing, the customer immediately sees their exact true-up cost. This information is extremely valuable for budgeting, forecasting, and project planning. With more than 180,000 software renewals processed yearly, CDW•G offers the expertise necessary for NASPO ValuePoint members, having proven our ability to execute timely renewals with reduced customer stress. NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-9 5. Reports Requirement 5.1 Describe standard reports which can be generated for a State (other than downloadable reports addressed earlier). Provide sample reports. Response CDW•G has a slew of reporting options available to NASPO ValuePoint customers. Agency-specific reports are accessible through the Account Center or their AM. State-wide reports are available through the state’s dedicated program manager, reporting flexibility a key benefit to partnering with CDW•G; procurement-structure specific reporting is detailed in requirement 3. Requirement 5.2 Describe on-line, real time, reporting capabilities using established state website reports: 5.2.1 Standard Reports. Provide sample reports. Response Agencies have access to invoice reporting through the Account Center Payment Reporting section (note: requires finance user permission). We also offer the following invoice/invoice reporting methods: P-Cards (compliant to level/tier 3) and electronic invoicing (ANSIx12 4010 EDI, XML, cXML, mapped flat file formats. Requirement 5.2.2 Reports that can be generated by the LSCA. NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-10 Response Your program manager can provide contract-wide reports to the LSCA, including but not limited to standard reports, licensing reports, and ad hoc reports. Please refer to the sample report included in requirement 5.2.1. Requirement 5.2.3 Reports that can be generated by the Participating State. Provide sample reports. Response CDW•G’s dynamic, ad hoc reporting capabilities on the Account Center, including our pivot table feature, enable purchasers to better manage data and to make more cost-effective decisions. The Account Center provides access to real-time information in a way that is convenient and easy to use. Authorized users have the ability to generate a variety of reports, such as those listed below, as well as others at their request. Customers can view standard reports, and create and save custom reports. Reports can also be generated for a variety of timeframes, differentiated by site, division, department, buyer, city, product, etc. In order to generate reports at the state level, Account Centers need to be linked for all applicable state agencies. Please also refer to the sample report included for requirement 5.2.1. Requirement 5.2.4 Reports that can be generated by the User agency. Provide sample reports. Response In addition to the reporting capabilities at the state level (detailed in requirement 5.2.3), within the Account Center, customers can also generate reports for various assets with a variety of fields. As part of any hardware sale that goes through our configuration center, customers can view serial numbers, MAC Addresses (where applicable), BIOS configurations, software installations, and much more. NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-11 Using CDW•G’s Software License Tracker (SLT), offered to customers via the Account Center site at no additional charge, users can access this tool that simplifies license management, especially software license agreements. The SLT is accessible to all authorized users via the Account Center 24/7 and enables authorized users to manage license agreements by tracking expiration dates and generating standard or customized reports for delivery via email. Users can run reports in SLT to show what license agreements are about to expire and to set up email alerts to be sent out at a specified time in advance of expiration. Our EA workbook (detailed in requirement 4.3) also lends a significant amount of customization at the agency level. Requirement 5.3 Address whether your Company is able to provide “Custom Reports” as an optional service to Participating States, should State determine to utilize this service? (See Section 3: Scope of Work, 3.7.3 Custom Reports) Response Yes; should the state need to see reporting into areas of the contract that fall outside of the ad hoc and standard capabilities listed above, we will work with you to create the custom report. Our reporting tools are incredibly flexible, and we employ database administrators to combine the power of data feeds we have from our partners with our own data sets to automate custom reports. Upon award, CDW•G commits to having a discovery meeting with the state to determine additional reporting requirements that are necessary for the success of this contract. 6. Maximizing Value for the State Requirement 6. Describe how your Company works with a State and publisher to maximize the State’s value in obtaining products and services under this contract. Description is to address, but is not limited to, the following: 6.1 Working with a State and a publisher to assist the State in managing their volume or enterprise license agreements. Response True to our customer-centric approach, CDW•G aims to be more than a fulfillment provider to NASPO ValuePoint members, committing to provide the resources to navigate the increasingly complex world of software. Maximizing value for NASPO ValuePoint customers starts with the CDW•G field presence in each of the participating states. It is our best practice to work closely with a manufacturer’s account manager within a specific state to build the necessary relationship and customer trust. Our field and inside reps have many existing relationships with the publisher rep for each state named in this contract. Streamlining license agreements, providing install-based reports from a given publisher, and working with each agency to manage all software—including software purchased from other vendors—is the heart of the CDW•G advantage. As mentioned in requirement 4.3, our AMs and licensing specialists use a very methodical approach in managing agreements. This process is in place to ensure accuracy of licensing purchased, true updates, and renewals. NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-12 Even after a software contract is signed, our dedicated account teams and software licensing specialists maintain regular contact with customers to ensure that all licensing program benefits are maximized and that contracts are renewed on time. CDW•G provides contract management for all our software licensing partners’ programs; our team of 22 software licensing renewal specialists will offer fast processing of renewal orders. Sample Contract Lifecycle Management Year 1 Year 2 Year 3 Welcome letter Kickoff meeting Software review Cloud planning Software profile CDW solutions Software deployment check True Up 1 due Annual business review Cloud planning Software profile CDW solutions Software deployment check True Up 2 due Annual business review Renewal intro Cloud planning Software profile Software deployment check Contract review True Up 3 due Annual business review Requirement 6.2 Working with a State and publisher to maximize the leverage created by the total sales volume from a State and its cooperative partners to ensure best value to all State’s. Response Prior to software purchase and any renewals, our LAEs evaluate total spend, assets, usage, and purchase history. Their recommendations include potential options that would optimize investment through vendor and contract consolidation, including volume transactional purchasing options or contractual volume agreements. Additionally, our teams will inform the customer of any volume purchase opportunities specific to the contract available for entities to leverage. For example, CDW•G is the University of Southern California’s (USC’s) primary software provider, managing their Microsoft EES agreement. We recognized an opportunity for savings by aggregating USC’s departmental Microsoft purchases under one master EES agreement, to leverage the volume the university was purchasing as a whole. Even though the master agreement is leveraged campus- wide, each department still has their own portal, ability to manage their own licenses, and pay for usage out of their department’s budget. Consolidating departments’ purchases under one EES agreement—as opposed to Microsoft’s Open-Value option—provided USC with approximately three percent (3%) savings on the majority of their desktop product purchases. Requirement 6.3 Working with a publisher to maximize the leverage created by the total sales volume overall resulting from this contract. Response We work in partnership with contract holders to act as an advocate in the contract environment, utilizing our experience with similar contracts to negotiate prices prior to final agreement and compare volume discounts occurring elsewhere. Regular reporting measures, monitored by our program manager and reviewed by sales leadership at various intervals, allow us to provide NASPO ValuePoint and its customers the most competitive offers on the market today. NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-13 With broad-scope contracts, we often see emerging trends in demand for certain publishers. If sales volumes indicate high spend in a specific solution, we collaborate with the software publisher to determine if additional savings or value can be incorporated for purchasers. If reports indicate a high volume of purchases with a software publisher with which we do not have a direct relationship established, a CDW•G coworker will initiate our New Vendor Addition Process, structure for evaluating both risk and reward when considering potential new vendors. This process protects contract users’ best interests by considering the unique capabilities and products each vendor offers alongside potential areas of risk. Part of this methodology includes negotiating a partner agreement and competitive pricing with the new vendor, so that we can bolster support around the solutions being purchased and pass on additional savings. Requirement 6.4 Working with State and publisher to obtain the best quote on a high volume purchase. Response While our online ordering capabilities are far superior to other resellers, we always encourage customers to reach out to their CDW•G AM before making a large purchase. This is because we train our AMs to view the contract pricing as a “ceiling” price. They will negotiate with the publisher on the customer’s behalf, often securing additional savings. Requirement 6.5 If, and how, your Company uses historical purchase information to provide targeted assistance to State. Response The team described in our response to requirement 6.1 leverages historical data in supporting software license purchasing and management. However, leveraging historical data requires a different approach when you are not a contract incumbent. When awarded, CDW•G is committed to expend the extra effort to effectively collaborate with the customer and applicable software publishers. The number of publishers purchased and the willingness of the customer to share information dictates the method in which CDW•G collects historical information. Most often, our licensing team will recommend our Software License Review, to ensure we gather all relevant information available. The CDW Software License Review provides our team and our customers an easy-to-read overview of all software assets and license purchased across all departments and units. Instead of customers having to contact each publisher individually, we take that task on for them. While other resellers offer similar solutions, CDW•G returns this review and accompanying timeline within 10 days, not four to eight weeks. Instead of uploading the information to a web portal for customers to navigate alone, our software experts consult customers, providing recommendations for cost savings, license consolidation, and renewal strategy. These steps simplify and streamline the licensing review process. As our software and account teams learn the customer’s systems and processes, they proactively guide the customer to licensing programs and products that best fit the customers’ requirements and technology goals. Requirement 6.6 How maintenance support is to be made available. NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-14 Response CDW•G partners closely with each software publisher’s supporting resources to provide easy access for phone-in incidents, software upgrades, and technical support. Within our sales offices, we have dedicated vendor desks, where qualified manufacturer personnel respond to customer inquiries and provide support to AMs. Additionally, software-specific newsletters are available to customers, keeping you up-to-date on popular and new-release products. Part of our industry-best pre-sales consulting methodology is maintaining communication with customers to ensure awareness of release dates and the maximization of our no-cost roadmapping offer. Please note that CDW•G account managers will never include maintenance or any additional purchasing options on a quote without first discussing with the customer to ensure they understand the different maintenance levels that are available and what is included in the maintenance offer selected. Requirement 6.7 Describe how training regarding the installation of products and use of products will be made available and how to obtain best value from it. Response CDW•G’s software practice includes resources such as pre-sales technical specialists, licensing specialists, product specialists, and post-sales engineers. These resources play a valuable role for our customers as it relates to product-pertinent questions, technical questions, and installation/use rights. Our team of experts offers guidance and directs customers to the correct location on a manufacturer website to obtain installation training, instructions, and industry best practice. Our ability to quickly provide this guidance is a value to getting the most out of the software once purchased. Online Training The current webinars/trainings offered by CDW•G are listed in the Media Library located by clicking on the Solutions tab on www.cdwg.com. The Media Library is dynamic, with new content updated monthly. In addition to webinars and video channels, there are helpful documents, including white papers, reference guides, data sheets, and reports. CDW•G also offers website showcases for many of our software manufacturing partners, such as Microsoft. For example, the Microsoft Showcase is located at www.cdwg.com/Microsoft. The site provides customers with Microsoft-specific material, updated at minimum on a monthly basis. Additional resources for segment-specific material include our State Tech magazines (www.statetechmagazine.com) and Ed Tech Magazine (www.edtechmagazing.com/k12/), both to which interested agencies and schools can subscribe. NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-15 7. Value-Added Services Requirement 7. A significant aspect of this service is to be Value-Added Services. 7.1 Describe how your company handles the complexities related to enterprise license agreements (e.g. Microsoft EA, Adobe CLP, etc.). Include how you assist customers (especially first time customers) through this process to ensure they are comfortable moving forward, and are knowledgeable about the agreements once they are complete? Response CDW•G understands that Enterprise Agreements (EAs) are often one of the most expensive IT costs a customer will incur during a year. It is our goal to ensure our customers are knowledgeable about the agreement and receive the most out of their investment as possible. Because of this, we have created the following EA contract management process, which has become a proven methodology in helping manage state software contracts over the years. Requirement 7.2 Describe how your company handles transitioning a group of customers from an account manager with whom they have built a relationship to an account manager who is new to them? o 7.2.1 How do you ensure that all of the customers' needs are met? o 7.2.2 How do you ensure the new account manager is given the resources necessary to be successful in the new role? Response CDW•G subscribes to a practice of warm transfers in regard to customer transition. The existing account manager will reach out to the customer and introduce the incoming account manager; behind the scenes, the incoming account manager will receive a full debrief from the existing, utilizing our internal tracking and monitoring system which manages individual account history. Customer accounts transfer to tenured, experienced dedicated account resources, often already possessing familiarity with the customer and who have completed approximately six months of in-depth sales training. Nearly a quarter of our AMs have been with CDW for more than 10 years. Requirement 7.3 Describe the training available regarding the use of this contract and how to obtain best value from it, other than on-line tutorials. Response CDW•G provides a variety of value-added training options. Many times, we offer these options in tandem with our publisher partners. For example, CDW•G works closely with Microsoft to directly engage and educate customers via phone, online, and in-person seminars and educational events. Microsoft and CDW•G work together to present information to customers and respond to their questions. CDW•G is open to all options, both remote and onsite, as well as at CDW•G facilities to meet NASPO ValuePoint customer needs. We also offer the unique Microsoft Education Center, which presents a hands-on experience to our customers who want to test out new Microsoft products and software. NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-16 For all other solutions, CDW•G offers our Technology Experience Center, which allows customers to try out a demo of the software outside of their own environment, make software comparisons, and explore the latest innovations to see if that product will help achieve the customer’s business goals. Requirement 7.4 Explain what unique Value-Added services your Company will make available under a resultant contract. State whether they are to be provided at no cost. If there are costs, identify these costs on the applicable Pricing Sheet in the Cost Section. Response CDW•G does not compete on price alone. As a vendor-agnostic solution provider, pre-sales recommendation support from our knowledgeable account teams and software specialists will always be an unparalleled differentiator when compared against our major competitors. We are the leading reseller to multiple named publishers in this RFP, including key itemized Microsoft, VMware, and Adobe. Our close partnerships mean we receive competitive price offers and early notifications regarding product changes, allowing the account managers serving NASPO ValuePoint members to keep their customers apprised of new product releases, version and price changes, and more in a timely manner. Our ability to serve NASPO ValuePoint customers participating in this contract is exponentially heightened by the myriad value-added benefits we provide at no cost. These benefits include, but are not limited to, the following: NO COST Value-Added Benefits for NASPO ValuePoint Benefit Cost Description Solution Consultation Services FREE Savings: over $250/hour Inside Solution Architects (ISAs)—technology and product experts—vet complex solutions, arrange product demos, webinars, and information documentation Solution Design Services FREE Savings: over $300/hour Field and inside engineers available for onsite access to customer environments, conduct assessment, provide technology-needs analysis Threat Check FREE Savings: $3,000-5,000 per assessment Passively monitors networks for unknown malware, alerts customers to active and installed malware, provide customized plan for remediation Partner Assisted Grant Help FREE AMs assist with learning about available resources for segment-specific grant-finding processes eProcurement Integration Services FREE Dedicated team integrating customer ePro systems for punch-out, PO delivery, eInvoicing, quote retrieval, order, and more K–12 Consulting FREE Savings: over $250/hour Former educators and educational technologists work as strategists to guide schools through high-access implementation and develop long-term adoption success plans Digital Age Teaching and Learning Webinars FREE Savings: over $125 per attendee CDW·G’s Education Strategy Team conducts series of three one-hour webinars on latest technology trends in education NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-17 NO COST Value-Added Benefits for NASPO ValuePoint Benefit Cost Description Track and Communicate CDW•G Software Webinars FREE CDW·G advertises to all contract holders and end users for webinars pertinent to COTS software on NASPO ValuePoint contract Technical Trainings FREE Includes two (2) trainings per calendar year WebEx trainings specific to this contract, scheduled 60 days in advance on pertinent software (approx.. 30+ hours of CDW·G backend planning/work for each session0 CDW•G Blog FREE All interested parties under the contract will receive our Solutions Blog: blog.cdw.com; internal engineers and SMEs write to relevant IT topics Partner-Funded Programs FREE Leverage CDW·G relationship with key OEMs to get business development funds for projects users are potentially unable to fund independently Marketing & Social Media FREE CDW·G collaboratively creates marketing materials and events with each participating state to promote adoption of contract Technology Roadmapping Sessions FREE Valued at $1,000, one per year Held by request with key software publishers and state customers, proctored by CDW·G sales teams Other free benefits include access to CDW-badged product specialists, dedicate contract expert resources, Media Library access, and free eligibility for state customers interested in the Microsoft Rapid Deployment and Technology Adopter programs. Each participating state’s specific account team offers additional value-added benefits, in terms of personnel and expertise, at no cost to the customer. These personnel include software licensing specialists, licensing account executives, pre-sale system engineers, software manufacturer representatives, and dedicated renewals specialists, program managers, account managers, and account executives. Snow License Management There are more comprehensive options for software license management outside of the Account Center website and your CDW·G account team. Automated tools such as Snow Software’s License Manager can identify every piece of software in a NASPO ValuePoint member’s IT systems and match them to licenses, reducing risk, cost, and complexity often found in typical software management. At this time, there are 282,800 software applications automatically recognized by Snow through its Software Recognition Service (part of the License Manager solution). For NASPO ValuePoint members, CDW·G will provide a Snow Software Proof of Concept software assessment in order to understand and agency’s current environment at no cost. The Proof of Concept includes the following: Detailed inventory collection via Snow or using existing inventory tools (e.g., SCCM) Software metering via Snow to understand usage In-depth analysis of up to five Windows-based applications Business-case documentation illustrating compliance, usage, risk areas NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-18 8. Customer Support Requirement 8. Explain how your Company will: 8.1 Retain publisher certification levels and improve on them. Response CDW•G holds the top certification levels with most major software publishers. Each of these publishers has a stringent set of criteria that must be met in order to hold this certification. Often included in this set of criteria are certification requirements for individual employees, such as sales teams, engineers, and licensing specialists. Moreover, a reseller is only as reliable as the coworkers directly serving their customers. Therefore, we have described our process for both CDW•G as a company, and the process we follow to ensure our coworkers acquire and maintain the necessary certifications to support our customer base. CDW•G Company Certifications CDW’s Product and Partner Management team manages all aspects of our partner relationships. One of the group’s primary goals is to optimize partner relationships. Included in the duties supporting this goal is the management, tracking, and administration of partner certifications across CDW•G. They work with our publisher partners to ensure we continue to meet the requirements for our certifications. If we have not reached the top certification level, they are actively engaged in monitoring and engaging the teams needed to help meet those additional requirements to reach the next certification level. Coworker Certifications We require our sales coworkers to acquire and maintain specific partner certifications. When an account manager wants to move up in their role, say from an account manager to a senior account manager, there are additional certifications we require them to obtain. This methodology ensures our coworkers continue to be experts in the solutions they are selling. To give insight into the depth of our bench of certified coworkers, we include a few examples of CDW’s total certifications for some of our publisher partners: VMware: 1,300+ VMware Sales Professional Accreditations (VSPs) Microsoft: 740+ coworker certifications Adobe: 800+ sales-specific Adobe certifications Symantec: 2,590 total coworker certifications Additionally, CDW•G compliments some of our partner certifications with CDW-designed training for our partners, such as Microsoft, which provides more in-depth knowledge than the partner created training. Requirement 8.2 Work to reduce costs to obtain publisher products? Response Two major differentiators to the CDW•G business model are tools that streamline processes and the vast number of resources we dedicate to supporting our customers. NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-19 Conventional thinking might disagree considering high-touch service and investments in cutting-edge methods as cost saving attributes. However, we have repeatedly demonstrated on agreements similar to the NASPO ValuePoint software contract that our differentiators are true drivers to reducing costs; all while adding value that our competitors fail to replicate. Holding a high certification level with a publisher partner provides resellers access to favorable pricing, tools and resources, including vendor incentive programs, which resellers use to provide additional value to their customers. Because of our unique industry position and business model, CDW•G is often able to negotiate beyond these incentives because our partners see the value we offer: a cost-effective way to get their solutions to their customers. Other resellers may offer a streamlined purchasing process or a long list of personnel, but very few offer both, and even fewer in the capacity that CDW•G offers. Our systems support the coordination and synchronization demands that are required to keep costs under control for customers, supplier/OEM partners, and CDW•G. When coupling partner savings with the sheer volume of products CDW•G procures for our customer base, it is easy to understand how we can negotiate additional savings and value adds to pass on to our customers. We provide a unified customer experience, routing every customer-initiated interaction to a named account manager. Our tools and support are designed around this central concept. Our customer- facing technologies, supply chain tools, and ordering processing system are one in the same. This innovative system provides the customer transparency to the purchase process, reduces order errors, and allows us to manage the complexities of our large distribution channel. Simply put, we provide logistical capabilities typically attributed to distributors, while also providing support staff that greatly reduces the customer issues escalated to the partner. In turn, partners pass savings on to our customers with more aggressive discounts. Our software services team further drives software cost reductions. Instead of pointing our customers to a web tool to manage their licenses or a blog post to understand a software solution, we support them with a software services team. These individuals are helping customers in leveraging software benefits, ensuring customers are using the appropriate level of licensing, and helping to understand if cloud solution really is cost-effective for customers’ specific needs. Requirement 8.3 How does your Company respond to customer complaints and service issues? 8.4 What is your Company’s escalation process? Response We always direct customers first to their AM to assist with complaints and service issues. CDW•G also provides NASPO ValuePoint customers access to our US-based customer relations department as a value-added service. This support is available 7am-9pm CST, Monday through Friday. For sales-specific issues, our government and education sales support team is available Monday through Friday, 7am-6pm CST. NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-20 The four no-cost general levels of support available to NASPO ValuePoint customers are the following: Customer Relations. 866.782.4239 (M-F, 7am-9pm CST); online chat (M-F, 7am-6pm CST; customersupport@cdw.com Government and Education Sales. 800.808.4239 (M-F, 7am-6pm CST); cdwgsales@cdwg.com E-Support. For website questions only: 888.239.7270 (M-Th, 7am-7pm CST; F, 7am-6pm CST); online chat (M-F, 7am-6pm CST); support@cdw.com Technical Support. 800.383.4239 (M-F, 7am-7pm CST); online chat (M-F, 7am-6pm CST); support@cdw.com Additionally, for customers who have purchased Microsoft Office 365 through the CSP program, CDW•G offers 24/7/365 support at ManS-O365@cdw.com or 888.793.2480 (option #5). The above departments all work together to help resolve any issues which may arise. CDW•G aims to resolve all cases within 24 hours. Escalation Process If a NASPO ValuePoint member feels a request is not receiving proper attention, they can reach out directly to a sales manager to resolve the issue. For non-critical incidents, sales managers typically respond within four business hours; critical issues will be escalated as appropriate to the severity of the incident. NASPO ValuePoint members should be confident this contract has the appropriate level of executive sponsorship within CDW•G. David Hutchins (VP, State & Local Sales) and Tony Sivore (Director, State & Local Sales) are both high-level points of contact focused on the success of this agreement. Both have extensive knowledge of tour government agreements and current NASPO ValuePoint reseller agreements. If an incident requires further escalation, our sales managers will quickly engage either Mr. Hutchins or Mr. Sivore, dependent on the subject of the incident. Mr. Sivore typically responds within one business day for non-critical issues; two business days for those escalated to Mr. Hutchins. If an issue arises with a manufacturer or distribution partner, both gentlemen have the best points of contact committed to quickly resolve these issues, as well. 9. Problem Resolution Requirement 9.1 Problem Resolution: Scenario 1: Describe at least one recent situation where your Company made a major error that resulted in dire consequences for a customer. Detail the error and what changes your Company has made to avoid repeating the error in the future. In this situation, the problem is not solved in time to take care of the customer, and the customer is likely lost. Response One of our longtime customers, a Washington school district, worked with CDW•G to design their new networking system. After implementing the system, the school tasked us with implementing a policy platform for the network. Due to our solution architect’s design error, the products purchased were not compatible with the network endpoints previously installed, and we could not properly implement the solution. The situation was a major error and could have resulted in the customer going elsewhere. NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-21 However, the CDW•G account team quickly reacted to remedy the error. We brought on additional engineers to redesign and implement the solution on-site, while the account team handled expediting the replacement product orders. We absorbed the resource and material costs required to meet all the originally agreed upon requirements. This major error also threatened to delay the project but our quick reaction allowed us to meet the initial deadline that we had committed. The error also shook the customer’s confidence in CDW•G’s ability to fulfill the project. While the customer wavered in its decision to continue with us, they recognized our monumental effort to fix the mistake and offered a second chance. We made sure that they did not regret it and met their original implementation deadline without cutting any corners. Today, this customer is elated with their networking system and they continue to work with us for project design, to product fulfillment, to implementation and follow-up needs. Lessons Learned To mitigate future errors, CDW•G has our solution architects assigned to specific account teams. This ensures the same solution architects are designing all of the same customers’ solutions, providing them intimate knowledge of the customers’ systems. Additionally, this structure builds the solution architect/account team relationship, resulting in regular communication of important customer background information. This change in communication methodology allows the account teams and the solution architects to better anticipate customer needs and provide a greater level of customer service. Requirement 9.2 Scenario 2: Describe at least one recent situation where your Company made a major error that had potential dire consequences for a customer. Detail the error and what was done to correct the situation. To what lengths did your Company go to take care of the customer? What changes (if any) did your Company make to avoid repeating the error in the future? In this situation, the problem is solved in time to take care of the customer, and the customer is likely not lost. Response Six years ago, the County Commissioners of Pennsylvania (CCAP) awarded CDW•G its Microsoft contract. Prior to CDW•G’s award, CCAP had had been engaged with another provider. Due to CCAP’s familiarity with the incumbent, CDW•G had to work closely with Microsoft and CCAP to ensure the success of the transition from the other vendor’s services. This was a single award contract, and the contract implementation took place during the busiest month of the contract year. The issue in this scenario was that it was not yet a part of our process for us to begin working with Microsoft immediately after the award of the contract to understand upcoming renewals and annual payments. We previously waited until Microsoft’s Change of Reseller process was complete, and we were able to run reporting on our own. This resulted in many CCAP customers becoming nervous that their Microsoft Agreements would expire before we could renew them. Fortunately, due to our Microsoft relationships and experience in managing Microsoft contracts, the detailed instructions we provided for completion of the contract implementation resulted in no lapsed agreements. Our ability to stay in close contact with Microsoft and CCAP proved to be critical to the overall success of the transition. After going through a formal RFP process at the end of the original contract term, CCAP awarded their next Microsoft contract to CDW•G again. NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-22 This award was due to the successful implementation of our contract management methodologies and our contract implementation plan execution. In the past three years, CDW•G has maintained a 100 percent on-time renewal rate for expiring agreements on this contract. We continue to be successful because of our proactive touch points with the customer during the license management process, our understanding of their procurement processes, and our operational excellence. Lesson Learned From this transition, we learned that it is important to begin working with our partners immediately after the award of the contract to understand past, current, and future projects. We previously waited until the Change of Reseller process was complete and were able to run reporting on our own. Now, we start immediately and proactively communicate the plan to all constituents so that no one becomes concerned that their agreement may lapse. Although this is an example that deals with Microsoft, the lessons learned are applicable to contracting as a whole. We learned that it is necessary to take preliminary steps before a contract goes into effect. This approach will be adopted as part of our methodology to ensure that any transition to NASPO ValuePoint contract is seamless to customers. This will be the tactic from the date of an award to CDW•G as a primary vendor for the NASPO ValuePoint contract. 10. Product Return Process Requirement Describe the proposed product return process in the following situations: 10.1 Scenario 1: Product was ordered. The order was filled and shipped correctly. After the order was accepted, AP discovered it ordered the wrong product and wants to return the product. Response In the context of this first scenario, a customer can submit an RMA request in a variety of methods: online via the website, via email or a call to their AM, or via the customer service team. The standard return period for all products purchased from CDW•G is 30 days from date of invoice. Once the RMA request is processed, the customer receives an automated email with return instructions. Following receipt of the instructions, the customer ships the products back to our distribution centers with the shipping label they receive automatically. Requirement 10.2 Scenario 2: Product was ordered. The order was filled and shipped. After the order was accepted, AP discovered the product delivered did not match the product that was ordered. AP would like to return the product. Response As in the previous scenario, the customer can submit an RMA request online, contacting their account manager, or reaching out to our customer service team. They receive product return instructions for processed RMAs via email. Following the instructions, the customer ships the products back to our distribution centers with the shipping label they receive automatically. The key exception is that in this situation, there are no restocking fees issued since the error was committed by CDW•G. The return period for all products purchased from CDW•G is 30 days from date of invoice. NASPO ValuePoint | Software Value-Added Reseller Services Attachment B: CDW·G Methodology | B-23 As an option during either scenario, customers can take advantage of the Advanced Order Replacement (AOR) program. This is most often used when the customer receives a defective or DOA product and cannot wait for CDW•G to receive the defective one back before the replacement is sent out. This process ensures that the customer receives the products they need as soon as a product is found to be DOA, incorrectly purchased, or incorrectly shipped. 11. SVAR Performance Requirement Describe the process to be used to track and document the SVAR’s performance, to include “Cost Savings” achieved, under this Contract. See Section 3: Scope of work, Items 3.5.3 and 3.5.4. Response Our systems record key information about order fulfillment time, quote, and order activity that can be aggregated by OEM or function, and pricing benchmarks. CDW·G contract support teams hold regular quarterly business reviews (QBRs) with many of our top customers to review activity, customer service levels, and savings under various program structures. NASPO ValuePoint customers and the LSCA will receive the same attention to detail. CDW·G will establish a regular cadence for our contract professionals and key sales leaders to meet with purchasing operations, contract administration and other representatives of the Lead State, to review spend reports and actions implemented during the previous quarter, and to discuss possible improvements to be implemented during the coming quarter. Any known issues or escalations will be addressed, as well as the review of performance surveys. Options to reduce costs, improve service, and enhance operability and future-proofing can also be determined during these QBRs. In our current contract reviews, we typically review the following: spend analysis, spend by product category (e.g., Security Software/Dbase Software/Network Management, Virtualization), spend by publisher, purchase method, and savings analysis, future forecasting, and new and emerging technologies. Our goal is to maximize a customer’s investments by giving our recommendations towards the best use of volume or enterprise license agreements, in addition to seeking ways that NASPO ValuePoint members can take advantage of publishers' promotions and incentives. NASPO ValuePoint | Software Value-Added Reseller Services Attachment C: Cost Proposal | C-1 Attachment C: Cost Proposal Requirement Any narrative explanation of the Pricing Sheet forms is to be submitted as part of Attachment C—COST PROPOSAL. Offeror shall provide pricing that includes all costs associated with the responsibilities and related services, including but not limited to, freight and delivery, cost of materials and product, travel expenses, transaction fees, overhead, profits, and other costs or expenses incidental to the Offeror’s performance. Response To confirm, CDW•G’s offer does not include any “incidentals.” There are no additional charges as described in the above requirement (e.g., freight and delivery, cost of materials and product, travel expenses). Presenting our pricing rationale, or “cost reasonableness,” illustrates the transparency with which we will approach the negotiation of establishing a Master Agreement with NASPO ValuePoint. CDW•G has the ability to provide thousands of software titles to NASPO ValuePoint members. Outside of the named Key Itemized publishers, many software OEMs only publish current Manufacturer’s Suggested Retail Price lists (MSRPs) irregularly or infrequently, despite titles going end-of-life and new titles being listed. Additionally, once an MSRP is published, the price points rarely change and are often not indicative of market pricing that is commonly available. This means a large discount off MSRP that may seem to be an ideal offer today can over time become non-competitive given normal product lifecycle and cyclical pricing declines common to the IT marketplace. In other words, the cost of IT products—including software—typically trend downward. For this reason, our presented offer to your members is a cost-plus model over CDW•G Sim Cost, which is the standard acquisition cost associated with the inventory of product, but also including the management costs with procuring, warehousing, and distributing the inventory. This model enables members to achieve the greatest long-term cost savings. The advantage of this dynamic pricing model is that as our acquisition cost is reduced, the price to the customer is reduced accordingly. Once loaded into our contract management system, price changes trigger automatically to the customer’s CDW•G website (described in Attachment B) and EDI pricing without manual intervention. Aligning with the primary objective of this RFP—to obtain best value and more favorable pricing for participating members than can be achieved independently—CDW•G strives to simplify the complexities of technology procurement across selection, integration, and management for customers large and small, acting as an extension of their IT staff. Upon award, CDW•G will continually seek out savings to offer NASPO ValuePoint members, as well as providing unmatched stewardship and service to this contract. ATTACHMENT C1 - PRICING SUBMISSION SHEET NASPO VALUEPOINT SOFTWARE VALUE-ADDED RESELLER (SVAR) MARKUP/DOWN 2 1 The price to Authorized Purchaser (AP) is calculated using the following formula: "Reseller Cost" + ("Reseller Cost" x "Markup/down") ADOBE 0.97%PROPOSER INSTRUCTIONS: CITRIX 0.97% MICROSOFT ‐1.26% NOVELL 0.97% SYMANTEC 0.97% VMWARE 0.88% AI SQUARED 2.20% AIRWATCH MOBILE DEVICE MANAGEMENT VMWARE 1.13% ALLIANCE ENTERPRISES 2.20% APPLE 2.20% ATTACHMATE – MICROFOCUS 1.25% AUTODESK 2.20% AUTONOMY – HP 2.20% BAKBONE – DELL 1.13% BARRACUDA 2.20% BOMGAR REMOTE SOFTWARE 0.75% CA TECHNOLOGIES 2.20% CISCO 2.20% COMPUTRONIX USA 1.13% COMPUWARE 2.20% COREL 2.20% DOUBLETAKE 2.20% EMC 2.20% ENCHOICE 2.20% ESET 2.20% ESRI 2.20% FREEDOM SCIENTIFIC 2.20% GUARDIAN EDGE – SYMANTEC 2.20% GW MICRO 2.20% IBM 2.20% ICM CONVERSIONS 2.20% INFOR 2.20% INTERMEDIX EMSYSTEMS 2.20% HP 2.20% HUMANWARE 2.20% INFORMATION BUILDERS 2.20% KRONOS SOFTWARE 2.20% LANDESK 2.20% LASERFISCHE 2.20% LIQUIDWARE STATUSPHERE 2.20% MICROFOCUS INC 2.20% MINJET 2.20% MPS 2.20% Enter a percentage markup or markdown for each line in column D. This is the markup/down at which proposer is offering to provide the stated publishers' titles. Percentages may be listed to two decimal points.KEY ITEMIZEDOTHER ITEMIZEDPUBLISHERS Proposer must be certified as a direct reseller for all Key Itemized publishers. Direct reseller certification is preferred for Other Itemized publishers ATTACHMENT C1 - PRICING SUBMISSION SHEET NASPO VALUEPOINT SOFTWARE VALUE-ADDED RESELLER (SVAR) MQSOFTWARE – BMC SOFTWARE 2.20% NCIRCLE 0.00% NETOP 1.25% NUANCE 2.20% ORACLE 2.20% OSAM 2.20% PASSPORT 1.25% PATCHLINK 1.25% PROOFPOINT 2.20% RSA SECURITY 2.20% REFERENCIA SYSTEMS 2.20% SAP AMERICA 2.20% SAS 1.25% SOLUTIONS SOFTWARE 1.13% SOPHOS 2.20% SPLUNK SOFTWARE 2.20% STASEEKER NETWORK INFRASTRUCTURE MONITORING 2.20% STELLENT – ORACLE 1.25% SUNGUARD 1.13% SYBASE 1.25% TECHSMITH 1.25% TREND MICRO 1.25% TRUSTWARE 0.25% ULTRABAC 1.13% VORMETRIC 1.13% WEBSENSE 0.88% any other non‐listed publisher 2.20% NASPO ValuePoint | Software Value-Added Reseller Services Attachment D: CDW·G Executive Summary | D-1 Executive Summary Requirement Attachment D-Executive Summary should highlight the major features of the Offer. Briefly describe the Offer in no more than two (2) pages. The reader should be able to determine the essence of the Offer by reading the Executive Summary. Any requirements that cannot be met by the Offeror must be included. Response The NASPO ValuePoint Cooperation Purchasing Program is the standard of excellence by which public cooperative contracting is measured in the United States. With 3,901 participating addenda, NASPO ValuePoint encourages competitive vendors to offer the most innovative technologies at the best value. CDW Government LLC (CDW·G), as the nation’s leading IT solution provider, is ideally positioned to serve as a primary software value-added reseller (SVAR) for all participating states. Qualifications Our capabilities extend beyond those of the typical SVAR, with dedicated public sector account managers, knowledgeable field executives, experienced program managers, and qualified engineers providing targeted, streamlined assistance to individual customers. These personnel are here to serve, in person, on the ground, and from the warehouse. Specifically, our Software Licensing Support Team ensures that purchases are scalable and complementary to existing customer systems. This team includes over 85 licensing specialists, 250 systems engineers, and 45 account executives—all experienced in helping agencies choose and use the best possible software solution available. CDW·G is built upon a foundation of strategic partnerships, including the listed key and secondary software publishers named in the RFP. Microsoft®, Adobe®, VMware®, Citrix®, and Symantec™ are only a few of the brands we offer. Our extensive catalog gives participating entities the luxury of choosing the best commercial-off-the-shelf software products tailored to their needs, be it state and local government, K-12, or higher education. Methodology License management is an integral component of our methodology. Through our account teams, licensing specialists, free customized websites, timely reporting, and quarterly reviews, CDW·G eases the burden of managing software licenses and maintains frequent communication to alert users of updates, renewals, and new products without prompting. A good solution begins with good people. CDW·G software engineers provide NASPO ValuePoint customers with design and consultative services at no additional charge. Other no-cost services offered to participating state agencies include threat checks, roadmapping, integration services, grant assistance, and software webinars. NASPO ValuePoint | Software Value-Added Reseller Services Exceptions to Contract Requirements CDW Government LLC (“Contractor” or “Reseller”) proposes the following changes to the terms and conditions. Insertions are underlined and deletions are stricken through. All other proposals are indicated in bold. Explanations are in comments. These proposals are for the State’s review and input. Notwithstanding what is stated in the RFP, Reseller shall not be bound to any terms and conditions of the RFP or to any contract related to the RFP until or unless: (i) the State confirms in writing its acceptance of these deviations as fully incorporated therein; or (ii) authorized representatives of both parties execute a written contract that is separate from the RFP. Section 3: Scope of Work 3.2.1.6.1 The Reseller must agree that there are no software publishers with whom, absent just cause, they will refuse to do business…[remainder as written] 3.2.1.8.3 Notwithstanding what is stated in this section, Reseller proposes all returns are subject to the manufacturer’s then-current return policy. 3.4.1 Training, if offered by manufacturer, shall be available in the form of tutorials for basic installation and web-based training for software operation, basic phone support. 3.4.2 If offered by manufacturer, Pprovision of information on how to access a Software Publisher's "Help Desk" (either telecom or web-based) for basic use questions. 3.4.5.1 Upon written request from the State, Reseller is expected to will conduct quarterly reviews of all sales volumes and report sales figures and savings from Publisher's list price, by Publisher and by PA, as well as observed trends or purchasing patterns, and to present the information to the LSCA. Section 4: NASPO ValuePoint Master Agreement Terms and Conditions 1. Notwithstanding what is stated in this section, Contractor proposes that its response to the Solicitation take precedence over all other documents forming the Master Agreement to ensure the exceptions contained herein have binding effect. 14.b.(2) The Indemnified Party shall notify the Contractor within a reasonable time … [language as written] … in the pursuit of the Intellectual Property Claim. Unless otherwise agreed in writing, this section is not subject to any limitations of liability in this Master Agreement or in any other document executed in conjunction with this Master Agreement. NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, CONSEQUENTIAL, PUNITIVE, OR SPECIAL DAMAGES. IN THE EVENT OF ANY LIABILITY INCURRED BY CONTRACTOR OR ANY OF ITS AFFILIATES HEREUNDER, THE ENTIRE LIABILITY OF CONTRACTOR AND ITS AFFILIATES FOR DAMAGES FROM ANY CAUSE WHATSOEVER WILL NOT EXCEED THE GREATER OF: (A) THE DOLLAR AMOUNT PAID BY THE LEAD STATE, PARTICIPATING ENTITIES, OR PURCHASING ENTITIES FOR EITHER THE SPECIFIC PURCHASED ITEM(S) GIVING RISE TO THE CLAIM; OR (B) $2,000,000.00. 17.b.1 Policy shall include bodily injury, property damage, and broad form contractual liability coverage. 17.d Prior to commencement of performance, Contractor shall provide to the Lead State a written endorsement to the Contractor's general liability insurance policy or other documentary evidence acceptable to the Lead State that (1) names includes the Participating States identified in the Request for Proposal as additional insureds, (2) provides that the General Liability policy shall by blanket endorsement by contract give a thirty (30) days prior written notice of cancellation if any of the additional described policies are cancelled before the expiration date thereof, notice will be delivered in accordance with the policy provisions no material alteration, cancellation, non-renewal, or expiration of the coverage contained in such policy shall have effect unless the named Participating State has been given at least thirty (30) days prior written notice, and (3) … [remainder left intact as written] 23. Payment for completion of a contract order is normally made within 30 days following the date the entire any partial order is delivered or the date a correct invoice is received, whichever is later. [remainder as written] 31. Notwithstanding the foregoing, title to third party software, the licenses to which are resold by Contractor, will remain with the third party. Purchasing Entity’s rights in such software are specified in the license agreement between such third party and Purchasing Entity. Upon Acceptance by the Purchasing Entity, Contractor shall convey to Purchasing Entity title to Product consisting of tangible media free and clear of all liens, encumbrances, or other security interests. Section 5: Lead State (State of Arizona) Terms and Conditions, 5.1 State of Arizona Special Terms and Conditions O. The Materials and services supplied under this Contract shall comply with all applicable Federal, state and local laws, and the Contractor shall maintain all applicable licenses and permit requirements. Contractor represents and warrants to the State that Contractor has the skill and knowledge possessed by members of its trade or profession and Contractor will apply that skill and knowledge with care and diligence so Contactor and Contractor's employees and any authorized subcontractors shall perform the Services described in this Contract in accordance with the Statement of Work. Contractor represents and warrants that the Materials provided through this Contract and Statement of Work shall be free of viruses, backdoors, worms, spyware, malware and other malicious code that will hamper performance of the Materials, collect unlawful personally identifiable information on Users or prevent the Materials from performing as required under the terms and conditions of this Contract. X. 1.5. Applicable to all General Liability insurance policies required within the Insurance Requirements of this Contract, Contractor's insurance shall not be permitted to expire, be suspended, be canceled, or be materially changed for any reason without thirty (30) days prior written notice to the State of Arizona. Within two (2) business days of receipt, Contractor must provide notice to the State of Arizona if they receive notice of a policy that has been or will be suspended, canceled, materially changed for any reason, has expired, or will be expiring. If any of the additional described policies are cancelled before the expiration date thereof, notice will be delivered in accordance with the policy provisions. Such notice shall be sent directly to the Department and shall be mailed, emailed, hand delivered or sent by facsimile transmission to (State Representative's Name, Address & Fax Number). BB. Contractor access to State facilities and resources …with an unlawful breach or harmful access committed by Contractor shall be paid by the Contractor. 5.2 State of Arizona Uniform Terms and Conditions 2. Notwithstanding what is stated in this section, Contractor proposes that its response to the Solicitation or Proposal take precedence over all other contract documents to ensure the exceptions contained herein have binding effect. 3.7. Subject to third party licensing limitations, Aany materials, including reports, computer programs and other deliverables, created under this Contract are the sole property of the State. The Contractor is not entitled to a patent or copyright on those materials and may not transfer the patent or copyright to anyone else. The Contractor shall not use or release these materials without the prior written consent of the State. The Contractor shall maintain ownership of its pre-existing work. 3.8. Subject to third party licensing limitations, Aa and all intellectual property, including but not limited to copyright, [language as written] … of the State of Arizona requesting the issuance of this contract. The Contractor shall maintain ownership of its pre-existing work. Comment [TB1]: Before services are to be performed, Reseller will create a Statement of Work (“SOW”) detailing the exact scoping and pricing of the services to be provided, which will be executed by both parties prior to the start of services. The SOW will reflect the terms and conditions as negotiated between the parties during the bidding and contracting process. Comment [TB2]: Explanation - Reseller takes pride in screening its suppliers for liquidity and longevity and therefore proposes the following clarification: Comment [TB3]: Explanations - Reseller, acting as a reseller and not the manufacturer of any proposed products and software, proposes the following clarifications, which apply to the remaining sections: Comment [TB4]: Explanations - Reseller, acting as a reseller and not the manufacturer of any proposed products and software, proposes the following clarifications, which apply to the remaining sections: Comment [TB5]: Explanations - Reseller, acting as a reseller and not the manufacturer of any proposed products and software, proposes the following clarifications, which apply to the remaining sections: Comment [TB6]: Explanations - Reseller, acting as a reseller and not the manufacturer of any proposed products and software, proposes the following clarifications, which apply to the remaining sections: Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7201 Agenda Date: 12/19/2019 Status: Consent AgendaVersion: 1 File Type: Action ItemIn Control: Public Utilities Agenda Number: 7.13 SUBJECT/RECOMMENDATION: Approve the Interlocal Agreement between Pinellas County and the Cities of Clearwater, Dunedin, Gulfport, Largo, Oldsmar, Pinellas Park, Safety Harbor, St. Petersburg, and Tarpon Springs for funding the Tampa Bay Estuary Program match of a Florida Department of Environmental Protection Grant to develop a social marketing campaign focused on reducing sanitary sewer overflows and authorize the appropriate officials to execute same. (consent) SUMMARY: Public Utilities is a member of the Pinellas County Wastewater/Stormwater Task Force (Partnership). Together we are working to jointly develop methods, techniques and actions that will help us all reduce the incidence of sanitary sewer overflows. The grant will provide funds to allow TDE/Pinellas County/Partnership member municipal governments to develop and implement a public awareness and education program to assist us in combating SSOs. APPROPRIATION CODE AND AMOUNT: Budgeted funds for FY20 are available in Public Utilities’ operating cost centers, cost code 543200 Other Promotional Activity ·FY2020 $10,247 Page 1 City of Clearwater Printed on 12/19/2019 Page 1 of 16 INTERLOCAL AGREEMENT BETWEEN PINELLAS COUNTY AND THE CITIES OF CLEARWATER, DUNEDIN, GULFPORT, LARGO, OLDSMAR, PINELLAS PARK, SAFETY HARBOR, ST. PETERSBURG, AND TARPON SPRINGS FOR FUNDING THE TAMPA BAY ESTUARY PROGRAM MATCH OF A FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION GRANT TO DEVELOP A SOCIAL MARKETING CAMPAIGN FOCUSED ON REDUCING SANITARY SEWER OVERFLOWS This INTERLOCAL AGREEMENT BETWEEN PINELLAS COUNTY AND THE CITIES OF CLEARWATER, DUNEDIN, GULFPORT, LARGO, OLDSMAR, PINELLAS PARK, SAFETY HARBOR, ST. PETERSBURG, AND TARPON SPRINGS FOR FUNDING THE TAMPA BAY ESTUARY PROGRAM MATCH OF A FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION GRANT TO DEVELOP A SOCIAL MARKETING CAMPAIGN FOCUSED ON REDUCING SANITARY SEWER OVERFLOWS (“AGREEMENT”) is entered into this ____day of ___________, 2019, by and between PINELLAS COUNTY, a political subdivision of the State of Florida(“COUNTY”), the CITY OF CLEARWATER, a municipal corporation (“CLEARWATER”), the CITY OF DUNEDIN, a municipal corporation (“DUNEDIN”), the CITY OF GULFPORT, a municipal corporation (“GULFPORT”), the CITY OF LARGO, a municipal corporation (“LARGO”), the CITY OF OLDSMAR, a municipal corporation (“OLDSMAR”), the CITY OF PINELLAS PARK, a municipal corporation (“PINELLAS PARK”), the CITY OF SAFETY HARBOR, a municipal corporation (“SAFETY HARBOR”), the CITY OF ST. PETERSBURG, a municipal corporation (“ST. PETERSBURG”), and the CITY OF TARPON SPRINGS, a municipal corporation (“TARPON SPRINGS”), together collectively known as “PARTNERS.” W I T N E S S E T H: WHEREAS, PARTNERS sit on the Pinellas Wastewater/Stormwater Task Force together; WHEREAS, PARTNERS agree that blockages due to fats/oils/grease or non- flushable items and/or excessive inflow and infiltration to both public and private components of the wastewater system are contributing factors to Sanitary Sewer Overflows (“SSOs”); WHEREAS, PARTNERS acknowledge that there is a shared responsibility to address the systematic causes of overflows including the proper disposal of fats/oils/grease and non-flushable items, the elimination of illicit connections, and the repair/replacement of failing privately-owned lateral lines; WHEREAS, reducing the occurrence of SSOs is a priority action identified in the Tampa Bay Estuary Program’s (“TBEP”) Comprehensive Conservation and Management Plan for Tampa Bay (WW-5) and will contribute to the continued maintenance and improvement of water quality in Tampa Bay, the Gulf of Mexico, and other local waterways; Page 2 of 16 WHEREAS, on April 23, 2019, TBEP received a $75,000 matching grant from the Florida Department of Environmental Protection (“FDEP”) to fund a social marketing campaign to reduce sanitary sewer overflows in the Tampa Bay Watershed (the “FDEP SSO Grant”); WHEREAS, PARTNERS wish to assist TBEP by providing $77,536 to, at a minimum, match the $75,000 TBEP share for the FDEP Grant; WHEREAS, PARTNERS agree that allocating such cost share based on each PARTNER’s land area acreage is equitable; WHEREAS, COUNTY is entering into a separate agreement with TBEP providing for COUNTY payment to TBEP of the $77,536 collected under this AGREEMENT; and WHEREAS, execution of such agreement between COUNTY and TBEP is a condition precedent to PARTNERS’ performance of this AGREEMENT. NOW, THEREFORE, in consideration of the mutual covenants, conditions, and terms set forth herein, PARTNERS agree as follows: SECTION 1. PURPOSE The sole purpose of this AGREEMENT is to establish the funding amount that each of PARTNERS will contribute to the TBEP match of the FDEP SSO Grant. This AGREEMENT does not require any of PARTNERS to take any action implementing the FDEP SSO Grant. For reference only, the Grant Work Plan for the FDEP SSO Grant is attached hereto as Exhibit A. SECTION 2. CONDITION PRECEDENT No payment or any performance by any PARTNER hereunder shall be required until and unless COUNTY enters into an agreement with TBEP that guarantees COUNTY payment to TBEP of $77,536 in furtherance of the FDEP SSO Grant. Upon execution of such agreement with TBEP, COUNTY shall promptly send all PARTNERS a copy of such agreement. Should such agreement not be fully executed by December 31, 2019, COUNTY shall promptly notify all PARTNERS; termination of this AGREEMENT shall be effective upon receipt of such notice by all PARTNERS. Should such agreement with TBEP, or the FDEP SSO Grant, be terminated prior to COUNTY payment to TBEP, COUNTY shall promptly notify all PARTNERS; termination of this AGREEMENT shall be effective upon receipt of such notice by all PARTNERS. Together with such notices, COUNTY shall refund any received payments to PARTNERS. Page 3 of 16 SECTION 3. DUTIES OF PARTNERS Each PARTNER agrees to contribute the following respective amount to the FDEP SSO Grant; the sum of these amounts is $77,536: COUNTY:$22,217 CLEARWATER:$10,247 DUNEDIN:$3,189 GULFPORT:$292 LARGO:$8,287 OLDSMAR:$2,107 PINELLAS PARK:$5,015 SAFETY HARBOR $3,000 ST. PETERSBURG:$19,673 TARPON SPRINGS:$3,509 Each PARTNER, except for COUNTY, shall mail a check to COUNTY for its respective amount by May 31, 2020. The check shall be made out to the Pinellas County Board of County Commissioners and mailed to Pinellas County Environmental Management, Attn: Stacey Day, 22211 U.S. 19 N, Bldg 10, Clearwater, FL 33765. Once COUNTY receives payment from all other PARTNERS, COUNTY shall promptly provide a check for $77,536 to TBEP; COUNTY shall promptly provide evidence of such payment to PARTNERS. Should TBEP refund payment to the COUNTY for any reason, COUNTY shall promptly refund payments to PARTNERS. If any PARTNER does not mail payment to COUNTY by May 31, 2020, COUNTY may deduct that amount from the $77,536 payment to TBEP. In such case, COUNTY shall promptly notify the remaining partners and TBEP of the non-paying PARTNER’s breach of this AGREEMENT. Page 4 of 16 SECTION 4. NOTICES All notices, payments, and other written communications between PARTNERS shall be sent by electronic mail, certified U.S. mail, or courier delivery service. Notices shall be considered effective when delivered as reflected by an electronic mail read receipt, a certified mail delivery receipt, or a courier service delivery receipt. Any notices, invoices, payments, and written communications shall be delivered to each party’s Project Manager as provided below: PINELLAS COUNTY: Environmental Management DivisionAttn: Stacey Day22211 US Hwy 19 N., Bldg 10 Clearwater, FL 33765 sday@pinellascounty.org CLEARWATER: City of ClearwaterAttn: Dave Porter, DirectorClearwater Public Utilities 1650 N. Arcturas Ave., Building CClearwater, FL 33765 DUNEDIN: City of DunedinAttn: Jorge M. Quintas, P.E.Public Works & Utilities Director/City Eng. 1415 Pinehurst Rd., Suite F P.O. Box 1348Dunedin, FL 34697-1348 JQuintas@DunedinFL.Net GULFPORT: City of GulfportAttn: Tom Nicholls, Public Works Director2401 53rd Street S Gulfport, FL 33707 tnicholls@mygulfport.us LARGO:City of Largo Attn: Irvin Kety, P.G. Environmental Services Dept. Director5100 150th Ave N Clearwater, FL 33760 ikety@largo.com OLDSMAR:City of Oldsmar Attn: Nan Bennett, Public Works Director 100 State Street WestOldsmar, FL 34677 nbennett@myoldsmar.com PINELLAS PARK: City of Pinellas Park Attn: Marty Reich, Utilities Director6250 82nd Avenue Pinellas Park, FL 33781 mreich@pinellas-park.com SAFETY HARBOR City of Safety Harbor Attn: Ray Boler, Public Works Director1200 Railroad Avenue Safety Harbor, FL 34695 rboler@cityofsafetyharbor.com ST. PETERSBURG: City of St. Petersburg Attn: Angela MillerP.O. Box 2842 St. Petersburg, FL 33731 Angela.miller@stpete.org TARPON SPRINGS: City of Tarpon Springs Attn: Public Services Department Director324 E. Pine Street Tarpon Springs, FL 34689 Page 5 of 16 SECTION 5. NON APPROPRIATION The obligations of each PARTNER as to any funding required pursuant to this Agreement shall be limited to an obligation in any given year to budget, appropriated and paid from legally available funds, after monies for essential services to PARTNER’s residents and customers have been budgeted and appropriated for the funding that is required during that year. If such additional funds are not legally available after appropriations for essential services, PARTNER shall owe no payment to COUNTY. Notwithstanding the foregoing, each PARTNER shall not be prohibited from pledging any legally available non-ad valorem revenues for any obligations heretofore or hereafter incurred, which pledge shall be prior and superior to any obligation of the PARTNER pursuant to this Agreement. Each PARTNER understands that this AGREEMENT is not a commitment of future appropriations by any PARTNER’S governing body. SECTION 6. ENTIRE AGREEMENT AND MODIFICATION This AGREEMENT embodies the whole agreement of PARTNERS. There are no promises, terms, conditions, or allegations other than those contained herein and this AGREEMENT shall supersede all previous communications, representations, and agreements, whether written or verbal, between PARTNERS. This AGREEMENT may be amended, extended, or terminated by mutual written agreement of PARTNERS at any time. SECTION 7. AGREEMENT TERM After this AGREEMENT has been fully executed by all PARTNERS, COUNTY shall file this AGREEMENT with the Clerk of Circuit Court of Pinellas County, at which time this AGREEMENT shall take effect. This AGREEMENT shall remain in effect until December 31, 2020, unless extended or terminated in accordance with the terms herein. SECTION 8. LIABILITY Each PARTNER shall be responsible for its own negligence under this AGREEMENT. SECTION 9. CHOICE OF LAW This AGREEMENT and the rights and obligations of PARTNERS shall be governed and construed according to the laws of the State of Florida. Any state litigation arising from this Agreement shall be filed in a court of competent jurisdiction in Pinellas County, Florida. Any federal litigation arising from this Agreement shall be filed in the Middle District of Florida, Tampa Division. Page 6 of 16 SECTION 10. COMPLIANCE WITH LAWS AND PUBLIC RECORDSREQUIREMENTS PARTNERS shall always comply with all federal, state, and local statutes, rules, regulations and ordinances, the federal and state constitutions, and the orders and decrees of lawful authorities having jurisdiction over the matter at issue (collectively, “Laws”), including but not limited to Florida laws regarding the retention and disclosure of public records. PARTNERS hereby make all certifications required under Florida Statute section 287.135. SECTION 11. CITY CONSENT AND ACTION (AS TO THE CITY OF ST.PETERSBURG) A. For purposes of this Agreement, any required written permission, consent, acceptance, approval, or agreement by the City of St. Petersburg means the approval of the Mayor or his authorized designee, unless otherwise set forth in this Agreement or unless otherwise required to be exercised by City Council pursuant to the City Charter or applicable Laws. B. For purposes of this Agreement, any right of the City of St. Petersburg to take any action permitted, allowed, or required by this Agreement may be exercised by the Mayor or his authorized designee, unless otherwise set forth in this Agreement or unless otherwise required to be exercised by City Council pursuant to the City Charter or applicable Laws. SECTION 12. SEVERABILITY If any clause or portion of a clause in this AGREEMENT is determined to be invalid under the rule of law, the remainder of this AGREEMENT shall remain in full force and effect. Page 7 of 16 IN WITNESS WHEREOF, PARTNERS, by and through the undersigned, have caused this AGREEMENT to be executed as of the day and year first above written. PINELLAS COUNTY By: Joe Lauro, Administrative Services Department Director APPROVED AS TO FORM: By: Office of County Attorney Page 8 of 16 CITY OF CLEARWATER By: Mayor Reviewed and Approved: Attest: City Attorney City Clerk Page 9 of 16 CITY OF DUNEDIN By: Julie Ward Bujalski, Mayor City of Dunedin Reviewed and Approved: Attest: Tomas J. Trask, Esquire, City Attorney Rebecca Schlichter, City Clerk Page 10 of 16 CITY OF GULFPORT By: Mayor Reviewed and Approved: Attest: City Attorney City Clerk Page 11 of 16 CITY OF LARGO By: Mayor Reviewed and Approved: Attest: City Attorney City Clerk Page 12 of 16 CITY OF OLDSMAR By: __________________________________________________ Eric Seidel Al Braithwaite Mayor City Manager Approved as to form:Attest: __________________________________________________ Tom Trask Ann Nixon Attorney City Clerk Page 13 of 16 CITY OF PINELLAS PARK By: Sandra Bradbury, Mayor Reviewed and Approved: Attest: James W. Denhardt, Esq., City Attorney Diane Corna, City Clerk Page 14 of 16 CITY OF SAFETY HARBOR By: Mayor Joseph Ayoub Reviewed and Approved: Attest: City Attorney Nikki C. Day City Clerk Karen Sammons Page 15 of 16 CITY OF ST. PETERSBURG By: Rick Kriseman, Mayor Reviewed and Approved: Attest: City Attorney (Designee) Chan Srinivasa, City Clerk Page 16 of 16 CITY OF TARPON SPRINGS By: Chris Alahouzos Mayor Reviewed and Approved: Attest: Thomas J. Trask, B.C.S. Irene S. Jacobs, CMC City Attorney City Clerk & Collector Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7214 Agenda Date: 12/19/2019 Status: Consent AgendaVersion: 1 File Type: Action ItemIn Control: Public Utilities Agenda Number: 7.14 SUBJECT/RECOMMENDATION: Authorize the award of Invitation to Bid 12-20, Liquid Aluminum Sulfate, to Thatcher Chemical of Florida, Inc., in an annual not-to-exceed amount of $235,000, with the option for two one-year extensions at the City’s discretion and authorize the appropriate officials to execute same. (consent) SUMMARY: Invitation to Bid (ITB) #12-20, Liquid Aluminum Sulfate was issued on November 1, 2019. Five bids were received on December 2, 2019. Thatcher Chemical of Florida, Inc., represents the lowest responsive, responsible bidder for Liquid Aluminum Sulfate. Liquid Aluminum Sulfate (Alum) is used in the Northeast, East, and Marshall Street Water Reclamation Facilities (WRF) to maintain regulatory compliance with the City’s Florida Department of Environmental Protection (FDEP) operating permits. The initial contract period will be December 20, 2019 through December 19, 2020, with the option for two, one-year term renewal terms available to the City. Renewal Terms allow for cost increases based on the Producer Price Index #06130209 Aluminum compounds; renewal prices shall be firm for the respective annual term. APPROPRIATION CODE AND AMOUNT: Budgeted funds for FY20 are available in Public Utilities’ cost centers, cost code 550100 Lab Chem Supplies. Funding for future fiscal years (FY21 through FY23) will be requested within contract calendar and spending limits Page 1 City of Clearwater Printed on 12/19/2019 CITY OF CLEARWATER ITB # 12-20, Liquid Aluminum Sulfate DUE DATE: December 2, 2019; 10:00 AM BID TABULATION Item No.Description Est. Quantity (UOM) Unit Price (UOM) Total Price Unit Price (UOM) Total Price Unit Price (UOM) Total Price Unit Price (UOM) Total Price Unit Price (UOM) Total Price 1 Liquid Aluminum Sulfate (non-emergency)1,037 $283.00 $ 293,471.00 $232.00 $ 240,584.00 $477.21 $ 494,866.77 $214.98 $ 222,934.26 $444.00 $ 460,428.00 2 Liquid Aluminum Sulfate (emergency)50 $295.00 $ 14,750.00 $232.00 $ 11,600.00 $497.21 $ 24,860.50 $214.98 $ 10,749.00 $500.00 $ 25,000.00 Total Bid Items: $ 308,221.00 Total Bid Items: $ 252,184.00 Total Bid Items: $ 519,727.27 Total Bid Items: $ 233,683.26 Total Bid Items: $ 485,428.00 C & S CHEMICALS CHEMTRADE CHEMICALS US GEO SPECIALTY CHEMICALS INC THATCHER COMPANY UNIVAR SOLUTIONS USA INC Page 1 of 1 - December 3, 2019 NOTICE OF INTENT TO AWARD Public Utilities and Purchasing recommend award of ITB No. 12-20, Liquid Aluminum Sulfate, to Thatcher Chemical of Florida, Inc., the lowest most responsible bidder, in accordance with the bid specifications, in the estimated amount of $235,000 annually, for a period of one (1) year, with two (2), one (1) year extension options. This Award recommendation will be considered by the City Council at the December 16, 2019 Work Session (9:00 a.m.) and voted on at the December 19, 2019 Council Meeting (6:00 p.m.). These meetings are held at Clearwater Main Library, at 100 N. Osceola Ave., Clearwater, FL 33755. Inquiries regarding this Intent to Award can be directed to the City’s Procurement Analyst at (727) 562-4634, or mailed to City of Clearwater, Attn: Purchasing, PO Box 4748, Clearwater, FL 33758- 4748. Posted on this date by: Valerie Craig Valerie Craig Procurement Analyst v. 11.2018 Purchasing Office 100 S Myrtle Ave 33756-5520 PO Box 4748 33758-4748 Clearwater FL 727-562-4633 INVITATION TO BID #12-20 Liquid Aluminum Sulfate November 1, 2019 NOTICE IS HEREBY GIVEN that sealed bids will be received by the City of Clearwater (City) until 10:00 A.M., Local Time, Monday, December 2, 2019 to provide Liquid Aluminum Sulfate. Brief Description: The City of Clearwater is soliciting sealed bids to supply Liquid Aluminum Sulfate (Alum) for the Public Utilities Water Reclamation Facilities (WRF). Bids must be in accordance with the provisions, specifications and instructions set forth herein and will be received by Purchasing until the above noted time, when they will be publicly acknowledged and accepted. Bid packets, any attachments and addenda are available for download at www.myclearwater.com/bid. Please read the entire solicitation package and submit the bid in accordance with the instructions. This document (less this invitation and the instructions) and any required response documents, attachments, and submissions will constitute the bid. General, Process or Technical Questions concerning this solicitation should be directed, IN WRITING, to the following Procurement Analyst: Valerie Craig Procurement Analyst Valerie.Craig@myclearwater.com This Invitation to Bid is issued by: Lori Vogel, CPPB Interim Procurement Manager Lori.Vogel@myclearwater.com INSTRUCTIONS LIQUID ALUMINUM SULFATE 2 ITB #12-20 i.1 VENDOR QUESTIONS: All questions regarding the contents of this solicitation, and solicitation process (including requests for ADA accommodations), shall be directed solely to the contact listed on page 1. Questions should be submitted in writing via letter, fax or email. Questions received less than seven (7) calendar days prior to the due date and time may be answered at the discretion of the City. i.2 ADDENDA/CLARIFICATIONS: Any changes to the specifications will be in the form of an addendum. Addenda are posted on the City website and e-mailed to those who register on the City website when downloading solicitations no less than seven (7) days prior to the Due Date. Vendors are cautioned to check the Purchasing Website for addenda and clarifications prior to submitting their bid. The City cannot be held responsible if a vendor fails to receive any addenda issued. The City shall not be responsible for any oral changes to these specifications made by any employees or officer of the City. Failure to acknowledge receipt of an addendum may result in disqualification of a bid. i.3 VENDOR CONFERENCE / SITE VISIT: Yes No Mandatory Attendance: Yes No If designated above, attendance is mandatory as a condition of submitting a bid. The conference/site visit provides interested parties an opportunity to discuss the City's needs, inspect the site and ask questions. During any site visit you must fully acquaint yourself with the conditions as they exist and the character of the operations to be conducted under the resulting contract. i.4 DUE DATE & TIME FOR SUBMISSION AND OPENING: Date: December 2, 2019 Time: 10:00 A.M. (Local Time) The City will open all bids properly and timely submitted and will record the names and other information specified by law and rule. All bids become the property of the City and will not be returned except in the case of a late submission. Respondent names, as read at the bid opening, will be posted on the City website. Once a notice of intent to award is posted or 30 days from day of opening elapses, whichever occurs earlier, bids are available for inspection by contacting Purchasing. i.5 BID FIRM TIME: 60 days from Opening Bid shall remain firm and unaltered after opening for the number of days shown above. The City may accept the bid, subject to successful contract negotiations, at any time during this time. i.6 BID SECURITY: Yes No If designated above, a bid security in the amount specified must be submitted with the bid. The security may be submitted in any one of the following forms: an executed surety bond issued by a firm licensed and registered to transact such business with the State of Florida; cash; certified check, or cashier's check payable to the City of Clearwater (personal or company checks are not acceptable); certificate of deposit or any other form of deposit issued by a financial institution and acceptable to the City. Such bid security shall be forfeited to the City of Clearwater should the bidder selected fail to execute a contract when requested. PERFORMANCE SECURITY: Yes No If required herein, the Contractor, simultaneously with the execution of the Contract, will be required to furnish a performance security. The security may be submitted in one-year increments and in any one of the following forms: an executed surety bond issued by a firm licensed and registered to transact such business with the State of Florida; cash; certified check, cashier's check or money order payable to the City of Clearwater (personal and company checks are not acceptable); certificate of deposit or any other form of deposit issued by a financial institution and acceptable to the City. If the Contractor fails or refuses to fully comply with the terms and conditions of the contract, the City shall have the right to use all or such part of said security as may be necessary INSTRUCTIONS LIQUID ALUMINUM SULFATE 3 ITB #12-20 to reimburse the City for loss sustained by reason of such breach. The balance of said security, if any, will be returned to Contractor upon the expiration or termination of the contract. i.6 SUBMIT BIDS TO: Use label at the end of this solicitation package City of Clearwater Attn: Purchasing 100 S Myrtle Ave, 3rd Fl, Clearwater FL 33756-5520 or PO Box 4748, Clearwater FL 33758-4748 Bids will be received at this address. Bidders may mail or hand-deliver bids. E-mail or fax submissions will not be accepted. No responsibility will attach to the City of Clearwater, its employees or agents for premature opening of a bid that is not properly addressed and identified. i.7 LATE BIDS. The bidder assumes responsibility for having the bid delivered on time at the place specified. All bids received after the date and time specified shall not be considered and will be returned unopened to the bidder. The bidder assumes the risk of any delay in the mail or in handling of the mail by employees of the City of Clearwater, or any private courier, regardless whether sent by mail or by means of personal delivery. You must allow adequate time to accommodate all registration and security screenings at the delivery site. A valid photo I.D. may be required. It shall not be sufficient to show that you mailed or commenced delivery before the due date and time. All times are Clearwater, Florida local times. The bidder agrees to accept the time stamp in the City Purchasing Office as the official time. i.8 COMMENCEMENT OF WORK. If bidder begins any billable work prior to the City’s final approval and execution of the contract, bidder does so at its own risk. i.9 RESPONSIBILITY TO READ AND UNDERSTAND. Failure to read, examine and understand the solicitation will not excuse any failure to comply with the requirements of the solicitation or any resulting contract, nor shall such failure be a basis for claiming additional compensation. If a vendor suspects an error, omission or discrepancy in this solicitation, the vendor must immediately and in any case not later than seven (7) business days in advance of the due date notify the contact on page one (1). The City is not responsible for and will not pay any costs associated with the preparation and submission of the bid. Bidders are cautioned to verify their bids before submission, as amendments to or withdrawal of bids submitted after time specified for opening of bids may not be considered. The City will not be responsible for any bidder errors or omissions. i.10 FORM AND CONTENT OF BIDS. Unless otherwise instructed or allowed, bids shall be submitted on the forms provided. An original and the designated number of copies of each bid are required. Bids, including modifications, must be submitted in ink, typed, or printed form and signed by an authorized representative. Please line through and initial rather than erase changes. If the bid is not properly signed or if any changes are not initialed, it may be considered non-responsive. In the event of a disparity between the unit price and the extended price, the unit price shall prevail unless obviously in error, as determined by the City. The City may require that an electronic copy of the bid be submitted. The bid must provide all information requested and must address all points. The City does not encourage exceptions. The City is not required to grant exceptions and depending on the exception, the City may reject the bid. i.11 SPECIFICATIONS. Technical specifications define the minimum acceptable standard. When the specification calls for “Brand Name or Equal,” the brand name product is acceptable. Alternates will be considered upon demonstrating the other product meets stated specifications and is equivalent to the brand product in terms of quality, performance and desired characteristics. Minor differences that do not affect the suitability of the supply or service for the City’s needs may be accepted. Burden of proof that the product meets the minimum standards or is equal to the brand name, product, is on the bidder. The City reserves the right to reject bids that the City deems unacceptable. INSTRUCTIONS LIQUID ALUMINUM SULFATE 4 ITB #12-20 i.12 MODIFICATION / WITHDRAWAL OF BID. Written requests to modify or withdraw the bid received by the City prior to the scheduled opening time will be accepted and will be corrected after opening. No oral requests will be allowed. Requests must be addressed and labeled in the same manner as the bid and marked as a MODIFICATION or WITHDRAWAL of the bid. Requests for withdrawal after the bid opening will only be granted upon proof of undue hardship and may result in the forfeiture of any bid security. Any withdrawal after the bid opening shall be allowed solely at the City’s discretion. i.13 DEBARMENT DISCLOSURE. If the vendor submitting this bid has been debarred, suspended, or otherwise lawfully precluded from participating in any public procurement activity, including being disapproved as a subcontractor with any federal, state, or local government, or if any such preclusion from participation from any public procurement activity is currently pending, the bidder shall include a letter with its bid identifying the name and address of the governmental unit, the effective date of this suspension or debarment, the duration of the suspension or debarment, and the relevant circumstances relating the suspension or debarment. i.14 RESERVATIONS. The City reserves the right to reject any or all bids or any part thereof; to rebid the solicitation; to reject non-responsive or non-responsible bids; to reject unbalanced bids; to reject bids where the terms, prices, and/or awards are conditioned upon another event; to reject individual bids for failure to meet any requirement; to award by item, part or portion of an item, group of items, or total; to make multiple awards; to waive minor irregularities, defects, omissions, technicalities or form errors in any bid. The City may seek clarification of the bid from bidder at any time, and failure to respond is cause for rejection. Submission of a bid confers on bidder no right to an award or to a subsequent contract. The City is charged by its Charter to make an award that is in the best interest of the City. All decisions on compliance, evaluation, terms and conditions shall be made solely at the City’s discretion and made to favor the City. No binding contract will exist between the bidder and the City until the City executes a written contract or purchase order. i.15 OFFICIAL SOLICITATION DOCUMENT. Changes to the solicitation document made by a bidder may not be acknowledged or accepted by the City. Award or execution of a contract does not constitute acceptance of a changed term, condition or specification unless specifically acknowledged and agreed to by the City. The copy maintained and published by the City shall be the official solicitation document. i.16 COPYING OF BIDS. Bidder hereby grants the City permission to copy all parts of its bid, including without limitation any documents and/or materials copyrighted by the bidder. The City’s right to copy shall be for internal use in evaluating the proposal. i.17 CONTRACTOR ETHICS. It is the policy of the City to promote courtesy, fairness, impartiality, integrity, service, professionalism, economy, and government by law in the Procurement process. The responsibility for implementing this policy rests with each individual who participates in the Procurement process, including Respondents and Contractors. To achieve the purpose of this Article, it is essential that Respondents and Contractors doing business with the City also observe the ethical standards prescribed herein. It shall be a breach of ethical standards to: a. Exert any effort to influence any City employee or agent to breach the standards of ethical conduct. b. Intentionally invoice any amount greater than provided in Contract or to invoice for Materials or Services not provided. c. Intentionally offer or provide sub-standard Materials or Services or to intentionally not comply with any term, condition, specification or other requirement of a City Contract. i.18 GIFTS. The City will accept no gifts, gratuities or advertising products from bidders or prospective bidders and affiliates. The City may request product samples from vendors for product evaluation. i.19 PROTESTS AND APPEALS. If a Respondent believes there is a mistake, impropriety, or defect in the solicitation, believes the City improperly rejected its proposal, and/or believes the selected INSTRUCTIONS LIQUID ALUMINUM SULFATE 5 ITB #12-20 proposal is not in the City’s best interests, the Respondent may submit a written protest. All protests and appeals are governed by the City of Clearwater Purchasing Policy and Procedures. If any discrepancy exists between this Section and the Purchasing Policy, the language of the Purchasing Policy controls. Protests based upon alleged mistake, impropriety, or defect in a solicitation that is apparent before the bid opening must be filed with the Procurement Officer no later than five (5) business days before Bid Opening. Protests that only become apparent after the Bid Opening must be filed within ten (10) business days of the alleged violation of the applicable purchasing ordinance. The complete protest procedure can be obtained by contacting Purchasing. ADDRESS PROTESTS TO: City of Clearwater – Procurement Office 100 S Myrtle Ave, 3rd Fl Clearwater FL 33756-5520 or PO Box 4748 Clearwater FL 33758-4748 INSTRUCTIONS – EVALUATION LIQUID ALUMINUM SULFATE 6 ITB #12-20 i.20 EVALUATION PROCESS. Bids will be reviewed by Purchasing and representative(s) of the respective department(s). The City staff may or may not initiate discussions with bidders for clarification purposes. Clarification is not an opportunity to change the bid. Bidders shall not initiate discussions with any City employee or official. i.21 PRESENTATIONS/INTERVIEWS. The bidder must provide a formal presentation/interview upon request. i.22 CRITERIA FOR EVALUATION AND AWARD. The City evaluates three (3) categories of information: responsiveness, responsibility, and price. All bids must meet the following responsiveness and responsibility criteria to be considered further. a) Responsiveness. The City will determine whether the bid complies with the instructions for submitting bids including completeness of bid which encompasses the inclusion of all required attachments and submissions. The City must reject any bids that are submitted late. Failure to meet other requirements may result in rejection. b) Responsibility. The City will determine whether the bidder is one with whom it can or should do business. Factors that the City may evaluate to determine "responsibility" include, but are not limited to: excessively high or low priced bids, past performance, references (including those found outside the bid), compliance with applicable laws-including tax laws, bidder's record of performance and integrity - e.g. has the bidder been delinquent or unfaithful to any contract with the City, whether the bidder is qualified legally to contract with the City, financial stability and the perceived ability to perform completely as specified. A bidder must at all times have financial resources sufficient, in the opinion of the City, to ensure performance of the contract and must provide proof upon request. City staff may also use Dun & Bradstreet and/or any generally available industry information. The City reserves the right to inspect and review bidder’s facilities, equipment and personnel and those of any identified subcontractors. The City will determine whether any failure to supply information, or the quality of the information, will result in rejection. c) Price. We will then evaluate the bids that have met the requirements above. i.23 COST JUSTIFICATION. In the event only one response is received, the City may require that the bidder submit a cost proposal in sufficient detail for the City to perform a cost/price analysis to determine if the bid price is fair and reasonable. i.24 CONTRACT NEGOTIATIONS AND ACCEPTANCE. Bidder must be prepared for the City to accept the bid as submitted. If bidder fails to sign all documents necessary to successfully execute the final contract within a reasonable time as specified, or negotiations do not result in an acceptable agreement, the City may reject bid or revoke the award, and may begin negotiations with another bidder. Final contract terms must be approved or signed by the appropriately authorized City official(s). No binding contract will exist between the bidder and the City until the City executes a written contract or purchase order. i.25 NOTICE OF INTENT TO AWARD. Notices of the City’s intent to award a Contract are posted to Purchasing’s website. It is the bidder’s responsibility to check the City of Clearwater’s website at www.myclearwater.com/bid to view relevant bid information and notices. i.26 BID TIMELINE. Dates are tentative and subject to change. Release ITB: 11/1/2019 Advertise Tampa Bay Times: 11/06/2019 Bids due: 12/2/2019 Review bids: 12/2-12/6/2019 Award recommendation: 12/6/2019 Council authorization: 12/19/2019 Contract begins: 12/2019 STANDARD TERMS AND CONDITIONS LIQUID ALUMINUM SULFATE 7 ITB #12-20 S.1 DEFINITIONS. Uses of the following terms are interchangeable as referenced: “vendor, contractor, supplier, proposer, company, parties, persons”, “purchase order, PO, contract, agreement”, “city, Clearwater, agency, requestor, parties”, “bid, proposal, response, quote”. S.2 INDEPENDENT CONTRACTOR. It is expressly understood that the relationship of Contractor to the City will be that of an independent contractor. Contractor and all persons employed by Contractor, either directly or indirectly, are Contractor’s employees, not City employees. Accordingly, Contractor and Contractor’s employees are not entitled to any benefits provided to City employees including, but not limited to, health benefits, enrollment in a retirement system, paid time off or other rights afforded City employees. Contractor employees will not be regarded as City employees or agents for any purpose, including the payment of unemployment or workers’ compensation. If any Contractor employees or subcontractors assert a claim for wages or other employment benefits against the City, Contractor will defend, indemnify and hold harmless the City from all such claims. S.3 SUBCONTRACTING. Contractor may not subcontract work under this Agreement without the express written permission of the City. If Contractor has received authorization to subcontract work, it is agreed that all subcontractors performing work under the Agreement must comply with its provisions. Further, all agreements between Contractor and its subcontractors must provide that the terms and conditions of this Agreement be incorporated therein. S.4 ASSIGNMENT. This Agreement may not be assigned either in whole or in part without first receiving the City’s written consent. Any attempted assignment, either in whole or in part, without such consent will be null and void and in such event the City will have the right at its option to terminate the Agreement. No granting of consent to any assignment will relieve Contractor from any of its obligations and liabilities under the Agreement. S.5 SUCCESSORS AND ASSIGNS, BINDING EFFECT. This Agreement will be binding upon and inure to the benefit of the parties and their respective permitted successors and assigns. S.6 NO THIRD-PARTY BENEFICIARIES. This Agreement is intended for the exclusive benefit of the parties. Nothing set forth in this Agreement is intended to create, or will create, any benefits, rights, or responsibilities in any third parties. S.7 NON- EXCLUSIVITY. The City, in its sole discretion, reserves the right to request the materials or services set forth herein from other sources when deemed necessary and appropriate. No exclusive rights are encompassed through this Agreement. S.8 AMENDMENTS. There will be no oral changes to this Agreement. This Agreement can only be modified in a writing signed by both parties. No charge for extra work or material will be allowed unless approved in writing, in advance, by the City and Contractor. S.9 TIME OF THE ESSENCE. Time is of the essence to the performance of the parties’ obligations under this Agreement. S.10 COMPLIANCE WITH APPLICABLE LAWS. a. General. Contractor must procure all permits and licenses and pay all charges and fees necessary and incidental to the lawful conduct of business. Contractor must stay fully informed of existing and future federal, state, and local laws, ordinances, and regulations that in any manner affect the fulfillment of this Agreement and must comply with the same at its own expense. Contractor bears full responsibility for training, safety, and providing necessary equipment for all Contractor personnel to achieve throughout the term of the Agreement. Upon request, Contractor will demonstrate to the City's satisfaction any programs, procedures, and other activities used to ensure compliance. b. Drug-Free Workplace. Contractor is hereby advised that the City has adopted a policy establishing a drug-free workplace for itself and those doing business with the City to ensure the safety and health of all persons working on City contracts and projects. Contractor will require a drug-free workplace for all Contractor personnel working under this Agreement. Specifically, all Contractor personnel who are working under this Agreement must be notified STANDARD TERMS AND CONDITIONS LIQUID ALUMINUM SULFATE 8 ITB #12-20 in writing by Contractor that they are prohibited from the manufacture, distribution, dispensation, possession, or unlawful use of a controlled substance in the workplace. Contractor agrees to prohibit the use of intoxicating substances by all Contractor personnel and will ensure that Contractor personnel do not use or possess illegal drugs while in the course of performing their duties. c. Federal and State Immigration Laws. Contractor agrees to comply with the Immigration Reform and Control Act of 1986 (IRCA) in performance under this Agreement and to permit the City and its agents to inspect applicable personnel records to verify such compliance as permitted by law. Contractor will ensure and keep appropriate records to demonstrate that all Contractor personnel have a legal right to live and work in the United States. (i) As applicable to Contractor, under this provision, Contractor hereby warrants to the City that Contractor and each of its subcontractors will comply with, and are contractually obligated to comply with, all federal immigration laws and regulations that relate to their employees (hereinafter “Contractor Immigration Warranty”). (ii) A breach of the Contractor Immigration Warranty will constitute as a material breach of this Agreement and will subject Contractor to penalties up to and including termination of this Agreement at the sole discretion of the City. (iii) The City retains the legal right to inspect the papers of all Contractor personnel who provide services under this Agreement to ensure that Contractor or its subcontractors are complying with the Contractor Immigration Warranty. Contractor agrees to assist the City in regard to any such inspections. (iv) The City may, at its sole discretion, conduct random verification of the employment records of Contractor and any subcontractor to ensure compliance with the Contractor Immigration Warranty. Contractor agrees to assist the City in regard to any random verification performed. (v) Neither Contractor nor any subcontractor will be deemed to have materially breached the Contractor Immigration Warranty if Contractor or subcontractor establishes that it has complied with the employment verification provisions prescribed by Sections 274A and 274B of the Federal Immigration and Nationality Act. d. Nondiscrimination. Contractor represents and warrants that it does not discriminate against any employee or applicant for employment or person to whom it provides services because of race, color, religion, sex, national origin, or disability, and represents and warrants that it complies with all applicable federal, state, and local laws and executive orders regarding employment. Contractor and Contractor’s personnel will comply with applicable provisions of Title VII of the U.S. Civil Rights Act of 1964, as amended, Section 504 of the Federal Rehabilitation Act, the Americans with Disabilities Act (42 U.S.C. § 12101 et seq.), and applicable rules in performance under this Agreement. S.11 SALES/USE TAX, OTHER TAXES. Contractor is responsible for the payment of all taxes including federal, state, and local taxes related to or arising out of Contractor’s services under this Agreement, including by way of illustration but not limitation, federal and state income tax, Social Security tax, unemployment insurance taxes, and any other taxes or business license fees as required. If any taxing authority should deem Contractor or Contractor employees an employee of the City, or should otherwise claim the City is liable for the payment of taxes that are Contractor’s responsibility under this Agreement, Contractor will indemnify the City for any tax liability, interest, and penalties imposed upon the City. The City is exempt from paying state and local sales/use taxes and certain federal excise taxes and will furnish an exemption certificate upon request. S.12 AMOUNTS DUE THE CITY. Contractor must be current and remain current in all obligations due to the City during the performance of services under the Agreement. Payments to Contractor may be offset by any delinquent amounts due the City or fees and charges owed to the City. STANDARD TERMS AND CONDITIONS LIQUID ALUMINUM SULFATE 9 ITB #12-20 S.13 OPENNESS OF PROCUREMENT PROCESS. Written competitive proposals, replies, oral presentations, meetings where vendors answer questions, other submissions, correspondence, and all records made thereof, as well as negotiations or meetings where negotiation strategies are discussed, conducted pursuant to this Invitation to Bid (ITB), shall be handled in compliance with Chapters 119 and 286, Florida Statutes. Proposals or replies received by the City pursuant to this ITB are exempt from public disclosure until such time that the City provides notice of an intended decision or until 30 days after opening the proposals, whichever is earlier. If the City rejects all proposals or replies pursuant to this ITB and provides notice of its intent to reissue the ITB, then the rejected proposals or replies remain exempt from public disclosure until such time that the City provides notice of an intended decision concerning the reissued ITB or until the City withdraws the reissued ITB. A proposal or reply shall not be exempt from public disclosure longer than 12 months after the initial City notice rejecting all proposals or replies. Oral presentations, meetings where vendors answer questions, or meetings convened by City staff to discuss negotiation strategies, if any, shall be closed to the public (and other proposers) in compliance with Chapter 286 Florida Statutes. A complete recording shall be made of such closed meeting. The recording of, and any records presented at, the exempt meeting shall be available to the public when the City provides notice of an intended decision or until 30 days after opening proposals or final replies, whichever occurs first. If the City rejects all proposals or replies pursuant to this ITB and provides notice of its intent to reissue the ITB, then the recording and any records presented at the exempt meeting remain exempt from public disclosure until such time that the City provides notice of an intended decision concerning the reissued ITB or until the City withdraws the reissued ITB. A recording and any records presented at an exempt meeting shall not be exempt from public disclosure longer than 12 months after the initial City notice rejecting all proposals or replies. In addition to all other contract requirements as provided by law, the contractor executing this agreement agrees to comply with public records law. IF THE CONTRACTOR HAS QUESTIONS REGARDING THE APPLICATION OF CHAPTER 119, FLORIDA STATUTES, TO THE CONTRACTOR’S DUTY TO PROVIDE PUBLIC RECORDS RELATING TO THIS CONTRACT, CONTACT THE CUSTODIAN OF PUBLIC RECORDS, Rosemarie Call, phone: 727-562-4092 or Rosemarie.Call@myclearwater.com, 600 Cleveland Street, Suite 600, Clearwater, FL 33755. The contractor’s agreement to comply with public records law applies specifically to: a) Keep and maintain public records required by the City of Clearwater (hereinafter “public agency”) to perform the service being provided by the contractor hereunder. b) Upon request from the public agency’s custodian of public records, provide the public agency with a copy of the requested records or allow the records to be inspected or copied within a reasonable time at a cost that does not exceed the cost provided for in Chapter 119, Florida Statutes, as may be amended from time to time, or as otherwise provided by law. c) Ensure that the public records that are exempt or confidential and exempt from public records disclosure requirements are not disclosed except as authorized by law for the duration of the contract term and following completion of the contract if the contractor does not transfer the records to the public agency. d) Upon completion of the contract, transfer, at no cost, to the public agency all public records in possession of the contractor or keep and maintain public records required by the public agency to perform the service. If the contractor transfers all public records to the public agency upon completion of the contract, the contractor shall destroy any duplicate public records that are exempt or confidential and exempt from public records disclosure requirements. If the STANDARD TERMS AND CONDITIONS LIQUID ALUMINUM SULFATE 10 ITB #12-20 contractor keeps and maintains public records upon completion of the contract, the contractor shall meet all applicable requirements for retaining public records. All records stored electronically must be provided to the public agency, upon request from the public agency’s custodian of public records, in a format that is compatible with the information technology systems of the public agency. e) A request to inspect or copy public records relating to a public agency’s contract for services must be made directly to the public agency. If the public agency does not possess the requested records, the public agency shall immediately notify the contractor of the request and the contractor must provide the records to the public agency or allow the records to be inspected or copied within a reasonable time. f) The contractor hereby acknowledges and agrees that if the contractor does not comply with the public agency’s request for records, the public agency shall enforce the contract provisions in accordance with the contract. g) A contractor who fails to provide the public records to the public agency within a reasonable time may be subject to penalties under Section 119.10, Florida Statutes. h) If a civil action is filed against a contractor to compel production of public records relating to a public agency’s contract for services, the court shall assess and award against the contractor the reasonable costs of enforcement, including reasonable attorney fees, if: 1. The court determines that the contractor unlawfully refused to comply with the public records request within a reasonable time; and 2. At least eight (8) business days before filing the action, the plaintiff provided written notice of the public records request, including a statement that the contractor has not complied with the request, to the public agency and to the contractor. i) A notice complies with subparagraph (h)2. if it is sent to the public agency’s custodian of public records and to the contractor at the contractor’s address listed on its contract with the public agency or to the contractor’s registered agent. Such notices must be sent by common carrier delivery service or by registered, Global Express Guaranteed, or certified mail, with postage or shipping paid by the sender and with evidence of delivery, which may be in an electronic format. A contractor who complies with a public records request within 8 business days after the notice is sent is not liable for the reasonable costs of enforcement. S.14 AUDITS AND RECORDS. Contractor must preserve the records related to this Agreement for five (5) years after completion of the Agreement. The City or its authorized agent reserves the right to inspect any records related to the performance of work specified herein. In addition, the City may inspect any and all payroll, billing or other relevant records kept by Contractor in relation to the Agreement. Contractor will permit such inspections and audits during normal business hours and upon reasonable notice by the City. The audit of records may occur at Contractor’s place of business or at City offices, as determined by the City. S.15 BACKGROUND CHECK. The City may conduct criminal, driver history, and all other requested background checks of Contractor personnel who would perform services under the Agreement or who will have access to the City’s information, data, or facilities in accordance with the City’s current background check policies. Any officer, employee, or agent that fails the background check must be replaced immediately for any reasonable cause not prohibited by law. STANDARD TERMS AND CONDITIONS LIQUID ALUMINUM SULFATE 11 ITB #12-20 S.16 SECURITY CLEARANCE AND REMOVAL OF CONTRACTOR PERSONNEL. The City will have final authority, based on security reasons: (i) to determine when security clearance of Contractor personnel is required; (ii) to determine the nature of the security clearance, up to and including fingerprinting Contractor personnel; and (iii) to determine whether or not any individual or entity may provide services under this Agreement. If the City objects to any Contractor personnel for any reasonable cause not prohibited by law, then Contractor will, upon notice from the City, remove any such individual from performance of services under this Agreement. S.17 DEFAULT. a. A party will be in default if that party: (i) is or becomes insolvent or is a party to any voluntary bankruptcy or receivership proceeding, makes an assignment for a creditor, or there is any similar action that affects Contractor’s capability to perform under the Agreement; (ii) is the subject of a petition for involuntary bankruptcy not removed within sixty (60) calendar days; (iii) conducts business in an unethical manner or in an illegal manner; or (iv) fails to carry out any term, promise, or condition of the Agreement. b. Contractor will be in default of this Agreement if Contractor is debarred from participating in City procurements and solicitations in accordance with the City’s Purchasing Policy and Procedures Manual. c. Notice and Opportunity to Cure. In the event a party is in default then the other party may, at its option and at any time, provide written notice to the defaulting party of the default. The defaulting party will have thirty (30) days from receipt of the notice to cure the default; the thirty (30) day cure period may be extended by mutual agreement of the parties, but no cure period may exceed ninety (90) days. A default notice will be deemed to be sufficient if it is reasonably calculated to provide notice of the nature and extent of such default. Failure of the non-defaulting party to provide notice of the default does not waive any rights under the Agreement. d. Anticipatory Repudiation. Whenever the City in good faith has reason to question Contractor’s intent or ability to perform, the City may demand that Contractor give a written assurance of its intent and ability to perform. In the event that the demand is made and no written assurance is given within five (5) calendar days, the City may treat this failure as an anticipatory repudiation of the Agreement. S.18 REMEDIES. The remedies set forth in this Agreement are not exclusive. Election of one remedy will not preclude the use of other remedies. In the event of default: a. The non-defaulting party may terminate the Agreement, and the termination will be effective immediately or at such other date as specified by the terminating party. b. The City may purchase the services required under the Agreement from the open market, complete required work itself, or have it completed at the expense of Contractor. If the cost of obtaining substitute services exceeds the contract price, the City may recover the excess cost by: (i) requiring immediate reimbursement to the City; (ii) deduction from an unpaid balance due to Contractor; (iii) collection against the proposal and/or performance security, if any; (iv) collection against liquidated damages (if applicable); or (v) a combination of the aforementioned remedies or other remedies as provided by law. Costs includes any and all, fees, and expenses incurred in obtaining substitute services and expended in obtaining reimbursement, including, but not limited to, administrative expenses, attorneys’ fees, and costs. c. The non-defaulting party will have all other rights granted under this Agreement and all rights at law or in equity that may be available to it. d. Neither party will be liable for incidental, special, or consequential damages. S.19 CONTINUATION DURING DISPUTES. Contractor agrees that during any dispute between the parties, Contractor will continue to perform its obligations until the dispute is settled, instructed to cease performance by the City, enjoined or prohibited by judicial action, or otherwise required or obligated to cease performance by other provisions in this Agreement. STANDARD TERMS AND CONDITIONS LIQUID ALUMINUM SULFATE 12 ITB #12-20 S.20 TERMINATION FOR CONVENIENCE. The City reserves the right to terminate this Agreement in part or in whole upon thirty (30) calendar days’ written notice. S.21 TERMINATION FOR CONFLICT OF INTEREST Florida Statutes Section 112. Pursuant to F.S. Section 112, the City may cancel this Agreement after its execution, without penalty or further obligation, if any person significantly involved in initiating, securing, drafting, or creating the Agreement for the City becomes an employee or agent of Contractor. S.22 TERMINATION FOR NON-APPROPRIATION AND MODIFICATION FOR BUDGETARY CONSTRAINT. The City is a governmental agency which relies upon the appropriation of funds by its governing body to satisfy its obligations. If the City reasonably determines that it does not have funds to meet its obligations under this Agreement, the City will have the right to terminate the Agreement without penalty on the last day of the fiscal period for which funds were legally available. In the event of such termination, the City agrees to provide written notice of its intent to terminate thirty (30) calendar days prior to the stated termination date. S.23 PAYMENT TO CONTRACTOR UPON TERMINATION. Upon termination of this Agreement, Contractor will be entitled only to payment for those services performed up to the date of termination, and any authorized expenses already incurred up to such date of termination. The City will make final payment within thirty (30) calendar days after the City has both completed its appraisal of the materials and services provided and received Contractor’s properly prepared final invoice. S.24 NON-WAIVER OF RIGHTS. There will be no waiver of any provision of this agreement unless approved in writing and signed by the waiving party. Failure or delay to exercise any rights or remedies provided herein or by law or in equity, or the acceptance of, or payment for, any services hereunder, will not release the other party of any of the warranties or other obligations of the Agreement and will not be deemed a waiver of any such rights or remedies. S.25 INDEMNIFICATION/LIABILITY. a. To the fullest extent permitted by law, Contractor agrees to defend, indemnify, and hold the City, its officers, agents, and employees, harmless from and against any and all liabilities, demands, claims, suits, losses, damages, causes of action, fines or judgments, including costs, attorneys’, witnesses’, and expert witnesses’ fees, and expenses incident thereto, relating to, arising out of, or resulting from: (i) the services provided by Contractor personnel under this Agreement; (ii) any negligent acts, errors, mistakes or omissions by Contractor or Contractor personnel; and (iii) Contractor or Contractor personnel’s failure to comply with or fulfill the obligations established by this Agreement. b. Contractor will update the City during the course of the litigation to timely notify the City of any issues that may involve the independent negligence of the City that is not covered by this indemnification. c. The City assumes no liability for actions of Contractor and will not indemnify or hold Contractor or any third party harmless for claims based on this Agreement or use of Contractor-provided supplies or services. S.26 WARRANTY. Contractor warrants that the services and materials will conform to the requirements of the Agreement. Additionally, Contractor warrants that all services will be performed in a good, workman-like and professional manner. The City’s acceptance of service or materials provided by Contractor will not relieve Contractor from its obligations under this warranty. If any materials or services are of a substandard or unsatisfactory manner as determined by the City, Contractor, at no additional charge to the City, will provide materials or redo such services until in accordance with this Agreement and to the City’s reasonable satisfaction. Unless otherwise agreed, Contractor warrants that materials will be new, unused, of most current manufacture and not discontinued, will be free of defects in materials and workmanship, will be provided in accordance with manufacturer's standard warranty for at least one (1) year unless otherwise specified, and will perform in accordance with manufacturer's published specifications. STANDARD TERMS AND CONDITIONS LIQUID ALUMINUM SULFATE 13 ITB #12-20 S.27 THE CITY’S RIGHT TO RECOVER AGAINST THIRD PARTIES. Contractor will do nothing to prejudice the City’s right to recover against third parties for any loss, destruction, or damage to City property, and will at the City’s request and expense, furnish to the City reasonable assistance and cooperation, including assistance in the prosecution or defense of suit and the execution of instruments of assignment in favor of the City in obtaining recovery. S.28 NO GUARANTEE OF WORK. Contractor acknowledges and agrees that it is not entitled to deliver any specific amount of materials or services or any materials or services at all under this Agreement and acknowledges and agrees that the materials or services will be requested by the City on an as needed basis at the sole discretion of the City. Any document referencing quantities or performance frequencies represent the City's best estimate of current requirements, but will not bind the City to purchase, accept, or pay for materials or services which exceed its actual needs. S.29 OWNERSHIP. All deliverables, services, and information provided by Contractor or the City pursuant to this Agreement (whether electronically or manually generated) including without limitation, reports, test plans, and survey results, graphics, and technical tables, originally prepared in the performance of this Agreement, are the property of the City and will not be used or released by Contractor or any other person except with prior written permission by the City. S.30 USE OF NAME. Contractor will not use the name of the City of Clearwater in any advertising or publicity without obtaining the prior written consent of the City. S.31 PROHIBITED ACTS. Pursuant to Florida Constitution Article II Section 8, a current or former public officer or employee within the last two (2) years shall not represent another organization before the City on any matter for which the officer or employee was directly concerned and personally participated in during their service or employment or over which they had a substantial or material administrative discretion. S.32 FOB DESTINATION FREIGHT PREPAID AND ALLOWED. All deliveries will be FOB destination freight prepaid and allowed unless otherwise agreed. S.33 RISK OF LOSS. Contractor agrees to bear all risks of loss, injury, or destruction of goods or equipment incidental to providing these services and such loss, injury, or destruction will not release Contractor from any obligation hereunder. S.34 SAFEGUARDING CITY PROPERTY. Contractor will be responsible for any damage to City real property or damage or loss of City personal property when such property is the responsibility of or in the custody of Contractor or its employees. S.35 WARRANTY OF RIGHTS. Contractor warrants it has title to, or the right to allow the City to use, the materials and services being provided and that the City may use same without suit, trouble or hindrance from Contractor or third parties. S.36 PROPRIETARY RIGHTS INDEMNIFICATION. Without limiting the foregoing, Contractor will without limitation, at its expense defend the City against all claims asserted by any person that anything provided by Contractor infringes a patent, copyright, trade secret or other intellectual property right and must, without limitation, pay the costs, damages and attorneys' fees awarded against the City in any such action, or pay any settlement of such action or claim. Each party agrees to notify the other promptly of any matters to which this provision may apply and to cooperate with each other in connection with such defense or settlement. If a preliminary or final judgment is obtained against the City’s use or operation of the items provided by Contractor hereunder or any part thereof by reason of any alleged infringement, Contractor will, at its expense and without limitation, either: (a) modify the item so that it becomes non-infringing; (b) procure for the City the right to continue to use the item; (c) substitute for the infringing item other item(s) having at least equivalent capability; or (d) refund to the City an amount equal to the price paid, less reasonable usage, from the time of installation acceptance through cessation of use, which amount will be calculated on a useful life not less than five (5) years, plus any additional costs the City may incur to acquire substitute supplies or services. S.37 CONTRACT ADMINISTRATION. The contract will be administered by the Purchasing Administrator and/or an authorized representative from the using department. All questions STANDARD TERMS AND CONDITIONS LIQUID ALUMINUM SULFATE 14 ITB #12-20 regarding the contract will be referred to the administrator for resolution. Supplements may be written to the contract for the addition or deletion of services. Payment will be negotiated and determined by the contract administrator(s). S.38 FORCE MAJEURE. Failure by either party to perform its duties and obligations will be excused by unforeseeable circumstances beyond its reasonable control, including acts of nature, acts of the public enemy, riots, fire, explosion, legislation, and governmental regulation. The party whose performance is so affected will within five (5) calendar days of the unforeseeable circumstance notify the other party of all pertinent facts and identify the force majeure event. The party whose performance is so affected must also take all reasonable steps, promptly and diligently, to prevent such causes if it is feasible to do so, or to minimize or eliminate the effect thereof. The delivery or performance date will be extended for a period equal to the time lost by reason of delay, plus such additional time as may be reasonably necessary to overcome the effect of the delay, provided however, under no circumstances will delays caused by a force majeure extend beyond one hundred-twenty (120) calendar days from the scheduled delivery or completion date of a task unless agreed upon by the parties. S.39 COOPERATIVE USE OF CONTRACT. The City has entered into various cooperative purchasing agreements with other Florida government agencies, including the Tampa Bay Area Purchasing Cooperative. Under a Cooperative Purchasing Agreement, any contract may be extended for use by other municipalities, school districts and government agencies in the State of Florida with the approval of Contractor. Any such usage by other entities must be in accordance with the statutes, codes, ordinances, charter and/or procurement rules and regulations of the respective government agency. Orders placed by other agencies and payment thereof will be the sole responsibility of that agency. The City is not responsible for any disputes arising out of transactions made by others. S.40 FUEL CHARGES AND PRICE INCREASES. No fuel surcharges will be accepted. No price increases will be accepted without proper request by Contractor and response by the City’s Purchasing Division. S.41 NOTICES. All notices to be given pursuant to this Agreement must be delivered to the parties at their respective addresses. Notices may be (i) personally delivered; (ii) sent via certified or registered mail, postage prepaid; (iii) sent via overnight courier; or (iv) sent via facsimile. If provided by personal delivery, receipt will be deemed effective upon delivery. If sent via certified or registered mail, receipt will be deemed effective three (3) calendar days after being deposited in the United States mail. If sent via overnight courier or facsimile, receipt will be deemed effective two (2) calendar days after the sending thereof. S.42 GOVERNING LAW, VENUE. This Agreement is governed by the laws of the State of Florida. The exclusive venue selected for any proceeding or suit in law or equity arising from or incident to this Agreement will be Pinellas County, Florida. S.43 INTEGRATION CLAUSE. This Agreement, including all attachments and exhibits hereto, supersede all prior oral or written agreements, if any, between the parties and constitutes the entire agreement between the parties with respect to the work to be performed. S.44 PROVISIONS REQUIRED BY LAW. Any provision required by law to be in this Agreement is a part of this Agreement as if fully stated in it. STANDARD TERMS AND CONDITIONS LIQUID ALUMINUM SULFATE 15 ITB #12-20 S.45 SEVERABILITY. If any provision of this Agreement is declared void or unenforceable, such provision will be severed from this Agreement, which will otherwise remain in full force and effect. The parties will negotiate diligently in good faith for such amendment(s) of this Agreement as may be necessary to achieve the original intent of this Agreement, notwithstanding such invalidity or unenforceability. S.46 SURVIVING PROVISIONS. Notwithstanding any completion, termination, or other expiration of this Agreement, all provisions which, by the terms of reasonable interpretation thereof, set forth rights and obligations that extend beyond completion, termination, or other expiration of this Agreement, will survive and remain in full force and effect. Except as specifically provided in this Agreement, completion, termination, or other expiration of this Agreement will not release any party from any liability or obligation arising prior to the date of termination. STANDARD TERMS AND CONDITIONS LIQUID ALUMINUM SULFATE 16 ITB #12-20 1. INTRODUCTION. The City of Clearwater (City) is located on the West Coast of Florida in the Tampa Bay region. It is the third largest city in the region with an estimated population of 110,000 residents. The City of Clearwater is a major tourist destination – Clearwater Beach was recently rated #1 U.S. Beach by TripAdvisor, previously named “Florida’s Best Beach Town 2013” by USA Today, and was on the “Top Ten List of Best Beaches from Maine to Hawaii”. The City of Clearwater is home to the Philadelphia Phillies Spring Training and Clearwater Threshers Minor League Baseball and hosts several sports tournaments through the year that attract visitors from across the country. Clearwater is home for Winter the Dolphin and the Clearwater Marine Aquarium. Winter’s story has made it all the way to Hollywood in the motion pictures “Dolphin Tale” and “Dolphin Tale 2”, both filmed here in Clearwater. 2. SCOPE OF WORK. The City of Clearwater is soliciting sealed bids to supply Liquid Aluminum Sulfate (Alum) for the Public Utilities Water Reclamation Facilities (WRF). The successful bidder will provide liquid aluminum sulfate on an as needed basis. The estimated annual usage is approximately 185,000 gallons (1,037 dry tons). 3. SPECIFICATIONS. Liquid Aluminum Sulfate (Alum) 1. Alum shall be shipped as a liquid. 2. Bidder shall provide price for dry Alum, per ton. 3. Liquid Aluminum Sulfate shall contain a minimum of 8.0% Aluminum Oxide, total by weight. 4. Liquid Aluminum Sulfate shall be of such clarity to permit the reading of flow- measuring devices without difficulty. 5. Water-insoluble matter shall not exceed 0.2% by weight in the Liquid Aluminum Sulfate. 6. The total water-soluble iron, expressed as Fe2O3 content of the Liquid Aluminum Sulfate shall be no more than 0.35%. 7. Liquid Aluminum Sulfate shall meet the American Water Works Association Standard Specifications B403-09 and shall be NSF/ANSI Standard 60: Drinking Water Treatment Chemicals, Health Effects; Certified. 8. A certified chemical analysis of the liquid aluminum sulfate which the manufacturer proposes to deliver must be submitted with Bidder’s proposal. 9. Every delivery shall include the scale ticket, bill of lading and percent (%) of Liquid Aluminum Sulfate analysis. 10. Each delivery ticket, bill of lading and invoice shall have the number of gallons along with pounds (lbs.) on it. 11. % Liquid Aluminum Sulfate shall be defined as: %AL2O3 (total by weight), % AL2O3 (free by weight), % Fe2O3 (total soluble by weight), % water insoluble by weight 12. Liquid aluminum sulfate shall be pumped by Vendor from their tanker truck into our tanks with a two (2) inch hose with cam lock ends. 13. As these chemicals are required by the city for use in treating water to meet Federal and State requirements, upon award the successful Vendor shall provide a written plan to provide uninterruptable service to the city. This plan will include a backup system, to be approved by the city, that will ensure the uninterruptable service to the city. 4. SAFE HANDLING TRAINING. The Contractor shall provide an appropriate safe handling training course for liquid aluminum sulfate within the first month of the contract, to all current City of Clearwater operations personnel and shall be available to conduct “refresher” courses or new employee training annually during the contract period. The Contractor shall provide this assistance at no charge to the City of Clearwater. STANDARD TERMS AND CONDITIONS LIQUID ALUMINUM SULFATE 17 ITB #12-20 5. DELIVERY AND SPECIAL CONDITIONS. All normal (non-emergency) deliveries shall be made within four (4) business days after receipt of order. All emergency deliveries shall be made within one (1) business day after receipt of order. Delivery time of day shall be as arranged upon placement of order and shall be between the hours of 7:00AM and 5:00PM EST. The City of Clearwater reserves the right to change quantities and delivery dates at their discretion within a twenty-four (24) hour notice. Delivery shipments which fail to meet any contract specifications stated in this document shall be rejected. If a delivery shipment is rejected by the City of Clearwater, upon notification, the Vendor shall be required to ship a replacement delivery to the affected location within twenty-four (24) hours from the time of notification. Failure to provide replacement product that meets the specification of this agreement in the manner above will constitute failure to comply with the delivery requirements set forth in this document. Delivery shall be made by standard tanker truck designed to carry liquid aluminum. Deliveries shall be full truck loads (44,000 – 49,000 pounds net weight) as required. At the City’s request, a full truck load may be split between more than one facility. Proper performance shall require attendant delivery personnel’s constant inspection and observation of unloading operations and knowledgeable response to problems or emergencies, which would most commonly be expected to occur. The City of Clearwater reserves the right to refuse any and all deliveries made with equipment that is poorly maintained. Vendor shall provide all equipment necessary for all services specified herein. All equipment shall be in good condition and be properly maintained to minimize down time and should be appropriate for the application. All equipment shall be maintained so that it can be safely operated and does not present a threat to people, private or public property. It shall be the Vendor’s responsibility to keep all equipment in good working order. The Vendor’s tank or trailer shall be clean and free of residue that may contaminate the Vendor’s product or impede the unloading process. It is the Vendor’s responsibility to verify the cleanliness of the transporting equipment before loading. All appurtenant valves, pumps, and discharge hoses used for delivery of liquid aluminum sulfate shall be supplied by the Vendor and shall be clean and free from contaminating material. The City of Clearwater may reject a load if the equipment is not properly cleaned. The Vendor shall supply the equipment to offload the chemical from their truck (i.e. pumps, flexible hoses, etc.) and connect to the City’s permanent fill piping that fills City bulk tanks. The Vendor shall furnish the City an approved, leak-free connection device between the trailer and the intake receptacle. The Vendor shall observe the entire filling operation at each delivery site and shall immediately report any spill caused during the filling operations to plant staff. The Vendor shall be responsible for any spills resulting from the failure of the Vendor or the Vendor’s subcontractor’s delivery equipment or from failure of attendant delivery personnel in the proper performance of their duties. The Vendor shall take immediate and appropriate actions to clean up any spilled liquid aluminum sulfate. If the spill is not cleaned up within twenty-four (24) hours, the city of Clearwater will hire a certified hazardous material handling company to clean up the spill. The cost of such service will be charged to the vendor and deducted from the amount due to the Vendor. If the spillage is not the fault of the Vendor or its subcontractor, the Vendor shall be relieved of cleanup. The Vendor shall provide a minimum of two points of contact for ordering. Within ten (10) days of award, Vendor shall provide the City of Clearwater contact information for emergency deliveries. A list of drivers, including copies of driver licenses, must be submitted with response. STANDARD TERMS AND CONDITIONS LIQUID ALUMINUM SULFATE 18 ITB #12-20 DELIVERY LOCATIONS & STAFFED HOURS OF OPERATION: Site Name Site Contact Site Address Staffed Hours Estimated Annual Dry Tons Marshall Street WRF Primary Contact: Chief Plant Operator Ryan Alexander 727-562-4994 Secondary Contact: PU Assistant Manager Michael Flanigan 727-224-7690 1605 Harbor Dr Clearwater, FL 33755 24 hours/7 days 497 Northeast WRF Primary Contact: Chief Plant Operator Cathy Borden 727-793-2787 Secondary Contact: PU Assistant Manager Michael Flanigan 727-224-7690 3290 State Rd 580 Clearwater, FL 33461 24 hours/7 days 480 East WRF Primary Contact: Chief Plant Operator Jack Sadowski 727-462-6667 Secondary Contact: PU Assistant Manager Michael Flanigan 727-224-7690 3141 Gulf to Bay Blvd Clearwater, FL 33759 24 hours/7 days 60 DETAILED SPECIFICATIONS LIQUID ALUMINUM SULFATE 19 ITB #12-20 6. INSURANCE REQUIREMENTS. The Vendor shall, at its own cost and expense, acquire and maintain (and cause any subcontractors, representatives or agents to acquire and maintain) during the term with the City, sufficient insurance to adequately protect the respective interest of the parties. Coverage shall be obtained with a carrier having an AM Best Rating of A-VII or better. In addition, the City has the right to review the Contractor’s deductible or self-insured retention and to require that it be reduced or eliminated. Specifically, the Vendor must carry the following minimum types and amounts of insurance on an occurrence basis or in the case of coverage that cannot be obtained on an occurrence basis, then coverage can be obtained on a claims-made basis with a minimum three (3) year tail following the termination or expiration of this Agreement: a. Commercial General Liability Insurance coverage, including but not limited to, premises operations, products/completed operations, products liability, contractual liability, advertising injury, personal injury, death, and property damage in the minimum amount of $1,000,000 (one million dollars) per occurrence and $2,000,000 (two million dollars) general aggregate. b. Commercial Automobile Liability Insurance coverage for any owned, non-owned, hired or borrowed automobile is required in the minimum amount of $1,000,000 (one million dollars) combined single limit. c. Unless waived by the State of Florida and proof of waiver is provided to the City, statutory Workers’ Compensation Insurance coverage in accordance with the laws of the State of Florida, and Employer’s Liability Insurance in the minimum amount of $500,000 (five hundred thousand dollars) each employee each accident, $500,000 (five hundred thousand dollars) each employee by disease, and $500,000 (five hundred thousand dollars) disease policy limit. Coverage should include Voluntary Compensation, Jones Act, and U.S. Longshoremen’s and Harbor Worker’s Act coverage where applicable. Coverage must be applicable to employees, contractors, subcontractors, and volunteers, if any. d. Pollution Liability Insurance coverage, which covers any and all losses caused by pollution conditions (including sudden and non-sudden pollution conditions) arising from the servicing and operations of Vendor (and any subcontractors, representatives, or agents) involved in the work/transport, in the minimum amount of $2,000,000 (two million dollars) per occurrence and $2,000,000 (two million dollars) general aggregate. The above insurance limits may be achieved by a combination of primary and umbrella/excess liability policies. Other Insurance Provisions. a. Prior to the execution of this Agreement, and then annually upon the anniversary date(s) of the insurance policy’s renewal date(s) for as long as this Agreement remains in effect, the Vendor will furnish the City with a Certificate of Insurance(s) (using appropriate ACORD certificate, SIGNED by the Issuer, and with applicable endorsements) evidencing all of the coverage set forth above and naming the City as an “Additional Insured” on the Commercial General Liability Insurance and Auto Liability policies. In addition, when requested in writing from the City, Vendor will provide the City with certified copies of all applicable policies. The address where such certificates and certified policies shall be sent or delivered is as follows: City of Clearwater Attn: Purchasing Department, ITB #12-20 P.O. Box 4748 Clearwater, FL 33758-4748 DETAILED SPECIFICATIONS LIQUID ALUMINUM SULFATE 20 ITB #12-20 b. Vendor shall provide thirty (30) days written notice of any cancellation, non-renewal, termination, material change or reduction in coverage. c. Vendor’s insurance as outlined above shall be primary and non-contributory coverage for Vendor’s negligence. d. Vendor reserves the right to appoint legal counsel to provide for the Vendor’s defense, for any and all claims that may arise related to Agreement, work performed under this Agreement, or to Vendor’s design, equipment, or service. Vendor agrees that the City shall not be liable to reimburse Vendor for any legal fees or costs as a result of Vendor providing its defense as contemplated herein. The stipulated limits of coverage above shall not be construed as a limitation of any potential liability to the City, and City’s failure to request evidence of this insurance shall not be construed as a waiver of Vendor’s (or any contractors’, subcontractors’, representatives’ or agents’) obligation to provide the insurance coverage specified. MILESTONES LIQUID ALUMINUM SULFATE 21 ITB #12-20 1. BEGINNING AND END DATE OF INITIAL TERM. December 2019 - November 2020 If the commencement of performance is delayed because the City does not execute the contract on the start date, the City may adjust the start date, end date and milestones to reflect the delayed execution. 2. EXTENSION. The City reserves the right to extend the term of this contract, provided however, that the City shall give written notice of its intentions to extend this contract no later than thirty (30) days prior to the expiration date of the contract. 3. RENEWAL. At the end of the initial term of this contract, the City may initiate renewal(s) as provided. The decision to renew a contract rests solely with the City. The City will give written notice of its intention to renew the contract no later than thirty (30) days prior to the expiration. Two (2), one (1) year renewals possible at the City’s option. 4. PRICES. All pricing shall be firm for the initial term of one (1) year; except where otherwise provided by the specifications, and include all transportation, insurance and warranty costs. The City shall not be invoiced at prices higher than those stated in any contract resulting from this bid. The Contractor certifies that the prices offered are no higher than the lowest price the Contractor charges other buyers for similar quantities under similar conditions. The Contractor further agrees that any reductions in the price of the goods or services covered by this bid and occurring after award will apply to the undelivered balance. The Contractor shall promptly notify the City of such price reductions. During the sixty (60) day period prior to each annual anniversary of the contract effective date, the Contractor may submit a written request that the City increase the prices for an amount for no more than the twelve month change in the Producer Price Index for PPI 06130209, aluminum compounds, Not Seasonally Adjusted as published by the U.S. Department of Labor, Bureau of Labor Statistics (http://www.bls.gov/ppi/home.htm). The City shall review the request for adjustment and respond in writing; such response and approval shall not be unreasonably withheld. At the end of the initial term, pricing may be adjusted for amounts other than inflation based on mutual agreement of the parties after review of appropriate documentation. Renewal prices shall be firm for at least one year, and may be adjusted thereafter as outlined in the previous paragraph. No fuel surcharges will be accepted. BID PRICING LIQUID ALUMINUM SULFATE 22 ITB #12-20 1. BID SUBMISSION. Submit one (1) signed original bid and one (1) electronic copy of the bid in a sealed container. 2. BIDDER RESPONSE CHECKLIST. This checklist is provided for your convenience. It is not necessary to return a copy of this solicitation’s Instructions, Terms and Conditions, or Detailed Specifications with your bid response. Only submit the requested forms and any other requested or descriptive literature. Original copy with electronic format Bid container properly labeled Bid pricing form W-9 Form to be provided by Bidder (http://www.irs.gov/pub/irs-pdf/fw9.pdf) Exceptions/Additional Materials/Addenda form Vendor Information form Offer Certification form Scrutinized Companies form(s) as required A certified chemical analysis of the liquid aluminum sulfate A list of drivers, including copies of driver licenses BID PRICING LIQUID ALUMINUM SULFATE 23 ITB #12-20 Pursuant to all the contract specifications enumerated and described in this solicitation, we agree to furnish Liquid Aluminum Sulfate to the City of Clearwater at the price(s) stated below. The City of Clearwater makes no expressed or implied guarantees to purchase specific quantities. The estimated quantities indicated are given only as a guideline for preparing your bid and should not be construed as representing the actual amount to be purchased under this contract. A slight increase in the estimated annual quantity has been made to cover any additional requirements if needed. Item No. Description Unit Estimated Annual Quantity Cost Per Dry Ton Total Price 1 Liquid Aluminum Sulfate (non-emergency) Dry Ton 1037 $ $ 2 Liquid Aluminum Sulfate (emergency) Dry Ton 50 $ $ Grand Total $ DELIVERY REQUIREMENTS FOB: Destination, Freight Prepaid and Allowed Freight Costs: Unit prices should include all freight and transportation charges PAYMENT TERMS Select one choice of payment terms: Net 30, City of Clearwater’s standard payment terms 2%15, Net 30 _____%10, Net 30 (identify discount not less than 3%) Procurement card (Bank of America Visa card): o Credit processing fees apply o Invoices under $2,500 paid by department Vendor: _________________________________________ Date: _______________________________ EXCEPTIONS/ADDITIONAL MATERIALS/ADDENDA LIQUID ALUMINUM SULFATE 24 ITB #12-20 Bidders shall indicate any and all exceptions taken to the provisions or specifications in this solicitation document. Exceptions that surface elsewhere and that do not also appear under this section shall be considered invalid and void and of no contractual significance. Exceptions (mark one): Note – Any material exceptions taken to the City’s Standard Terms and Conditions will render a Bid Non-responsive. No exceptions Exceptions taken (describe--attach additional pages if needed) Additional Materials submitted (mark one): No additional materials have been included with this bid Additional Materials attached (describe--attach additional pages if needed) Addenda Bidders are responsible for verifying receipt of any addenda issued by checking the City’s website at http://www.myclearwater.com/business/bid-information/ prior to the bid opening. Failure to acknowledge any addenda issued may result in a response being deemed non-responsive. Acknowledgement of Receipt of Addenda (initial for each addenda received, if applicable): Addenda Number Initial to acknowledge receipt Vendor Name ____ Date: ____ VENDOR INFORMATION LIQUID ALUMINUM SULFATE 25 ITB #12-20 Company Legal/Corporate Name: Doing Business As (if different than above): Address: City: State: Zip: - Phone: Fax: E-Mail Address: Website: DUNS # Remit to Address (if different than above): Order from Address (if different from above): Address: Address: City: State: Zip: City: State: Zip: Contact for Questions about this bid: Name: Fax: Phone: E-Mail Address: Day-to-Day Project Contact (if awarded): Name: Fax: Phone: E-Mail Address: Certified Small Business Certifying Agency: Certified Minority, Woman or Disadvantaged Business Enterprise Certifying Agency: SCRUTINIZED COMPANIES LIQUID ALUMINUM SULFATE 26 ITB #12-20 SCRUTINIZED COMPANIES THAT BOYCOTT ISRAEL LIST CERTIFICATION FORM THIS FORM MUST BE COMPLETED AND SUBMITTED WITH THE BID/PROPOSAL. FAILURE TO SUBMIT THIS FORM AS REQUIRED MAY DEEM YOUR SUBMITTAL NONRESPONSIVE. The affiant, by virtue of the signature below, certifies that: 1. The vendor, company, individual, principal, subsidiary, affiliate, or owner is aware of the requirements of section 287.135, Florida Statutes, regarding companies on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel; and 2. The vendor, company, individual, principal, subsidiary, affiliate, or owner is eligible to participate in this solicitation and is not listed on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel; and 3. “Boycott Israel” or “boycott of Israel” means refusing to deal, terminating business activities, or taking other actions to limit commercial relations with Israel, or persons or entities doing business in Israel or in Israeli-controlled territories, in a discriminatory manner. A statement by a company that it is participating in a boycott of Israel, or that it has initiated a boycott in response to a request for a boycott of Israel or in compliance with, or in furtherance of, calls for a boycott of Israel, may be considered as evidence that a company is participating in a boycott of Israel; and 4. If awarded the Contract (or Agreement), the vendor, company, individual, principal, subsidiary, affiliate, or owner will immediately notify the City of Clearwater in writing, no later than five (5) calendar days after any of its principals are placed on the Scrutinized Companies that Boycott Israel List, or engaged in a boycott of Israel. __________________________________________ Authorized Signature __________________________________________ Printed Name __________________________________________ Title __________________________________________ Name of Entity/Corporation STATE OF _____________________ COUNTY OF ___________________ The foregoing instrument was acknowledged before me on this ______ day of _____________________, 20____, by _________________________________ (name of person whose signature is being notarized) as the ________________________ (title) of ________________________________________ (name of corporation/entity), personally known to me as described herein _____________________, or produced a _________________________ (type of identification) as identification, and who did/did not take an oath. _______________________________________ Notary Public ____________________________________ Printed Name My Commission Expires: __________________ NOTARY SEAL ABOVE OFFER CERTIFICATION LIQUID ALUMINUM SULFATE 27 ITB #12-20 By signing and submitting this Bid, the Vendor certifies that: a) It is under no legal prohibition on contracting with the City of Clearwater. b) It has read, understands, and is in compliance with the specifications, terms and conditions stated herein, as well as its attachments, and any referenced documents. c) It has no known, undisclosed conflicts of interest. d) The prices offered were independently developed without consultation or collusion with any of the other respondents or potential respondents or any other anti-competitive practices. e) No offer of gifts, payments or other consideration were made to any City employee, officer, elected official, or consultant who has or may have had a role in the procurement process for the services and or goods/materials covered by this contract. f) It understands the City of Clearwater may copy all parts of this response, including without limitation any documents and/or materials copyrighted by the respondent, for internal use in evaluating respondent’s offer, or in response to a public records request under Florida’s public records law (F.S. 119) or other applicable law, subpoena, or other judicial process; provided that Clearwater agrees not to change or delete any copyright or proprietary notices. g) Respondent hereby warrants to the City that the respondent and each of its subcontractors (“Subcontractors”) will comply with, and are contractually obligated to comply with, all Federal Immigration laws and regulations that relate to their employees. h) Respondent certifies that they are not in violation of section 6(j) of the Federal Export Administration Act and not debarred by any Federal or public agency. i) It will provide the materials or services specified in compliance with all Federal, State, and Local Statutes and Rules if awarded by the City. j) It is current in all obligations due to the City. k) It will accept such terms and conditions in a resulting contract if awarded by the City. l) The signatory is an officer or duly authorized agent of the respondent with full power and authority to submit binding offers for the goods or services as specified herein. ACCEPTED AND AGREED TO: Company Name: Signature: Printed Name: Title: Date: MAILING LABEL CUT ALONG THE LINE AND AFFIX TO THE FRONT OF YOUR BID CONTAINER LIQUID ALUMINUM SULFATE 28 ITB #12-20 --------------------------------------------------------------------------------- For US Mail ------------------------------------------------------------------------------ SEALED BID Submitted by: Company Name: Address: City, State, Zip: ITB #12-20, Liquid Aluminum Sulfate Due Date: December 2, 2019 at 10:00 A.M. City of Clearwater Attn: Purchasing PO Box 4748 Clearwater FL 33758-4748 --------------------------------------------------------------------------------- For US Mail ------------------------------------------------------------------------------ ---------------------------------------------- For Hand Deliveries, FEDEX, UPS or Other Courier Services ------------------------------------------------ SEALED BID Submitted by: Company Name: Address: City, State, Zip: ITB #12-20, Liquid Aluminum Sulfate Due Date: December 2, 2019 at 10:00 A.M. ---------------------------------------------- For Hand Deliveries, FEDEX, UPS or Other Courier Services ------------------------------------------------ City of Clearwater Attn: Purchasing 100 S Myrtle Ave 3rd Fl Clearwater FL 33756-5520 Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7206 Agenda Date: 12/19/2019 Status: Public HearingVersion: 1 File Type: Action ItemIn Control: Economic Development & Housing Agenda Number: 8.1 SUBJECT/RECOMMENDATION: Declare surplus, for the purpose of donation for development of affordable housing, two parcels of real property located at 1002 LaSalle Street and 1011 LaSalle Street; approve the Real Property Donation Agreement between the City and Habitat for Humanity of Pinellas County, Inc., and authorize the appropriate officials to execute same, together with all other instruments required to affect closing. (APH) SUMMARY: Properties located at 1002 LaSalle Street (Parcel A) and 1011 LaSalle Street (Parcel B together, the Properties) are currently vacant, and are each identified by Resolution #19-10 as city-owned property appropriate for use as affordable housing (Pinellas County Property I.D. #10-29-15-65718-004-0150 and #10-29-15-33498-000-0070 respectively). The City acquired Parcel A in 2015 and Parcel B in 2009. Both properties were initially acquired by local affordable housing developers with loans under the city’s affordable housing program. Failure to develop each property per loan terms resulted in loan default. The city acquired both properties in lieu of collecting the debt. The Properties are located within the North Greenwood Neighborhood Revitalization Strategy Area which is identified in the city’s Consolidated Plan. Each parcel is suitable for construction of a single-family home. Habitat for Humanity of Pinellas County is planning to construct a single-family home for sale to an income-qualifying household on each parcel. Parcel A is 7,500 square feet (0.17 acres) and is legally described as follows: Lot 15, Block D, Palm Park, according to the map or plat thereof, recorded in Plat Book 4, Page 86, of the Public Records of Hillsborough County, Florida of which Pinellas County was formerly a part. Parcel B is 12,055 square feet (0.28 acres) and is legally described as follows: GREENWOOD MANOR, South ½ of Lot 6 and all of Lot 7, according to the map or plat thereof as recorded in Plat Book 21, Page 65, of the Public Records of Pinellas County, Florida. A staff appraisal valued Parcel A at $15,366 and Parcel B at $30,741 on November 22, 2019. According to Section 2.01(d)(5)(i) of the Clearwater City Charter, the City Council may approve the donation or sale for less than fair market value of city-owned property of not more than one-half acre in size for workforce or affordable housing following a public hearing. APPROPRIATION CODE AND AMOUNT: N/A USE OF RESERVE FUNDS: N/A Page 1 City of Clearwater Printed on 12/19/2019 File Number: ID#19-7206 Page 2 City of Clearwater Printed on 12/19/2019 Real Property Donation Agreement between the City of Clearwater and Habitat for Humanity of Pinellas County 1002 LaSalle St and 1011 LaSalle St REAL PROPERTY DONATION AGREEMENT This REAL PROPERTY DONATION AGREEMENT (“Agreement”) is made on this ____ day of ___________, 2019, between the City of Clearwater (the “City”), a Florida municipal corporation whose address is 600 Cleveland Street, Suite 600, Clearwater, FL 33755; and Habitat for Humanity of Pinellas County, Inc. (“Habitat”), a Florida not for profit corporation whose address is 13355 49th Street North, Clearwater, FL 33762. RECITALS: WHEREAS, the City is the owner of two (2) parcels of real property (collectively, the “Properties”), commonly known as 1002 Lasalle Street, Clearwater, FL 33755 (“Parcel 1”), and 1011 LaSalle Street, Clearwater, FL 33755 (“Parcel 2”), more particularly described herein; and WHEREAS, Habitat is a not for profit corporation within the State of Florida established for the purpose of constructing homes for families in need of affordable housing; and WHEREAS, Habitat wishes to acquire the Properties for the construction of two homes for qualified families, and the City desires to donate the Properties as provided for under Section 2.01(d)(5)(i) of the Clearwater City Charter, subject to certain conditions; and WHEREAS, the parties desire to memorialize their Agreement. NOW THEREFORE, in consideration of the mutual covenants herein contained, and the mutual benefits to be derived hereunder, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. The recitals set forth above are true and correct and are incorporated herein by reference. 2. This Agreement describes the respective responsibilities of each party in providing for the donation of the Properties for the purpose of constructing a Habitat home on each parcel to be used for affordable housing. 3. Parcel 1 is located at 1002 LaSalle Street (Pinellas County Property I.D. No. 10-29-15-65718-004- 0150) and is legally described as follows: Lot 15, Block D, Palm Park, according to the map or plat thereof, recorded in Plat Book 4, Page 86, of the Public Records of Hillsborough County, Florida of which Pinellas County was formerly a part 4. Parcel 2 is located at 1011 LaSalle Street (Pinellas County Property I.D. No. 10-29-15-33498-000- 0070) and is legally described as follows: GREENWOOD MANOR, South ½ of Lot 6 and all of Lot 7, according to the map or plat thereof as recorded in Plat Book 21, Page 65, of the Public Records of Pinellas County, Florida Real Property Donation Agreement between the City of Clearwater and Habitat for Humanity of Pinellas County 1002 LaSalle St and 1011 LaSalle St 5. The parties agree the value of Parcel 1 is Fifteen Thousand Three Hundred Sixty-Six and 00/100 Dollars ($15,366.00) and the value of Parcel 2 is Thirty Thousand Seven Hundred Forty-One and 00/100 Dollars ($30,741.00) and that no monetary consideration is being received by the City in connection with said donation. 6. The City agrees to donate, convey and transfer to Habitat, all of the City’s right, title and interest in and to the Properties subject to the terms, conditions and provisions hereof. The donation of the Properties contemplated by this Agreement shall be conveyed by Special Warranty Deed. The Special Warranty Deed shall contain a reverter clause providing that in the event Habitat has not commenced and/or completed construction of the improvements within the timeframe(s) specified in paragraph ten (10) below, Habitat shall forthwith, upon the request of the City, reconvey each parcel not in compliance with Paragraph ten (10) to the City via Special Warranty Deed. The City makes no warranties as to the marketability of title and donates the Properties in “as-is, where-is, with all faults” condition. 7. Habitat shall have, at its own expense, the right to conduct inspections and determine feasibility of accepting the donation of the Properties. For purposes of physical inspection of the Properties, the City grants Habitat, its agents and professionals engaged by such parties, the right to enter upon the Properties. Habitat shall not perform any inspections or tests requiring invasive methods without prior written consent of the City. 8. Habitat will pay all closing costs associated with the transfer of Properties, including but not limited to; settlement fees, title insurance, appraisal fees, taxes, and recording fees. 9. Habitat shall have, at its own expense, the right to purchase title insurance. Any matters set forth in the title commitment, including any defects, or liens and encumbrances, shall be the responsibility of Habitat to cure, or accept as exceptions to the title policy. 10. The Properties must be used by Habitat for the sole purpose of constructing a single-family home on each parcel to be sold to a household whose total household income does not exceed eighty percent (80%) of Area Median Income, adjusted for household size, as published by the United States Department of Housing and Urban Development for Pinellas County. Habitat agrees to commence construction of certain improvements on the Properties within twelve (12) months of the date of this Agreement. Habitat further agrees to complete construction of such improvements within eighteen (18) months of the date of this Agreement. The City retains the unilateral discretion to extend the above timeframes as it determines appropriate. 11. Whenever this Agreement requires or permits any consent, notice, request, or demand from one party to the other (collectively “Notice”), such Notice must be in writing and shall be delivered either by hand or by certified mail. Notice shall be effective as of the date of actual delivery or, if delivery is refused by the receiving party, the date on which such delivery was attempted. Each party’s initial address for delivery of any Notice is designated below, but any party from time to time may designate a different address for delivery of any Notice by delivering to the other party Notice of such different address: If to City: City of Clearwater Attn: City Manager One Clearwater Tower Real Property Donation Agreement between the City of Clearwater and Habitat for Humanity of Pinellas County 1002 LaSalle St and 1011 LaSalle St 600 Cleveland Street, Suite 600 Clearwater, FL 33755 If to Habitat: Habitat for Humanity of Pinellas County, Inc. c/o Michael Sutton, CEO 13355 49th Street N. Clearwater, FL 33762 12. This Agreement may not be assigned by Habitat without the express written consent of the City, which consent shall be in in the City’s sole discretion. 13. This Agreement, together with any exhibit(s) attached hereto, constitutes the entire Agreement between the parties and no representation, warranty, promise or inducement not expressly included in the Agreement shall be binding upon any party hereto, their legal representative, successors and assigns. 14. The “Effective Date” of this Agreement shall be the date on which both parties have executed this Agreement. The Remainder of This Page Intentionally Left Blank Real Property Donation Agreement between the City of Clearwater and Habitat for Humanity of Pinellas County 1002 LaSalle St and 1011 LaSalle St IN WITNESS WHEREOF, the parties have duly executed this agreement the day and year first above written. THE CITY OF CLEARWATER, FLORIDA By: ______________________________ George N. Cretekos, Mayor Approved as to form: Attest: ______________________________ _________________________________ Laura Mahony Rosemarie Call Assistant City Attorney City Clerk HABITAT FOR HUMANITY OF PINELLAS COUNTY, INC. Attest: ______________________________ By: _____________________________ Michael Sutton, CEO ______________________________ Print Name ______________________________ ______________________________ Print Name Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7207 Agenda Date: 12/19/2019 Status: Public HearingVersion: 1 File Type: Action ItemIn Control: Economic Development & Housing Agenda Number: 8.2 SUBJECT/RECOMMENDATION: Declare surplus, for the purpose of donation for development of affordable housing, real property located at 912 Nicholson Street, approve the Real Property Donation Agreement between the city and Emerge Community Economic Development Corporation, and authorize the appropriate officials to execute same, together with all other instruments required to affect closing. (APH) SUMMARY: This property is currently vacant, and it is identified by Resolution 19-10 as a city-owned property appropriate for use as affordable housing (Pinellas County Property I.D. #22-29-15-69138-002-0070). The property is suitable for construction of a single-family home. The City acquired the property in 2006 in a land exchange with Clearwater Neighborhood Housing Services. This property is located within the North Greenwood Revitalization Strategy Area which is identified in the City’s Consolidated Plan. Emerge Community Economic Development Corporation (Emerge) is a non-profit organization that aims to transform low-income neighborhoods into self-sufficient, vibrant communities through development of affordable housing. Emerge is planning to construct a single-family home for sale to a household whose total household income does not exceed one hundred twenty percent (120%) of Area Median Income. The Property is 0.17 acres (7,600 square feet) and is legally described as follows: Lot 7, Block 2, PINE CREST, together with that 1/2 of the vacated alley adjacent to the North, according to the map of plat thereof as recorded in Plat Book 1, Page 66, Public Records of Pinellas County, Florida. An independent appraisal was performed on the property on December 3, 2018 by Jim Millspaugh and Associates. The appraisal report determined that the fair market value of the lot is $26,000.00. According to Section 2.01(d)(5)(i) of the Clearwater City Charter, the City Council may approve the donation or sale for less than fair market value of city-owned property of not more than one-half acre in size for workforce or affordable housing following a public hearing. APPROPRIATION CODE AND AMOUNT: N/A USE OF RESERVE FUNDS: N/A Page 1 City of Clearwater Printed on 12/19/2019 File Number: ID#19-7207 Page 2 City of Clearwater Printed on 12/19/2019 Real Property Donation Agreement between the City of Clearwater and Emerge Community Development Corporation – 912 Nicholson St. REAL PROPERTY DONATION AGREEMENT This REAL PROPERTY DONATION AGREEMENT (“Agreement”) is made on this ____ day of ___________, 2019, between the City of Clearwater (the “City”), a Florida municipal corporation whose address is 600 Cleveland Street, Suite 600, Clearwater, FL 33755; and Emerge Community Economic Development Corporation (“Emerge”), a Florida not for profit corporation whose address is 2314 30th Street South, St. Petersburg, FL 33712. RECITALS: WHEREAS, the City is the owner of a parcel of real property, commonly known as 912 Nicholson Street, Clearwater, FL 33755 (“Property”); and WHEREAS, Emerge is a not for profit corporation within the State of Florida established for the purpose of improving economic conditions in low- to moderate-income communities including constructing homes for families in need of affordable housing; and WHEREAS, Emerge wishes to acquire the Property for the construction of a single-family home for a qualified family, and the City desires to donate the Property as provided for under Section 2.01(d)(5)(i) of the Clearwater City Charter, subject to certain conditions; and WHEREAS, the parties desire to memorialize their Agreement. NOW THEREFORE, in consideration of the mutual covenants herein contained, and the mutual benefits to be derived hereunder, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. The recitals set forth above are true and correct and are incorporated herein by reference. 2. This Agreement describes the respective responsibilities of each party in providing for the donation of the Property for the purpose of constructing a single-family home to be used for affordable housing. 3. The Property (Pinellas County Property I.D. No. 10-29-15-69138-002-0070) is legally described as follows: Lot 7, Block 2, PINE CREST, together with that 1/2 of the vacated alley adjacent to the North, according to the map of plat thereof as recorded in Plat Book 1, Page 66, Public Records of Pinellas County, Florida. 4. The parties agree the value of the Property is Twenty-six Thousand and 00/100 Dollars ($26,000.00) and that no monetary consideration is being received by the City in connection with said donation. 5. The City agrees to donate, convey and transfer to Emerge, all of the City’s right, title and interest in and to the Property subject to the terms, conditions and provisions hereof. The donation of the Property contemplated by this Agreement shall be conveyed by Special Warranty Deed. The Special Warranty Deed shall contain a reverter clause providing that in the event Emerge has not commenced and/or completed construction of the improvements within the timeframe(s) Real Property Donation Agreement between the City of Clearwater and Emerge Community Development Corporation – 912 Nicholson St. specified in paragraph nine (9) below, Emerge shall forthwith, upon the request of the City, reconvey the Property to the City via Special Warranty Deed. The City makes no warranties as to the marketability of title and donates the Property in “as-is, where-is, with all faults” condition. 6. Emerge shall have, at its own expense, the right to conduct inspections and determine feasibility of accepting the donation of the Property. For purposes of physical inspection of the Property, the City grants Emerge, its agents and professionals engaged by such parties, the right to enter upon the Property. Emerge shall not perform any inspections or tests requiring invasive methods without prior written consent of the City. 7. Emerge will pay all closing costs associated with the transfer of Property, including but not limited to; settlement fees, title insurance, appraisal fees, taxes, and recording fees. 8. Emerge shall have, at its own expense, the right to purchase title insurance. Any matters set forth in the title commitment, including any defects, or liens and encumbrances, shall be the responsibility of Emerge to cure, or accept as exceptions to the title policy. 9. The Property must be used by Emerge for the sole purpose of constructing a single-family home to be sold to a household whose total household income does not exceed one hundred twenty percent (120%) of Area Median Income, adjusted for household size, as published by the United States Department of Housing and Urban Development for Pinellas County. Emerge agrees to commence construction of certain improvements on the Property within twelve (12) months of the date of this Agreement. Emerge further agrees to complete construction of such improvements within eighteen (18) months of the date of this Agreement. The City retains the unilateral discretion to extend the above timeframes as it determines appropriate. 10. Whenever this Agreement requires or permits any consent, notice, request, or demand from one party to the other (collectively “Notice”), such Notice must be in writing and shall be delivered either by hand or by certified mail. Notice shall be effective as of the date of actual delivery or, if delivery is refused by the receiving party, the date on which such delivery was attempted. Each party’s initial address for delivery of any Notice is designated below, but any party from time to time may designate a different address for delivery of any Notice by delivering to the other party Notice of such different address: If to City: City of Clearwater Attn: City Manager One Clearwater Tower 600 Cleveland Street, Suite 600 Clearwater, FL 33755 If to Emerge: Emerge Community Economic Development Corporation c/o Brian Taylor, CEO 2314 30th Street South St. Petersburg, FL 33712 11. This Agreement may not be assigned by Emerge without the express written consent of the City, which consent shall be in the City’s sole discretion. Real Property Donation Agreement between the City of Clearwater and Emerge Community Development Corporation – 912 Nicholson St. 12. This Agreement, together with any exhibit(s) attached hereto, constitutes the entire Agreement between the parties and no representation, warranty, promise or inducement not expressly included in the Agreement shall be binding upon any party hereto, their legal representative, successors and assigns. 13. The “Effective Date” of this Agreement shall be the date on which both parties have executed this Agreement. IN WITNESS WHEREOF, the parties have duly executed this agreement the day and year first above written. THE CITY OF CLEARWATER, FLORIDA By: ______________________________ George N. Cretekos, Mayor Approved as to form: Attest: ______________________________ _________________________________ Laura Mahony Rosemarie Call Assistant City Attorney City Clerk EMERGE COMMUNITY DEVELOPMENT CORPORATION Attest: ______________________________ By: _____________________________ Brian Taylor, CEO ______________________________ Print Name ______________________________ ______________________________ Print Name Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7211 Agenda Date: 12/19/2019 Status: Public HearingVersion: 1 File Type: Action ItemIn Control: Economic Development & Housing Agenda Number: 8.3 SUBJECT/RECOMMENDATION: Approve the City of Clearwater’s Fiscal Year 2018-2019 Consolidated Annual Performance and Evaluation Report (CAPER). (APH) SUMMARY: The Consolidated Annual Performance and Evaluation Report (CAPER) is the principal administrative report documenting the City’s expenditures for Community Development Block Grant (CDBG) and HOME Investment Partnership (HOME) programs to the U.S. Department of Housing and Urban Development (HUD). For Fiscal Year (FY) 2018-2019, the City’s entitlement allocation was $740,943 in CDBG and $383,146 in HOME program funds, $1,399,518 of Prior Year funds, $131,203 of Program Income and $1,152,452 in CDBG Revolving Loan funding for a total budget of $3,807,262 from federal funds. Through the CDBG and HOME program activities, total expenditures were $1,388,830 in FY 2018-2019, which included program income and funding from the prior year reprogrammed funds. Those funds not expended from this year’s budget will be programmed in future years. In addition to reporting activities carried out with federal money, a summary of activities conducted with the Florida State Housing Initiatives Partnership (SHIP) Program and Pinellas County Housing Trust Fund (PCHTF) Program is also included in the narrative section. For FY 2018-2019, SHIP fund expenditures totaled $692,617 and PCHTF fund expenditures totaled $241,663. The report provides HUD with necessary information for the Department to meet its requirement to assess each grantee’s ability to carry out relevant Community Planning and Development programs in compliance with all applicable rules and regulations. It also provides information necessary for HUD’s Annual Report to Congress and it provides grantees an opportunity to describe to citizens their successes in revitalizing deteriorated neighborhoods and in meeting objectives stipulated in their Consolidated Planning document. The City of Clearwater’s FY 2018-2019 CAPER contains information on the City’s assessment of the following activities: -Assessment of Four-Year Goals and Outcomes -Resources and Investments -Affordable Housing -Homeless and Other Special Needs -Public Housing -Other Actions to Address Barriers to Affordable Housing Page 1 City of Clearwater Printed on 12/19/2019 File Number: ID#19-7211 -Monitoring -CDBG -HOME A list of notable accomplishments utilizing federal, state and local funds for FY 2018-2019 include: -Provided twelve (12) down payment & closing cost assistance loans totaling $239,725 -Provided $278,308 for the rehabilitation of eleven (11) owner-occupied units -Assisted Community Service Foundation with the lease-up of seven rental units -Provided $357,252 to Habitat for Humanity of Pinellas County for the acquisition of land and construction of three single-family homes -Completed construction and lease-up of Woodlawn Trail Apartments; an 80-unit rental complex -Completed construction and lease-up of Madison Point Apartments; an 80-unit rental complex -Provided $390,863 for five Public Facilities projects: Directions for Living, St. Vincent DePaul Community Kitchen and Resource Center, R’Club Child Care, Miracles Outreach Community Development Center and the Arc of Tampa Bay. -Provided Directions For Living $99,000 for the rehabilitation of their lobby and waiting area -Provided Homeless Empowerment Program $99,000 for the rehabilitation of Baty Villas, a permanent supportive housing facility -Provided $111,140 to assist 1,841 individuals through partnerships with seven public service providers: Intercultural Advocacy Institute, Pinellas Opportunity Council, Safety Harbor Neighborhood Family Center, Gulfcoast Legal Services, WestCare GulfCoast of Florida, Homeless Emergency Project and Religious Community Services. -Provided $55,000 for technical assistance services provided by the Hispanic Business Initiative Fund of Florida, Inc. and Tampa Bay Black Business Investment Corporation that assisted 219 entrepreneurs and businesses -Provided $10,622 to three organizations to provide homebuyer education to assist 153 Clearwater residents: Clearwater Neighborhood Housing Services, Tampa Bay Community Development Corporation, and Housing & Education Alliance Overall federal, state and local funding assisted 7,411 persons and 192 households. On December 10, 2019, the Neighborhood and Affordable Housing Advisory Board (NAHAB) recommended the City Council approve the CAPER as written. The CAPER is due to HUD no later than December 31, 2019. APPROPRIATION CODE AND AMOUNT: N/A USE OF RESERVE FUNDS: N/A Page 2 City of Clearwater Printed on 12/19/2019 City of Clearwater, Florida December 19͕2019 2018/2019 Consolidated Annual Performance and Evaluation Report (CAPER) 2018/2019 CAPER - Draft 1 OMB Control No: 2506-0117 (exp. 06/30/2018) CR-05 - Goals and Outcomes Progress the jurisdiction has made in carrying out its strategic plan and its action plan. 91.520(a) This could be an overview that includes major initiatives and highlights that were proposed and executed throughout the program year. The City of Clearwater is designated an Urban City for the Community Development Block Grant (CDBG); HOME Investment Partnerships (HOME); State Housing Initiatives Partnership (SHIP); and Pinellas County Housing Trust Fund (PCHTF) programs. The City of Clearwater’s objectives and outcomes are: Objective: Performance Measure One – Provide Availability of and Accessibility to Decent Affordable Housing for the Residents of the City of Clearwater: 30 households will have access to affordable housing through down payment and closing cost assistance. 57 households will have new or improved access to housing through the preservation of existing, creation or acquisition of units for the purpose of preserving and/or creating decent affordable housing. Outcome: 19 households served; additional housing activities remain underway and will be reported upon project completion. Objective: Performance Measure Two – Prevent and Reduce Homelessness within the City of Clearwater: 480 individuals will have access to shelter facilities and beds and have access to agencies that provide homeless prevention and service programs. Outcome: 1,981 individuals served. Objective: Performance Measure Three – Expand Accessibility and Coordination of Social Services to the City of Clearwater Special Needs Population: 20 special needs individuals will have access to support programs that assisted elderly, frail/elderly, disabled, veterans and other populations with specials needs. Outcome: 58 individuals served. Objective: Performance Measure Four – Enhance the Living Environment for Persons in Low- and Moderate-Income Areas Through Community Development Activities, Public Service Programs and Elimination of Blight: 4,406 individuals will have a more livable environment through infrastructure construction and improvements and facility rehabilitation. 50 individuals will have access to social services and a more livable environment through the support of programs that promote neighborhood safety and security; youth accountability and mentoring; affordable youth/children centers; community outreach; meal and/or food bank services; senior services; health and mental health facilities; and the expansion and improvement of public parks. Outcome: 6,008 individuals served. 2018/2019 CAPER - Draft 2 OMB Control No: 2506-0117 (exp. 06/30/2018) Objective: Performance Measure Five – Support Programs that Create Economic Opportunities in the City of Clearwater; Particularly in Neighborhood Revitalization Strategy Areas: 2 façade loan-to-grants will be awarded for the removal of slum or blight or job creation. 2 businesses will be assisted through microenterprise/entrepreneurial technical assistance. Outcome: 0 façade loan to grant was awarded; 74 businesses were assisted. Comparison of the proposed versus actual outcomes for each outcome measure submitted with the consolidated plan and explain, if applicable, why progress was not made toward meeting goals and objectives. 91.520(g) Categories, priority levels, funding sources and amounts, outcomes/objectives, goal outcome indicators, units of measure, targets, actual outcomes/outputs, and percentage completed for each of the grantee’s program year goals. Goal Category Source Unit of Measure Expected - Strategic Plan Actual - Strategic Plan Percent Complete Expected - Program Year Actual - Program Year Percent Complete Community Development and Public Services Public Facility or Infrastructure Activities other than Low/Moderate Income Housing Benefit Non-Housing Community Development CDBG Persons Assisted 8906 8269 92.8% 5136 5115 99.6% Public service activities other than Low/Moderate Income Housing Benefit Non-Housing Community Development CDBG Persons Assisted 4550 7626 167.6% 550 893 162.4% 2018/2019 CAPER - Draft 3 OMB Control No: 2506-0117 (exp. 06/30/2018) Economic Development Facade treatment/business building rehabilitation Economic Development CDBG Business 3 1 33.3% 2 0 0.0% Jobs Created Maintained Economic Development CDBG Jobs 3 0 0.0% 0 0 0.0% Businesses Assisted Economic Development CDBG Businesses Assisted 2 135 6750.0% 0 0 0.0% Public service activities other than Low/Moderate Income Housing Benefit Economic Development CDBG Persons Assisted 0 0 0.0% 75 219 292.0% Homelessness Public service activities other than Low/Moderate Income Housing Benefit Homeless CDBG Persons Assisted 50 2951 5902.0% 1099 223 20.3% Homeless Person Overnight Shelter Homeless CDBG Persons Assisted 50 2951 5902.0% 1027 736 71.7% Homelessness Prevention Homeless CDBG Persons Assisted 1280 1434 112.0% 0 0 0.0% Public Facility or Infrastructure Activities other than Homeless CDBG Persons Assisted 0 0 0.0% 175 63 36.0% 2018/2019 CAPER - Draft 4 OMB Control No: 2506-0117 (exp. 06/30/2018) Low/Moderate Income Housing Benefit Housing Public service activities for Low/Moderate Income Housing Benefit Affordable Housing HOME Households Assisted 188 0 0.0% 0 0 0.0% Rental units constructed Affordable Housing HOME Household Housing Unit 15 12 80.0% 5 0 0.0% Rental units rehabilitated Affordable Housing HOME Household Housing Unit 24 21 87.5% 5 0 0.0% Homeowner Housing Rehabilitated Affordable Housing HOME Household Housing Unit 83 7 8.4% 11 3 0.0% Direct Financial Assistance to Homebuyers Affordable Housing HOME Households Assisted 90 21 23.3% 0 0 0.0% Other Affordable Housing HOME Other 20 0 0.0% 0 0 0.0% Homeowner Housing Added Affordable Housing HOME Household Housing Unit 0 0 0.0% 90 5 5.6% 2018/2019 CAPER - Draft 5 OMB Control No: 2506-0117 (exp. 06/30/2018) Non-Homeless Special Needs Public service activities other than Low/Moderate Income Housing Benefit Non-Homeless Special Needs CDBG Persons Assisted 320 145 45.3% 32 58 181.3% Program Administration Program Administration CDBG/ HOME Other 0 0 0.0% 0 0 N/A Table 1 - Accomplishments – Program Year & Strategic Plan to Date Assess how the jurisdiction’s use of funds, particularly CDBG, addresses the priorities and specific objectives identified in the plan, giving special attention to the highest priority activities identified. CDBG, HOME, SHIP and PCHTF funds were used to address high priority needs by providing down payment and closing cost assistance; homeowner rehabilitation; homebuyer education; acquisition of land and new construction of housing; public facility and public service programs; and economic development opportunities. Goal: Provide availability of, and access to, decent affordable housing for the residents of the City of Clearwater: Addressed goal through completion of the following activities: acquisition of land and construction of new housing units in collaboration with Habitat for Humanity of Pinellas County, Inc.; acquisition of a homeowner unit for rehabilitation in collaboration with Bright Community Trust (CHDO); lease-up of recently acquired rental units in collaboration with Community Service Foundation; rehabilitation of owner-occupied units; provided down payment and closing cost assistance loans through Tampa Bay Community Development Corporation and Clearwater Neighborhood Housing Services, Inc.; and provided homebuyer education/fair housing education through Tampa Bay Community Development Corporation and Clearwater Neighborhood Housing Services, Inc. 2018/2019 CAPER - Draft 6 OMB Control No: 2506-0117 (exp. 06/30/2018) Goal: Help to prevent and reduce homelessness within the City of Clearwater: Addressed goal through completion of the following activities: Religious Community Services - Grace House; Homeless Emergency Project – Emergency Shelter Program; Homeless Emergency Project, Inc. - Baty Villas; and St. Vincent dePaul Soup Kitchen and Community Resource Center. Goal: Expand the accessibility and coordination of social services to City of Clearwater special needs populations: Addressed goal through completion of the following activities: Pinellas Opportunity Council, Inc. – Chore Services and The Arc of Tampa Bay, Inc. – Employer Outreach Program. Goal: Enhance the living environment for persons in low- and moderate-income areas through community development activities, public service programs, and elimination of blight: Addressed goal through completion of the following activities: Gulfcoast Legal Services, Inc. – Legal Services; Miracles Outreach Community Development Center, Inc. – Youth Services; Intercultural Advocacy Institute, Inc. – Youth Services; Westcare Gulf Coast Florida, Inc. – Substance Abuse Services; Directions For Mental Health, Inc. – Public Facilities Improvement; and R’Club Child Care – Whitney Early Learning Academy. Goal: Support programs that create economic opportunities in the City of Clearwater, particularly for persons of low- and moderate-income and in Neighborhood Revitalization Strategy Areas: Addressed goal through completion of the following activities: Tampa Bay Black Business Investment Corp. – Microenterprise Technical Support and Hispanic Initiative Fund of Florida, Inc., dba Prospera, – Microenterprise Technical Support. Expenditures for each priority need during FY 2018-2019 were consistent with the Action Plan and identified objectives. Affordable housing projects often span multiple reporting periods, thus carry over into subsequent years. 2018/2019 CAPER - Draft 7 OMB Control No: 2506-0117 (exp. 06/30/2018) CR-10 - Racial and Ethnic composition of families assisted Describe the families assisted (including the racial and ethnic status of families assisted). 91.520(a) CDBG HOME White 4,790 2 Black or African American 1,249 1 Asian 50 0 American Indian or American Native 22 0 Native Hawaiian or Other Pacific Islander 18 0 Total 6,129 3 Hispanic 656 0 Not Hispanic 5,473 3 Table 2 – Table of assistance to racial and ethnic populations by source of funds Narrative In FY 2018-2019, CDBG funded public service, public facility, acquisition and housing activities that served 7,192 individuals. The following are the racial and ethnic status of program participants: White - 4,780 (66.46%); Black/African American - 1,191 (16.56%); Asian - 49 (0.68%); American Indian/Alaskan Native - 21 (0.29%); Native Hawaiian/Other Pacific Islander -18 (0.25%); American Indian/Alaskan Native & White - 5 (0.07%); Asian White - 3 (0.04%); Black/African American & White - 23 (0.32%); American Indian/Alaskan Native & Black/African American - 1 (0.01%); Other Multi-Racial - 1,101 (15.31%); 1,214 program participants identified as Hispanic. In FY 2018-2019, CDBG funded economic development activities and served 219 individuals: White - 10 (4.57%); Black/African American - 58 (26.48%); Asian - 1 (0.46%); American Indian/Alaskan Native - 1 (0.46%); Black/African American & White - 1 (0.46%); and Other Multi-Racial - 148 (67.58%); 149 identified as Hispanic. (***The table above does not reflect American Indian/Alaskan Native & White; Asian White; Black/African American & White; American Indian/Alaskan Native & Black/African American; or Other Multi-Racial utilizing CDBG funds.) In FY 2018-2019, HOME funded housing activities served 3 households. The following are the racial and ethnic status of program participants: White – 2 (67%); Black/African American – 1 (33%); 0 program participants identified as Hispanic. 2018/2019 CAPER - Draft 8 OMB Control No: 2506-0117 (exp. 06/30/2018) In FY 2018-2019, SHIP funded housing activities served 29 households. The following are the racial and ethnic status of program participants: White - 22 (76%); Black/African American - 7 (24%); 1 program participants identified as Hispanic. The following activities are currently underway: Habitat for Humanity of Pinellas County, Inc. – construction of 5 housing units, scheduled for completion in Program Year 2019 (HOME and SHIP Funds); Madison Point, LLC - construction of 80 rental units, scheduled for completion in fall of 2019 (SHIP Funds); and Woodlawn Trail Apartments - construction of 80 rental units, scheduled for completion in fall of 2019 (SHIP Funds). 2018/2019 CAPER - Draft 9 OMB Control No: 2506-0117 (exp. 06/30/2018) CR-15 - Resources and Investments 91.520(a) Identify the resources made available Source of Funds Source Resources Made Available Amount Expended During Program Year CDBG public - federal 1,596,912 996,308 HOME public - federal 2,210,350 392,522 Table 3 - Resources Made Available Narrative In FY 2018-2019, the City had $3,807,262.35 in CDBG and HOME program funding available to fund eligible housing and community development activities; economic development activities; and local agencies that provide services that assist extremely-low to moderate-income residents. Funding consisted of $1,124,089.00 in new entitlement funding through the CDBG and HOME programs; $1,399,518.18 of prior year entitlement, interest and program income; $131,202.73 in current year program income; and $1,152,452.44 in CDBG Revolving Loan funding. Additionally, the City had a total of $692,617.29 in Florida State Housing Initiatives Partnership (SHIP) and $241,663.18 in County Housing Trust program funds available to assist housing needs. In FY 2018-2019, the City expended $947,617.80 in CDBG Funds for 2018 activities and $48,690.68 for 2017 activities; 2017 activities, where funds were expended and completed in 2018, include 1 Public Facility Rehabilitation activity. In FY 2018-2019, t he City expended $392,521.88 in HOME funds for 2018 activities and $0.00 for 2017 activities; no funds were expended and completed in 2018 for 2017 activities. 2018/2019 CAPER - Draft 10 OMB Control No: 2506-0117 (exp. 06/30/2018) Identify the geographic distribution and location of investments Target Area Planned Percentage of Allocation Actual Percentage of Allocation Narrative Description Citywide Low- and Moderate-Income Areas 58 60 Allocation was accomplished through housing assistance, economic development, and public services. East Gateway District Neighborhood Revitalization Strategy Area 2 3 Allocation was accomplished through a public facilities improvement and economic development technical assistance. Lake Bellevue Neighborhood Revitalization Strategy Area 39 0 In FY 2018-2019, no activities were completed in the NRSA. North Greenwood Neighborhood Revitalization Strategy Area 1 37 Allocation was accomplished through various housing activities and economic development. Table 4 – Identify the geographic distribution and location of investments Narrative In FY 2018-2019, the City expended 60% of CDBG and HOME funds on activities through down payment and closing cost assistance, and owner-occupied rehabilitation, that benefited individuals/families in the incorporated areas of the city. The City expended 37% of CDBG and HOME funds on activities through down payment and closing cost assistance; new construction; acquisition of land for owner-occupied housing activities; home rehabilitation; and economic development technical assistance that benefited individuals/families in the North Greenwood Neighborhood Revitalization Strategy Area. No housing activities were completed in the Lake Bellevue Neighborhood Revitalization Strategy Area; Community Service Foundation will have 7 rental units leased-up by December 2018 and Madison Point, LLC will have 80 rental units leased-up in 2019. The City expended 3% of CDBG and HOME funds on activities through technical assistance to start-ups and micro and small businesses, and replaced two air conditioning systems and provided inspection services required by the City of Clearwater activities that benefited individuals/families in the East Gateway District Neighborhood Revitalization Strategy Area. No housing activities were completed or are expected to be completed in the East Gateway Neighborhood Revitalization Strategy Area. Public facility improvements and public service activities are utilized by extremely-low to moderate income individuals/families located throughout the city. Economic Development activities are utilized 2018/2019 CAPER - Draft 11 OMB Control No: 2506-0117 (exp. 06/30/2018) by extremely-low to moderate-income individuals/businesses primarily located within the three Neighborhood Revitalization Strategy Areas. 2018/2019 CAPER - Draft 12 OMB Control No: 2506-0117 (exp. 06/30/2018) Leveraging Explain how federal funds leveraged additional resources (private, state and local funds), including a description of how matching requirements were satisfied, as well as how any publicly owned land or property located within the jurisdiction that were used to address the needs identified in the plan. The City leverages federal funds through the use of other public and private resources to include allocations and program income generated through SHIP and PCHTF programs; private lenders; homeowner contributions; and other city departments. In FY 2018-2019, the City expended $1,388,830 in CDBG and HOME funds on housing; public service; public facility; and economic development activities. Completed federal funded activities leveraged $178,101 in state/local funds and $769,380 in private/community funding. In FY 2018-1019, the City expended $390,862.30 in CDBG funds on 5 public facilities projects. The City provided $101,267.50 to Directions for Living to upgrade its facility on Belcher Road; $21,678.00 to St. Vincent DePaul Community Kitchen and Resource Center to replace a failing HVAC system; $27,601.50 to R’Club Child Care to upgrade its facility on Whitney Road; and $233,161.30 to Miracles Outreach Community Development Center for acquisition of a group home in the North Greenwood neighborhood to serve at-risk children. The City also provided $7,154.00 to The Arc of Tampa Bay for a facilities improvement project that will be completed in the fall of 2019. Fiscal Year Summary – HOME Match 1. Excess match from prior Federal fiscal year 1,131,408 2. Match contributed during current Federal fiscal year 178,010 3. Total match available for current Federal fiscal year (Line 1 plus Line 2) 1,309,418 4. Match liability for current Federal fiscal year 21,141 5. Excess match carried over to next Federal fiscal year (Line 3 minus Line 4) 1,288,277 Table 5 – Fiscal Year Summary - HOME Match Report 2018/2019 CAPER - Draft 13 OMB Control No: 2506-0117 (exp. 06/30/2018) Match Contribution for the Federal Fiscal Year Project No. or Other ID Date of Contribution Cash (non-Federal sources) Foregone Taxes, Fees, Charges Appraised Land/Real Property Required Infrastructure Site Preparation, Construction Materials, Donated labor Bond Financing Total Match CFI-377-1 06/28/2019 45,100 0 0 0 7,215 0 52,315 CFI-378-1 06/28/2019 81,000 0 0 0 6,955 0 87,955 CFI-379 09/27/2018 32,900 0 0 0 4,840 0 37,740 Table 6 – Match Contribution for the Federal Fiscal Year HOME MBE/WBE report Program Income – Enter the program amounts for the reporting period Balance on hand at begin-ning of reporting period $ Amount received during reporting period $ Total amount expended during reporting period $ Amount expended for TBRA $ Balance on hand at end of reporting period $ 1,180,263.42 674,751.56 489,673.75 0 1,365,341.23 Table 7 – Program Income 2018/2019 CAPER - Draft 14 OMB Control No: 2506-0117 (exp. 06/30/2018) Minority Business Enterprises and Women Business Enterprises – Indicate the number and dollar value of contracts for HOME projects completed during the reporting period Total Minority Business Enterprises White Non- Hispanic Alaskan Native or American Indian Asian or Pacific Islander Black Non- Hispanic Hispanic Contracts Dollar Amount 434130 0 0 0 0 434130 Number 4 0 0 0 0 4 Sub-Contracts Number 3 0 0 2 0 1 Dollar Amount 173796 0 0 129696 0 44100 Total Women Business Enterprises Male Contracts Dollar Amount 434130 0 434130 Number 4 0 4 Sub-Contracts Number 3 0 3 Dollar Amount 173796 0 173796 Table 8 - Minority Business and Women Business Enterprises Minority Owners of Rental Property – Indicate the number of HOME assisted rental property owners and the total amount of HOME funds in these rental properties assisted Total Minority Property Owners White Non- Hispanic Alaskan Native or American Indian Asian or Pacific Islander Black Non- Hispanic Hispanic Number 0 0 0 0 0 0 Dollar Amount 0 0 0 0 0 0 Table 9 – Minority Owners of Rental Property 2018/2019 CAPER - Draft 15 OMB Control No: 2506-0117 (exp. 06/30/2018) Relocation and Real Property Acquisition – Indicate the number of persons displaced, the cost of relocation payments, the number of parcels acquired, and the cost of acquisition Parcels Acquired 0 0 Businesses Displaced 0 0 Nonprofit Organizations Displaced 0 0 Households Temporarily Relocated, not Displaced 0 0 Households Displaced Total Minority Property Enterprises White Non- Hispanic Alaskan Native or American Indian Asian or Pacific Islander Black Non- Hispanic Hispanic Number 0 0 0 0 0 0 Cost 0 0 0 0 0 0 Table 10 – Relocation and Real Property Acquisition 2018/2019 CAPER - Draft 16 OMB Control No: 2506-0117 (exp. 06/30/2018) CR-20 - Affordable Housing 91.520(b) Evaluation of the jurisdiction's progress in providing affordable housing, including the number and types of families served, the number of extremely low-income, low-income, moderate-income, and middle-income persons served. One-Year Goal Actual Number of Homeless households to be provided affordable housing units 0 0 Number of Non-Homeless households to be provided affordable housing units 87 5 Number of Special-Needs households to be provided affordable housing units 0 0 Total 87 5 Table 11 – Number of Households One-Year Goal Actual Number of households supported through Rental Assistance 0 0 Number of households supported through The Production of New Units 19 3 Number of households supported through Rehab of Existing Units 38 2 Number of households supported through Acquisition of Existing Units 30 0 Total 87 5 Table 12 – Number of Households Supported Discuss the difference between goals and outcomes and problems encountered in meeting these goals. The City worked diligently to meet the second year goals as identified in the 2016/2017 - 2019/2020 Consolidated Plan. The City made modest progress in meeting the affordable housing goals; a major obstacle the City faces is the availability of land and/or housing stock for affordable housing. The City continues and will continue to work with its housing partners to identify land purchase opportunities for affordable housing. 2018/2019 CAPER - Draft 17 OMB Control No: 2506-0117 (exp. 06/30/2018) Currently, 5 single-family homes are under or awaiting construction (HOME and SHIP funds); and 160 rental units are leasing up (SHIP). Discuss how these outcomes will impact future annual action plans. Affordable housing and homelessness continues to be a high priority and is identified in the FY 2018- 2019 Annual Action Plan. More emphasis is being placed on the utilization of the City’s 2 Revolving Loan funds to assist more low-to moderate-income families in their pursuit of homeownership and to assist in the rehabilitation of housing to ensure a safe and decent place to live. The City continued to support economic development activities to include a loan-to-grant façade program and microenterprise technical assistance, especially in the City’s 3 Neighborhood Revitalization Strategy Areas. The City continued to utilize CDBG, HOME, SHIP and Housing Trust funds and all other available resources to meet the needs identified. Include the number of extremely low-income, low-income, and moderate-income persons served by each activity where information on income by family size is required to determine the eligibility of the activity. Number of Households Served CDBG Actual HOME Actual Extremely Low-income 17 0 Low-income 28 1 Moderate-income 36 2 Total 81 3 Table 13 – Number of Households Served Narrative Information The City’s housing programs are available to extremely-low to moderate-income households that meet the eligibility requirements for each program. In FY 2018-2019, the City’s housing programs assisted 19 households utilizing CDBG, HOME, SHIP and PCHTF funds. Owner housing opportunity, owner preservation and owner housing production programs served a total of 19 households whose incomes are: 1 extremely-low; 6 low-; 10 moderate-; and 2 being rehabilitated. Madison Point, LLC and Woodlawn Trail Apartments projects, both scheduled for completion in fall of 2019, will have leased-up 160 units. (Housing production: 3 new units were constructed.) Based on the data sourced from the 2012-2016 Comprehensive Housing Affordability Strategy database, the City of Clearwater had 26,030 households whose income was 80% or more of HUD’s Adjusted Median Family Income (HAMFI); 8,025 households whose income was 50-80% of HAMFI; 6,155 households whose income was 30-50% of HAMFI; and 6,360 households whose income was below 30% of HAMFI. 2018/2019 CAPER - Draft 18 OMB Control No: 2506-0117 (exp. 06/30/2018) Cost burden is a fraction of a household’s total gross income spent on housing costs; severe cost burden is defined as more than 50% of income going towards rent and utilities. Among all income groups, 10,745 renters have a cost burden greater than 30% of income and 5,365 renters have a cost burden greater than 50% of income. Among all income groups, 7,865 owner-households have a cost burden greater than 30% of income and 3,470 owner-households have a cost burden greater than 50% of income. The City of Clearwater is a built-out community and lacks developable land for construction of new affordable owner-occupied and rental housing. These barriers continue to have a negative impact on projects and programs utilized to implement the City’s stated strategies. 2018/2019 CAPER - Draft 19 OMB Control No: 2506-0117 (exp. 06/30/2018) CR-25 - Homeless and Other Special Needs 91.220(d, e); 91.320(d, e); 91.520(c) Evaluate the jurisdiction’s progress in meeting its specific objectives for reducing and ending homelessness through: Reaching out to homeless persons (especially unsheltered persons) and assessing their individual needs The Pinellas County Homeless Leadership Board (HLB) is the lead agency for the Pinellas County Continuum of Care (CoC). Its mission is: "Homelessness should be rare, brief, and one-time." There are two major Councils under the HLB with very specific roles: 1) Providers Council, made up of public and private homeless and at-risk of becoming homeless service providers, develops recommendations to the HLB on issues affecting the homeless services system, addresses the needs of all target groups, and coordinates planning and recommendations with other community-wide planning groups; and 2) The Funders Council, composed of representatives from local and state governments, businesses, foundations, and other funders of services that affect all homeless/at-risk target groups, was created in August 2013 and develops recommendations to the HLB board on funding of homeless/ at- risk of becoming homeless programs and services and on strategically aligning funding resources available for homeless/at-risk programs and services based on HLB-approved priorities, to make the most effective use of scarce resources. The City provides staff support for the annual Point-In-Time Survey and Count. According to the Point- In-Time Survey and Count of the homeless population in Pinellas County for 2019, the total number of homeless individuals was 2,415. Approximately 20.1% of the entire homeless population in Pinellas County self-reported that they come from Clearwater. In FY 2018-2019, City staff continued educating City employees and the general public on the city’s homeless initiative. Staff created a website listed in the City’s webpage at www.myclearwater.com/homelessinitiative. Additionally, staff created a handout in an effort to educate the residents about the main goal of the city’s homeless initiative, how they can assist the homeless population by giving a hand up and not a hand out, and provided the citizens with contact information of local social service providers. In 2018-2019, the Clearwater Homeless Street Outreach Team directly assisted 254 homeless individuals that were placed in Safe Harbor, Pinellas Hope, Homeless Emergency Project, Inc., and other continuum of care providers. The case manager identifies mentally ill individuals that are eligible for Social Security benefits and assists them through the process to obtain their benefits. The Team received over 700 calls. In FY 2018-2019, the City provided $370,799 in CDBG funds supporting homeless operations and transitional housing rehabilitation. Funding was provided to 5 projects: Religious Community Services – 2018/2019 CAPER - Draft 20 OMB Control No: 2506-0117 (exp. 06/30/2018) Grace House for operating costs including salary support for their domestic violence shelter; Homeless Emergency Project, Inc. – Emergency Shelter Program for operating costs including salary support; to St. Vincent DePaul Community Kitchen and Resource Center for facility improvement; and Homeless Emergency Project, Inc. - Baty Villas, a 16-unit transitional housing rental complex. The funding provided addressed the following priority needs: Supporting improvements of transitional housing serving extremely-low to moderate-income persons, including the homeless and special needs populations and supporting operations of programs serving extremely-low to moderate-income persons, including the homeless and special needs population. Addressing the emergency shelter and transitional housing needs of homeless persons In FY 2018-2019, the City provided $115,960 in CDBG funding to assist with rehabilitation projects and operational support for the following: $8,480 to Religious Community Services – Grace House for operating costs including salary support for their domestic violence shelter that assisted 125 individuals; $8,440 to Homeless Emergency Project, Inc. – Emergency Shelter Program for operating costs including salary support that assisted 611 individuals; and $99,000 to Homeless Emergency Project, Inc. – Baty Villas to rehabilitate a 16-unit transitional housing complex that assisted 11 families. In FY 2018-2019, the City, through its General Fund, contributed $100,000 to Pinellas Safe Harbor; $50,000 to Homeless Emergency Project, Inc.; $25,000 to the Homeless Leadership Board; $25,000 to Pinellas Hope; $25,000 to Religious Community Services; and $10,000 to The Salvation Army of Upper Pinellas. The funding supports the operation of programs serving extremely-low to moderate-income individuals, including the homeless and special needs populations. Helping low-income individuals and families avoid becoming homeless, especially extremely low-income individuals and families and those who are: likely to become homeless after being discharged from publicly funded institutions and systems of care (such as health care facilities, mental health facilities, foster care and other youth facilities, and corrections programs and institutions); and, receiving assistance from public or private agencies that address housing, health, social services, employment, education, or youth needs Pinellas County Human Services provides homeless prevention and self-sufficiency programs targeting the homeless population. The programs target high poverty zone areas throughout the County, to include Clearwater, and focuses on individuals who are disabled and need assistance applying for Federal benefits, assisting homeless families with children seeking affordable, permanent housing and veterans who need assistance with obtaining Federal benefits, with a special focus on homeless veterans to include the following programs: Family Housing Assistance Program; Adult Emergency Financial Assistance Program and Veterans Services Program. The City continues to work closely with Pinellas County to ensure all eligible recipients are referred to the appropriate organization that will assist with their various needs. 2018/2019 CAPER - Draft 21 OMB Control No: 2506-0117 (exp. 06/30/2018) Helping homeless persons (especially chronically homeless individuals and families, families with children, veterans and their families, and unaccompanied youth) make the transition to permanent housing and independent living, including shortening the period of time that individuals and families experience homelessness, facilitating access for homeless individuals and families to affordable housing units, and preventing individuals and families who were recently homeless from becoming homeless again In FY 2018-2019, the City provided $115,960 in CDBG funding to assist with rehabilitation projects and operational support for the following: $8,480 to Religious Community Services – Grace House for operating costs including salary support for their domestic violence shelter that assisted 125 individuals; $8,440 to Homeless Emergency Project, Inc. – Emergency Shelter Program for operating costs including salary support that assisted 611 individuals; and $99,000 to Homeless Emergency Project, Inc. – Baty Villas to rehabilitate a 16-unit transitional housing complex that assisted 11 families. Additionally, the City, through its General Fund, contributed the following in support of transitioning from homelessness to permanent housing and independent living: $100,000 to Pinellas Safe Harbor, a 470-bed homeless shelter and jail diversion program that opened in January 2011. Transportation is provided to individuals who are willing to enter and receive case management services rather than go to jail; $50,000 to Homeless Emergency Project, Inc. to support their emergency shelter program, family transition program, and permanent supportive and rapid re-housing services; $25,000 to the Pinellas County Homeless Leadership Board who is the lead agency for the Pinellas County Continuum of Care (CoC); $25,000 to Pinellas Hope, a temporary emergency shelter for 250 men and women located on 20 acres provided by Bishop Robert N. Lynch and the Diocese of St. Petersburg. Case Managers meet with the individuals on a regular basis to set goals towards self-sufficiency. Case Managers also assist shelter residents with job and housing placement, perform follow up visits, and provide after shelter care to ensure successful outcomes; $25,000 to Religious Community Services for their domestic violence shelter that provides apartment-style emergency shelter to homeless families with children. The program works one- on-one with families through case management, education, job readiness skills, and assisting families with the tools needed to save money in order to secure stable housing; and $10,000 to the Salvation Army of Upper Pinellas for Hope Crest, a transitional living center that comprises two- and three-bedroom apartments. Families are offered ongoing assistance of a case manager upon leaving through a new program called Pathway of Hope. 2018/2019 CAPER - Draft 22 OMB Control No: 2506-0117 (exp. 06/30/2018) CR-30 - Public Housing 91.220(h); 91.320(j) Actions taken to address the needs of public housing The City collaborates with the Clearwater Housing Authority (CHA) to foster innovative public housing developments, potential joint ventures and residential initiatives. HUD funds are used to subsidize the Housing Choice Voucher (HCV) Program and subsidizes 235 units of public housing. CHA’s affordable housing consists of 529 mixed-income units, that are not subsidized utilizing Federal, state, county, or city monies. In FY 2018-2019, the CHA assisted 1,256 families through their monthly Housing Choice Voucher Program, expended $9,027,516 in Housing Assistance Payments, assisted 264 families through its Public Housing Program and listed $2,152,876 dollars in expenditures, plus an additional $211,075 in Capital and Replacement Housing Funds. The City and CHA continue to work together to identify opportunities that will provide affordable units to households at 50% AMI, 80% AMI and up to 120% AMI. Actions taken to encourage public housing residents to become more involved in management and participate in homeownership The Clearwater Housing Authority (CHA) encourages residents to become more involved with management and to participate in self-sufficiency programs. The CHA offers a Family Self-Sufficiency (FSS) Program for all Housing Choice Voucher holders who wish to improve their financial situation, eliminate their dependence on public assistance and are motivated to change their lives. FSS participants sign a five-year contract, during which time they complete an educational or vocational program, obtain employment, and become free from government assistance. The FSS staff provides the structure and support necessary to break down barriers and achieve goals. Once a FSS participant obtains employment or higher wages, he or she may begin to save money in an escrow account which is awarded upon completion of the program. Actions taken to provide assistance to troubled PHAs The CHA was checked through HUD’s Public Housing Assessment System (PHAS) and is designated as Small PHA Deregulation with a score of 95. No further action is needed. 2018/2019 CAPER - Draft 23 OMB Control No: 2506-0117 (exp. 06/30/2018) CR-35 - Other Actions 91.220(j)-(k); 91.320(i)-(j) Actions taken to remove or ameliorate the negative effects of public policies that serve as barriers to affordable housing such as land use controls, tax policies affecting land, zoning ordinances, building codes, fees and charges, growth limitations, and policies affecting the return on residential investment. 91.220 (j); 91.320 (i) The City began receiving SHIP Program funding in 1992 when the Florida Legislature adopted the Sadowski Act. During the 2007 legislative session, the Florida legislature passed House Bill 1375. Under this bill, approval was granted for the creation of Section 420.9076 of the Florida Statute. This statute requires counties and cities receiving SHIP funds to appoint an eleven member Affordable Housing Advisory Committee (AHAC). The statute further provides that the committee be made up of members from a specific industry or a specific group as identified in the statute. The requirement was largely met through the use of the City’s existing Neighborhood and Affordable Housing Advisory Board (NAHAB). The City Council adopted Resolution No. 17-34 that created and appointed the AHAC. The duties of the AHAC included reviewing policies and procedures, ordinances, land development regulations and the City’s adopted comprehensive plan and recommending specific actions or initiatives to encourage or facilitate affordable housing. The following are barriers and strategies undertaken by the City to remove or ameliorate the barrier: Barrier: Lack of land available to develop affordable housing projects – Strategy: Prepare inventory of locally-owned public lands suitable for affordable housing. Barrier: Limited funding to invest in production and rehabilitation of attainable housing – Strategy: Strengthen our relationship with the Clearwater Housing Authority and private developers to foster innovative public housing developments, mixed-income residential developments, potential joint ventures and residential initiatives. Barrier: Lack of information concerning the City’s permitting process for affordable housing units and limited information on the City’s affordable incentives and programs – Strategy: Provide information on affordable housing permitting process to interested developers through printed material and City website. Barrier: Land Development codes and incentives and third party barriers such as involuntary easements/encroachments and homeowners insurance - Strategy: Initiate an expedited permitting and ongoing review process; provide for flexible densities for affordable housing projects; reduction of parking setback requirements for affordable housing; allowance of flexible lot configuration, including zero-lot line configuration for affordable housing; and support of development near transportation hubs, major employment centers, and mixed-use development. While homeowners insurance is 2018/2019 CAPER - Draft 24 OMB Control No: 2506-0117 (exp. 06/30/2018) required, the City’s policy is to ensure the client receives only the insurance required. Barrier: Public perception of affordable housing development – Strategy: Provide information to the public via printed material, reports and the City website showcasing ongoing and completed projects. Support mixed-income housing development projects that strengthen the socio-economic foundation of the community with the inclusion of market-rate units. Barrier: Maintaining the City’s aging stock as a source of affordable housing - Strategy: Provide educational opportunities to citizens concerning barriers that can be eliminated such as poor credit; provide acquisition and rehabilitation loans to non-profits whose goal is to preserve affordable housing; provide down payment loans for eligible homebuyers and rehabilitation loans to eligible homeowners to ensure homes are code compliant. Actions taken to address obstacles to meeting underserved needs. 91.220(k); 91.320(j) A significant obstacle to meeting underserved needs is the lack of financial resources among housing and service providers that support the City’s institutional delivery structure. Local government policies concerning building codes, subdivision standards and impact fees enacted to protect the general welfare of the public have unintended consequences; an example of an unintended consequence is the creation of barriers to housing affordability by increasing per unit development costs that impacts the supply of affordable housing to extremely-low to moderate-income families. Other signifcant obstacles to meeting underserved needs are rents and housing affordability. Average rents in the City of Clearwater are not affordable; many households struggle to pay their rent and afford necessities such as food, clothing, medical care and transportation. The City gives priority to the acquisition and construction of new mixed-use development projects especially in the established Neighborhood Revitalization Strategy Areas, where need is greatest. First time homebuyer obstacles include the purchase price of a single-family home, credit issues and unemployment/underemployment. The City provides first time homebuyers educational opportunities and down payment and closing cost assistance. In FY 2018-2019, the City provided $101,000 in CDBG funds and $0 SHIP funds to Habitat for Humanity of Pinellas County, Inc. for acquisition of 5 vacant lots to construct 5 single-family homes; $239,725 in SHIP funds for down payment and closing cost assistance to 12 families; and $73,512 in CDBG Revolving Loan funds, $202,579 in SHIP funds and $2,216 in Pinellas County Housing Trust Funds to rehabilitate 8 owner-occupied dwellings. The City provided $1,996 in CDBG and $3,604 in SHIP funds to Tampa Bay Community Development Corporation; $3,010 in CDBG and $1,872 in SHIP funds to Clearwater Neighborhood Housing Services, Inc.; and $140 in SHIP funds to Housing and Education Alliance, Inc. for homebuyer education/counseling that assisted 153 individuals. The City provided $12,000 in SHIP funds to Tampa 2018/2019 CAPER - Draft 25 OMB Control No: 2506-0117 (exp. 06/30/2018) Bay Community Development Corporation for down payment and closing cost processing fees that assisted 12 families. These activities preserve the existing housing stock through acquisition, rehabilitation and construction of affordable rental units; rehabilitation of aging single-family homes; the increase of available affordable homes through new construction and improved access; homebuyer education; and down payment and closing cost assistance for qualified low- to moderate-income households. Actions taken to reduce lead-based paint hazards. 91.220(k); 91.320(j) Lead based paint continues to be a problem throughout cities across the United States. It is usually prevalent in homes built prior to 1978. The City maintains that lead based paint is a serious issue and conducts housing inspections to determine if there are defective paint surfaces. If lead conditions are present, the lead paint is either removed or covered in a manner prescribed by HUD. The City continues its effort to rid structures of lead based paint and inspects homes built prior to 1978 for any presence of lead based paint. If the presence of lead based paint is found, the City requires removal of the paint as part of its down payment and closing cost assistance and rehabilitation programs. In FY 2018-2019, the City inspected 15 homes for the presence of lead; the 15 were determined to be lead-safe. Additionally, the City continues to coordinate with agencies in the Clearwater area that screen residents for elevated blood lead levels (EBL) and inspect housing units for lead based paint hazards. These agencies include the Pinellas County Health Department and the Clearwater and Pinellas County housing authorities, among others. The City places information about lead based paint and safety on the City’s Affordable Housing Division webpage. Program activities include: Assurance that children identified as at risk receive blood lead testing and a child with elevated lead levels receives follow-up care; promotion of a public awareness campaign through education and disbursement of educational materials via physicians and the community; routine placement of educational materials on the City’s Affordable Housing Division webpage; assessment of homes at risk to identify lead hazard control services to eliminate hazards identified in homes; initiation of supportive lead hazard control services to eliminate hazards identified in homes; and evaluation of prevention activities to measure the impact and outcome of program services and intervention efforts in the community. Actions taken to reduce the number of poverty-level families. 91.220(k); 91.320(j) According to the 2013-2017 American Community Survey 5-Year Estimates, 15.9% of all people living in the City of Clearwater are at poverty level or below. To combat this statistic, the City continued to coordinate with a number of agencies that support poverty-level families. These agencies provide services to other homeless and non-homeless special needs populations, as well as to low- to moderate- income families. Such services include referrals to affordable housing; employment assistance; job training; and economic opportunity. 2018/2019 CAPER - Draft 26 OMB Control No: 2506-0117 (exp. 06/30/2018) In FY 2018-2019, the City provided $17,704 in CDBG funds to Intercultural Advocacy Institute, Inc. and $21,478 to Pinellas Opportunity Council, Inc. These two organizations provided for family advocacy and mentoring toward academic and employment success or self-sufficiency. The City provided $17,807 to Safety Harbor Neighborhood Family Center to provide youth services to Clearwater residents; $19,808 to Gulf Coast Legal Services to represent low-income clients; $8,480 to WestCare GulfCoast of Florida to provide substance abuse services; and $8,480 to Homeless Emergency Project and $8,480 to RCS Pinellas to provide homeless facilities and shelters. Combined, these agencies assisted 1,841 individuals throughout the program year. In FY 2018-2019, the City provided $25,000 in CDBG funds to Tampa Bay Black Business Investment Corporation (TBBBIC) that assisted 71 individuals/businesses and provided $30,000 in CDBG funds to Hispanic Business Initiative Fund of Florida, Inc. – dba Prospera that assisted 148 individuals/businesses. Both organizations provided technical assistance to small businesses and entrepreneurs. TBBBIC served residents/entrepreneurs located primarily in the North Greenwood Neighborhood Revitalization Strategy Area and Prospera served Clearwater’s Hispanic community primarily in the East Gateway Neighborhood Revitalization Strategy Area. The City also provided $21,678 to Saint Vincent DePaul Community Kitchen and Resource Center for job training to low-income Clearwater residents. Through the coordination of programs, including the Environmental Protection Agency; State Brownfields Redevelopment Initiatives; Juvenile Welfare Board; United Way; the Eckerd Foundation; Career Source Pinellas; and the University of South Florida; the City continued to expand its efforts to reduce impediments. Actions taken to develop institutional structure. 91.220(k); 91.320(j) The City continued to work with its own departments and various housing and public service providers, as well as partners of their programs, in an effort to expand opportunities and to make continuous improvements to the institutional structure. Continued actions will include solicitation of feedback on referral processes and other means of coordination between such providers and the City of Clearwater. In FY 2018-2019, the City supported an array of activities that strengthen the institutional structure’s ability to serve persons of extremely-low to moderate-income; persons with special needs; and the homeless population. These activities include case management; emergency shelter; transitional housing; behavioral and mental health services; supportive services for the elderly; facilities for the disabled; referrals to appropriate housing providers; affordable housing unit construction and rehabilitation; homebuyer education; down payment assistance; and access to economic opportunity technical assistance. 2018/2019 CAPER - Draft 27 OMB Control No: 2506-0117 (exp. 06/30/2018) Actions taken to enhance coordination between public and private housing and social service agencies. 91.220(k); 91.320(j) The City continued to coordinate with housing and public service providers to develop an effective institutional structure and enhance inter-agency coordination. The City continued to work with the Clearwater and Pinellas County Housing Authorities, to improve access to public housing and tenant- based assistance. Although funding for public housing authorities is limited, and competition for affordable housing is high, these agencies continued to provide housing-related activities to include rental assistance; rehabilitation; and new construction for low- to moderate-income individuals. Input from public housing authorities is solicited during preparation of the City’s Annual Action Plan. Additionally, the City promotes coordination between non-profit and private for-profit housing providers through its Neighborhood and Affordable Housing Advisory Board (NAHAB); through the SHIP- mandated Affordable Housing Advisory Committee (AHAC) in conjunction with the Local Housing Assistance Plan and Local Housing Incentive Strategy reports; and through the Annual Action Plan process. Moreover, annual meetings in conjunction with the Action Plan process provide an opportunity for these providers to interact. Public service providers in the greater Clearwater area provide a wide array of services to extremely-low to moderate- income individuals. These organizations typically have a specific target population that they serve (homeless individuals/families; persons with special needs or disabilities; extremely-low to moderate-income families) and possess a level of knowledge and expertise that is invaluable when identifying underserved needs. The continuation and expansion of these public services were encouraged by means of matching programs with funding, as available. The City recognizes that improved coordination between housing and public service providers will continue to be a critical action toward preventing homelessness. Therefore, input from public service providers is solicited during preparation of the City’s Annual Action Plan. Identify actions taken to overcome the effects of any impediments identified in the jurisdictions analysis of impediments to fair housing choice. 91.520(a) In FY 2016-2017, Pinellas County’s Office of Human Rights and the Community Development and Planning Division of the Planning Department prepared a countywide Analysis of Impediments to Fair Housing Choice (Analysis) which included the City of Clearwater. Data from the Analysis suggested that the following types of impediments exist: Areas of Discrimination; Areas of Limited Opportunity; and Condition of Housing Stock. The County will be preparing an updated study in 2019-2020. The City-funded programs that offer free classes for persons interested in homeownership, as well as provides outreach and training in fair housing. In FY 2018-2019, the City provided $1,996 in CDBG funds and 3,604 in SHIP funds to Tampa Bay Community Development Corp., $3,010 in CDBG funds and $1,872 in SHIP funds to Clearwater Neighborhood Housing Services, Inc. and $140 in CDBG funds to Housing and Education Alliance, Inc. and assisted 153 individuals. The City’s efforts are furthered through partnerships with the Pinellas Realtor Organization which subscribes to the Affirmative Marketing Agreement and the Bay Area Apartment Association; both entities work to educate its members on Fair Housing issues. 2018/2019 CAPER - Draft 28 OMB Control No: 2506-0117 (exp. 06/30/2018) The City supported self-help initiatives based on volunteers providing housing assistance to designated elderly and indigent property owners and assisted them in complying with municipal housing codes to include individual volunteers; community and religious organizations/institutions; and businesses as a means of supplementing financial resources for housing repair and neighborhood cleanups to include Paint Your Heart Out and United Way’s Day of Caring. The City established the Affordable Housing Advisory Committee (AHAC), that provides oversight and review of incentives that will encourage the development of affordable housing. The AHAC provides recommendations to the City when there are changes to be considered that will facilitate the removal of barriers. Inquiries from extremely-low to moderate-income tenants are often referred to the City’s Code Enforcement staff. Tenants often seek remedies for actual or perceived Housing Code violations in their rental unit that the landlord or property management company may have declined to address or for repairs that are being addressed by the landlord at an unacceptable pace for the tenant. City code enforcement staff provides general information on code enforcement alternatives and remedies as well as the State’s landlord tenant law. Some tenants are referred to pro bono or low-cost legal assistance programs to serve tenants needs. While the City does not provide legal services, the City provided $19,808 in CDBG funds to Gulfcoast Legal Services, Inc. to provide civil legal aid related to housing related matters. Also, Pinellas County Clerk of the Circuit Court operates three legal self-help centers to assist Pinellas County citizens on representing themselves in court in regard to family law; small claims; or landlord/tenant matters. The self-help centers provide consultation with an attorney for a minimal fee; forms and packets for civil court actions; document notary; and copying services. 2018/2019 CAPER - Draft 29 OMB Control No: 2506-0117 (exp. 06/30/2018) CR-40 - Monitoring 91.220 and 91.230 Describe the standards and procedures used to monitor activities carried out in furtherance of the plan and used to ensure long-term compliance with requirements of the programs involved, including minority business outreach and the comprehensive planning requirements The City is responsible for monitoring all agreements administered under its CDBG and HOME programs, advising subrecipients on their performance, and ensuring compliance with Federal rules and regulations corresponding to the funding source. Monitoring is necessary to ensure that subrecipients continue to meet expectations for timeliness, capacity, and reporting; and that activities continue to meet National Objectives and other program goals. Through frequent monitoring, conflicts of interest and opportunities for waste, mismanagement, fraud and abuse are minimized. On-site monitoring visits occur at least annually depending on the risk-level of the subrecipient, or if concerns were identified during a prior visit, on-site monitoring visits may occur more frequently to determine compliance or until corrective actions are taken. Staff contacts the subrecipient by phone or email to schedule a monitoring visit and follows-up with a formal Notification Letter to the recipient at least two weeks prior to the scheduled visit. The Notification Letter includes confirmation of the date; time and duration of the visit; a description of the purpose for the monitoring visit; and identification of the subrecipient representatives expected to be present and any office/meeting space that will be required. In preparation for an on-site monitoring visit, City staff reviews all documentation associated with the subrecipient’s records, including but not limited to: original application for CDBG or HOME funding; subrecipient agreement; requests for payment and corresponding documentation; monthly or quarterly reports; documentation from previous monitoring visits; and copies of other audits performed. At the beginning of the scheduled on-site monitoring visit, City staff holds an entrance conference with the subrecipient’s Director and appropriate financial and program staff. The entrance conference reiterates the schedule and purpose of the on-site monitoring visit and documents the subrecipient’s participation. The entrance conference is used to convey the City’s responsibility to monitor the subrecipient to determine whether the use of Federal funds is appropriate and consistent with the agreement, even if the on-site monitoring visit presents an inconvenience for the subrecipient. Within 30 days after the visit, the City mails a monitoring letter to the subrecipient that details the results of the on-site monitoring visit. The letter identifies any Findings or Concerns as follows: Finding – A violation of law or regulation that could result in a sanction; or Concern – A matter that, if not properly addressed, could become a finding that could result in a sanction. The monitoring letter details each Finding identified, if applicable, along with the corresponding citation(s) of applicable laws, regulations, or program policies and the supporting fact(s) collected during 2018/2019 CAPER - Draft 30 OMB Control No: 2506-0117 (exp. 06/30/2018) the on-site visit. For each Finding identified, the letter specifies the corrective action(s) that the subrecipient must take along with a specific date by which the subrecipient must provide a written response detailing how and by when the corrective action(s) will be taken. Citizen Participation Plan 91.105(d); 91.115(d) Describe the efforts to provide citizens with reasonable notice and an opportunity to comment on performance reports. As required, reasonable notice for review and comment of the CAPER was provided; public notice of two public meetings and public comment period was published in the Tampa Bay Times on December 4, 2019 advising of the availability of this performance report for viewing and public comment from December 5, 2019 through December 19, 2019. Both notices were placed on the City of Clearwater’s Affordable Housing webpage located at www.myclearwater.com/affordablehousing. No comments were received during the comment period. 2018/2019 CAPER - Draft 31 OMB Control No: 2506-0117 (exp. 06/30/2018) CR-45 - CDBG 91.520(c) Specify the nature of, and reasons for, any changes in the jurisdiction’s program objectives and indications of how the jurisdiction would change its programs as a result of its experiences. The programs administered during FY 2018-2019 were Housing; Homelessness; Non-Homeless Special Needs; Community Development and Public Services; and Economic Development. Housing includes: Tampa Bay Community Development Corporation - Down Payment Assistance; Habitat for Humanity of Pinellas County – Single Family Homes; Clearwater Neighborhood Housing Services, Inc. – Down Payment Assistance; CHDO – 15% Set-Aside; Revolving Loan Program – Rehabilitation; Revolving Loan Program – Acquisition; Bright Community Trust – Single Family Homes; HOME Rehabilitation/Purchase Assistance; SP Trail LLC – Woodlawn Project; and Housing Pool Activities. Homelessness includes: Religious Community Services, Inc. – Grace House; Homeless Emergency Project, Inc. – Emergency Shelter; and Homeless Emergency Project, Inc. – Baty Villas. Non-Homeless Specials Needs includes: Pinellas Opportunity Council, Inc. – Chore Services and The Arc of Tampa Bay, Inc. – Employer Outreach. Community Development and Public Services includes: Gulfcoast Legal Services, Inc. – Legal Services; Miracles Outreach Community Development Center, Inc. – Youth Services; Intercultural Advocacy Institute, Inc. – Youth Services; Westcare GulfCoast Florida, Inc. – Substance Abuse Services; Directions for Mental Health, Inc. – Public Facilities Improvements; R'Club Child Care - Public Facilities Improvements; Saint Vincent dePaul Community Kitchen and Resource Center - Public Facilities Improvements. Economic Development includes: Business Development – Façade Improvements; Tampa Bay Black Business Investment Corp. – Microenterprise Technical Support; and Hispanic Business Initiative Fund of Florida, Inc. – dba Prospera - Microenterprise Technical Support. The City utilized its Revolving Loan program funds this fiscal year under its home rehabilitation program; the City will actively pursue multi-family rehabilitation and new construction projects utilizing Revolving Loan funds in fiscal year 2019-2020. Does this Jurisdiction have any open Brownfields Economic Development Initiative (BEDI) grants? No [BEDI grantees] Describe accomplishments and program outcomes during the last year. 2018/2019 CAPER - Draft 32 OMB Control No: 2506-0117 (exp. 06/30/2018) CR-50 - HOME 91.520(d) Include the results of on-site inspections of affordable rental housing assisted under the program to determine compliance with housing codes and other applicable regulations Please list those projects that should have been inspected on-site this program year based upon the schedule in §92.504(d). Indicate which of these were inspected and a summary of issues that were detected during the inspection. For those that were not inspected, please indicate the reason and how you will remedy the situation. Inspection of initial lease-up of rental housing units is conducted by City staff and ongoing inspections of rental housing funded by HOME funds are also conducted by City staff or contracted compliance monitoring agency. All HOME funded projects are monitored annually, either by a desk review or an on- site inspection. A desk review includes compliance with income and rent eligibility requirements and financial records. An on-site monitoring includes compliance with income and rent eligibility requirements, financial reports, program records/files and is performed at least every two or three years as applicable. The following identifies all projects that received an on-site or desk review in FY 2018- 2019: Abilities of Morningside II (2500-1 Harn Boulevard) – On Site - In Progress Abilities of St. Andrews Cove (605 North Keene Road) –On Site – In Progress Fulton Avenue Apartments (1602 Fulton Avenue) – Desk Audit - In Progress Homeless Emergency Project (1250 Palmetto Street) – On Site - In Compliance Fairburn Apartments (1102 Fairburn Avenue) – On Site - In Compliance Kimberly Home, Inc. (114 North Missouri Avenue) – On Site - In Progress Kimberly Home, Inc. (1192 Browns Court) – On-Site - In Progress Pineberry Apartments (1225 Highland Avenue) – Desk Audit – In Compliance Prospect Towers (801 Chestnut Street) – On Site - In Compliance Garden Trail Apartments (609 Seminole Street) – On Site - In Compliance Norton Apartments (1450 South Martin Luther King Jr. Avenue) – Desk Audit - In Compliance Provide an assessment of the jurisdiction's affirmative marketing actions for HOME units. 92.351(b) As part of the HOME application, applicants are required to submit an affirmative marketing plan to the City which must conform to the City’s affirmative marketing requirements. Monitoring of affirmative marketing for HOME funded units is incorporated into the City’s overall monitoring process. During each onsite monitoring visit, the City monitors subrecipients for compliance with affirmative marketing requirements. Refer to IDIS reports to describe the amount and use of program income for projects, including the number of projects and owner and tenant characteristics 2018/2019 CAPER - Draft 33 OMB Control No: 2506-0117 (exp. 06/30/2018) HOME Program Income received during the program year totaled $674,752 and is broken down into the following: Payments: $110,891 Payoffs: $513,258 Interest: $50,603 In FY 2018-2019, HOME funds were expended on 4 activities and administration/planning totaling $556,823. Program Income was expended as it became available with 10% utilized for administration/planning. The following are racial and ethnic status of HOME program participants: White – 2 (67%), Black/African American – 1 (33%); 0 program participants identified as Hispanic. The following are income levels of the HOME program participants: 0 were extremely-low (below 30%) or 0%, 1 were low (between 30% - 60%) or 33% and 2 were moderate-income (between 60% - 80%) or 67%. Describe other actions taken to foster and maintain affordable housing. 91.220(k) (STATES ONLY: Including the coordination of LIHTC with the development of affordable housing). 91.320(j) During FY 2018-2019, the City continued to proactively support, develop and maintain affordable housing. Utilizing CDBG, HOME, SHIP and Pinellas County Housing Trust Fund, the City assisted 12 households to become first time homeowners through down payment and closing cost assistance; assisted 11 homeowners to preserve their homes through rehabilitation; assisted Habitat for Humanity of Pinellas County to acquire vacant land and construct 8 single family homes, 5 of which are currently under or awaiting construction; assisted Community Service Foundation with the lease-up of 7 rental units for extremely low-income tenants; assisted 2 developers, SP Trail, LLC – Woodlawn Project and Madison Point, LLC, with funding to construct 160 rental units in coordination with Low Income Housing Tax Credits, both of which will lease up in the fall of 2019; and ensured long-term availability by assisting Bright Community Trust, a CHDO, through construction of a single-family home that was placed in a land trust upon completion and sold to a low-income household. The City continues to support national, state and local housing policies and continues to educate and inform citizens and elected officials of the need for affordable housing. FY 2018-2019 CONSOLIDATED ANNUAL PERFORMANCE AND EVALUATION REPORT (CAPER) ECONOMIC DEVELOPMENT AND HOUSING December 19, 2019 CAPER FY 2018-2019 Program Processes Activities Undertaken Funding Sources CDBG HOME SHIP PCHTF Due By December 31st Resources Expenditures Entitlement CDBG HOME $740,943 $383,146 Prior Year Funds $1,399,518 Program Income $131,203 CDBG Revolving Loan Fund $1,152,452 Total $3,807,262 FY 18-19 Expenditures - $1,388,830 Balance $2,418,432 RESOURCES/EXPENDITURES - FEDERAL OTHER PROGRAM EXPENDITURES – STATE/LOCAL Program Expenditure SHIP $692,617 PCHTF $241,663 General Fund (Homeless Initiative) $235,000 Total $1,169,280 FEDERAL FUNDS LEVERAGED Source Amount Leveraged State/Local Funds $178,101 Private/Community Funds $769,380 Total $947,481 HOUSEHOLDS/PERSONS ASSISTED – FEDERAL FUNDS Activity Households/Persons Acquisition 86 Households Economic Development 219 Persons/Business Owners Housing 18 Households Public Facilities 239 Persons Public Services 6,938 Persons Total 7,396 Persons / 104 Households HOUSEHOLDS/PERSONS ASSISTED – STATE/LOCAL FUNDS Goal Households/Persons Housing Education 84 Persons Rehabilitation 8 Households Down Payment Assistance 12 Households Madison Point/Woodlawn Trail –Rental Housing 160 Households Total 84 Persons/180 Households PARTNERS – PUBLIC SERVICES PARTNERS – HOMEBUYER EDUCATION PARTNERS – PUBLIC FACILITIES AND MICROENTERPRISE DIRECTIONS FOR LIVING FACILITY IMPROVEMENTS BATY VILLAS REHABILITATION (HEP) PARTNERS – HOUSING Madison Point, LLC HABITAT FOR HUMANITY NORTH GARDEN AVENUE ONGOING HOUSING ACTIVITIES FROM FY 18-19 Owner-Occupied New Construction - 5 Units Homeowner Rehabilitation 4 Units Rental New Construction Potential Partnership with HEP & School Board RFP for N Greenwood Project Coordinating with CRA on Mixed-Income Housing Potential 81-Unit Development at 610 Franklin St. For a Detailed Listing of Programs, Activities and Actions Undertaken See Pages 16-33 of the CAPER www.myclearwater.com/affordablehousing ECONOMIC DEVELOPMENT AND HOUSING December 19, 2019 FY 2018-2019 CONSOLIDATED ANNUAL PERFORMANCE AND EVALUATION REPORT (CAPER) Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: 9352-20 Agenda Date: 12/19/2019 Status: Public HearingVersion: 1 File Type: OrdinanceIn Control: Engineering Department Agenda Number: 8.4 SUBJECT/RECOMMENDATION: Approve the request from Edgewater Valor Capital LLC, (Applicant) to vacate a portion of a 5 foot-wide platted utility easement as recorded in Plat Book 31, Page 12 of the Public Records of Pinellas County, Florida, and a portion of a 10 foot-wide platted alley, as recorded in Plat Book 4, Page 56 of the Public Records of Pinellas County, Florida, and pass Ordinance 9352-20 on first reading. (VAC2020-01) SUMMARY: The property owner of 1020 Sunset Point Rd., Clearwater (Applicant) has requested that the City vacate a portion of a 5-foot-wide platted Utility Easement and a portion of a 10-foot-wide platted alley on Applicant’s property. As a condition of vacation, the Applicant will grant a 10-foot-wide Utility Easement to the City. City stakeholders have reviewed the vacation request and the proposed location of the new Utility Easement being granted by the property owner and have no objection. All public and private utilities shall be relocated without interrupting service by the property owner at its own expense and to the approval and acceptance of the utility owners and with all out of service utilities removed prior to completion of the project. This vacation ordinance shall be rendered null and void and the vacations not effective if any of the preceding conditions are not met, or, if for any reason whatsoever, the Project is abandoned, terminated, or otherwise not constructed. Page 1 City of Clearwater Printed on 12/19/2019 Ord. No. 9352-20 ORDINANCE NO. 9352-20 AN ORDINANCE OF THE CITY OF CLEARWATER, FLORIDA, VACATING A PORTION OF A 5 FOOT-WIDE UTILITY EASEMENT, ABUTTING THE SOUTH LINE OF LOTS 1, 2, AND THE WEST 34 FEET OF LOT 3 AS SHOWN ON THE PLAT FOR SUNNYDALE SUBDIVISION AS RECORDED IN PLAT BOOK 31, PAGE 12, OF THE PUBLIC RECORDS OF PINELLAS COUNTY, FLORIDA, AND A PORTION OF A 10 FOOT ALLEY, ABUTING THE NORTH LINE OF LOTS 2, 6, 7, 8, AND THE WEST 40 FEET OF LOT 9, AS SHOWN ON THE PLAT FOR SUNSET POINT SUBDIVISION AS RECORDED IN PLAT BOOK 4, PAGE 56, OF THE PUBLIC RECORDS OF PINELLAS COUNTY, FLORIDA, PROVIDING AN EFFECTIVE DATE. WHEREAS, the owner in fee title of real property described and depicted in Exhibits“A” and “B” attached hereto, has requested that the City vacate said platted easement and said platted alley; and WHEREAS, as a condition to the vacations, the City will require that the owner grant a new Utility Easement in place of the vacated Utility Easement; and WHEREAS, the City Council of the City of Clearwater, Florida finds that said easement and alley are not necessary for municipal use and it is deemed to be in the best interest of the City and the general public that the same be vacated; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CLEARWATER, FLORIDA: Section 1. The following: The easement and alley described as follows: See Exhibit “A”and Exhibit “B” Ord. No. 9352-20 are hereby vacated, closed and released, and the City of Clearwater releases all of its right, title and interest thereto, contingent upon, and subject to, the following conditions precedent: 1.The property owner will grant to the City of Clearwater, Florida, a 10 foot-wide Utility Easement over, under, across, and through the real property described in Exhibit “C”, (attached hereto and incorporated herein) as deemed acceptable to the City of Clearwater, for installation and maintenance of all utilities therein by the City of Clearwater. 2. All public and private utilities shall be relocated without interrupting service by Edgewater Capital, LLC at its own expense and to the approval and acceptance of the utility owners and with all out of service utilities removed prior to completion of the project. 3. The Property Owner shall grant an individual easement to Knology of Central Florida (doing business as WOW!), as may be requested by said provider and the location and terms of which are acceptable to the respective utility provider. Duke Energy Florida, Inc. (doing business as “Duke Energy”), Bright House Networks, LLC, Verizon Florida, Inc. and Frontier Communications have all submitted Letters of No Objection in response to the City’s vacation process stakeholder review. 4. This vacation ordinance shall be rendered null and void and the vacations not effective if any of the preceding conditions are not met, or, if for any reason whatsoever, the Project is abandoned, terminated, or otherwise not constructed. Section 2. TheCity Clerk shall record this ordinance in the Public Records of Pinellas County, Florida, following adoption. Section 3. This ordinance shall take effect immediately upon adoption. PASSED ON FIRST READING ________________________________ PASSED ON SECOND AND FINAL READING AND ADOPTED ________________________________ ________________________________ George N. Cretekos Mayor Ord. No. 9352-20 Approved as to form: Attest: ________________________________________________________________Laura Lipowski Mahony Rosemarie Call Assistant City Attorney City Clerk SUNNYDALE DR SUNSET POINT RD EDGEWATER DR N FORT HARRISON AVE 1919 102010231900 100910141901 1860 102510271932 1035102810391018102810531022103010211920 1949 10311951 10341941 1899 104010441054E1052C1050B1050C1050D1052A1020102610581052B1054D1050AAERIAL MAP Proposed New 10' Utility Easement ² N.T.S.Scale: Prepared by:Engineering DepartmentGeographic Technology Division100 S. Myrtle Ave, Clearwater, FL 33756Ph: (727)562-4750, Fax: (727)526-4755www.MyClearwater.com Proposed Alley and Utility Easement Vacationand Proposed New Utility Easement to City of Clearwater1020 Sunset Point Rd. Page 1 of 1Aerial Flown 20193-29s-15eS-T-R:251AGrid #:WDMap Gen By:Date:10/16/2019 Document Path: C:\Users\Wioletta.Dabrowski\City of Clearwater\Engineering Geographic Technology - Location Maps\1020 Sunset Point Rd..mxd Proposed Vacation 10' Alley Proposed Vacation 5' Utility Easement RBReviewed By: Section 3-914. - General standards for Level One and Level Two approvals. A. Level One applications, in order to be approved by the community development coordinator, and Level Two applications, in order to be approved by the community development board, shall meet each and every one of the following criteria: The proposed development of the land will be in harmony with the scale, bulk, coverage, density, and character of adjacent properties in which it is located. 2. The proposed development will not hinder or discourage the appropriate development and use of adjacent land and buildings or significantly impair the value thereof. 3. The proposed development will not adversely affect the health or safety or persons residing or working in the neighborhood ofthe proposed use. 4. The proposed development is designed to minimize traffic congestion. 5. The proposed development is consistent with the community character of the immediate vicinity of the parcel proposed for development 6_ The design of the proposed development minimizes adverse effects, including visual, acoustic and olfactory and hours of operation impacts, on adjacent properties. Sunset Point La Vista 1020 Sunset Point Road Formerly addressed as 1919 Edgewater Drive and 1026 Sunset Point Road) Responses to General Applicability Criteria of CDC Section 3-914,A redeveloped with 12 attached dwellings (FLS2017-03014, denied May 31, 2017). Additionally, properties farther east were also proposed to be redeveloped with 27 attached dwellings (FLS2017- 03015, denied May 31, 2017). The proposal complies and exceeds required setbacks adjacent to the dwellings to the east and provides perimeter buffering to the dwelling at 1021 Sunnydale Drive where Code where Code does not require such. A six-foot high, solid, white vinyl fence is proposed along the east property line adjacent to 1028 Sunset Point Road and 1021 Sunnydale Drive, again where Code provisions do not require such. Buildings 2 and 3 have been located a minimum of 152 feet from the east property line to assist with minimizing negative effects on the residential properties to the east on Sunnydale Drive. Building 1 has been located set back 69 feet from the eastern property line to the parking garage and 75 feet to the residential building itself, again to assist with minimizing negative impacts on the dwellings to the east along Sunset Point Road. Development of the subject property as proposed may or may not have an impact on party values of the detached dwellings on Sunnydale Drive, bi,1 "_ is not anticipated to signiicantly impact their property values. Overall, this proposal is not viewed as hindering or discouraging appi,,i,}a,e use ana nevelop hent of adjacent uses and buildings, but may act as a catalyst for redevelopment activities on Sunset Point Road east of the subject property, and its development shilrf not significantly impair the fair market value of adjacent properties, but rather may improve the fair market value of some adjacent properties, especially those fronting on Sunset Point Road. Therefore, it is the applicant's position that the proposal is consistent with this criterion. Community Development Board Training 4.- rt.:-._-__! "1-; Ale -ti '24k441.-..# p e• I -r:1 1 - ' 1 5-4 1 Ab: cosPnplimentain, stirs make Ore: homejfj,4 rte-frr&hstpxdittg the tifircrence Li: ofere %mark -al& drrs-rarz- 17 tits. aimnrzzter of mc ...psigfrth5i-kfie., termt,6 torworkerrrtfr," and scr!:, Example 2: In tents of use, er_ active re-ci: rnirtz (rviive b!:,sting ezetirs) is nutcornraak, e-ttztry schcci. Citizen Comment Card Name: A v'/ atc-e/ Address: a s 'sa/%4'q'. -50‘. 2 - City: /../ 2,4 Zip: 33 7 5' Telephone Number 27-1 -6//'7 ' CC 3 0 Email Address: Z.Zrj..74< y v 4 °4'1 Speaking under citizens to be heard re items not on the agenda? Agenda item(s) to which you wish to speak: 1/ c- `i i y b', y' 9? Z- 2J What is your position on the item? For Against 'f Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: 9349-20 Agenda Date: 12/19/2019 Status: Public HearingVersion: 1 File Type: OrdinanceIn Control: Planning & Development Agenda Number: 8.5 SUBJECT/RECOMMENDATION: Approve amendments to the Community Development Code to adopt the International Property Maintenance Code with Certain Local Amendments in Section 3-1502 in place of Chapter 47, Article VII, Unsafe Buildings and Systems and Chapter 49, Housing Code and expanding the powers of the Building/Flood Board of Adjustment and Appeals to hear violations and appeals related to the International Property Maintenance Code, and pass Ordinance 9349-20 on first reading. (TA2019-10005) SUMMARY: The City enforces unsafe building and housing cases through two different provisions: Article VII, Chapter 47, which adopts the 1985 Standard Unsafe Building Abatement Code with certain amendments, and Chapter 49, which adopts the 1991 Standard Housing Code with certain amendments. These codes were published by an entity known as the Southern Building Code Congress International, Inc. (SBCCI). In 1998 the SBCCI participated in the first ever International Property Maintenance Code (IPMC) which compiled the standard unsafe building code and the standard housing code into one uniform code. Several editions of the IPMC have been published throughout the years, and the 2018 edition is the latest one. The City desires to amend its unsafe building and housing codes in three respects. First, the City’s proposed ordinance adopts the IPMC with several local amendments. Second, the City’s proposed ordinance expands the power of the Building/Flood Board of Adjustment and Appeals (the Flood Board or the Board). Under the new ordinance, the Flood Board now has the power to enter orders requiring repair of unsafe structures and to allow the City to enter onto the property to make the repairs on the owner’s behalf. Finally, the remaining amendments are technical in nature and remove certain references to the Standard Unsafe Building Abatement Code and the Standard Housing Code found in the Code. The Planning and Development Department has determined that the proposed text amendments to the Code are consistent with and furthers the goals, objectives and policies of the Comprehensive Plan and the Code as outlined in the staff report. The Community Development Board also reviewed the proposed amendment at its November 19, 2019 meeting and unanimously recommended approval. APPROPRIATION CODE AND AMOUNT: N/A Page 1 City of Clearwater Printed on 12/19/2019 File Number: 9349-20 USE OF RESERVE FUNDS: N/A Page 2 City of Clearwater Printed on 12/19/2019 1 ORDINANCE NO. 9349-20 AN ORDINANCE OF THE CITY OF CLEARWATER, FLORIDA AMENDING SECTION 3-1502 OF THE CLEARWATER COMMUNITY DEVELOPMENT CODE TO ADOPT THE INTERNATIONAL PROPERTY MAINTENANCE CODE, 2018 EDITION WITH CERTAIN LOCAL AMENDMENTS; AMENDING SECTION 3-2304 OF THE CLEARWATER COMMUNITY DEVELOPMENT CODE TO REMOVE REFERENCE TO THE STANDARD HOUSING CODE AND REPLACE WITH REFERENCE TO THE INTERNATIONAL PROPERTY MAINTENANCE CODE, 2018 EDITION; AMENDING SECTION 3- 2305 OF THE CLEARWATER COMMUNITY DEVELOPMENT CODE TO REMOVE REFERENCE TO THE STANDARD HOUSING CODE AND REPLACE WITH REFERENCE TO THE INTERNATIONAL PROPERTY MAINTENANCE CODE, 2018 EDITION; AMENDING SECTION 47.033 OF THE CLEARWATER COMMUNITY DEVELOPMENT CODE TO EXPAND THE POWERS OF THE BUILDING/FLOOD BOARD OF ADJUSTMENT AND APPEALS; AMENDING SECTION 47.051 OF THE CLEARWATER COMMUNITY DEVELOPMENT CODE TO ADOPT THE FLORIDA BUILDING CODE; REPEALING CHAPTER 47, ARTICLE VII OF THE CLEARWATER COMMUNITY DEVELOPMENT CODE IN ITS ENTIRETY; REPEALING CHAPTER 49 OF THE CLEARWATER COMMUNITY DEVELOPMENT CODE IN ITS ENTIRETY; PROVIDING FOR SEVERABILITY; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Clearwater adopted a new Community Development Code (“the Code”) on January 21, 1999 which took effect on March 8, 1999; and WHEREAS, Chapter 47, Article VII of the Code establishes standards for unsafe building abatement as articulated by the 1985 “Standard Unsafe Building Abatement Code” published by “Southern Building Code Congress International” (“SBCCI”); and WHEREAS, Chapter 49 of the Code also establishes minimum housing standards for the City as articulated by the 1991 “Standard Housing Code” (as amended), also published by SBCCI; and WHEREAS, in 1998, SBCCI, a statutory member of the “International Code Council” (“ICC”), participated in the development of the first edition of the “International Property Maintenance Code” (“IPMC”); and WHEREAS, the IPMC prescribes minimum maintenance standards for both residential and non-residential structures and buildings, as well as unsafe building abatement standards for both residential and non-residential buildings; and 2 WHEREAS, the City of Clearwater has determined that it is in the best interests of the citizens and to adopt parts of the IPMC, with certain local amendments, in order to properly secure the health, safety, and welfare of the public by prescribing minimum property maintenance standards for all buildings and structures within the City’s municipal limits; and WHEREAS, the Building/Flood Board of Adjustment and Appeals (“the Board”) has the power to hear appears from the decisions of the building official related to unsafe buildings, structures, and services systems but the Board does not have the power to issue orders requiring repair or demolition of unsafe buildings and structures; and WHEREAS, pursuant to Chapter 553, Florida Statutes, the City has adopted by reference the Florida Building Code with certain amendments; now therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CLEARWATER, FLORIDA: Section 1. Section 3-1502 of the Clearwater Community Development Code is hereby amended to read as follows: Section 3-1502. – Property maintenance requirements. (A).Minimum building and fire code requirements. All buildings shall be maintained in accordance with the Standard Florida Building Code, the Florida Fire Protection Prevention Code, and the Minimum Standard Housing Code as provided in Chapters 47 and 49 of the City's Code International Property Maintenance Code. (B)-(L). No change. (M).Adoption of the International Property Maintenance Code, 2018 ed. There shall be enforced in the city, by the building official, the “International Property Maintenance Code,” 2018 Edition, a copy of which is kept with the office of the city clerk, which is incorporated into the Code and adopted by reference with the following local amendments: 1.General amendments. The International Property Maintenance Code, 2018 addition is amended in that: a. Wherever the terms “International Building Code,” "International Energy Conservation Code,”“International Existing Building Code,” “International Fire Code,” ‘International Fuel Gas Code,” International Mechanical Code,” “International Plumbing Code,” “International Residential Code,” or “International Zoning Code” are found, the term “Florida Building Code” shall be substituted. 3 b. Whenever the term “code official” is found it shall be replaced with the term “building official.” 2. Section 101.1 “Title” is amended to read as follows: These regulations shall be known as the City of Clearwater Property Maintenance Code, hereinafter referred to as “this code.” 3. Section 102.1 “General” is amended to read as follows: Where there is a conflict between a general requirement and a specific requirement, the specific requirement shall govern. Where differences occur between provisions of this code and the Clearwater Code of Ordinances or the Clearwater Community Development Code and any ordinance of the City which is not specifically set forth therein, the most restrictive shall apply. Where differences occur between provisions of this code and a referenced code other than the Clearwater Code of Ordinances or the Clearwater Community Development Code and any ordinance of the City which is not specifically set forth therein, the provisions of this code shall apply. Where, in a specific case, different sections of this code specify different requirements, the most restrictive shall apply. 4. Section 102.3 “Application of other codes” is amended to read as follows: Repairs, additions, or alterations to a structure or changes of occupancy shall be done in accordance with the provisions of the Florida Building Code, Florida Fuel Gas Code, Florida Mechanical Code, and the National Fire Protection Act 70. Any conflict between this code and Chapter 553, Florida Statutes, as may be amended, the Florida Building Code, and the Florida Fire Prevention Code shall be resolved in favor of Chapter 553, Florida Statutes, the Florida Building Code, or the Florida Fire Prevention Code and nothing herein shall be deemed to be an amendment to those provisions of Florida law. 5. Section 103.1 “General” is amended to read as follows: The provisions of this code shall be administered by the building official or such other person or persons designated by the building official or the community development coordinator. 6. Section 103.2 “Appointment” is deleted in its entirety. 7. Section 103.4 “Liability” is amended so that the term “board of appeals” is replaced with the terms “the municipal code enforcement board” and “the building/flood board of adjustment and appeals.” 8. Section 103.5 “Fees” is deleted in its entirety. 9. Section 104.3 “Right of entry” is deleted in its entirety. 10.Section 106.3 “Prosecution of violation” is amended to read as follows: The building official may, in addition to or in alternative of, any criminal or civil penalties or seeking injunctive relief, bring violations of this code for prosecution before the municipal code enforcement board or the building/flood board of adjustment and appeals. In any 4 case in which either board finds that a violation has occurred, the board may order corrective action to be taken by a date certain, which corrective action may include the repair, improvement, vacation, or demolition of the building or structure. Both boards may also enter an order declaring that the city has the right to enter the property and have such work done on behalf of the owner at the owner's cost, including administrative costs, which shall become a lien against the property as provided in Section 7-103(G) of the Clearwater Community Development Code. 11.Section 107.1 “Notice to person responsible” is amended to read as follows: Whenever the building official determines that there has been a violation of this code or has grounds to believe that a violation has occurred, notice shall be given in the manner prescribed in Sections 107.2 and 107.3 to the property owner for the violation as specified in this code. Notices for condemnation procedures shall comply with Section 108.3. 12.Section 107.2 “Form” is amended to read as follows: Such notice prescribed in Section 107.1 shall be in accordance with Section 7-102(B) of the Clearwater Community Development Code. 13.Section 107.3 “Method of Service” is amended to read as follows: Such notice prescribed in Section 107.3 shall be served upon the alleged violator as provided in Section 162.12, Florida Statutes (2018), and all subsequent amendments. 14.Section 107.6 “Transfer of ownership” is deleted in its entirety. 15.Section 108.2 “Closing of vacant structures” is deleted in its entirety. 16.Section 108.3 “Notice” is amended to read as follows: Whenever the building official has condemned a structure or equipment under the provisions of this section, notice shall be given to the person responsible in a form substantially similar to that found in Section 7-102(B) of the Clearwater Community Development Code and served upon the property owner as provided in Section 162.12, Florida Statutes, and all subsequent amendments. 17.Section 109 “Emergency Measures” is deleted in its entirety except for Section 109.2 “Temporary Safeguards” which is amended to read as follows: Notwithstanding other provisions of this code, whenever in the opinion of the building official there is imminent danger due to an unsafe condition, the building official shall order the necessary work to be done, including the boarding of openings, to render such building or structure temporarily safe whether or not the legal procedure herein described has been instituted and shall cause such other action to be taken as the building official deems necessary to meet such emergency. Any costs associated with this, including administrative costs, which shall become a lien against the property as provided in Section 7-103(G) of the Clearwater Community Development Code. 18.Section 110.3 “Failure to Comply” is amended to read as follows: If the owner of a premises or the owner’s authorized agent fails to comply with a demolition 5 order or an unsafe notice given pursuant to Section 108.3 within the time prescribed, the building official in addition to or in alternative of any criminal or civil penalties or seeking injunctive relief, may request a hearing before the municipal code enforcement board or the building/flood board of adjustment and appeals. In any case in which either board finds that a building or structure is dangerous, unsafe, insanitary, or otherwise unfit for human habitation or occupancy, the board may order corrective action to be taken by a date certain, which corrective action may include the repair, improvement, vacation, or demolition of the building or structure. Both boards may also enter an order declaring that the city has the right to enter the property and have such work done on behalf of the owner at the owner's cost, including administrative costs, which shall become a lien against the property as provided in Section 7-103(G) of the Clearwater Community Development Code. Both boards may also issue fines as provided in Section 7-103(B) of the Clearwater Community Development Board. 19.Section 111 “Means of Appeal” is deleted in its entirety except for Section 111.1 “Application for Appeal” which is amended to read as follows: Any person directly affected by a decision of the building official shall have the right to appeal that decision to the building/flood board of adjustment and appeals as provided in section 47.035 of the Clearwater Community Development Code. 20.Section 112.2 “Issuance” is amended to read as follows: A stop work order shall be in writing and shall be given to the property owner. Upon issuance of a stop work order, the cited work shall immediately cease. The stop work order shall state the reason for the order and the conditions under which the cited work is authorized to resume. 21.Section 112.4 “Failure to comply” is amended to read as follows: any personal who shall continue any work after having been served with a stop work order, except such work as that person is directed to perform to remove a violation or unsafe conditions, shall be prosecuted in any manner authorized by the Clearwater Code of Ordinances or the Clearwater Community Development Code.. 22.Section 302 “Exterior Property Areas” is deleted in its entirety. 23.Section 303.2 “Enclosures” is deleted in its entirety. 24.Section 304.2 “Protective Treatment” is deleted in its entirety. 25.Section 304.3 “Premises identification” is deleted in its entirety. 26.Section 304.14 “Insect screens” is amended to read as follows: Every window in a residential structure that is capable of being opened and every door, window, and other outside opening required for ventilation of habitable rooms, food preparation areas, food service areas, or any areas where products to be included or utilized in food for human consumption are processed, manufactured, packaged, or stored shall be supplied with approved tightly fitting screens of not less than 16 mesh per inch (16 mesh per 25 mm), and every screen door used for insect control shall have a self-closing device 6 in good working condition. Screens shall not, however, be required where other approved means, such as air curtains or insect repellent fans, are employed. 27.Section 304.18.1 “Doors” is amended to read as follows: Doors providing access to a dwelling unit, rooming unit, or housekeeping unit that is rented, leased, or let shall be equipped with a lock designed to be readily openable from the side from which egress is to be made without the need for keys, special knowledge, or effort. Such locks shall be installed according to the manufacturer’s specifications and maintained in good working order. For the purpose of this section, a sliding bolt shall not be considered an acceptable lock. 28.Section 308 “Rubbish and Garbage” is deleted in its entirety. 29.Section 602.2 “Residential Occupancies” is amended to read as follows: Dwellings shall be provided with heating facilities capable of maintaining a room temperature of 68° F (20° C) in all habitable rooms, bathrooms, and toilet rooms. Cooking appliances shall not be used, nor shall portable unvented fuel-burning space heaters be used as a means to provide required heating. If the heating facility is a portable electric space heater, then it must have a tip-over switch with automatic shut-off capability and overheat protection with automatic shut-off capability. 30.Section 602.3 “Heat Supply” is amended to require the supply of heat year- round and Exceptions Number 1 and 2 are hereby deleted in their entirety. 31.Section 602.4 “Occupiable Work Spaces” is amended to require the supply of heat year-round. 32.Section 603 “Mechanical Equipment” is deleted in its entirety. 33.Section 606 “Elevators, escalators and dumbwaiters” is deleted in its entirety. 34.Section 607 “Duct Systems” is deleted in its entirety. 35.Chapter 7 “Fire Safety Requirements” is deleted in its entirety except for Section 702 “Means of Egress” and Section 704.1 “Inspection, testing and maintenance.” Further, Section 704.1.3 “Fire protection systems” is amended to read as follows: The following fire protection systems shall be inspected, maintained, and tested in accordance with the Florida Building Code: 1) carbon monoxide alarms and carbon monoxide detection systems; and 2) single- and multiple-station smoke alarms. 36.Chapter 8 “Referenced Standards” is deleted in its entirety. 37.Appendix A101.1 “General” is amended to read as follows: Windows and doors shall be boarded in an approved manner to prevent entry by unauthorized persons. 7 38.Appendix A102 “Materials,” Appendix A103 “Installation,” and Appendix A104 “Referenced Standard” are deleted in their entirety and replaced with the following specifications: To secure structures: materials to be used are as follows: Wire mesh ½ inch hardware cloth 19 gauge, galvanized to resist rust. Edges must be finished with no sharp projections. Frame 1”x 4” pressure treated wood pre-drilled for screws. Installation: Wire will cover window and or door with mitered corners wood frame on the outside 2” inches of the perimeter of wire and be screwed no more than 12” inches apart in center of run and at each end of wood, frame, and screwed to solid surface of metal, wood, and or concrete walls. Section 2. Section 3-2304 of the Clearwater Community Development Code is hereby amended to read as follows: Section 3-2304. – Residential rental compliance—Notice requirements of minimum applicable standards form acknowledging notice of housing and development standards. Each owner of real property to which this division is applicable shall receive notice of and shall file, with an initial business tax receipt application or, for existing licensees, by October 1 of each business tax receipt year, a notice requirements of minimum applicable standards form with the development and neighborhood services department acknowledging receipt of housing and development standards contained in Section 28.82, the Standard Housing Code the International Property Maintenance Code, 2018 edition, as adopted by Code of Ordinances Sections 49.01 and 49.02 3-1502(m) of the Clearwater Community Development Code, and the Development Standards, Divisions 8, 12, 13, 14, 15, 18, contained in Community Development Code, Article 3. Section 3. Section 3-2305 of the Clearwater Community Development Code is hereby amended to read as follows:Section 3-2305. – Inspections; noncompliance inspection fee. Complaint-driven or inspector-initiated inspections of properties subject to this division shall be conducted by the city to ensure that such properties are in compliance with the provisions of the Standard Housing Code International Property Maintenance Code, 2018 edition, and the city's development standards; provided, however, this provision shall not be interpreted as authorizing the city to conduct inspections of properties without the consent of the owner or occupant or without a warrant. 8 If the inspection of a property reveals violations of three or more of the provisions of Section 28.82, the Standard Housing Code International Property Maintenance Code, 2018 edition, or the city's development standards contained within Division 8, 12, 13, 14, 15, and/or 18, or a combination thereof, this may trigger a code inspector's request with the consent of the owner/occupant or designee, for an inspection of the interior of the property and/or a random sampling of the properties involved which may include multiple units. For inspections involving multiple units at one location and upon consent of owner or designee or issuance of inspection warrant, a random sampling of the properties will be inspected as follows: • One—four units, all units • Five—ten units, 50 percent of units • 11—29 units, 20 percent of units • 30—49 units, 15 percent of units • 50 or greater, if one location, five percent of the units with a maximum of 20 units In the case of 50 or greater units, buildings/developments if the inspector finds one or more, major, life safety or habitability violations in five percent of the units, the inspector may ask to see more units up to a total of 100 percent of the units in the community. The development services director shall assess a noncompliance inspection fee of $50.00 per unit inspected per re-inspection if any violation still exists after allowance of a reasonable time period for compliance. Section 4. Section 47.033 of the Clearwater Community Development Code is hereby amended to read as follows: Powers. The building/flood board of adjustment and appeals shall have the power to hear appeals from decisions and interpretations of the building official and to grant variances from the provisions of the technical codes adopted in this chapter and from the provisions of the flood protection ordinance of the city. The board shall have the power to hear appeals from decisions of the building official relating to unsafe buildings, structures and service systems, but the procedures for such appeals shall be as provided in the Standard Unsafe Building Abatement Code the International Property Maintenance Code, 2018 edition adopted in section 47.051 3-1502(m) of the Clearwater Community Development Code. The board shall also have the power to hear alleged violations of the International Property Maintenance Code, 2018 edition and in any case in which the board finds that a building or structure is dangerous, unsafe, insanitary, or otherwise unfit for human habitation or occupancy, the board may order corrective action to be taken by a date certain, which corrective action may include the repair, improvement, vacation, or 9 demolition of the building or structure. The board may also enter an order declaring that the city has the right to enter the property and have such work done on behalf of the owner at the owner's cost, including administrative costs, which shall become a lien against the property as provided in Section 7-103(G) of the Clearwater Community Development Code. The board shall also have the power to issue fines as provided in Section 7-103(B) of the Clearwater Community Development Board. Section 5. Section 47.051 of the Clearwater Community Development Code is hereby amended to read as follows: (1) There shall be enforced within the city, by the building official, the following standard or national state-wide codes, which are adopted by reference: (a) Standard Codes, published by the Southern Building Code, Congress International, Inc.: 1. Standard Building Code, 1994 edition, including but not limited to chapter 39, the Coastal Construction Code; chapter 40, the County Wide Pool Code; and Appendix C. 2. Standard Plumbing Code, 1994 edition, with Appendixes B, C, G, I, and J.3. Standard Mechanical Code, 1997 edition. Note: All references to the Standard Gas Code in the Standard Building, Plumbing, or Mechanical Code are to be interpreted as reference to NFPA 54 or NFPA 58. (b) National Electrical Code, 1999 edition, published by the National Fire Protection Association. (c) National Fuel Gas Code, NFPA 54, 1992 edition, published by the National Fire Protection Association. (d) Standard for the Storage and Handling of Liquefied Petroleum Gases, NFPA 58, 1992 edition, published by the National Fire Protection Association. (e) Standard Unsafe Building Abatement Code, 1985 edition, published by the Southern Building Code Congress International, Inc. (a) The Florida Building Code, as adopted by the Florida Building Commission, which is composed of: 1. Florida Building Code—Accessibility—6th Edition 2. Florida Building Code—Existing Building—6th Edition 3. Florida Building Code—Fuel Gas—6th Edition 10 4. Florida Building Code—Mechanical—6th Edition5. Florida Building Code—Plumbing—6th Edition 6. Florida Building Code—Energy Conservation—6th Edition 7. Florida Building Code—Test Protocols for High-Velocity Hurricane Zones—6th Edition 8. Florida Building Code—Building—6th Edition Section 6. Chapter 47, Article VII of the Clearwater Community Development Code “Unsafe Buildings and Systems” is hereby repealed in its entirety. Section 7. Chapter 49 of the Clearwater Community Development Code “Housing Code” is hereby repealed in its entirety. Section 8.Should any part or provision of this Ordinance be declared by a court of competent jurisdiction to be invalid, the same shall not affect the validity of the Ordinance as a whole, or any part thereof other than the part declared to be invalid. Section 9.Notice of the proposed enactment of this Ordinance has been properly advertised in a newspaper of general circulation in accordance with applicable law. Section 10. This ordinance shall take effect immediately upon adoption. PASSED ON FIRST READING _____________________ PASSED ON SECOND AND FINAL _____________________READING AND ADOPTED ___________________________ George N. Cretekos Mayor Approved as to form: Attest: ______________________________________________________ Michael P. Fuino Rosemarie Call Assistant City Attorney City Clerk Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: 9343-19 2nd rdg Agenda Date: 12/19/2019 Status: Second ReadingVersion: 1 File Type: OrdinanceIn Control: Legal Department Agenda Number: 9.1 SUBJECT/RECOMMENDATION: Adopt Ordinance 9343-19 on second reading, annexing certain real property whose post office address is 1725 Owen Drive, Clearwater, Florida 33759, into the corporate limits of the city and redefining the boundary lines of the city to include said addition. SUMMARY: APPROPRIATION CODE AND AMOUNT: USE OF RESERVE FUNDS: Page 1 City of Clearwater Printed on 12/19/2019 Ordinance No. 9343-19 ORDINANCE NO. 9343-19 AN ORDINANCE OF THE CITY OF CLEARWATER, FLORIDA, ANNEXING CERTAIN REAL PROPERTY LOCATED ON THE EAST SIDE OF OWEN DRIVE APPROXIMATELY 365 FEET NORTH OF SR 590, WHOSE POST OFFICE ADDRESS IS 1725 OWEN DRIVE, CLEARWATER, FLORIDA 33759, INTO THE CORPORATE LIMITS OF THE CITY, AND REDEFINING THE BOUNDARY LINES OF THE CITY TO INCLUDE SAID ADDITION; PROVIDING AN EFFECTIVE DATE. WHEREAS, the owners of the real property described herein and depicted on the map attached hereto as Exhibit A have petitioned the City of Clearwater to annex the property into the City pursuant to Section 171.044, Florida Statutes, and the City has complied with all applicable requirements of Florida law in connection with this ordinance; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CLEARWATER, FLORIDA: Section 1. The following-described property is hereby annexed into the City of Clearwater and the boundary lines of the City are redefined accordingly: Lot 18, PINELLAS TERRACE, according to the Plat thereof, recorded in Plat Book 49, Page 52, of the Public Records of Pinellas County, Florida (ANX2019-10023) The map attached as Exhibit A is hereby incorporated by reference. Section 2. The provisions of this ordinance are found and determined to be consistent with the City of Clearwater Comprehensive Plan. The City Council hereby accepts the dedication of all easements, parks, rights-of-way and other dedications to the public, which have heretofore been made by plat, deed or user within the annexed property. The City Engineer, the City Clerk and the Community Development Coordinator are directed to include and show the property described herein upon the official maps and records of the City. Section 3. This ordinance shall take effect immediately upon adoption. The City Clerk shall file certified copies of this ordinance, including the map attached hereto, with the Clerk of the Circuit Court and with the County Administrator of Pinellas County, Florida, within 7 days after adoption, and shall file a certified copy with the Florida Department of State within 30 days after adoption. Ordinance No. 9343-19 PASSED ON FIRST READING PASSED ON SECOND AND FINAL READING AND ADOPTED George N. Cretekos Mayor Approved as to form: Michael P. Fuino Assistant City Attorney Attest: Rosemarie Call City Clerk Exhibit A PROPOSED ANNEXATION MAP Owner(s): Caseco Group LLC Case: ANX2019-10023 Site: 1725 Owen Drive Property Size(Acres): ROW (Acres): 0.2 Land Use Zoning PIN: 05-29-16-71424-000-0180 From : Residential Low (RL), Preservation (P) R-3 Single Family Residential Atlas Page: 264A To: Residential Low (RL), Water/Drainage Feature Overlay Low Medium Density Residential (LMDR) 71424 943927 6 12 13 14 15 16 17 18 19 20 21 2223 24 25 26 27 28 29 30 31 32 3340 41 42 43 44 45 46 47 48 49 5051 52 53 54 55 56 57 58 59 60 6168 69 70 71 72 73 74 75 76 77 78 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 1219 20 21 22 23 24 25 26 27 28 29 30 206117(S)60SR 590 OWEN DR EVANS DR AUDREY DR CARDINAL DR 1707 1754 27201725 1730 27001731 1719 1707 1721 1719 1728 1737 1732 1733 1737 1700 1716 1701 1736 1731 1742 1741 1705 1736 1718 1725 1719 1718 1761 1751 1749 1760 1743 1700 1761 1701 1691 1733 1737 1712 1755 1707 1718 1730 1706 1706 1745 1748 1745 1712 1713 1743 1713 1754 1724 1704 1744 1725 1680 1717 1760 1729 1724 1736 1742 1701 1712 1740 1737 131701 1761 1749 1725 1743 1724 1604 1715 -Not to Scale--Not a Survey-Rev. 10/10/2019 LOCATION MAP Owner(s): Caseco Group LLC Case: ANX2019-10023 Site: 1725 Owen Drive Property Size(Acres): ROW (Acres): 0.2 Land Use Zoning PIN: 05-29-16-71424-000-0180 From : Residential Low (RL), Preservation (P) R-3 Single Family Residential Atlas Page: 264A To: Residential Low (RL), Water/Drainage Feature Overlay Low Medium Density Residential (LMDR) US-19 NSR 590 OWEN DR EVANS DR AUDREY DR CARDINAL DR E US-19 FRONTAGE RDCOACHMAN PLAZA DR WEST VIRGINIA LN 1707 1718 1754 1655 1725 1730 1766 27001746 27121731 1572 1772 26151719 1707 1767 1721 1719 1508 1728 1771 1737 26531732 1733 26511750 1762 1737 1717 1619 1778 1700 1716 1766 1573 1701 1749 1754 1736 1742 1741 1701 1600 1705 1736 26441591 1654 1773 1734 27111742 1738 1718 1725 1700 1517 1730 1761 1753 1718 1751 1749 1771 1760 1749 1743 1700 1761 1701 1691 1733 1701 1721 1715 1737 1712 1755 1618 1602 1707 1772 1718 1730 1743 1706 1706 1745 1748 1766 1745 1724 1636 1712 26551637 1713 1510 1758 1743 26671604 1767 1713 1770 1754 1724 1506 1704 1744 1767 1512 1715 26201778 1756 1725 1680 1521 1717 1773 1670 1760 1729 1722 1590 1724 1750 1727 1736 1742 1701 1712 26351673 1726 1740 1737 23045 23025 230## 234## 233## 22995 22991 23331 23197 23459 23399 571731 27131719 1779 1761 1513 1725 1760 1752 262522999 23035 231## 232##23055 ^ PROJECT SITE -Not to Scale--Not a Survey-Rev. 10/9/2019 AERIAL PHOTOGRAPH Owner(s): Caseco Group LLC Case: ANX2019-10023 Site: 1725 Owen Drive Property Size(Acres): ROW (Acres): 0.2 Land Use Zoning PIN: 05-29-16-71424-000-0180 From : Residential Low (RL), Preservation (P) R-3 Single Family Residential Atlas Page: 264A To: Residential Low (RL), Water/Drainage Feature Overlay Low Medium Density Residential (LMDR) SR 590 SR 590 OWEN DR OWEN DR EVANS DR EVANS DR AUDREY DR AUDREY DR CARDINAL DR CARDINAL DR -Not to Scale--Not a Survey-Rev. 10/9/2019 71424 943927 6 12 13 14 15 16 17 18 19 20 21 2223 24 25 26 27 28 29 30 31 32 3340 41 42 43 44 45 46 47 48 49 5051 52 53 54 55 56 57 58 59 60 6168 69 70 71 72 73 74 75 76 77 78 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 1219 20 21 22 23 24 25 26 27 28 29 30 206117(S)60SR 590 OWEN DR EVANS DR AUDREY DR CARDINAL DR 1707 1754 27201725 1730 27001731 1719 1707 1721 1719 1728 1737 1732 1733 1737 1700 1716 1701 1736 1731 1742 1741 1705 1736 1718 1725 1719 1718 1761 1751 1749 1760 1743 1700 1761 1701 1691 1733 1737 1712 1755 1707 1718 1730 1706 1706 1745 1748 1745 1712 1713 1743 1713 1754 1724 1704 1744 1725 1680 1717 1760 1729 1724 1736 1742 1701 1712 1740 1737 131701 1761 1749 1725 1743 1724 1604 1715 -Not to Scale--Not a Survey-Rev. 10/10/2019 EXISTING SURROUNDING USES MAP Owner(s): Caseco Group LLC Case: ANX2019-10023 Site: 1725 Owen Drive Property Size(Acres): ROW (Acres): 0.2 Land Use Zoning PIN: 05-29-16-71424-000-0180 From : Residential Low (RL), Preservation (P) R-3 Single Family Residential Atlas Page: 264A To: Residential Low (RL), Water/Drainage Feature Overlay Low Medium Density Residential (LMDR) Single Family Residential Single Family Residential Single Family Residential Single Family Residential ANX2019-10023 Caseco Group LLC 1725 Owen Drive View looking east at subject property, 1725 Owen Drive. South of the subject property North of the subject property Across the street, to the west of the subject property View looking northerly along Owen Drive View looking southerly along Owen Drive Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: 9344-19 2nd rdg Agenda Date: 12/19/2019 Status: Second ReadingVersion: 1 File Type: OrdinanceIn Control: Legal Department Agenda Number: 9.2 SUBJECT/RECOMMENDATION: Adopt Ordinance 9344-19 on second reading, amending the future land use element of the Comprehensive Plan to designate the land use for certain real property whose post office address is 1725 Owen Drive, Clearwater, Florida 33759, upon annexation into the City of Clearwater, as Residential Low (RL) and Water/Drainage Feature Overlay. SUMMARY: APPROPRIATION CODE AND AMOUNT: USE OF RESERVE FUNDS: Page 1 City of Clearwater Printed on 12/19/2019 Ordinance No. 9344-19 ORDINANCE NO. 9344-19 AN ORDINANCE OF THE CITY OF CLEARWATER, FLORIDA, AMENDING THE FUTURE LAND USE ELEMENT OF THE COMPREHENSIVE PLAN OF THE CITY, TO DESIGNATE THE LAND USE FOR CERTAIN REAL PROPERTY LOCATED ON THE EAST SIDE OF OWEN DRIVE APPROXIMATELY 365 FEET NORTH OF SR 590, WHOSE POST OFFICE ADDRESS IS 1725 OWEN DRIVE, CLEARWATER, FLORIDA 33759, UPON ANNEXATION INTO THE CITY OF CLEARWATER, AS RESIDENTIAL LOW (RL) AND WATER/DRAINAGE FEATURE OVERLAY; PROVIDING AN EFFECTIVE DATE. WHEREAS, the amendment to the Future Land Use Element of the Comprehensive Plan of the City as set forth in this ordinance is found to be reasonable, proper and appropriate, and is consistent with the City's Comprehensive Plan; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CLEARWATER, FLORIDA: Section 1. The Future Land Use Element of the Comprehensive Plan of the City of Clearwater is amended by designating the land use category for the hereinafter described property, upon annexation into the City of Clearwater, as follows: Property Land Use Category Lot 18, PINELLAS TERRACE, according to the Plat thereof, recorded in Plat Book 49, Page 52, of the Public Records of Pinellas County, Florida. Residential Low (RL), Water/Drainage Feature Overlay (ANX2019-10023) The map attached as Exhibit A is hereby incorporated by reference. Section 2. The City Council does hereby certify that this ordinance is consistent with the City’s Comprehensive Plan. Section 3. This ordinance shall take effect immediately upon adoption, contingent upon and subject to the adoption of Ordinance No. 9343-19. Ordinance No. 9344-19 PASSED ON FIRST READING PASSED ON SECOND AND FINAL READING AND ADOPTED George N. Cretekos Mayor Approved as to form: Michael P. Fuino Assistant City Attorney Attest: Rosemarie Call City Clerk Exhibit A 71424 943927 6 12 13 14 15 16 17 18 19 20 21 2223 24 25 26 27 28 29 30 31 32 3340 41 42 43 44 45 46 47 48 49 5051 52 53 54 55 56 57 58 59 60 6168 69 70 71 72 73 74 75 76 77 78 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 1219 20 21 22 23 24 25 26 27 28 29 30 206117(S)60RL RL RLRLRL R/OL SR 590 OWEN DR EVANS DR AUDREY DR CARDINAL DR 1707 1754 27201725 1730 27001719 1707 1721 1719 1728 1737 1732 1733 1737 1700 1701 1736 1742 1741 1705 1736 1718 1725 1719 1718 1761 1751 1749 1760 1743 1700 1761 1701 1691 1737 1712 1755 1707 1718 1706 1706 1745 1748 1745 1712 1713 1743 1713 1754 1724 1704 1744 1725 1680 1760 1729 1724 1736 1742 1701 1740 1737 1731 1716 1731 31701 1761 1749 1733 1725 1730 1743 1724 1604 1715 1717 1712 -Not to Scale--Not a Survey-Rev. 10/11/2019 PROPOSED FUTURE LAND USE MAP Owner(s): Caseco Group LLC Case: ANX2019-10023 Site: 1725 Owen Drive Property Size(Acres): ROW (Acres): 0.2 Land Use Zoning PIN: 05-29-16-71424-000-0180 From : Residential Low (RL), Preservation (P) R-3 Single Family Residential Atlas Page: 264A To: Residential Low (RL), Water/Drainage Feature Overlay Low Medium Density Residential (LMDR) LOCATION MAP Owner(s): Caseco Group LLC Case: ANX2019-10023 Site: 1725 Owen Drive Property Size(Acres): ROW (Acres): 0.2 Land Use Zoning PIN: 05-29-16-71424-000-0180 From : Residential Low (RL), Preservation (P) R-3 Single Family Residential Atlas Page: 264A To: Residential Low (RL), Water/Drainage Feature Overlay Low Medium Density Residential (LMDR) US-19 NSR 590 OWEN DR EVANS DR AUDREY DR CARDINAL DR E US-19 FRONTAGE RDCOACHMAN PLAZA DR WEST VIRGINIA LN 1707 1718 1754 1655 1725 1730 1766 27001746 27121731 1572 1772 26151719 1707 1767 1721 1719 1508 1728 1771 1737 26531732 1733 26511750 1762 1737 1717 1619 1778 1700 1716 1766 1573 1701 1749 1754 1736 1742 1741 1701 1600 1705 1736 26441591 1654 1773 1734 27111742 1738 1718 1725 1700 1517 1730 1761 1753 1718 1751 1749 1771 1760 1749 1743 1700 1761 1701 1691 1733 1701 1721 1715 1737 1712 1755 1618 1602 1707 1772 1718 1730 1743 1706 1706 1745 1748 1766 1745 1724 1636 1712 26551637 1713 1510 1758 1743 26671604 1767 1713 1770 1754 1724 1506 1704 1744 1767 1512 1715 26201778 1756 1725 1680 1521 1717 1773 1670 1760 1729 1722 1590 1724 1750 1727 1736 1742 1701 1712 26351673 1726 1740 1737 23045 23025 230## 234## 233## 22995 22991 23331 23197 23459 23399 571731 27131719 1779 1761 1513 1725 1760 1752 262522999 23035 231## 232##23055 ^ PROJECT SITE -Not to Scale--Not a Survey-Rev. 10/9/2019 AERIAL PHOTOGRAPH Owner(s): Caseco Group LLC Case: ANX2019-10023 Site: 1725 Owen Drive Property Size(Acres): ROW (Acres): 0.2 Land Use Zoning PIN: 05-29-16-71424-000-0180 From : Residential Low (RL), Preservation (P) R-3 Single Family Residential Atlas Page: 264A To: Residential Low (RL), Water/Drainage Feature Overlay Low Medium Density Residential (LMDR) SR 590 SR 590 OWEN DR OWEN DR EVANS DR EVANS DR AUDREY DR AUDREY DR CARDINAL DR CARDINAL DR -Not to Scale--Not a Survey-Rev. 10/9/2019 71424 943927 6 12 13 14 15 16 17 18 19 20 21 2223 24 25 26 27 28 29 30 31 32 3340 41 42 43 44 45 46 47 48 49 5051 52 53 54 55 56 57 58 59 60 6168 69 70 71 72 73 74 75 76 77 78 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 1219 20 21 22 23 24 25 26 27 28 29 30 206117(S)60SR 590 OWEN DR EVANS DR AUDREY DR CARDINAL DR 1707 1754 27201725 1730 27001731 1719 1707 1721 1719 1728 1737 1732 1733 1737 1700 1716 1701 1736 1731 1742 1741 1705 1736 1718 1725 1719 1718 1761 1751 1749 1760 1743 1700 1761 1701 1691 1733 1737 1712 1755 1707 1718 1730 1706 1706 1745 1748 1745 1712 1713 1743 1713 1754 1724 1704 1744 1725 1680 1717 1760 1729 1724 1736 1742 1701 1712 1740 1737 131701 1761 1749 1725 1743 1724 1604 1715 -Not to Scale--Not a Survey-Rev. 10/10/2019 EXISTING SURROUNDING USES MAP Owner(s): Caseco Group LLC Case: ANX2019-10023 Site: 1725 Owen Drive Property Size(Acres): ROW (Acres): 0.2 Land Use Zoning PIN: 05-29-16-71424-000-0180 From : Residential Low (RL), Preservation (P) R-3 Single Family Residential Atlas Page: 264A To: Residential Low (RL), Water/Drainage Feature Overlay Low Medium Density Residential (LMDR) Single Family Residential Single Family Residential Single Family Residential Single Family Residential ANX2019-10023 Caseco Group LLC 1725 Owen Drive View looking east at subject property, 1725 Owen Drive. South of the subject property North of the subject property Across the street, to the west of the subject property View looking northerly along Owen Drive View looking southerly along Owen Drive Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: 9345-19 2nd rdg Agenda Date: 12/19/2019 Status: Second ReadingVersion: 1 File Type: OrdinanceIn Control: Legal Department Agenda Number: 9.3 SUBJECT/RECOMMENDATION: Adopt Ordinance 9345-19 on second reading, amending the Zoning Atlas of the city by zoning certain real property whose post office address 1725 Owen Drive, Clearwater, Florida 33759, upon annexation into the City of Clearwater, as Low Medium Density Residential (LMDR). SUMMARY: APPROPRIATION CODE AND AMOUNT: USE OF RESERVE FUNDS: Page 1 City of Clearwater Printed on 12/19/2019 Ordinance No. 9345-19 ORDINANCE NO. 9345-19 AN ORDINANCE OF THE CITY OF CLEARWATER, FLORIDA, AMENDING THE ZONING ATLAS OF THE CITY BY ZONING CERTAIN REAL PROPERTY LOCATED ON THE EAST SIDE OF OWEN DRIVE APPROXIMATELY 365 FEET NORTH OF SR 590, WHOSE POST OFFICE ADDRESS IS 1725 OWEN DRIVE, CLEARWATER, FLORIDA 33759, UPON ANNEXATION INTO THE CITY OF CLEARWATER, AS LOW MEDIUM DENSITY RESIDENTIAL (LMDR); PROVIDING AN EFFECTIVE DATE. WHEREAS, the assignment of a zoning classification as set forth in this ordinance is found to be reasonable, proper and appropriate, and is consistent with the City's Comprehensive Plan; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CLEARWATER, FLORIDA: Section 1. The following described property located in Pinellas County, Florida, is hereby zoned as indicated upon annexation into the City of Clearwater, and the Zoning Atlas of the City is amended, as follows: The map attached as Exhibit A is hereby incorporated by reference. Section 2. The City Engineer is directed to revise the Zoning Atlas of the City in accordance with the foregoing amendment. Section 3. This ordinance shall take effect immediately upon adoption, contingent upon and subject to the adoption of Ordinance No. 9343-19. Property Zoning District Lot 18, PINELLAS TERRACE, according to the Plat thereof, recorded in Plat Book 49, Page 52, of the Public Records of Pinellas County, Florida . Low Medium Density Residential (LMDR) (ANX2019-10023) Ordinance No. 9345-19 PASSED ON FIRST READING PASSED ON SECOND AND FINAL READING AND ADOPTED George N. Cretekos Mayor Approved as to form: Michael P. Fuino Assistant City Attorney Attest: Rosemarie Call City Clerk Exhibit A PROPOSED ZONING MAP Owner(s): Caseco Group LLC Case: ANX2019-10023 Site: 1725 Owen Drive Property Size(Acres): ROW (Acres): 0.2 Land Use Zoning PIN: 05-29-16-71424-000-0180 From : Residential Low (RL), Preservation (P) R-3 Single Family Residential Atlas Page: 264A To: Residential Low (RL), Water/Drainage Feature Overlay Low Medium Density Residential (LMDR) 71424 943927 6 12 13 14 15 16 17 18 19 20 21 2223 24 25 26 27 28 29 30 31 32 3340 41 42 43 44 45 46 47 48 49 5051 52 53 54 55 56 57 58 59 60 6168 69 70 71 72 73 74 75 76 77 78 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 1219 20 21 22 23 24 25 26 27 28 29 30 206117(S)60LMDR US 19 LMDRLMDR P P P SR 590 OWEN DR EVANS DR AUDREY DR CARDINAL DR 1707 1754 27201725 1730 27001731 1719 1707 1721 1719 1728 1737 1732 1733 1737 1700 1701 1736 1731 1742 1741 1705 1736 1725 1719 1718 1751 1749 1760 1743 1700 1701 1691 1733 1737 1712 1755 1707 1718 1706 1706 1745 1748 1745 1712 1713 1743 1713 1754 1724 1704 1744 1725 1680 1760 1729 1724 1736 1742 1701 1712 1740 1737 1716 31701 1718 1761 1761 1749 1761 1725 1730 1743 1724 1604 1715 1717 -Not to Scale--Not a Survey-Rev. 10/10/2019 LOCATION MAP Owner(s): Caseco Group LLC Case: ANX2019-10023 Site: 1725 Owen Drive Property Size(Acres): ROW (Acres): 0.2 Land Use Zoning PIN: 05-29-16-71424-000-0180 From : Residential Low (RL), Preservation (P) R-3 Single Family Residential Atlas Page: 264A To: Residential Low (RL), Water/Drainage Feature Overlay Low Medium Density Residential (LMDR) US-19 NSR 590 OWEN DR EVANS DR AUDREY DR CARDINAL DR E US-19 FRONTAGE RDCOACHMAN PLAZA DR WEST VIRGINIA LN 1707 1718 1754 1655 1725 1730 1766 27001746 27121731 1572 1772 26151719 1707 1767 1721 1719 1508 1728 1771 1737 26531732 1733 26511750 1762 1737 1717 1619 1778 1700 1716 1766 1573 1701 1749 1754 1736 1742 1741 1701 1600 1705 1736 26441591 1654 1773 1734 27111742 1738 1718 1725 1700 1517 1730 1761 1753 1718 1751 1749 1771 1760 1749 1743 1700 1761 1701 1691 1733 1701 1721 1715 1737 1712 1755 1618 1602 1707 1772 1718 1730 1743 1706 1706 1745 1748 1766 1745 1724 1636 1712 26551637 1713 1510 1758 1743 26671604 1767 1713 1770 1754 1724 1506 1704 1744 1767 1512 1715 26201778 1756 1725 1680 1521 1717 1773 1670 1760 1729 1722 1590 1724 1750 1727 1736 1742 1701 1712 26351673 1726 1740 1737 23045 23025 230## 234## 233## 22995 22991 23331 23197 23459 23399 571731 27131719 1779 1761 1513 1725 1760 1752 262522999 23035 231## 232##23055 ^ PROJECT SITE -Not to Scale--Not a Survey-Rev. 10/9/2019 AERIAL PHOTOGRAPH Owner(s): Caseco Group LLC Case: ANX2019-10023 Site: 1725 Owen Drive Property Size(Acres): ROW (Acres): 0.2 Land Use Zoning PIN: 05-29-16-71424-000-0180 From : Residential Low (RL), Preservation (P) R-3 Single Family Residential Atlas Page: 264A To: Residential Low (RL), Water/Drainage Feature Overlay Low Medium Density Residential (LMDR) SR 590 SR 590 OWEN DR OWEN DR EVANS DR EVANS DR AUDREY DR AUDREY DR CARDINAL DR CARDINAL DR -Not to Scale--Not a Survey-Rev. 10/9/2019 71424 943927 6 12 13 14 15 16 17 18 19 20 21 2223 24 25 26 27 28 29 30 31 32 3340 41 42 43 44 45 46 47 48 49 5051 52 53 54 55 56 57 58 59 60 6168 69 70 71 72 73 74 75 76 77 78 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 1219 20 21 22 23 24 25 26 27 28 29 30 206117(S)60SR 590 OWEN DR EVANS DR AUDREY DR CARDINAL DR 1707 1754 27201725 1730 27001731 1719 1707 1721 1719 1728 1737 1732 1733 1737 1700 1716 1701 1736 1731 1742 1741 1705 1736 1718 1725 1719 1718 1761 1751 1749 1760 1743 1700 1761 1701 1691 1733 1737 1712 1755 1707 1718 1730 1706 1706 1745 1748 1745 1712 1713 1743 1713 1754 1724 1704 1744 1725 1680 1717 1760 1729 1724 1736 1742 1701 1712 1740 1737 131701 1761 1749 1725 1743 1724 1604 1715 -Not to Scale--Not a Survey-Rev. 10/10/2019 EXISTING SURROUNDING USES MAP Owner(s): Caseco Group LLC Case: ANX2019-10023 Site: 1725 Owen Drive Property Size(Acres): ROW (Acres): 0.2 Land Use Zoning PIN: 05-29-16-71424-000-0180 From : Residential Low (RL), Preservation (P) R-3 Single Family Residential Atlas Page: 264A To: Residential Low (RL), Water/Drainage Feature Overlay Low Medium Density Residential (LMDR) Single Family Residential Single Family Residential Single Family Residential Single Family Residential ANX2019-10023 Caseco Group LLC 1725 Owen Drive View looking east at subject property, 1725 Owen Drive. South of the subject property North of the subject property Across the street, to the west of the subject property View looking northerly along Owen Drive View looking southerly along Owen Drive Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: 9351-19 2nd rdg Agenda Date: 12/19/2019 Status: Second ReadingVersion: 1 File Type: OrdinanceIn Control: Legal Department Agenda Number: 9.4 SUBJECT/RECOMMENDATION: Adopt Ordinance 9351-19 on second reading, vacating a 20 foot wide alley described as all of the platted alley abutting Lots 6 and 7 of Block D, as described in the plat titled “McVeigh Subdivision,” as recorded in Plat Book 30 Page 83 of the Public Records of Pinellas County, Florida. SUMMARY: APPROPRIATION CODE AND AMOUNT: USE OF RESERVE FUNDS: Page 1 City of Clearwater Printed on 12/19/2019 S MISSOURI AVE JASMINE WAY MAGNOLIA DR 901 921 1209121412171208AERIAL MAP 20' Prepared by:Engineering DepartmentGeographic Technology Division100 S. Myrtle Ave, Clearwater, FL 33756Ph: (727)562-4750, Fax: (727)526-4755www.MyClearwater.com Proposed Alley Vacation offJasmine Way Page 1 of 1Aerial Flown 2019 Document Path: C:\Users\Kieffer.Nyland\City of Clearwater\Engineering Geographic Technology - Location Maps\Jasmine_Way-Proposed_Alley_Vacation.mxd Date:11/8/2019KNMap Gen By:JBReviewed By: Site Location137.5'296AGrid #:15-29s-15eS-T-R: ² 1"=50'Scale: 20'137.5'100' Lot 7 Mc V e i g h S u b d i v i s i o n Pl a t B o o k 3 0 , P a g e 8 3 Block D Lot 6 Lot 5 Lot 8 Lot 9 Lot 10 Fir s t A d d i t i o n t o Mc V e i g h S u b d i v i s i o n Pl a t B o o k 3 7 , P a g e 5 3 Block D Requested Vacation Jasmine Way (60' Right-of-Way)S Missouri Avenue(Right-of-Way Varies)Ingress and Egress EasementO.R. 5622, Page 14Utility Easement O.R. 5622, Page 11 3' Utility Easement D.B. 1430, Page 155 Retain 6' Utility Easement Vacated 20' Right-of-WayUtility Easement RetainedO.R. 5622, Page 31South 6' of Platted alley 20' platted alley An alley vacation described as follows: All of the platted alley abutting Lots 6 and 7 of Block D, as described in the plat titled "McVeigh Subdivision" as recorded in Plat Book 30, Page 83, of the Public Records of Pinellas County, FL. A utility easement to be retained described as follows: The south 6' of the platted alley abutting Lots 6 and 7 of Block D, as described in the plat titled "McVeigh Subdivision" as recorded in Plat Book 30, Page 83, of the Public Records of Pinellas County, FL. Legal Description CITY OF CLEARWATER ENGINEERING DEPARTMENT DRAWN BY CHECKED BY DATE DRAWN SEC-TWNSP-RNG DWG. NO.SHEET OF20' Platted Alley Vacation and 6' Utility Easement Retention JAB TLM 11/08/2019 Lgl_2019-21 1 1 15 29 S 15 E [RE15-1313-080/243748/1]1 Ord. No. 9351-19 ORDINANCE NO. 9351-19 AN ORDINANCE OF THE CITY OF CLEARWATER, FLORIDA, VACATING A 20 FOOT WIDE ALLEY DESCRIBED AS ALL OF THE PLATTED ALLEY ABUTTING LOTS 6 AND 7 OF BLOCK D, AS DESCRIBED IN THE PLAT TITLED “MCVEIGH SUBDIVISION”, AS RECORDED IN PLAT BOOK 30, PAGE 83 OF THE PUBLIC RECORDS OF PINELLAS COUNTY, FLORIDA;PROVIDING AN EFFECTIVE DATE. WHEREAS, the owners in fee title of certain real property described as Lots 6 and 7, which abut a dedicated alley as depicted in Exhibit “A”(attached hereto and incorporated herein), have requested that the City vacate said alley; and WHEREAS, the City Council of the City of Clearwater, Florida finds that said alley is not necessary for municipal use and it is deemed to be in the best interest of the City and the general public that the same be vacated; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CLEARWATER, FLORIDA: Section 1. The following: The alley described as follows: See Exhibit “A” Is hereby vacated, closed and released, and the City of Clearwater releases all of its right, title and interest thereto, contingent upon, and subject to, the following conditions precedent: 1.City of Clearwater hereby reserves a utility easement under, over, across and through the south 6 feet of the platted alley abutting Lots 6 and 7 of Block D, as described in the plat titled “McVeigh Subdivision” as recorded in Plat Book 30, [RE15-1313-080/243748/1]2 Ord. No. 9351-19 Page 83 of the Public Records of Pinellas County, Florida, for the installation and maintenance of any and all public utilities. Section 2. The City Clerk shall record this ordinance in the Public Records of Pinellas County, Florida, following adoption. Section 3. This ordinance shall take effect immediately upon adoption. PASSED ON FIRST READING ________________________________ PASSED ON SECOND AND FINAL READING AND ADOPTED ________________________________ ________________________________ George N. Cretekos Mayor Approved as to form: Attest: ________________________________________________________________ Laura Lipowski Mahony Rosemarie Call Assistant City Attorney City Clerk Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: 9353-19 2nd rdg Agenda Date: 12/19/2019 Status: Second ReadingVersion: 1 File Type: OrdinanceIn Control: Legal Department Agenda Number: 9.5 SUBJECT/RECOMMENDATION: Adopt Ordinance 9353-19 on second reading, submitting to the city electors proposed amendments to the City Charter amending Section 2.01(d)(5) to increase the size of city owned real property that can be donated or sold for less than fair market value to five acres for the purpose of affordable housing and to allow for the donation of sale for less than market value uneconomic remainders to adjacent property owners. SUMMARY: APPROPRIATION CODE AND AMOUNT: USE OF RESERVE FUNDS: Page 1 City of Clearwater Printed on 12/19/2019 Ordinance No. 9353-19 ORDINANCE NO. 9353-19 AN ORDINANCE OF THE CITY OF CLEARWATER, FLORIDA, SUBMITTING TO THE CITY ELECTORS PROPOSED AMENDMENTS TO THE CITY CHARTER AMENDING SECTION 2.01(d)(5) TO INCREASE THE SIZE OF CITY OWNED REAL PROPERTY THAT MAY BE DONATED OR SOLD FOR LESS THAN FAIR MARKET VALUE TO FIVE ACRES FOR THE PURPOSE OF WORKFORCE HOUSING; TO ALLOW THE DONATION OR SALE FOR LESS THAN FAIR MARKET VALUE OF UNECONOMIC REMAINDERS TO ADJACENT PROPERTY HOLDERS AFTER A PUBLIC HEARING; PROVIDING AN EFFECTIVE DATE. WHEREAS, the 2019 Charter Review Committee appointed by the City Council met 17 times over 8 months and reviewed the City Charter and presented their recommendations to the City Council on November 7, 2019; now therefore BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CLEARWATER, FLORIDA: Section 1. It is hereby proposed that Section 2.01(d)(5)(i) of the City Charter be amended as follows: Section 2.01. Council; composition; powers. * * * * *(d) Limitations.The legislative power provided herein shall have the following limitations: * * * * * (5) Real property. (i) Prior to the sale, donation, lease for a term longer than five years, or other transfer of any municipal real property, the real property must be declared surplus and no longer needed for municipal public use by the council at an advertised public hearing. Except in the case of right-of-way dedications, the granting of easements, transactions with governmental entities as described herein, conveyance for Workforce or Affordable Housing, or conveyance of an uneconomic remainder of land, no real property may be given away or donated without prior approval at referendum. Following a public hearing, the City Council may approve the donation or sale for less than fair market value of city-owned property of not more than five acres in size for workforce housing. Workforce Housing means housing affordable to persons or families whose total annual [MU18-9100-055/245314/1]2 Ordinance No. 9353-19 income does not exceed 120 percent of the Area Median Income (AMI), adjusted for household size, as published by the U.S. Department of Housing and Urban Development (HUD) for Pinellas County or metropolitan area. Following a public hearing, the City Council may approve the donation or sale for less than fair market value of city-owned property that has been determined by Council to be an uneconomic remainder of land to the owner of real property adjacent to said uneconomic remainder. For the purposes of this provision, an uneconomic remainder of land means real property owned by the City of Clearwater with characteristics such as size, shape, limited access or other limiting characteristics that prevent meaningful development of the property. Section 2. A referendum election is hereby called and will be held on March 17, 2020, at the regular city election for the consideration of the voters of the City of Clearwater of the proposed charter amendments. The questions to appear on the referendum ballot reflecting the proposed amendment to the charter at the regular municipal election scheduled for March 17, 2020, shall be as follows: DONATION OR SALE FOR LESS THAN MARKET VALUE OF PROPERTY FOR WORKFORCE HOUSING Shall Section 2.01(d)(5)(i) of the City Charter relating to limitations on the conveyance of real property be amended as provided in Ordinance No. 9353-19 to allow the city to donate or sell for less than market value real property which does not exceed five acres for workforce or affordable housing which means housing affordable to people and families whose total annual income does not exceed 120% of the Area Median Income? YES _____ For Amendment to City CharterNO _____Against Amendment to City Charter DONATION OR SALE OF UNECONOMIC REMAINDER TO ADJACENT PROPERTY OWNER Shall Section 2.01(d)(5)(i) of the City Charter relating to limitations on the conveyance of real property be amended as provided in Ordinance No. 9353-19 to allow the city to donate or sell for less than market value real property which has been determined to be an uneconomic remainder to an adjacent property owner, after a public hearing has been held?YES _____ For Amendment to City Charter NO _____Against Amendment to City Charter [MU18-9100-055/245314/1]3 Ordinance No. 9353-19 Section 3.The City Clerk is directed to notify the Pinellas County Supervisor of Elections that the referendum items provided above shall be considered at the election to be held on March 17, 2020. Section 4. This ordinance shall take effect immediately upon adoption. The amendments to the City Charter provided for herein shall take effect only upon approval of a majority of the City electors voting at the referendum election on these issues and upon the filing of the Amended Charter with the Secretary of State. PASSED ON FIRST READING _____________________ PASSED ON SECOND AND FINAL _____________________ READING AND ADOPTED ______________________________ George N. Cretekos, Mayor Approved as to form: Attest: ________________________________________________________ Pamela K. Akin, City Attorney Rosemarie Call, City Clerk Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: 9354-19 Agenda Date: 12/19/2019 Status: Second ReadingVersion: 1 File Type: OrdinanceIn Control: Legal Department Agenda Number: 9.6 SUBJECT/RECOMMENDATION: Adopt Ordinance 9354-19 on second reading, submitting to the city electors amendments to the City Charter making non-substantive organizational amendments; deleting Section 2.01(d) (8) because it has expired; amending Section 2.06(c) to be consistent with state law; amending section 3.03(f) to require the City Manager to submit to the council a report on the state of the city every November. SUMMARY: APPROPRIATION CODE AND AMOUNT: USE OF RESERVE FUNDS: Page 1 City of Clearwater Printed on 12/19/2019 Ordinance No. 9354-19 ORDINANCE NO. 9354-19 AN ORDINANCE OF THE CITY OF CLEARWATER, FLORIDA, SUBMITTING TO THE CITY ELECTORS PROPOSED AMENDMENTS TO THE CITY CHARTER MAKING NON-SUBSTANTIVE ORGANIZATIONAL AMENDMENTS TO THE CITY CHARTER; DELETING SECTION 2.01(d)(8) BECAUSE IT HAS EXPIRED; AMENDING SECTION 2.06(C) TO BE CONSISTENT WITH STATE LAW; AMENDING SECTION 3.03(F) TO REQUIRE THE CITY MANAGER TO SUBMIT TO THE COUNCIL A REPORT ON THE STATE OF THE CITY EVERY NOVEMBER; PROVIDING AN EFFECTIVE DATE. WHEREAS, the 2019 Charter Review Committee appointed by the City Council met ___ times over ____months and reviewed the City Charter and presented their recommendations to the City Council on November 7, 2019; and WHEREAS, Section 2.01(d)(8) of the City Charter, authorizing the lease of certain City property to the Clearwater Marine Aquarium has expired and is of no further force and effect; and WHEREAS, Florida State Statutes provides that elected officials shall not hold compensated office or employment for two years after the term for which they were elected; and WHEREAS, the City Manager currently reports on the financial condition and administrative activities of the cityin September, however, the city’s fiscal year ends on September 30. Therefore, giving the report in November would allow for a report on the entire previous fiscal year; now therefore BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CLEARWATER, FLORIDA: Section 1. It is hereby proposed that Section 2.01(d)(8) of the City Charter be deleted in its entirety as such has expired and has no further force and effect: Section 2.01. Council; composition; powers. * * * * * (d) Limitations.The legislative power provided herein shall have the following limitations: [MU18-9100-055/245315/1]2 Ordinance No. 9354-19 * * * * *(8) Section 2. It is hereby proposed that Section 2.06(c) be amended as follows: Section 2.06. - Prohibitions. * * * * * (c) Holding other office.No present or former council member shall hold any compensated appointive city office or employment until two years after the expiration of the term for which such council member was elected. Section 3.It is hereby proposed that Section 3.03(f) of the City Charter be amended as follows: Section 3.03. - Powers and duties of the city manager. The city manager shall: * * * * * (f) Submit to the council at the first regular meeting in November of each year and make available to the public a comprehensive report on the financial condition and administrative activities of the city. Section 4.A referendum election is hereby called and will be held on March 17, 2020, at the regular city election for the consideration of the voters of the City of Clearwater of the proposed charter amendments shall be as follows: REPEALING SECTION 2.01(D)(8) RELATING TO LEASING CITY PROPERTY TO CLEARWATER MARINE AQUARIUM Shall the City Charter be amended by repealing Section 2.01(d)(8) relating to leasing certain city property to the Clearwater Marine Aquarium, which provision has expired? YES ________ For Amendment to City CharterNO ________ Against Amendment to City Charter AMENDMENT TO CONFORM WITH STATE LAW Shall the City Charter Section 2.06(c) be amended to prohibit present or former councilmembers from holding any compensated appointive city [MU18-9100-055/245315/1]3 Ordinance No. 9354-19 office or employment until two years after the expiration of their elected term to conform with state law? YES _____ For Amendment to City Charter NO _____Against Amendment to City Charter ADMINISTRATIVE AMENDMENT Shall the City Charter Section 3.03(f) be amended to change the City Manager’s report from September to November? YES _____ For Amendment to City Charter NO _____Against Amendment to City Charter Section 5.The City Clerk is directed to notify the Pinellas County Supervisor of Elections that the referendum items provided above shall be considered at the election to be held on March 17, 2020. Section 6. This ordinance shall take effect immediately upon adoption. The amendments to the City Charter provided for herein shall take effect only upon approval of a majority of the City electors voting at the referendum election on these issues and upon the filing of the Amended Charter with the Secretary of State. PASSED ON FIRST READING _____________________ PASSED ON SECOND AND FINAL _____________________ READING AND ADOPTED ______________________________ George N. Cretekos, Mayor Approved as to form: Attest: ________________________________________________________ Pamela K. Akin, City Attorney Rosemarie Call, City Clerk Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: 9355-19 Agenda Date: 12/19/2019 Status: Second ReadingVersion: 1 File Type: OrdinanceIn Control: Legal Department Agenda Number: 9.7 SUBJECT/RECOMMENDATION: Adopt Ordinance 9355-19 on second reading, submitting to the city electors amendments to the City Charter, amending Section 7.02 to require the City Council to appoint a Charter Review Committee at least every eight years. SUMMARY: APPROPRIATION CODE AND AMOUNT: USE OF RESERVE FUNDS: Page 1 City of Clearwater Printed on 12/19/2019 Ordinance No. 9355-19 ORDINANCE NO. 9355-19 AN ORDINANCE OF THE CITY OF CLEARWATER, FLORIDA, SUBMITTING TO THE CITY ELECTORS PROPOSED AMENDMENTS TO THE CITY CHARTER AMENDING SECTION 7.02, GENERAL PROVISIONS; TO REQUIRE THE COUNCIL TO APPOINT A CHARTER REVIEW ADVISORY COMMITTEE AT LEAST EVERY EIGHT YEARS; PROVIDING AN EFFECTIVE DATE. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CLEARWATER, FLORIDA: Section 1. It is hereby proposed that Section 7.02 of the City Charter be amended as follows: Section 7.02. Charter review advisory committee. Commencing in January 2029, and at least every eight years thereafter, provided the appointments are made in January of a year preceding a city election, the Council shall appoint a Charter Review Advisory Committee. The charter review advisory committee shall be composed of not less than ten members. It shall review the existing charter and make recommendations to the council for revisions thereto. Section 2. A referendum election is hereby called and will be held on March 17, 2020, at the general city election for the consideration of the voters of the City of Clearwater for the proposed charter amendments. The question to appear on the referendum ballot reflecting the proposed amendment to the charter at the regular municipal election scheduled for March 17, 2020, shall be as follows: APPOINTMENT OF CHARTER REVIEW ADVISORY COMMITTEE Shall Section 7.02 of the City Charter be amended as provided in Ordinance No. 9355-19 to require the appointment of a Charter Review Advisory Committee at least every eight years instead of every five years? YES ________For Amendment to City Charter NO ________Against Amendment to City Charter PASSED ON FIRST READING _____________________ PASSED ON SECOND AND FINAL _____________________ [MU18-9100-055/245336/1]2 Ordinance No. 9355-19 READING AND ADOPTED ______________________________ George N. Cretekos, Mayor Approved as to form: Attest: ________________________________________________________ Pamela K. Akin, City Attorney Rosemarie Call, City Clerk Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: 9356-20 Agenda Date: 12/19/2019 Status: City Manager ReportVersion: 1 File Type: OrdinanceIn Control: City Manager's Office Agenda Number: 10.1 SUBJECT/RECOMMENDATION: Amend the Clearwater Code of Ordinances, Chapter 25 - Public Transportation Carriers, Article I - Public Conveyances to define commercial megacycles and definitions to establish standards for commercial megacycles, to require a license for commercial mega cycles to be operated in the city and to add penalties and pass Ordinance 9356-20 on first reading. SUMMARY: In August of 2019, staff was tasked with examining the feasibility of permitting the operation of megacycles in the City of Clearwater. After conducting research on a local and state level, staff developed a pilot program to determine the viability of the program. It has been determined that an amendment to the Clearwater Code of Ordinances, Chapter 25 - Public Transportation Carriers, Article I - Public Conveyances would be needed to administer the pilot program. APPROPRIATION CODE AND AMOUNT: N/A USE OF RESERVE FUNDS: N/A Page 1 City of Clearwater Printed on 12/19/2019 Ordinance No. 9356-20 ORDINANCE NO. 9356-20 AN ORDINANCE OF THE CITY OF CLEARWATER, FLORIDA, RELATING TO THE REGULATION OF COMMERCIAL MEGACYCLES; AMENDING CODE OF ORDINANCES CHAPTER 25 – PUBLIC TRANSPORTATION CARRIERS, ARTICLE I. – PUBLIC CONVEYANCES; ADDING DEFINITION OF COMMERCIAL MEGACYCLE TO SECTION 25.01, AND AMENDING DEFINITION OF RECREATIONAL VEHICLE TO ADD COMMERCIAL MEGACYCLE; AMENDING SECTION 25.02 TO ADD REGULATIONS FOR OPERATION OF COMMERICAL MEGACYCLES; AMENDING SEC. 25.04 TO PROVIDE FOR COMMERCIAL MEGACYCLE INSURANCE REQUIREMENT; AMENDING SEC. 25.21 TO ADD COMMERCIAL MEGACYCLE PROVIDER LICENSE REQUIREMENT AND ALLOW FOR PILOT PROGRAM; PROVIDING AN EFFECTIVE DATE. WHEREAS, City Council adopted the 2018 Clearwater Downtown Redevelopment Plan that supports bicycle-friendly amenities and encourages the use of the Pinellas Trail; and WHEREAS, the City values and promotes tourism and activities that allow tourists to explore Clearwater; and WHEREAS, commercial megacycles are a healthy and environmentally sustainable form of travel that provide a fun way to enjoy Clearwater; NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CLEARWATER, FLORIDA; Section 1: Sec. 25.01, Clearwater Code of Ordinances is hereby amended to read as follows: Sec. 25.01. – Definitions. The following words, terms and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning: Bicycle means a vehicle propelled solely by human power, and a motorized bicycle propelled by a combination of human power and an electric helper motor capable of propelling the vehicle at a speed of not more than 20 miles per hour on level ground upon which any person may ride, having two tandem wheels, and including any device generally recognized as a bicycle though equipped with two front or two rear wheels. The term does not include a scooter or similar device that does not have a seat or saddle for the use of the rider. Certificate to engage in business means a certificate issued by the director of planning and development to engage in the business of operating one or more public conveyances in the City of Clearwater. Commercial megacycle means a vehicle that has fully operational pedals for propulsion entirely by human power and: (1) has four wheels and is operated in a manner similar to a bicycle; (2) has at least 5 but no more than 15 seats for passengers; Ordinance No. 9356-20 and (3) is primarily powered by pedaling but may have an auxiliary motor capable of propelling the vehicle at no more than 15 miles per hour. Driver means every individual operating a pedicab or low-speed for hire vehicle, either as owner, agent, employee or otherwise, pursuant to the pedicab or low-speed for hire vehicle driver's permit issued as herein provided. Electric personal assistive mobility device means any self-balancing, two-nontandemwheeled device, designed to transport only one person, with an electric propulsion system with average power of 750 watts (one horsepower), the maximum speed of which, on a paved level surface when powered solely by such a propulsion system while being ridden by an operator who weighs 170 pounds, is less than 20 miles per hour. Low-speed for hire vehicle means a vehicle as defined in F.S. § 320.01(42), that is, any four-wheeled electric vehicle whose top speed is greater than 20 miles per hour but not greater than 25 miles per hour, including neighborhood electric vehicles, that complies with the safety standards in 49 C.F.R. s. 571,500 and F.S. § 316.2122 and that is used for transporting passengers for hire, fee, or compensation of any kind, including compensation derived from tips or advertising, upon or along the streets within the City of Clearwater. Micromobility device means any motorized transportation device made available for private use by reservation through an online application, website, or software for point-to-point trips and which is not capable of traveling at a speed greater than 20 miles per hour on level ground. This term includes motorized scooters and bicycles as defined in this article. Moped means any vehicle with pedals to permit propulsion by human power, having a seat or saddle for the use of the rider and designed to travel on not more than three wheels; with a motor rated not in excess of two brake horsepower and not capable of propelling the vehicle at a speed greater than 30 miles per hour on level ground; with a power-drive system that functions directly or automatically without clutching or shifting gears by the operator after the drive system is engaged; or, if an internal combustion engine is used, with a displacement not exceeding 50 cubic centimeters. Motorcycle means any motor vehicle having a seat or saddle for the use of the rider and designed to travel on not more than three wheels in contact with the ground, but excluding a tractor or a moped. Motorized scooter means any vehicle or micromobility device that is powered by a motor with or without a seat or saddle for the use of the rider, which is designed to travel on not more than three wheels, and which is not capable of propelling the vehicle at a speed greater than 20 miles per hour on level ground. Pedicab means any vehicle that is propelled solely by human power and that is used for transporting passengers for hire, fee, or compensation of any kind, including compensation derived from tips or advertising, upon or along the streets or sidewalks within the City of Clearwater. Pedicab or low-speed for hire vehicle driver's permit means a permit issued by the director of planning and development authorizing the holder thereof to drive a pedicab or low-speed for hire vehicle. Permitting means had knowledge or reason to know that the activity was occurring, failed to intervene in an attempt to prevent the activity from occurring, and had the power or authority to prevent the activity from occurring. Ordinance No. 9356-20 Public conveyance means a pedicab, low-speed for hire vehicle, or recreational vehicle. Public conveyance company means any business entity of whatever nature or composition that is issued a certificate by the director of planning and development to engage in the business of operating one or more public conveyances, and may be a corporation, partnership, joint venture, natural person, or other individual, association or combined persons or entities. Qualified means one who, by possession of recognized degree, certificate, or professional standing, or who by extensive knowledge, training, and experience, has successfully demonstrated his/her ability to solve or resolve problems relating to the subject matter, the work, or the project. Recreational vehicle means any vehicle that is rented typically for less than one day and that the renter intends to drive for the renter's personal, recreational use, such as a motorcycle containing an internal combustion engine with a displacement of 50 cubic centimeters or less, an electric personal assistive mobility device, a bicycle, a commercial megacycle, a micromobility device, motorized scooter, or a moped, but excluding a motor home, a camper, a motor vehicle leased from an entity that is engaged in the business of renting motor vehicles typically for more than one day, or an "off highway vehicle" as defined in F.S. § 261.03(6). Shared mobility device provider means any person, entity, or public conveyance company which makes available to the public any number of micromobility devices or motorized scooters for use in the City. Sidewalk means that portion of a street between the curbline, or the lateral line, of a roadway and the adjacent property lines, intended for use by pedestrians. Street means all public streets, avenues, alleys, lanes, highways, and other publicly owned places laid out for the use of motor vehicles, including publicly owned parking lots. Surrey bicycle means a bicycle containing three or more wheels that is designed to carry two or more persons and that has two or more pedaling positions. Vehicle means every device, in, upon, or by which any person is or may be transported or drawn upon a street. Section 2: Sec. 25.02, Clearwater Code of Ordinances is hereby amended to read as follows: Sec. 25.02. - Standards for pedicabs, low-speed for hire vehicles, surrey bicycles, micromobility devices, and commercial megacycles; equipment and restrictions. (1) All pedicabs shall be deemed bicycles as that term is used in Florida Statutes. As such, all pedicabs shall comply with any and all regulations of the state applicable to bicycles. See, for example, F.S. § 316.2065. All pedicabs required to be regulated under this article shall be equipped with a battery operated headlight capable of projecting a beam of white light for a distance of 500 feet and a pair of battery operated taillights each exhibiting a red light visible from a distance of 600 feet to the rear. All pedicabs shall also be equipped with at least one front white reflector and at least one red rear reflector and at least one amber side reflector one each side of said pedicab. All pedicabs required to be regulated under this article shall be kept clean and sanitary throughout and shall be kept and Ordinance No. 9356-20 maintained in sound operating condition. All safety devices and all other equipment shall be kept in such condition as to ensure safe operation. Any fares that are charged to the public shall be conspicuously posted in or on the pedicab. If a gratuity is accepted, "Gratuity appreciated" shall be conspicuously posted in or on the pedicab. (2) All low-speed for hire vehicles shall comply with any and all regulations of the state applicable to low-speed vehicles. See, for example, F.S. § 316.2122. All low-speed for hire vehicles required to be regulated under this article shall be equipped with headlamps, stop lamps, turn signal lamps, taillamps, reflex reflectors, parking brakes, rearview mirrors, windshields, seat belts, and vehicle identification numbers. All low-speed for hire vehicles required to be regulated under this article shall be kept clean and sanitary throughout and shall be kept and maintained in sound operating condition. All safety devices and all other equipment shall be kept in such condition as to ensure safe operation. Any fares that are charged to the public shall be conspicuously posted in or on the low-speed vehicle. If a gratuity is accepted, "Gratuity appreciated" shall be conspicuously posted in or on the low-speed vehicle. (3) All surrey bicycles operated pursuant to this article shall be equipped with a single, low-gear ratio to prevent excessive speeds. Surrey bicycles operated pursuant to this article that have multiple gears capable of changing gear ratios are prohibited. Surrey bicycles operated pursuant to this article shall not be driven by anyone under the age of 16 unless accompanied by a responsible adult and shall not be operated in the "roundabout" on Clearwater Beach. It is unlawful for any person to operate, or cause to be operated, a surrey bicycle that is not equipped with a braking system that is capable of skidding each rear wheel in contact with the ground on dry, level, clean pavement by the operator from his normal position of operation. (4) All micromobility devices are subject to the rules and regulations governing bicycles in the city code. In addition to the city code, micromobility devices are subject to any and all state laws pertaining to micromobility devices, as applicable, and as may be amended. No person under the age of 16 years old shall operate a micromobility device within the city of Clearwater. It is unlawful for the parent, legal guardian or custodian of a minor child to knowingly permit the child to violate any provision of this article. Ridership of more than one person on any micromobility device shall be prohibited, unless the micromobility device is specifically designed to carry more than one person. Micromobility devices may not be ridden on sidewalks. Micromobility devices may be allowed on the Pinellas Trail if specifically allowed by Pinellas County. Micromobility devices shall not be parked in a manner that obstructs any ingress or egress from any building or parking area. (5) All commercial megacycles shall be operated at all times by its owner or lessee or an employee of the owner or lessee. The operator shall be at least 18 years of age and possess a Class E driver license. While the commercial megacycle is in motion, it shall be occupied by a safety monitor at least 18 years of age, who shall supervise the passengers. No alcoholic beverages are allowed on the commercial megacycle, and Section 6.31 of this code shall apply to the passengers being transported. All passenger seats on the commercial megacycle must have seat backs and seat belts. All passengers under 16 years of age are required to wear helmets, and commercial megacycle operators must offer helmets for all passengers, regardless of age, at no cost. Ordinance No. 9356-20 Section 3: Sec. 25.04, Clearwater Code of Ordinances is hereby amended to read as follows: Sec. 25.04. - Liability insurance coverage required. (1) No certificate to engage in business shall be issued or renewed by the director of planning and development pursuant to this article unless there is in force a Commercial General Liability Insurance policy with the following minimum types and amounts: $500,000.00 per occurrence ($1,000,000.00 for commercial megacycles), combined single limit, for bodily injury, personal injury, and property damage. Such liability insurance policy shall specifically include the city as an additional insured and require each policy to be endorsed to state that coverage shall not be canceled by the applicant or carrier except after 30 days written notice sent via certified mail, return receipt requested, to the city. It is the applicant's responsibility to ensure notice to the city in accordance with the above requirement is met. (2) The applicant will provide the director of planning and development with a certificate or certificates of insurance showing the existence of coverage as required and will, upon written request by the city, provide the director of planning and development with certified copies of all policies of insurance. New insurance certificates and, when requested in writing, certified copies of policies shall be provided to the director of planning and development whenever any policy is renewed, revised, or obtained from other insurance carriers. Section 4: Secs. 25.21—25.214, Clearwater Code of Ordinances is hereby amended to read as follows: Sec. 25.21. – Commercial Megacycle License Required. No commercial megacycle provider shall display, offer, or make available for rent any commercial megacycle within the City, unless the provider holds a commercial megacycle license from the City through participation in a pilot program, a valid, fully executed operating agreement with the City, or approval from the City through an established process. No license shall be granted to allow commercial megacycle provider operations on the Pier 60 roundabout, Sand Key, Island Estates, or any other area restricted pursuant to Section 25.18 of this Code. During the pilot program, commercial megacycles are permitted to operate only in the following areas: (1) East Avenue on the northbound roadway not trail section from Pierce Street to Cleveland Street; (2) Cleveland Street from MLK Avenue to Osceola Avenue; (3) North on Osceola Avenue from Cleveland Street to Drew Street Extension; (4) West on Drew Street Extension around Coachman Commons to Cleveland Street; (5) South on Osceola Avenue to Pierce Street; (6) East on Pierce Street to East Avenue completing one circuit; and (7) Clearwater Beach north and south of the Pier 60 roundabout on streets as shown on Diagram 1. *Insert Diagram 1, attached* Sec. 25.214. - Reserved. Section 5: This ordinance shall take effect immediately upon adoption. Ordinance No. 9356-20 PASSED ON FIRST READING _____________________ PASSED ON SECOND AND FINAL _____________________ READING AND ADOPTED ___________________________ George N. Cretekos Mayor Approved as to form: Attest: __________________________ ____________________________ Matthew Smith Rosemarie Call Assistant City Attorney City Clerk SGULFVIEWBLVDROCKAWAY ST I SLAND WAY MANDALAY AVE MEMORIAL CSWY S GULFVIEW BLVD BAYSIDE DR LEEWARD I S CORONADO DR BAYWAY BLVD HAMDEN DR SNUG I S WINDWARD PSGE P A L M IS S E P A L M IS N E DEVON DR BRIGHTWATERDR LARBOARD WAY HARBOR I S POINSETTIA AVE GULF BLVD ACACIA ST SOMERSET ST H A R B O R P S G E BAYMONT ST BAY ESPLANADE EAST SHORE DR CAMBRIA ST IDLEWILD ST POINSETTIA AVE DIAGRAM 1 GULF ofMEXICO CLEARWATER HARBOR PIER 60 ² N.T.S.Scale: Legend AllowableMegacycle Route CLEARWATER PASS Citizen Comment Card Name: —A13 Address: S-Ovi< N I City. ( 1 r Zip• 3-3-1 Telephone Number: f (oC37 Email Address: 4/y?S () 4( Speaking under citizens to be heard re items not on the agenda? Agenda item(s) to which you wish to speak: %14 Nt What is your position on the item? For )l Against Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: 19-37 Agenda Date: 12/19/2019 Status: City Manager ReportVersion: 1 File Type: Action ItemIn Control: Finance Agenda Number: 10.2 SUBJECT/RECOMMENDATION: Authorize the negotiated sale of not to exceed $25,000,000 Water and Sewer Revenue Refunding Bonds, Series 2020 and adopt Resolution 19-37. SUMMARY: Currently there is outstanding $25,310,000 par value of Water & Sewer Revenue Bonds, Series 2014, with maturities in years 2020 - 2032 with an interest rate of 3.18% that are callable on December 9, 2019. Current bond-market conditions present an opportunity to refund these bonds to achieve a present value savings exceeding the level designated in the City’s debt management policy. The City’s debt management policy states, “As a general rule, the present value savings of a particular refunding should exceed 5%.” This resolution authorizes the negotiated sale of not to exceed $25,000,000 par value of Water and Sewer Revenue Refunding Bonds, Series 2020 and authorizes awarding the sale to Raymond James & Associates, Inc., a member of the underwriting team approved by Council in June 2017 per Resolution 17-20. Only the amount of bonds needed to optimize the refunding of all of the outstanding balance of the Water & Sewer Revenue Refunding Bonds, Series 2014, and associated issuance costs, will be issued. Page 1 City of Clearwater Printed on 12/19/2019 1 Resolution No. 19-37 RESOLUTION NO. 19-37 A RESOLUTION AUTHORIZING THE NEGOTIATED SALE OF NOT TO EXCEED $25,000,000 CITY OF CLEARWATER, FLORIDA, WATER AND SEWER REVENUE REFUNDING BONDS, SERIES 2020; AWARDING THE SALE THEREOF TO RAYMOND JAMES & ASSOCIATES, INC., SUBJECT TO THE TERMS AND CONDITIONS OF A PURCHASE CONTRACT; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF A PURCHASE CONTRACT; PROVIDING FOR THE ISSUANCE OF THE SERIES 2020 BONDS IN BOOK-ENTRY-ONLY FORM; AUTHORIZING THE DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND AN OFFICIAL STATEMENT IN CONNECTION WITH THE DELIVERY OF THE BONDS; PROVIDING FOR COMPLIANCE WITH A CONTINUING DISCLOSURE AGREEMENT; APPOINTING A PAYING AGENT AND REGISTRAR; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF A PAYING AGENT AND REGISTRAR AGREEMENT; PROVIDING CERTAIN OTHER MATTERS IN CONNECTION WITH THE ISSUANCE AND DELIVERY OF SUCH BONDS; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, on August 2, 1984, the City Council of the City of Clearwater, Florida (the "City") enacted Ordinance No. 3674-84 (the "1984 Ordinance") to provide for the issuance of bonds payable from Net Revenues of the System (as defined therein); and WHEREAS, on November 15, 2001, the City enacted Ordinance No. 6915-01 (the "2001 Ordinance" and, together with the 1984 Ordinance, the "Original Ordinance") which authorized the issuance of the City of Clearwater, Florida Water and Sewer Revenue [Refunding] Bonds, Series [to be determined], as Additional Bonds thereunder, which Original Ordinance was further amended by Ordinance No. 8620-14 enacted on December 4, 2014, and upon issuance of the City of its Water and Sewer Revenue Refunding Bonds, Series 2017B, became effective as of its date of enactment (collectively with the Original Ordinance, the “Bond Ordinance”); and WHEREAS, the City by this Resolution intends to provide for the issuance of its not to exceed $25,000,000 City of Clearwater, Florida Water and Sewer Revenue Refunding Bonds, Series 2020 (the "Series 2020 Bonds") as Additional Bonds to refund all of the City's outstanding Water and Sewer Revenue Refunding Bond, Series 2014 (the "Refunded Bond"); and WHEREAS, other than the Refunded Bond, the City has currently outstanding under the Bond Ordinance, its Water and Sewer Revenue Refunding Bonds, Series 2011, Water and Sewer Revenue Refunding Bonds, Series 2017, and Water and Sewer Revenue Refunding Bond, Series 2017B (collectively, the "Parity Bonds"); and WHEREAS, it is in the best interest of the City to provide for the negotiated sale of not to exceed $25,000,000 of Series 2020 Bonds; and WHEREAS, the City intends to negotiate a sale of the Series 2020 Bonds with Raymond James & Associates, Inc., (the "Underwriter") subject to the terms and conditions contained herein and set forth in a Purchase Contract, a copy of which is attached hereto as Exhibit A (the "Purchase Contract") and authorize its Mayor, or in his absence the Vice Mayor, and the City 2 Resolution No. 19-37 Manager or Assistant City Manager to execute such Purchase Contract upon the approval of the terms thereof by the City Manager or Assistant City Manager and the City Finance Director; and WHEREAS, the City now desires to approve the issuance of its Series 2020 Bonds, to sell its Series 2020 Bonds pursuant to the Purchase Contract, to authorize the distribution of a Preliminary Official Statement and an Official Statement in connection with the issuance of the Series 2020 Bonds and to take certain other actions in connection with the issuance and sale of the Series 2020 Bonds; and WHEREAS, the City desires to appoint U.S. Bank National Association as the Paying Agent and Registrar under the Bond Ordinance with respect to the Series 2020 Bonds and to enter into a Paying Agent and Registrar Agreement in the form attached hereto as Exhibit B; and WHEREAS, the City will be provided all applicable disclosure information by the Underwriter as required by Section 218.385, Florida Statutes, prior to the execution of the Purchase Contract, a copy of which disclosure is to be attached to the Purchase Contract; and WHEREAS, this Resolution shall constitute a supplemental resolution under the terms of the Bond Ordinance, and all capitalized undefined terms used herein shall have the meanings set forth in the Bond Ordinance; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CLEARWATER, FLORIDA: SECTION 1. The not to exceed $25,000,000 of the Water and Sewer Revenue Refunding Bonds, Series [to be determined] authorized by the Bond Ordinance being offered pursuant to this resolution are hereby designated as Series 2020 Bonds (the “Series 2020 Bonds”), provided that the series designation shall reflect the year in which the Series 2020 Bonds are actually issued. The issuance of not to exceed $25,000,000 of the Series 2020 Bonds by the City in one or more subseries is hereby approved upon the terms and conditions set forth in the Bond Ordinance and this Resolution. SECTION 2. It is in the best interest of the City and the residents and inhabitants thereof that the Series 2020 Bonds be issued utilizing a pure book-entry system of registration. For so long as the Series 2020 Bonds remain in such book entry only system of registration, in the event of a conflict between the provisions of the Bond Ordinance and the provisions of the Blanket Letter of Representations between the City and Depository Trust Company as previously executed and delivered, the terms and provisions of the Blanket Letter of Representations shall prevail. SECTION 3. (a) Due to the willingness of the Underwriter to purchase not to exceed $25,000,000 in aggregate principal amount of the Series 2020 Bonds at favorable interest costs and the importance of timing in the marketing of such obligations, it is hereby determined that it is in the best interest of the public and the City to sell the Series 2020 Bonds at a negotiated sale and such sale to the Underwriter pursuant to the terms and conditions contained in the Purchase Contract and herein is hereby authorized and approved, subject to the satisfaction of the conditions set forth in Section 3(b) below. (b) The Finance Director is hereby authorized to receive the offer to purchase the Series 2020 Bonds from the Underwriter in the form of an executed Purchase Contract substantially in the form approved herein. The City Manager or Assistant City Manager and the Finance Director are hereby authorized to award the sale of the Series 2020 Bonds on their determination that the 3 Resolution No. 19-37 offer submitted by the Underwriter for the purchase of all of the Series 2020 Bond is within the following parameters: (i) the refunding of that portion of the Refunded Bond to be refunded by the Series 2020 Bonds shall provide the City with a net present value savings of not less than 5.0% of the par amount of such Refunded Bond so refunded, (ii) the Underwriter’ Discount shall not be in excess of 0.40% of the principal amount thereof, (iii) the final maturity shall not be later than December 1, 2032, and (iv) the principal amount shall not be in excess of the amount necessary to redeem the Refunded Bond plus costs of issuing the Series 2020 Bonds. The City Manager or Assistant City Manager and the Finance Director are hereby authorized to award the sale of the Series 2020 Bonds as set forth above or to reject the offer from the Underwriter for any or all series of Series 2020 Bonds or any portion thereof. Such award shall be final. The acceptance of the offer to purchase the Series 2020 Bonds, to the extent the proceeds thereof are used to refund the Refunded Bond shall constitute a decision to refund the Refunded Bond in accordance with the Bond Ordinance. SECTION 4. The Series 2020 Bonds shall be sold to the Underwriter, upon the terms and conditions set forth in the Purchase Contract attached hereto as Exhibit A and incorporated by reference, upon the satisfaction of the conditions set forth in Section 3(b) hereof. The Mayor, or in his absence the Vice Mayor, the City Manager or Assistant City Manager and the City Clerk are hereby authorized to execute such Purchase Contract in substantially the form attached as Exhibit A upon the approval of the City Attorney as to form and legal sufficiency, with such additional changes, insertions and omissions therein as do not change the substance thereof and as may be approved by the said officers of the City executing the same, such execution to be conclusive evidence of such approval. SECTION 5. The Series 2020 Bonds shall be dated, shall bear interest at a rate or rates not exceeding the maximum rate permitted by law, payable at the times, shall mature and shall be subject to redemption as provided in the Purchase Contract. In addition to such redemption provisions, any notice of redemption of Series 2020 Bonds may be conditioned upon the deposit of sufficient funds to pay the 2019 Bonds subject to redemption on the redemption date. The use of the proceeds of the Series 2020 Bonds, shall be as provided in the Official Statement relating to the Series 2020 Bonds. SECTION 6. The Series 2020 Bonds shall be issued under and secured by the Bond Ordinance and shall be executed and delivered by the Mayor, the City Manager or Assistant City Manager and the City Clerk upon the approval of the City Attorney as to form and legal sufficiency, in substantially the form set forth in the Bond Ordinance, with such additional changes and insertions therein as conform to the provisions of the Purchase Contract and such execution and delivery shall be conclusive evidence of the approval thereof by such officers. SECTION 7. U.S. Bank National Association is hereby appointed Registrar and Paying Agent for the Series 2020 Bonds to serve pursuant to a Paying Agent And Registrar Agreement substantially in the form attached hereto as Exhibit B. The Mayor, or in his absence the Vice Mayor, the City Manager or Assistant City Manager and the City Clerk are hereby authorized to execute such Paying Agent And Registrar Agreement in substantially the form attached as Exhibit B upon the approval of the City Attorney as to form and legal sufficiency, with such additional changes and insertions therein as approved by the officers executing the same, and such execution and delivery shall be conclusive evidence of the approval thereof by such officers. SECTION 8. On the date of issuance of the Series 2020 Bonds, the City may transfer the funds on hand in the various funds and accounts established for the Refunded Bond in such 4 Resolution No. 19-37 manner as may be approved by a certificate of the Finance Director executed prior to or simultaneously with the issuance of the Series 2020 Bonds. SECTION 9. The distribution by the Underwriter of the Preliminary Official Statement is hereby approved, confirmed and ratified. The distribution of a final Official Statement of the City relating to the issuance of the Series 2020 Bonds is hereby approved, such final Official Statement to be in substantially the form attached hereto as Exhibit C, with such additional changes, insertions and omissions as may be made and approved by officers of the City executing the same, such execution to be conclusive evidence of any such approval. The Mayor, or in his absence the Vice Mayor, and the City Manager or Assistant City Manager are hereby authorized to execute such Official Statement in substantially the form attached hereto as Exhibit C. The execution of such Official Statement by such officers is hereby approved with such additional changes, insertions and omissions as may be made and approved by such officers. For purposes of Rule 15c2-12 of the United States Securities and Exchange Commission (the “Rule”), the City Manager or Assistant City Manager and the Finance Director are hereby authorized and directed to deem “final” the Preliminary Official Statement in substantially the form attached hereto as Exhibit C. SECTION 10. The City hereby covenants and agrees that, in order to provide for compliance by the City with the secondary market disclosure requirements of the Rule, that it will comply with and carry out all of the provisions of that certain Continuing Disclosure Agreement in substantially the form attached hereto as Exhibit D, to be executed by the City and dated the date of issuance and delivery of the Series 2020 Bonds, as it may be amended from time to time in accordance with the terms thereof (the "Continuing Disclosure Agreement"). Notwithstanding any other provision of this Resolution, failure of the City to comply with such Continuing Disclosure Agreement shall not be considered an event of default; however, any holder of Series 2020 Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Section and the Continuing Disclosure Agreement. The Mayor, or in his absence the Vice Mayor, the City Manager or Assistant City Manager and the City Clerk are hereby authorized to execute such Continuing Disclosure Agreement upon the approval of the City Attorney as to form and legal sufficiency, in substantially the form attached as Exhibit D, with such additional changes, insertions and omissions therein as do not change the substance thereof and as may be approved by the said officers of the City executing the same, such execution to be conclusive evidence of such approval. SECTION 11. All prior resolutions of the City inconsistent with the provisions of this resolution are hereby modified, supplemented and amended to conform with the provisions herein contained and except as otherwise modified, supplemented and amended hereby shall remain in full force and effect. SECTION 12. The Mayor, or in his absence the Vice Mayor, the City Manager, the Assistant City Manager, the Finance Director, the City Attorney and the City Clerk or any other appropriate officers of the City are hereby authorized and directed to execute any and all certifications or other instruments or documents required by the Resolution, the Purchase Contract, Agreement Relating To Paying And Registrar Agency, or any other document referred to above as a prerequisite or precondition to the issuance of the Series 2020 Bonds and any such representation made therein shall be deemed to be made on behalf of the City, and the City Manager or Assistant City Manager and the Finance Director are hereby authorized to take such actions as may be necessary or desired to effect the refunding of the Refunded Bond. In the event both the Mayor and the Vice Mayor are unable to execute the documents related to the 5 Resolution No. 19-37 Series 2020 Bonds, then any other member of the City Council shall be authorized to execute such documents with the full force and effect as if the Mayor, or the Vice Mayor had executed same. All action taken to date by the officers of the City in furtherance of the issuance of the Series 2020 Bonds is hereby approved, confirmed and ratified. SECTION 13. For purposes hereof, the Reserve Requirement (as defined in the Bond Ordinance) for the Series 2020 Bonds shall be $0.00, and the Series 2020 Bonds shall not be entitled to any security provided by any monies on deposit in the Reserve Account. SECTION 14. This resolution shall become effective immediately upon its adoption. Passed and adopted by the City Council of the City of Clearwater, Florida, this ____ day of December, 2019. CITY OF CLEARWATER, FLORIDA By: ______________________ George N. Cretekos Mayor Approved as to form: Attest: _________________ __________________ Pamela K. Akin Rosemarie Call, City Attorney City Clerk Resolution No. 19-37 EXHIBIT A FORM OF PURCHASE CONTRACT Resolution No. 19-37 EXHIBIT B FORM OF PAYING AGENT AND REGISTRAR AGREEMENT Resolution No. 19-37 EXHIBIT C FORM OF PRELIMINARY OFFICIAL STATEMENT Resolution No. 19-37 EXHIBIT D FORM OF CONTINUING DISCLOSURE AGREEMENT DRAFT #3: 11/27/19180-00022.B3 PRELIMINARY OFFICIAL STATEMENT DATED DECEMBER __, 2019 NEW ISSUE - FULL BOOK-ENTRY See "RATINGS" herein In the opinion of bond counsel, assuming compliance by the City with certain covenants, under existing statutes, regulations and judicial decisions, the interest on the Series 2020 Bonds is excluded from gross income for federal income tax purposes of the holders thereof and is not an item of tax preference for purposes of the federal alternative minimum tax. See "TAX MATTERS" herein for a description of certain other tax consequences to holders of the Series 2020 Bonds. CITY OF CLEARWATER, FLORIDA$________* Water and Sewer Revenue Refunding Bonds, Series 2020 Dated: Date of Delivery Due: December 1, as shown below The Water and Sewer Revenue Refunding Bonds, Series 2020 (the "Series 2020 Bonds") of the City of Clearwater, Florida (the "City") are being issued in fully registered form and, when initially issued, will be registered to Cede & Co., as nominee of The Depository Trust Company, New York, New York. U.S. Bank National Association, Orlando, Florida, is acting as the Paying Agent and Registrar for the Series 2020 Bonds. The Series 2020 Bonds will be purchased in book-entry form only, in the denomination of $5,000 or any integral multiple thereof. There will be no physical delivery of bond certificates to individual Bondholders. Interest on the Series 2020 Bonds will be payable at the rates shown on the inside cover semi-annually beginning on June 1, 2020 and on each December 1 and June 1 thereafter. Principal of, and premium, if any, on the Series 2020 Bonds will be payable on the dates and in the amounts shown on the inside cover or upon redemption prior to maturity. The Series 2020 Bonds will be issued pursuant to the authority of and in full compliance with (a) the charter of the City, (b) the Constitution and the laws of the State of Florida, particularly Chapter 166, Part II, Florida Statutes, and other applicable provisions of law, and (c) Ordinance No. 3674-84 enacted by the City on August 2, 1984, as amended and supplemented by Ordinance No. 6915-01, enacted by the City on November 15, 2001, as further amended and supplemented by Ordinance No. 8620-14, enacted by the City on December 4, 2014 (as amended, the "Bond Ordinance"), and as supplemented by Resolution No. 19-37, adopted by the City on December 19, 2019 (the "Resolution"). See "APPENDIX C - Copies of Bond Ordinance and Resolution" attached hereto. *Preliminary, subject to change. The Series 2020 Bonds may be subject to optional and mandatory redemption prior to maturity as described herein. The Series 2020 Bonds are being issued for the purposes of (i) currently refunding and redeeming all of the outstanding principal amount of the City's Water and Sewer Revenue Refunding Bond, Series 2014 and (ii) paying the costs of issuing the Series 2020 Bonds. The Series 2020 Bonds and the interest thereon are payable from and secured by a lien on the Pledged Revenues, which consist of the Net Revenues derived from the operation of the City's water, sewer and reclaimed water utility system (the "System"), as further described herein. The lien of the Series 2020 Bonds on the Net Revenues of the System is on parity with the holders of the City's outstanding Water and Sewer Revenue Refunding Bonds, Series 2011, Water and Sewer Revenue Refunding Bonds, Series 2017, and Water and Sewer Revenue Refunding Bond, Series 2017B (collectively, the "Parity Bonds"), as further described herein. Neither the Series 2020 Bonds nor the interest thereon constitute a general obligation or indebtedness of the City within the meaning of any constitutional, statutory or charter provision or limitation. No owner or owners of any Series 2020 Bonds shall ever have the right to compel the exercise of the ad valorem taxing power of the City, or any other taxing power in any form on any real or personal property of the City, to pay the Series 2020 Bonds or the interest thereon. The City shall not be obligated to pay the Series 2020 Bonds or any interest thereon except from the Net Revenues of the System, in the manner provided in the Bond Ordinance on parity with the Parity Bonds. This cover page contains certain information for quick reference only. It is not a summary of the issue. Investors must read this entire Official Statement to obtain information essential to the making of an informed investment decision. The Series 2020 Bonds are offered when, as and if issued and accepted by the Underwriter subject to the approval of legality by Bryant Miller Olive P.A., Tallahassee, Florida, Bond Counsel. Certain other legal matters will be passed upon for the City by Pamela K. Akin, Esquire, City Attorney, and by Nabors, Giblin & Nickerson, P.A., Tampa, Florida, Disclosure Counsel to the City. Nelson Mullins Riley & Scarborough LLP, Orlando, Florida is serving as counsel to the Underwriter. Public Resources Advisory Group, Inc., St. Petersburg, Florida is serving as Financial Advisor to the City. It is expected that the Series 2020 Bonds, in definitive book-entry form, will be available for delivery through DTC in New York, New York on or about ______________, 2020. RAYMOND JAMES ________________, 2020 $________* CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2020 MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS, PRICESAND INITIAL CUSIP NUMBERS $__________ Serial Bonds Maturity (December 1)* Principal Amount Interest Rate Yield Price Initial CUSIPNumber† 2020 2021 20222023 2024 20252026 202720282029 203020312032 $_______ __% Term Bond, Due December 1, 20__ Yield ____% Price __ CUSIP _______ ____________________________ *Preliminary, subject to change. †Neither the City nor the Underwriter is responsible for the use of CUSIP numbers referenced herein nor is any representation made by the City or the Underwriter as to their correctness. CUSIP numbers are included herein solely for the convenience of the readers of this Official Statement. CITY OF CLEARWATER, FLORIDA ELECTED OFFICIALS MAYOR George N. Cretekos CITY COUNCIL Jay Polglaze Dr. Bob Cundiff David Allbritton Hoyt Hamilton APPOINTED OFFICIALS William B. Horne, II, City Manager Michael Delk, Assistant City Manager Micah Maxwell, Assistant City Manager Pamela K. Akin, Esq., City Attorney Brian J. Ravins, CGFO, Finance Director David Porter, Public Utilities Director BOND COUNSEL Bryant Miller Olive P.A. Tallahassee, Florida FINANCIAL ADVISOR Public Resources Advisory Group, Inc. St. Petersburg, Florida DISCLOSURE COUNSEL Nabors, Giblin & Nickerson, P.A. Tampa, Florida REGISTRAR AND PAYING AGENT U.S. Bank National Association Orlando, Florida RATE CONSULTANT Stantec Consulting Services Inc. Tampa, Florida NO DEALER, BROKER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS OFFICIAL STATEMENT, IN CONNECTION WITH THE OFFERING OF THE SERIES 2020 BONDS DESCRIBED HEREIN, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CITY OR THE UNDERWRITER. THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL THE SERIES 2020 BONDS OR A SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THE SERIES 2020 BONDS BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH OFFER, SOLICITATION OR SALE. THE INFORMATION SET FORTH HEREIN HAS BEEN FURNISHED BY THE CITY AND BY OTHER SOURCES WHICH ARE BELIEVED TO BE RELIABLE, BUT IT IS NOT GUARANTEED AS TO ACCURACY OR COMPLETENESS, AND IS NOT TO BE CONSTRUED AS A REPRESENTATION OR CONTRACT BY THE CITY OR THE UNDERWRITER. THE INFORMATION AND EXPRESSIONS OF OPINION HEREIN ARE SUBJECT TO CHANGE WITHOUT NOTICE AND NEITHER THE DELIVERY OF THE OFFICIAL STATEMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CITY SINCE THE DATE HEREOF. THE SERIES 2020 BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS THE BOND ORDINANCE BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR QUALIFICATION OF THE SERIES 2020 BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF THE SECURITIES LAWS OF THE STATES, IF ANY, IN WHICH THE SERIES 2020 BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN CERTAIN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE STATES NOR ANY OF THEIR AGENCIES HAVE PASSED UPON THE MERITS OF THE SERIES 2020 BONDS OR THE ACCURACY OR COMPLETENESS OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS OFFICIAL STATEMENT PURSUANT TO ITS RESPONSIBILITIES TO INVESTORS UNDER THE FEDERAL SECURITIES LAWS, BUT THE UNDERWRITER DOES NOT GUARANTEE THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. THIS OFFICIAL STATEMENT IS NOT TO BE CONSTRUED AS A CONTRACT WITH THE PURCHASERS OF THE SERIES 2020 BONDS. STATEMENTS CONTAINED IN THIS OFFICIAL STATEMENT WHICH INVOLVE ESTIMATES, FORECASTS OR MATTERS OF OPINION, WHETHER OR NOT EXPRESSLY SO DESCRIBED IN THIS OFFICIAL STATEMENT, ARE INTENDED SOLELY AS SUCH AND ARE NOT TO BE CONSTRUED AS REPRESENTATIONS OF FACTS. THE INFORMATION AND EXPRESSIONS OF OPINION CONTAINED IN THIS OFFICIAL STATEMENT ARE SUBJECT TO CHANGE WITHOUT NOTICE AND NEITHER THE DELIVERY OF THIS OFFICIAL STATEMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE THE IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CITY SINCE THE DATE OF THIS OFFICIAL STATEMENT OR THE EARLIEST DATE AS OF WHICH SUCH INFORMATION IS GIVEN. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2020 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL THE SERIES 2020 BONDS TO CERTAIN DEALERS AND OTHERS AT PRICES LOWER THAN THE PUBLIC OFFERING PRICES STATED ON THE INSIDE COVER PAGE OF THIS OFFICIAL STATEMENT, AND SUCH PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER. CERTAIN STATEMENTS INCLUDED OR INCORPORATED BY REFERENCE IN THIS OFFICIAL STATEMENT CONSTITUTE "FORWARD- LOOKING STATEMENTS."SUCH STATEMENTS GENERALLY ARE IDENTIFIABLE BY THE TERMINOLOGY USED, SUCH AS "PLAN," "EXPECT," "ESTIMATE," "BUDGET" OR OTHER SIMILAR WORDS. SUCH FORWARD- LOOKING STATEMENTS INCLUDE BUT ARE NOT LIMITED TO CERTAIN STATEMENTS CONTAINED IN THE INFORMATION UNDER THE CAPTIONS "ESTIMATED SOURCES AND USES OF FUNDS" AND "THE WATER AND SEWER SYSTEM" IN THIS OFFICIAL STATEMENT. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD- LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE CITY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR, OTHER THAN AS DESCRIBED UNDER "CONTINUING DISCLOSURE" HEREIN. THIS PRELIMINARY OFFICIAL STATEMENT IS IN A FORM DEEMED FINAL BY THE CITY FOR PURPOSES OF RULE 15C2-12 ISSUED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT FOR CERTAIN INFORMATION PERMITTED TO BE OMITTED PURSUANT TO RULE 15C2-12(B)(1). i TABLE OF CONTENTS Page INTRODUCTION...............................................................................................................1 PLAN OF REFUNDING.....................................................................................................3 DESCRIPTION OF THE SERIES 2020 BONDS..............................................................3 General.............................................................................................................................3 Redemption Provisions....................................................................................................4 Notice of Redemption......................................................................................................5 Book-Entry Only System.................................................................................................5 SECURITY FOR THE SERIES 2020 BONDS..................................................................8 Net Revenues...................................................................................................................8 Rate Covenant..................................................................................................................9 Disposition of Revenues..................................................................................................9 Reserve Account............................................................................................................12Additional Bonds...........................................................................................................13Series 2020 Bonds Not a Debt of the City.....................................................................14Parity Bonds...................................................................................................................15 DEBT SERVICE REQUIREMENTS...............................................................................16 ESTIMATED SOURCES AND USES OF FUNDS.........................................................17 THE WATER AND SEWER SYSTEM...........................................................................17 Management...................................................................................................................17 Water System.................................................................................................................19 Sewer System.................................................................................................................21 Reclaimed Water System...............................................................................................24 Historical Debt Service Coverage..................................................................................26 Future Water and Sewer System Capital Improvements...............................................26 Regulation and Permitting.............................................................................................27 Establishment of Rates, Fees and Charges; Rate Study Recommendations..................28 No Mortgage or Sale of the System...............................................................................29 No Free Service..............................................................................................................29 Mandatory Connection ..................................................................................................30 Climate Change..............................................................................................................30 Cybersecurity.................................................................................................................30 PENSION AND OTHER POST-EMPLOYMENT BENEFIT LIABILITIES.................31 Defined Benefit Pension Plans ......................................................................................31Other Post-Employment Benefits (OPEB)....................................................................32 FINANCIAL STATEMENTS...........................................................................................33 INVESTMENT POLICY OF THE CITY.........................................................................33 LITIGATION ....................................................................................................................34 RATINGS..........................................................................................................................34 TAX MATTERS ...............................................................................................................34 General...........................................................................................................................34 ii Information Reporting and Backup Withholding..........................................................36 Other Tax Matters..........................................................................................................36 Tax Treatment of Original Issue Discount ....................................................................36 Tax Treatment of Bond Premium..................................................................................37 LEGAL OPINIONS ..........................................................................................................38 ENFORCEABILITY OF REMEDIES..............................................................................38 FINANCIAL ADVISOR...................................................................................................38 UNDERWRITING............................................................................................................39 DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS...................39 CONTINGENT AND OTHER FEES...............................................................................39 CONTINUING DISCLOSURE ........................................................................................40 CERTIFICATE CONCERNING OFFICIAL STATEMENT ..........................................40 MISCELLANEOUS..........................................................................................................41 APPENDICES APPENDIX A General Information Regarding the City APPENDIX B Comprehensive Annual Financial Report of the City for the Fiscal Year Ended September 30, 2018 APPENDIX C Copies of Bond Ordinance and Resolution APPENDIX D Form of Continuing Disclosure Agreement APPENDIX E Form of Bond Counsel Opinion APPENDIX F Fiscal Year 2019 Water, Sewer and Reclaimed Water Revenue Sufficiency Analysis (Rate Study) APPENDIX G Schedule of Rates, Fees and Charges OFFICIAL STATEMENT $________*CITY OF CLEARWATER, FLORIDAWater and Sewer Revenue Refunding Bonds,Series 2020 INTRODUCTION The purpose of this Official Statement, which includes the cover page and the appendices, is to provide information concerning the City of Clearwater, Florida (the "City") and the City's $________*Water and Sewer Revenue Refunding Bonds, Series 2020 (the "Series 2020 Bonds"). For certain general information relating to the City, see "APPENDIX A – General Information Regarding the City" attached hereto. The Series 2020 Bonds are being issued for the purposes of (i) currently refunding and redeeming all of the outstanding principal amount of the City's Water and Sewer Revenue Refunding Bond, Series 2014 (the "Refunded Bond") and (ii) paying the costs of issuing the Series 2020 Bonds. The Series 2020 Bonds are payable from and secured by a lien on the Pledged Revenues, which consist of the Net Revenues of the City's water, sewer and reclaimed water system (the "System"), as further described herein. The lien of the Series 2020 Bonds on the Pledged Revenues is on parity with the lien of the holders of $3,940,000 outstanding principal amount of the City's Water and Sewer Revenue Refunding Bonds, Series 2011 (the "Series 2011 Bonds"), $69,270,000 outstanding principal amount of the City's Water and Sewer Revenue Refunding Bonds, Series 2017 (the "Series 2017 Bonds") and $28,705,000 outstanding principal amount of the City's Water and Sewer Revenue Refunding Bond, Series 2017B (the "Series 2017B Bond" and collectively with the Series 2011 Bonds and the Series 2017 Bonds, the "Parity Bonds"), as further described herein. The Series 2020 Bonds will be issued pursuant to the authority of and in full compliance with (a) the charter of the City, (b) the Constitution and the laws of the State of Florida, particularly Chapter 166, Part II, Florida Statutes, and other applicable provisions of law, and (c) Ordinance No. 3674-84 enacted by the City on August 2, 1984, as amended and supplemented by Ordinance No. 6915-01, enacted by the City on November 15, 2001, as further amended and supplemented by Ordinance No. 8620-14, enacted by the City on December 4, 2014 (as amended, the "Bond Ordinance"), and as supplemented by Resolution No. 19-37, adopted by the City on December 19, 2019 (the *Preliminary, subject to change. 2 "Resolution"). See "APPENDIX C – Copies of Bond Ordinance and Resolution" attached hereto. Neither the Series 2020 Bonds nor the interest thereon constitute a general obligation or indebtedness of the City within the meaning of any constitutional, statutory or charter provision or limitation. No owner or owners of any Series 2020 Bonds shall ever have the right to compel the exercise of the ad valorem taxing power of the City, or any other taxing power in any form on any real or personal property of the City, to pay the Series 2020 Bonds or the interest thereon. The City shall not be obligated to pay the Series 2020 Bonds or any interest thereon except from the Pledged Revenues, in the manner provided in the Bond Ordinance on parity with the Parity Bonds. The City covenants in the Bond Ordinance to fix, establish and maintain such rates, and collect such fees, rentals and other charges for the services and facilities of the System and revise the same from time to time whenever necessary as will always provide Gross Revenues in each Fiscal Year sufficient to pay the Cost of Operation and Maintenance of the System in such Fiscal Year, one hundred fifteen percent (115%) of the Bond Service Requirement becoming due in such Fiscal Year on the outstanding Series 2020 Bonds and on all outstanding Additional Bonds and Parity Bonds, plus one hundred percent (100%)of all reserve and other payments required to be made pursuant to the Bond Ordinance. The City may issue Additional Bonds, payable on a parity from the Pledged Revenues with the Series 2020 Bonds and the Parity Bonds, for the purpose of refunding all or a portionof the outstanding Bondsupon receipt of a certificate of the Finance Director setting forth the annual debt service (i) for the Bonds then Outstanding and (ii) for all Series of Bonds to be immediately Outstanding thereafter and stating that the Bond Service Requirement in any year pursuant to (ii) above is not greater than the Bond Service Requirement in the corresponding year set forth pursuant to (i) above. Additional Bonds may also be issued for the purpose of financing the cost of extensions, additions and improvements to the System and for the acquisition and construction of, and extensions and improvements to, sewer and/or water or reclaimed water systems which are to be consolidated with the System and operated as a single combined utility, provided that, among other requirements, certain earnings tests relating historical Net Revenues to the Maximum Bond Service Requirement of all Bonds Outstanding after the issuance of such Additional Bonds can be met. Such historical Net Revenues may be adjusted by the Consulting Engineer as provided in the Bond Ordinance. See "SECURITY FOR THE SERIES 2020 BONDS – Additional Bonds" herein. It is anticipated that the City will issue Additional Bonds in the future to provide additional funds needed for the capital improvement program. See "THE WATER AND SEWER SYSTEM – Future Water and Sewer System Capital Improvements" herein and "APPENDIX F – Fiscal Year 2019 Water, Sewer and Reclaimed Water Revenue Sufficiency Analysis (Rate Study)" attached hereto. 3 All capitalized terms used in this Official Statement that are defined in the Bond Ordinance and not defined herein shall have the respective meanings set forth in the Bond Ordinance, a copy of which appears in composite APPENDIX C attached hereto. The references, excerpts and summaries of all documents referred to herein do not purport to be complete statements of the provisions of such documents, and reference is directed to all such documents for full and complete statements of all matters of fact relating to the Series 2020 Bonds, the security for the payment of the Series 2020 Bonds, and the rights and obligations of holders thereof. The information contained in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. Neither this Official Statement nor any statement which may have been made verbally or in writing is to be construed as a contract with the holders of the Series 2020 Bonds. PLAN OF REFUNDING On the date of issuance of the Series 2020 Bonds, a portion of the proceeds of the Series 2020 Bonds will be transferred to the holder of the Refunded Bond (the "2014 Bondholder") in an amount sufficient to pay and redeem the Refunded Bond at the redemption price of 100% of the principal amount thereof plus accrued interest to the date of redemption. Upon such transfer, the Refunded Bond will be deemed paid and the pledge of the Pledged Revenues created by or pursuant to the Bond Ordinance with respect to such Refunded Bond and all covenants, agreements and other obligations of the City to the 2014 Bondholder, shall cease, terminate and become void and be discharged and satisfied. DESCRIPTION OF THE SERIES 2020 BONDS General The Series 2020 Bonds will be dated the date of their initial issuance and delivery and will bear interest at the rates and mature on December 1 in the amounts and at the times set forth on the inside cover page of this Official Statement. The Series 2020 Bonds are to be issued as fully registered bonds in denominations of $5,000 or integral multiples thereof. Interest on the Series 2020 Bonds will be payable on June 1, 2020 and semiannually thereafter on December 1 and June 1 of each year to the person appearing on the registration books of the City as the registered Holder thereof, by check or draft mailed to such registered Holder at his address as it appears on such registration books or by wire transfer to Holders of $1,000,000 or more in principal amount of the Series 2020 Bonds. The Series 2020 Bonds shall bear interest from the interest payment date next preceding the date on which it is authenticated, unless authenticated on an interest payment 4 date, in which case it shall bear interest from such interest payment date, or, unless authenticated prior to the first interest payment date, in which case it shall bear interest from its date; provided, however, that if at the time of authentication payment of any interest which is due and payable has not been made, such Series 2020 Bond shall bear interest from the date to which interest shall have been paid. Principal of, and premium if any, are payable at maturity, or upon redemption prior to maturity, upon presentation and surrender thereof at the corporate trust office of the Paying Agent. U.S. Bank National Association, Orlando, Florida, is acting as Paying Agent and Registrar for the Series 2020 Bonds. No provision of the Bond Ordinance or Resolution provides for an adjustment of the interest rate borne by the Series 2020 Bonds in the event the interest on the Series 2020 Bonds should become included in gross income for federal income tax purposes. The Series 2020 Bonds will be initially issued in the form of a single fully registered Bond for each maturity of the Series 2020 Bonds. Upon initial issuance, the ownership of each such Series 2020 Bond will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). While held in book-entry form, all payments of principal, interest and premium, if any, on the Series 2020 Bonds will be made to DTC or the DTC nominee as the sole registered owner of the Series 2020 Bonds and payments to Beneficial Owners will be the responsibility of DTC and the DTC Participants. See "– Book-Entry Only System" below. Redemption Provisions Optional Redemption The Series 2020 Bonds maturing on December 1, 20__ and thereafter will be subject to optional redemption prior to their respective maturity dates beginning on December 1, 20__ at 100% of the par value thereof. Mandatory Sinking Fund Redemption The Series 2020 Bonds maturing on December 1, 20__ will be subject to mandatory redemption prior to maturity, selected by lot, or in such manner as the Registrar may deem appropriate, at a redemption price equal to par plus accrued interest to the redemption date, on December 1, 20__, and each December 1 thereafter, from amounts deposited in the Bond Amortization Account in the Sinking Fund established by the Bond Ordinance, in the years and amounts as follows: 5 Year Amount ___________________________* Maturity Notice of Redemption Notice of redemption, identifying the Series 2020 Bonds or portions thereof called for redemption (i) shall be filed with the Paying Agent and any Registrar; and (ii) shall be mailed by the Registrar, first-class mail, postage prepaid, to all registered owners of the Series 2020 Bonds to be redeemed not more than sixty (60) days and not less than thirty (30) days prior to the date fixed for redemption at their addresses as they appear on the registration books to be maintained in accordance with the provisions of the Bond Ordinance. Failure to give such notice by mailing to any owner of Series 2020 Bonds, or any defect therein, shall not affect the validity of any proceeding for the redemption of other Series 2020 Bonds. Notice having been mailed and filed in the manner and under the conditions described above, the Series 2020 Bonds or portions of Series 2020 Bonds so called for redemption shall, on the redemption date designated in such notice, become and be due and payable at the redemption price provided for redemption of such Series 2020 Bonds or portions of Series 2020 Bonds on such date. On the date so designated for redemption, notice having been mailed and filed and moneys for payment of the redemption price being held in separate accounts in trust for the holders of the Series 2020 Bonds or portions thereof to be redeemed, all as provided in the Bond Ordinance, interest on the Series 2020 Bonds or portions of Series 2020 Bonds so called for redemption shall cease to accrue, such Series 2020 Bonds and portions of Series 2020 Bonds shall cease to be entitled to any lien, benefit or security under the Bond Ordinance, and the holders or Registered Owners of such Series 2020 Bonds or portions of Series 2020 Bonds, shall have no rights in respect thereof, except the right to receive payment of the redemption price thereof. Any notice of redemption of Series 2020 Bonds may be conditioned upon the deposit of sufficient funds to pay the Series 2020 Bonds subject to redemption on the redemption date. Book-Entry Only System THE FOLLOWING INFORMATION CONCERNING DTC AND DTC'S BOOK- ENTRY ONLY SYSTEM HAS BEEN OBTAINED FROM DTC AND NEITHER THE CITY NOR THE UNDERWRITER MAKES ANY REPRESENTATION OR WARRANTY OR TAKES ANY RESPONSIBILITY FOR THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. 6 DTC will act as securities depository for the Series 2020 Bonds. The Series 2020 Bonds will be issued as fully-registered bonds registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered bond certificate will be issued for each maturity of the Series 2020 Bonds and will be deposited with DTC. DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants (the "Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (the "Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of the Series 2020 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for such Series 2020 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2020 Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2020 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of the Beneficial Owners. Beneficial Owners will not receive certificates 7 representing their ownership interests in the Series 2020 Bonds, except in the event that use of the book-entry system for the Series 2020 Bonds is discontinued. To facilitate subsequent transfers, all Series 2020 Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2020 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2020 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2020 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to DTC. If less than all of the Series 2020 Bonds are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such bonds, as the case may be, to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Series 2020 Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 2020 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Series 2020 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts, upon DTC's receipt of funds and corresponding detail information from the City or the Registrar on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Registrar or the City, subject to any statutory and regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City and/or the Paying Agent for the Series 2020 Bonds. Disbursement of such payments to 8 Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of the Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Series 2020 Bonds at any time by giving reasonable notice to the City. Under such circumstances, in the event that a successor securities depository is not obtained, Series 2020 Bond certificates are required to be printed and delivered. The City may decide to discontinue use of the book-entry only transfers through DTC (or a successor securities depository). In that event, Series 2020 Bond certificates will be printed and delivered to DTC. SECURITY FOR THE SERIES 2020 BONDS Net Revenues The principal of, premium, if any, and interest on the Series 2020 Bonds are payable solely from and secured by an irrevocable first lien upon and pledge of the Pledged Revenues, which consist of the Net Revenues derived and collected by the City from the operation of the System, on a parity with the Parity Bonds and Additional Bonds hereafter issued. "Net Revenues" is defined in the Bond Ordinance to mean the Gross Revenues after deduction of the Cost of Operation and Maintenance. "Gross Revenues" includes all income or earnings, including any income from the investment of funds, derived by the City from the operation of the System. "Cost of Operation and Maintenance" includes the current expenses, paid or accrued, of operation, maintenance and repair of the System as calculated in accordance with sound accounting practice, but does not include any reserves for renewals and replacements, for extraordinary repairs or any allowance for depreciation or amortization. See "THE WATER AND SEWER SYSTEM – Historical Debt Service Coverage" herein. The Series 2020 Bonds do not constitute a general indebtedness of the City within the meaning of any constitutional, statutory or charter provision or limitation. The principal of and interest on the Series 2020 Bonds and all required reserve and other payments shall be made solely from the Pledged Revenues, which includes only the Net Revenues of the System. The City shall never be required to levy ad valorem taxes on any property therein to pay the principal of and interest on the Series 2020 Bonds or to make any of the required debt service, reserve or other payments, and any failure to pay the Series 2020 Bonds shall not give rise to a lien upon any property of or in the City, except the Net Revenues of the System. 9 Rate Covenant In the Bond Ordinance, the City has covenanted to fix, establish and maintain such rates and collect such fees, rentals and other charges for the services and facilities of the System and revise the same from time to time whenever necessary, as will always provide Gross Revenues in each Fiscal Year sufficient to pay the Cost of Operation and Maintenance of the System in such Fiscal Year, one hundred fifteen percent (115%) of the Bond Service Requirement becoming due in such Fiscal Year on the outstanding Series 2020 Bonds and on all outstanding Additional Bonds and Parity Bonds, plus one hundred percent (100%) of all reserve and other payments required to be made pursuant to the Bond Ordinance. Such rates, fees, rentals and other charges shall not be reduced so as to be insufficient to provide Gross Revenues for such purposes. See "THE WATER AND SEWER SYSTEM – Historical Debt Service Coverage" herein. Disposition of Revenues The entire Gross Revenues shall upon receipt thereof be deposited in the Revenue Fund created and established by the Bond Ordinance. Such Revenue Fund shall constitutea trust fund for the purposes provided in the Bond Ordinance and shall be kept separate and distinct from all other funds of the City and used only for the purposes and in the manner provided in the Bond Ordinance. All funds at any time remaining on deposit in the Revenue Fund shall be disposed of on or before the twentieth day of each month for so long as any Bonds remain outstanding, only in the following manner and in the following order of priority: (1)Funds shall first be used for deposit into the Operation and Maintenance Fund, which was established by the Bond Ordinance, of such sums as are necessary for the Cost of Operation and Maintenance, for the next ensuing month. (2)A sum as shall be determined by supplemental resolution of the City shall be deposited into the Construction Fund and used for the purpose of paying Project Costs. (3)From the moneys remaining in the Revenue Fund, the City shall next deposit into the Sinking Fund created by the Bond Ordinance, such sums as will be sufficient to pay (a) one-sixth (1/6) of all interest becoming due on the Bonds on the next semi-annual interest payment date; (b) commencing in the first month which is twelve (12) months or six (6) months prior to the first annual or semi-annual maturity date, respectively, of any Serial Bonds, one-twelfth (1/12) or one-sixth (1/6), respectively, of the amount of Serial Bonds which will become due and payable on the next annual or semiannual principal maturity date, respectively, and (c) one-twelfth (1/12) of the Amortization Installment required to be made on the next annual payment date or one-sixth (1/6) of the Amortization Installment required to be made on the next semi-annual payment date into a "Bond Amortization Account", created and established in the Sinking Fund by the Bond 10 Ordinance. Such payments shall be credited to a separate special account for each series of Term Bonds outstanding, and if there shall be more than one stated maturity for Term Bonds of a series, then into a separate special account in the Sinking Fund for each such separate maturity of TermBonds. The funds and investments in each such separate account shall be pledged solely to the payment of principal of the Term Bonds of the series or maturity within a series for which it is established and shall not be available for payment, purchase or redemption of Term Bonds of any other series or within a series, or for transfer to the Sinking Fund to make up any deficiencies in required payments therein. The Amortization Installments may be due either annually or semiannually, but in any event, the required payments as set forth above shall be made monthly commencing in the first month which is six (6) months or twelve (12) months, as the case may be, prior to the date on which the Amortization Installment is required to be made pursuant to (c) above. Upon the sale of any series of Term Bonds, the City shall by resolution, establish the amounts and maturities of such Amortization Installments for each series, and if there shall be more than one maturity of Term Bonds within a series, the AmortizationInstallments for the Term Bonds of each maturity. In the event the moneys deposited for retirement of a maturity of Term Bonds are required to be invested, in the manner provided below, the Amortization Installments may be stated in terms of either the principal amount of the investments to be purchased on, or the cumulative amounts of the principal amount of investments required to have been purchased by, the payment date of such Amortization Installment. Moneys on deposit in each of the separate special accounts in the Bond Amortization Account shall be used for the open market purchase or the redemption of TermBonds of the series or maturity of Term Bonds within a series for which such separate special account is established or may remain in said separate special account and be invested until the stated date of maturity of the Term Bonds. The resolution establishing the Amortization Installments for any series or maturity of Term Bonds may limit the use of moneys to any one or more of the uses set forth in the preceding sentence and may specify the type or types of investments permitted under the Bond Ordinance to be purchased. (4)Moneys remaining in the Revenue Fund shall next be applied by the City to maintain either the Reserve Account or a separate Reserve Subaccount, which Reserve Account was created and established by the Bond Ordinance and which each Reserve Subaccount is created by subsequent Resolution relating to a specific Series of Bonds adopted prior to the issuance of such Bonds, in a sum equal to the Reserve Requirement for each applicable Series of Bonds, all or a portion of which sum may be initially provided from the proceeds of the sale of the respective Series of Bonds and/or other moneys of the City. The City shall thereafter deposit into said Reserve Account or Reserve Subaccount, as applicable, an amount equal to one-twelfth (1/12) of twenty percent (20%) of the difference between the amount, if any, so deposited upon the delivery of the Bonds and the 11 amount of the Reserve Requirement for the applicable Series of Bonds. No further payments shall be required to be made into such Reserve Account or Reserve Subaccount, as applicable, when there has been deposited therein and as long as there shall remain on deposit therein a sum equal to the Reserve Requirement on all applicable Series of outstanding Bonds becoming due in any ensuing Fiscal Year. Any withdrawals from the Reserve Account or a Reserve Subaccount shall be subsequently restored from the first moneys available in the Revenue Fund after all required current payments into the Sinking Fund and into the Reserve Account and each Reserve Subaccount, as applicable, including all deficiencies for prior payments into the Sinking Fund, have been made in full. Moneys in the Reserve Account or a Reserve Subaccount, as applicable, shall be used only for the purpose of the payment of maturing principal (including Amortization Installments) of or interest on the Series of Bonds secured by such Reserve Account or Reserve Subaccount, as applicable, when the moneys in the Sinking Fund and allocated to such Series of Bonds are insufficient therefor, and for no other purpose. Upon the issuanceby the City of any Additional Bonds under the terms, limitations and conditions provided in the Bond Ordinance, the payments into the Reserve Account or Reserve Subaccount, as applicable, shall be increased so that the amount on deposit therein shall be equal to the Reserve Requirement established for such Series of Additional Bonds in accordance with the subsequent Resolution authorizing such Series of Additional Bonds. Whenever the amount on deposit in the Reserve Account or any Reserve Subaccount exceeds the Reserve Requirement applicable to such Reserve Account or Reserve Subaccount, the excess may be withdrawn and deposited into the Sinking Fund to pay debt service on the respective Series of Bonds. The City shall not be required to make any further payments into the Sinking Fund or into the Reserve Account or any Reserve Subaccount when the aggregate amount of moneys in the Sinking Fund and the Reserve Account or any Reserve Subaccount, as applicable, is at least equal to the aggregate principal amount of Bonds then outstanding and secured by the Sinking Fund and the respective Reserve Account or Reserve Subaccount, plus the amount of interest then due or thereafter to become due on the respective Series of Bonds then outstanding. Notwithstanding the foregoing provisions, in lieu of the required deposits of Revenues into the Reserve Account, the City may cause to be deposited into the Reserve Account or a Reserve Subaccount a surety bond or an insurance policy issued by a reputable and recognized insurer for the benefit of the Bondholders of the Series of Bonds to be secured by such Reserve Account or Reserve Subaccount in an amount equal to the difference between the Reserve Requirement for such Series of Bonds and the sums then on deposit in the applicable Reserve Account or Reserve Subaccount, if any, which surety bond orinsurance policy shall be payable (upon the giving of notice as required thereunder) 12 on any interest payment date on which a deficiency exists which cannot be cured by funds in any other account held pursuant to the Bond Ordinance and available for such purpose. The insurer providing such surety bond or insurance policy shall be an insurer whose municipal bond insurance policies insuring the payment, when due, of the principal of and interest on municipal bond issues results in such issues being rated in one of the three highest rating categories by Standard & Poor's Corporation or Moody's Investors Service, Inc., or their successors. If a disbursement is made from a surety bond or an insurance policy provided pursuant to this paragraph, the City shall be obligated to either reinstate the maximum limits of such surety bond or insurance policy immediately following such disbursement or to deposit into the Reserve Account or Reserve Subaccount, as applicable, as herein provided in this paragraph for restoration of withdrawals from the Reserve Account or a Reserve Subaccount, as applicable, funds in the amount of the disbursement made under such policy, or a combination of such alternatives. (5)The City shall next apply and deposit the moneys in the Revenue Fund into the Renewal and Replacement Fund created by the Bond Ordinance. The City shall deposit into such Renewal and Replacement Fund an amount equal to one-twelfth (1/12) of five percent (5%) of the Gross Revenues of the System for the previous Fiscal Year, or such other amount as is certified as necessary for the purposes of the Renewal and Replacement Fund by the Consulting Engineer and as approved by the City Council. The moneys in said Renewal and Replacement Fund shall be used only for the purpose of paying the cost of extensions, enlargements or additions to or the replacement of capital assets of the System and emergency repairs thereto. Such moneys on deposit in such Fund shall also be used to supplement the Reserve Account if necessary in order to prevent a default in the payment of the principal of and interest on the Bonds. (6)To the extent junior lien bonds are issued and outstanding (which subordinated bonds the City reserves the right to issue), the City shall next apply moneys in the Revenue Fund to the payment of principal of, redemption premium, if any, and interest on such subordinated debt of the City. (7)The balance of any moneys remaining in the Revenue Fund after the above required payments have been made may either be deposited into either the Renewal and Replacement Fund or the Sinking Fund, or may be used for the purchase or redemption of Bonds, or may be used by the City for any lawful purpose of the City. Reserve Account The "Reserve Requirement" shall be such amount as determined by subsequent Resolution of the City relating to a specific Series of Bonds adopted prior to the issuance of such Bonds, which may not exceed the lesser of (i) the Maximum Bond Service Requirement, (ii) 125% of the average annual Bond Service Requirement or (iii) the largest amount as shall not adversely affect the exclusion of interest on the Bonds from gross income for Federal income tax purposes. The City shall determine by subsequent 13 Resolution relating to a specific Series of Bonds adopted prior to the issuance of such Bonds whether such Series of Bonds will be secured by the Reserve Account, and if such Series of Bonds will be secured by a Reserve Account or a Reserve Subaccount, whether such Series of Bonds will be secured by a separate Series specific Reserve Subaccount or on a parity with other Series of Bonds in the Reserve Account or a Reserve Subaccount, and if secured with other Series of Bonds on a parity basis, which Series of Bonds will be so secured. Pursuant to the Resolution, the Reserve Requirement for the Series 2020 Bonds shall be $0.00 and the Series 2020 Bonds will not be entitled to any security provided by any monies in the Reserve Account. Moneys in the Reserve Account or a Reserve Subaccount, as applicable, shall be used only for the purpose of the payment of maturing principal (including Amortization Installments) of or interest on the Series of Bonds secured by such Reserve Account or Reserve Subaccount, as applicable, when the moneys in the Sinking Fund and allocated to such Series of Bonds are insufficient therefor, and for no other purpose. Upon the issuance by the City of any Additional Bonds under the terms, limitations and conditions provided in the Bond Ordinance, the payments into the Reserve Account or Reserve Subaccount, as applicable, shall be increased so that the amount on deposit therein shall be equal to the Reserve Requirement established for such Series of Additional Bonds in accordance with the subsequent Resolution authorizing such Series of Additional Bonds. Any withdrawals from the Reserve Account or a Reserve Subaccount shall be subsequently restored from the first moneys available in the Revenue Fund after all required current payments into the Sinking Fund and into the Reserve Account and each Reserve Subaccount, as applicable, including all deficiencies for prior payments into the Sinking Fund, have been made in full. Additional Bonds Additional Bonds, payable on a parity from the Pledged Revenues with the Series 2020 Bonds and all other Outstanding Bonds, may be issued for the purposes of refunding all or a portion of the outstanding Bonds or financing the cost of extensions, additions and improvements to the System and for the acquisition and construction of, and extensions, additions and improvements to, sewer and/or water or reclaimed water systems which are to be consolidated with the System and operated as a single combined utility. Additional Bonds, other than for refunding purposes, will be issued only upon compliance with all of the conditions set forth in the Bond Ordinance, including the following: (1)There shall have been obtained and filed with the Clerk a certificate of the Finance Director stating: (a) that the books and records of the City relative to the System have been audited by a qualified and recognized firm of independent certified public accountants; (b) based on such audited financial statement, that the amount of the adjusted Net Revenues derived for the Fiscal Year preceding the date of issuance of the proposed Additional Bonds or for any twelve (12) consecutive months during the eighteen (18) 14 months immediately preceding the date of issuance of the Additional Bonds with respect to which such certificate is made, adjusted as herein below provided; and (c) based on such audited financial statement, that the aggregate amount of such Net Revenues, as adjusted, for the period for which such Net Revenues are being certified is equal to not less than 120% of the Maximum Bond Service Requirement becoming due in any Fiscal Year thereafter on (i) all Parity Bonds and the Bonds issued under the Bond Ordinance, if any, then Outstanding, and (ii) on the Additional Bonds with respect to which such certificate is made. (2)Upon recommendation of the Consulting Engineers, the Net Revenues certified pursuant to (b) in the previous paragraph may be adjusted by including: (a) 100% of the additional Net Revenues which in the opinion of the Consulting Engineer would have been derived by the City from rate increases adopted before the Additional Bonds are issued, if such rate increases had been implemented before the commencement of the period for which such Net Revenues are being certified, and (b) 100% of the additional Net Revenues estimated by the Consulting Engineer to be derived during the first full twelve month period after the facilities of the System are extended, enlarged, improved or added to with the proceeds of the Additional Bonds with respect to which such certificate is made. The adjustments described in (b) of this paragraph may only be made if the Net Revenues as adjusted under (a) of this paragraph for the period for which such Net Revenues are being certified equals at least 1.00 times the Maximum Bond Service Requirement becoming due in any Fiscal Year thereafter on (i) all Bonds then outstanding; and (ii) on the Additional Bonds with respect to which such certificate is made. The City need not comply with the provisions of paragraph (1) above if and to the extent the Additional Bonds to be issued are refunding bonds, and if the City shall cause to be delivered a certificate of the Finance Director setting forth the annual debt service (i) for the Bonds then Outstanding and (ii) for all Series of Bonds to be immediately Outstanding thereafter and stating that the Bond Service Requirement in any year pursuant to (ii) above is not greater than the Bond Service Requirement in the corresponding year set forth pursuant to (i) above. See "APPENDIX C - Copies of Bond Ordinance and Resolution" attached hereto and "– Parity Bonds" below. Series 2020 Bonds Not a Debt of the City The Series 2020 Bonds shall not be or constitute general indebtedness of the City within the meaning of any constitutional, statutory or charter provision or limitation, but shall be payable solely from and secured by a prior lien upon and pledge of the Pledged Revenues as provided in the Bond Ordinance. No Bondholder shall ever have the right tocompel the exercise of the ad valorem taxing power of the City or taxation in any form of any real property therein to pay the Series 2020 Bonds or the interest thereon or be entitled 15 to payment of such principal and interest from any other funds of the City except from the Pledged Revenues in the manner provided in the Bond Ordinance. Parity Bonds Upon the issuance of the Series 2020 Bonds, there will be outstanding under the Bond Ordinance $3,940,000 principal amount of the Series 2011 Bonds, $69,270,000 principal amount of the Series 2017 Bonds and $28,705,000 principal amount of the Series 2017B Bond. The Series 2011 Bonds, Series 2017 Bonds and Series 2017B Bond rank on parity with the Series 2020 Bonds as to the lien and pledge of the Pledged Revenues and are referred to collectively as the "Parity Bonds." It is anticipated that the City will continue to issue Additional Bonds from time to time on parity with all Bonds then outstanding in order to finance additions, expansions and improvements to the System and to refund outstanding Bonds. See "THE WATER AND SEWER SYSTEM – Future Water and Sewer System Capital Improvements" herein and "APPENDIX F – Fiscal Year 2019 Water, Sewer and Reclaimed Water Revenue Sufficiency Analysis (Rate Study)" attached hereto. [Remainder of page intentionally left blank] 16 DEBT SERVICE REQUIREMENTS Series 2020 Bonds Fiscal Year Ending September 30 Debt Service on OutstandingParity Bonds(1)Principal Interest Total Total DebtService(1)(2) 2020 $ 1,943,485 2021 6,575,240 2022 6,568,530 2023 6,582,88020246,584,880 2025 6,578,685 2026 6,584,110 2027 6,571,155 2028 6,574,76020296,569,615 2030 6,560,780 2031 6,558,070 2032 6,561,115 2033 6,554,79020349,455,050 2035 9,452,775 2036 9,454,500 2037 9,458,500 2038 9,452,90020399,453,700 2040 9,450,300 $153,545,820 __________________________________(1)Reflects the impact of the refunding of the Refunded Bond; Fiscal Year 2020 payment excludes debt service paid on December 1, 2019.(2)Totals may not add due to rounding. [Remainder of page intentionally left blank] 17 ESTIMATED SOURCES AND USES OF FUNDS SOURCES Principal Amount of Series 2020 Bonds $ Plus/Less: Net Original Issue Premium/Discount Other Legally Available Funds (1)______ Total Sources $ USES Payment of the Refunded Bond $ Costs of Issuance (2)______ Total Uses $ ___________________(1)Includes Sinking Fund transfer in the amount of $__________. (2)Includes Underwriter's discount, financial advisory fees, rating agency fees, printing costs and other miscellaneous costs of issuance. THE WATER AND SEWER SYSTEM Management The responsibility for the operational activities for the City's Public Utilities Department, consisting of potable water distribution, sanitary sewer, and reclaimed water systems, is assigned to the Director of Public Utilities. The Director of Public Utilities (David W. Porter, P.E.) reports to the Assistant City Manager (Micah Maxwell) who reports to the City Manager (William B. Horne, II) who is responsible to the City Council of the City of Clearwater (the "City Council") to administer the policies established by the City Council. William B. Horne, II – City Manager Mr. Horne has been employed by the City as City Manager since 2001. He is a credentialed City Manager as recognized by the International City/County Management Association since 2005. Mr. Horne earned his Bachelor of Science in Chemistry from the University of Tulsa, a Master's in Human Resources Management from Pepperdine University, and a Masters in Political Science from Auburn University. He has over 40 years of progressive leadership and management experience with documented success in the area of human resources, training, and operations at various organizational levels. Prior 18 to accepting his position with the City, he was in the United States Air Force retiring with the rank of Colonel. Micah Maxwell – Assistant City Manager Mr. Maxwell joined the City in 2017 as an Assistant City Manager. His duties include assisting the City Manager in the day to day management of the City by directly overseeing Finance/Budget, Information Technology, Parks and Recreation, Planning and Development, Public Utilities, Solid Waste/General Services and the Library. Mr. Maxwell earned his Bachelor of Arts in Political Science from the University of Florida in 1999 and a Master's in Public Administration from the University of South Florida in 2001. Additionally, Mr. Maxwell attended the Senior Executive Institute at the University of Virginia and is a graduate of the Leadership ICMA program of the International City/County Management Association. In 2019, Mr. Maxwell was appointed to serve as President-Elect for the Florida City/County Management Association and has served on the association's board of directors since 2014. Mr. Maxwell first worked for the City in 2003 as a Management Intern for City Manager Bill Horne. Mr. Maxwell left the City to serve as the Assistant to the City Manager in the neighboring community of Belleair in 2004 and was promoted to Assistant Town Manager in 2005. In 2006, Micah was hired to be Belleair's Town Manager, a position he held until 2017 when he accepted his current position with the City. David Porter – Public Utilities Director Mr. Porter began his employment with the City in 2010 as the Wastewater Environmental Technologies Manager. In May of 2015 he was promoted to Public Utilities Assistant Director and in August of that year he was again promoted to Public Utilities Director. Mr. Porter has over 46 years of experience in all facets of utility operations/maintenance, engineering and administration and has worked with utilities throughout the United States and the world. For 13 years just prior to joining the City, he was the owner and principal engineer at an engineering consulting firm that provided preliminary and final design services, operations/maintenance assistance, regulatory permitting and compliance services, Public Utilities Commission rate case and quality of service support to investor owner utilities, forensic engineering and expert witness support to investor owned utilities, and numerous other services to his clients. Mr. Porter is a graduate of the University of Massachusetts with a Bachelor of Civil Engineering (BSCE) degree. He has held wastewater treatment plant operator certification at the highest levels in Florida since 1981 and Massachusetts since 1973. He became a Licensed Professional Engineer in Florida in 1985. He is a member of numerous 19 professional organizations related to utility system operations and management. Mr. Porter has published journal articles and papers and been a featured presenter at professional conferences during his 46 year career. Water System The City's water distribution system consists of approximately 592 miles of water mains ranging up to 20 inches in diameter and contains numerous interconnections between piping making larger size mains unnecessary for existing flow conditions. Water storage within the distribution system consists of a series of six ground level water storage pumping systems and two elevated tank water storage facilities. The two elevated storage tanks are currently off-line. Total current water storage capacity currently sits at 23.5 million gallons. The water supply for the area served by the System is currently derived from existing City well fields and the purchase of water from Pinellas County (the "County"). The City currently has 44 Floridan Aquifer wells throughout the service area permitted for 14.3 million gallons per day ("MGD"), each equipped with automatic control systems. The City operates three potable water plants. Two of these plants, Reverse Osmosis One ("RO1") and Reverse Osmosis Two ("RO2"), utilize reverse osmosis treatment plus the addition of polyphosphate for corrosion control and chlorination/chloramination for disinfection. The raw water source for RO1 is water from the upper zone A of the Floridan aquifer. RO2 treats brackish water from the lower zone A to the semi confining layer between lower zone A and zone B of the Floridan aquifer. The City also operates one traditional water treatment plant, Water Treatment Plant Three ("WTP3"), which utilizes only chlorination/chloramination for disinfection plus polyphosphate for corrosion control. The raw water source for WTP3 is water from the upper zone A of the Floridan aquifer. An expansion of RO1 was completed in 2014. RO1 has a current capacity of 4.5 MGD of finished water. RO2 was completed and placed into service in June 2015. RO2 has a current capacity of 6.25 MGD of finished water. WTP3 has a current capacity of 12.0 MGD of finished water. In all, the City has the plant capacity to produce up to 22.75 MGD of finished water. In Fiscal Year 2019, the City produced on average approximately 8.645MGD from City well fields. Converting WTP3 to a reverse osmosis plant is currently in the design phase, with anticipated completion of the project scheduled for the 2021-2023 time frame. This conversion will provide the City with additional City-produced water production. In addition, as new and/or rehabilitated wells are placed into operation over the next two years, RO2 will produce more water, increasing City water production rates. The City's Fiscal Year 2019 water demand was approximately 11.0 MGD. In order to fulfill this demand, the City purchased an average of 4.3 MGD from the County. The City has a bulk water purchase agreement with the County which provides that the County will supply up to 15 MGD of the City's service area water needs on an as-needed basis. Supply under the contract commenced on October 1, 2005 and will terminate on September 20 30, 2035. The average purchase over the last five years has been approximately 35% of the agreed upon amount. The contract rate in Fiscal Year 2019 was $4.1742 per 1,000 gallons. This rate is set by the Pinellas County Board of County Commissioners and is based on a prorated share of revenue cost requirements of the County water system, including production and transmission costs required for the supply of water to County water users. The County has been reliably providing the City with supplemental finished water supplies for many years with an excellent record of consistently meeting the City's needs. The County obtains its water from Tampa Bay Water, a regional water supply authority ("Tampa Bay Water"). Tampa Bay Water has a contractual obligation to provide the County with 100% of its water requirements. Currently, Tampa Bay Water produces approximately 160 MGD of finished water of which the County receives approximately 49 MGD. The County has in the past obtained as high as 70 MGD from Tampa Bay Water. Tampa Bay Water is the regional water supplier for the entire Tampa Bay area and is made up of six member governments, which include the counties of Pinellas, Hillsborough, and Pasco and the cities of New Port Richey, St. Petersburg, and Tampa. The following chart shows the average daily water flow on an annualized basis over the past five years: Source and Volume of Water Pumped(in MGD, averaged over the Fiscal Year) Fiscal Year City Wells County Total 2015 7.0 5.1 12.1 2016 8.2 3.7 11.7 2017 6.7 5.4 11.4 2018 7.3 5.0 12.3 2019 (unaudited)7.9 4.2 12.1 _____________________________ Source: The City of Clearwater [Remainder of Page Intentionally Left Blank] 21 The table below illustrates the number of water service customers over the past five years. Historical Numbers of Water Service Customers(as of September 30 of the year indicated) Fiscal Year Water Service Customers 2015 37,018 2016 37,302 2017 37,598 2018 37,773 2019 (unaudited)37,848 _____________________________ Source: The City of Clearwater The 10 largest water customers in Fiscal Year 2019 based upon revenues produced are provided in the table below: Ten Largest Water CustomersFiscal Year Ended September 30, 2019 (unaudited) Rank Name of User Revenues Produced % of Total Revenues 1 City of Clearwater $1,203,026 3.18% 2 Church of Scientology 913,776 2.41 3 Morton Plant Hospital 804,079 2.12 4 Pinellas County Schools 437,889 1.16 5 K&P Clearwater Estate 258,348 0.68 6 Pinellas County Government 240,944 0.64 7 Sheraton Sand Key 212,417 0.56 8 The Sandpearl Resort 208,216 0.55 9 CP Clearwater 187,024 0.49 10 Madison Place Clearwater 182,288 0.48 Total $4,648,007 12.28%_____________________________ Source: The City of Clearwater Sewer System The City's sanitary sewage collection and transport system is composed of approximately 363 miles of gravity mains and 38 miles of force mains, utilizing 75 lift stations. The age of the various components which make up the City's wastewater collection and transport system varies from less than one-year old to over 50 years old. The City has an on-going inspection, repair and replacement program which is utilized to locate infrastructure that requires repair and replacement. Upon the determination of the 22 need for repair or replacement, such facilities are either lined or replaced in the case of gravity lines and force mains or repaired or components replaced in the case of lift stations. As portions of the collection and transport system age to the end of their useful life the City plans infrastructure replacement to ensure the integrity of the System overall. Three water reclamation facilities ("WRF") with a combined design capacity of 28.5 MGD provide treatment for the wastewater produced by the City's residents. These three plants are the Marshall Street WRF (10 MGD capacity), the Northeast WRF (13.5 MGD capacity) and the East WRF (5.0 MGD capacity). The Marshall Street WRF was constructed in the 1950's, the East WRF was constructed in the 1960's and the Northeast WRF was constructed in the 1970's. These plants have been expanded and upgraded numerous times to their current design capacities and to add advanced wastewater treatment capabilities. The facilities include a number of advanced treatment processes, such as nitrogen and phosphorus removal, effluent filtration, and high rate disinfection. All three facilities produce highly treated reclaimed water for private, commercial and municipal use. The Northeast WRF and the Marshall Street WRFalso provide for sludge stabilization by anaerobic digestion, sludge thickening and dewatering by centrifugation. The three facilities are maintained to ensure their continued operation and performance. Numerous major components at each facility have been replaced/renewed in the past five years including secondary clarifiers, effluent filters, electronic controls, emergency generators, process components such as aeration devices and mixers, and in-plant pumping systems. As facility components reach the end of their useful life, components are replaced or entire units are replaced. The City has entered into an Interlocal Agreement with the City of Safety Harbor, Florida ("Safety Harbor") to share operations and maintenance costs of the Northeast WRF. Pursuant to the agreement, the City bills Safety Harbor on the basis of usage calculated by (i) an operating cost charge, which is total cost of operations allocated on the basis of average use, plus (ii) a capacity cost charge, which is a reimbursement for replacement of the facility. The Interlocal Agreement was renewed in July of 2018 and expires in July of 2048. [Remainder of Page Intentionally Left Blank] 23 The following table shows the average daily sewage flow on an annualized basis over the past five years: Average Daily Sewage Flow(in MGD, averaged over the Fiscal Year) Fiscal Year Flow In MGD 2015 13.8 2016 13.5 2017 12.5 2018 12.5 2019 (unaudited)13.3 ____________________________ Source: The City of Clearwater The table below illustrates the number of sewer service customers over the past five years: Historical Number of Sewer Service Customers (as of September 30 of the year indicated) Fiscal Year Sewer Service Customers 2015 33,390 2016 33,763 2017 33,947 2018 33,111 2019 (unaudited)34,183 ____________________________Source: The City of Clearwater [Remainder of Page Intentionally Left Blank] 24 The 10 largest sewer customers in Fiscal Year 2019 based upon sewer revenues are shown in the table below: Ten Largest Sewer CustomersFiscal Year Ended September 30, 2019 (unaudited) Rank Name of User Revenues Produced % of Total Revenues 1 Morton Plant Hospital $ 856,048 2.00% 2 City of Clearwater 728,654 1.71 3 Church of Scientology 716,132 1.68 4 Pinellas County Schools 559,410 1.31 5 Sheraton Sand Key 269,790 0.63 6 K&P Clearwater Estate 265,461 0.62 7 CP Clearwater, LLC 247,632 0.58 8 Pinellas County Government 232,922 0.55 9 Clearwater Housing Authority 227,342 0.53 10 CCRC – Regency Oaks 225,563 0.53 Total $4,328,952 10.14%_____________________________ Source: The City of Clearwater Reclaimed Water System The City's reclaimed water system was established in 1988 and expanded in 1998. It operates under a master reuse permit with allowable distribution of 12 MGD for beneficial use. The reclaimed system uses treated effluent to produce high quality reclaimed water at all three water reclamation facilities. The storage capacity is currently 15 million gallons, with five million gallons each at the Northeast WRF, Marshall Street WRF and Skycrest Reclaimed Water Booster Pump Station. The reclaimed water system has 141 miles of completed pipeline distribution, which supplied City customers with 6.1 MGD in Fiscal Year 2019. In addition, pursuant to an Interlocal Agreement with the County, the reclaimed water system offers 3 MGD for sale to the County. This Interlocal Agreement was renewed in 2012 and expires in 2037. The operation of the reclaimed water system has enabled the City to meet various permitting requirements relating to its wastewater treatment facilities, reduced the number of separate water meters for irrigation, and has significantly reduced the use of potable water for irrigation purposes. 25 The table below lists the average daily flows of reclaimed water over the past five years: Annual Daily Reclaimed Water Flow(in MGD, averaged over the Fiscal Year) Fiscal Year Flow 2015 4.7 2016 5.2 2017 6.4 2018 5.5 2019 (unaudited)6.1 _____________________________ Source: The City of Clearwater The table below illustrates the number of reclaimed water service customers over the past five years: Historical Number of Reclaimed Water Service Customers(as of September 30 of the year indicated) Fiscal Year Reclaimed Water Service Customers 2015 7,218 2016 7,441 2017 7,67720187,713 2019 (unaudited)7,739 ______________________________Source: The City of Clearwater [Remainder of Page Intentionally Left Blank] 26 Historical Debt Service Coverage The following table is a schedule of the Water & Sewer System debt service coverage for the past five years. Historical Debt Service Coverage By Net Revenues Fiscal Years Ended September 30(1) (In Thousands of $) 2014 2015 2016 2017 2018 Gross Revenues(2)$68,601 $72,303 $76,164 $81,897 $83,739 Costs of Operations & Maintenance (2)$44,732 $47,680 $42,131 $50,177 $46,484 Net Revenues Available for Debt Service(2)$23,869 $24,623 $34,033 $31,720 $37,255 Annual Debt Service $13,779 $13,560 $13,635 $12,634 $12,166 Coverage (1.15x required)1.73 1.82 2.50 2.51 3.06______________________________(1)Though the audited financial statements for the Fiscal Year ended 2019 are unavailable, the Rate Consultant (hereinafter defined) has estimated the debt service coverage for such Fiscal Year to be 3.45. See Schedule 8 of "APPENDIX F - Fiscal Year 2019 Water, Sewer and Reclaimed Water Revenue Sufficiency Analysis (Rate Study)" attached hereto. (2)Revenues used in the calculation include interest earnings and exclude extraordinary gain and contributed revenues. Expenses used exclude depreciation (and similar non-cash expenses), amortization of bond discount, bond interest, sinking fund and reserve requirements and extraordinary loss. Source: The City of Clearwater For a pro forma of forecasted Net Revenues and debt service coverage for the Fiscal Years 2019 through and including 2029, see Schedule 8 of "APPENDIX F - Fiscal Year 2019 Water, Sewer and Reclaimed Water Revenue Sufficiency Analysis (Rate Study)" attached hereto. Future Water and Sewer System Capital Improvements The City of Clearwater Fiscal Year 2019 Water, Sewer and Reclaimed Water Revenue Sufficiency Analysis (the "Rate Study") forecasts a capital improvement program ("CIP") for the System over the 11-year period from 2019 through 2029 in the amount of approximately $634 million. Of this amount, it is anticipated that the City will incur long- term revenue bond financing of approximately $196 million from the future issuance of revenue bonds, including an anticipated bond issue in 2022. The balance of the costs of the capital improvement program are expected to be paid from impact fees, infrastructure sales tax revenues, grant funding, renewal and replacement and unexpended amounts on deposit in the Revenue Fund after payment of debt service on Bonds. See "APPENDIX F - Fiscal Year 2019 Water, Sewer and Reclaimed Water Revenue Sufficiency Analysis 27 (Rate Study)" attached hereto and "– Establishment of Rates, Fees and Charges; Rate Study Recommendations" below. Regulation and Permitting The System is regulated by the United States Environmental Protection Agency and by the State of Florida's Department of Environmental Protection ("FDEP"). The water supply permitting is regulated under the Southwest Florida Water Management District ("SWFWMD"), which grants water use permits. The current water use permit allows an annual average daily withdrawal of 14.3 MGD and is set to expire in December, 2039. Wastewater treatment plants operate under 5-year FDEP permits. The Marshall Street WRF Operating Permit expires in February 2022, the Northeast WRF Operating Permit expires in July 2022, the East WRF Operating Permit expires in June 2022, and the Master Reuse System Operating Permit expires in August 2023. The System is currently operating in compliance with the FDEP Wastewater Facility Operating Permits. The City is currently in discussions with FDEP regarding three regulatory issues: 1.As is the case for most utilities in Florida, the City occasionally experiencessanitary sewer overflows due to occasional piping damage as a result of (a) contractors hitting wastewater pipelines, (b) sewer clogging, and (c) excessive storm events caused by rain and ground water infiltration and inflow. The FDEP has indicated that they will be issuing a Settlement Agreement that will require the City to pay minimal administrative costs and complete in-kind projects to resolve the issues they have identified. The City has not yet received the Settlement Agreement. However, the City has sufficient funding in place as part of the CIP program to fund the anticipated in-kind projects required by the Settlement Agreement. The City currently has CIP projects underway designed to address infiltration and inflow issues and such problems are anticipated to diminish as the projects are completed. 2.A contractor damaged one of the groundwater monitor wells that are required by the City's Master Reuse System FDEP Operating Permit. The City is in discussions with FDEP related to modifying the current groundwater monitoring system to address the loss of this well and better utilize the monitoring system. The City does not anticipate any regulatory action will be required to resolve this issue. 3.The City is seeking to obtain approval for a minor Operating Permit modification to alter the operation of the brine disposal injection well at the RO2 water plant to reflect updated operating conditions. The City does not anticipate any regulatory action, other than the issuance of the requested Operating Permit modification. 28 Establishment of Rates, Fees and Charges; Rate Study Recommendations The City establishes by ordinance rates, fees and charges for use of the System. The ordinance is adopted in response to periodic rate studies conducted by Stantec, the City's utility rate consultant (the "Rate Consultant"). The most recent study, "FY 2019 Water, Sewer and Reclaimed Water Revenue Sufficiency Analysis," dated September 10, 2019, is the basis for establishing future rates, fees, and charges for System services based upon a planning period of Fiscal Year 2019 through Fiscal Year 2029. The Rate Study notes that: "In recent years, many challenges have affected the financial performance of the Utility. Pinellas County, the City's wholesale water provider, has continued to increase its wholesale rates. Aging infrastructure continues to drive the need for additional renewal and replacement projects within the Utility's capital improvement plan. Moreover, a combination of recent economic conditions and continued conservation awareness has caused many of the Utility's customers to reduce the quantity of water they are using." Therefore, the objective of the current Rate Study, taken together with previous annual rate studies, is to evaluate the sufficiency of the System's current rates and proposed annual rate adjustments for water and wastewater and to identify a plan of future increases that would provide adequate revenue to fund the System's cost requirements over a multi- year projection period while recognizing the effects of recent minor customer and demand growth, increasing purchased water costs, and increasing renewal and replacement requirements. The Rate Study states that annual 4.0% rate increases beginning Fiscal Year 2020 through Fiscal Year 2029 "should provide adequate revenue to meet the projected requirements of the Utility during each remaining year of the projection period." On September 7, 2017, the City Council adopted Ordinance 9054-17 approving a rate increase of 6.25% for Fiscal Year 2018 and annual rate increases of 4.0% from Fiscal Year 2019 through Fiscal Year 2022. The Rate Study also recommends that the City should continue to review the financial performance of the System on an annual basis and evaluate the adequacy of its revenues and current plan of rate increases. Doing so will allow for the recognition of updated revenue and expense information and changes in economic conditions so that any necessary adjustments can be made to planned rate increases in order to allow the System to meet its requirements during the projection period and minimize rate impacts to customers from future events occurring differently than currently projected. The complete Rate Study is included herein as APPENDIX F and a schedule of rates, fees, and charges is attached hereto as APPENDIX G. 29 No Mortgage or Sale of the System Pursuant to the Bond Ordinance, the City irrevocablycovenants, binds and obligates itself not to sell, lease, encumber or in any manner dispose of the System as a whole until all of the Bonds shall have been paid in full as to both principal and interest, or payment shall have been duly provided for under the Bond Ordinance. The foregoing provision notwithstanding, the City may sell or dispose of, for fair market value, any properties or parts of the System which the Consulting Engineer shall certify in writing are not necessary for the continued operation of the System and that the sale or disposal of which will not adversely affect the Gross Revenues to be derived from the System to such an extent that the City will fail to comply with the covenants contained in the Bond Ordinance. The proceeds derived from any sale or disposal of any properties or parts of the System as provided for in the above paragraph shall, in the discretion of the City, be (1) deposited in the Renewal and Replacement Fund and used exclusively for the purpose of paying the cost of extensions, enlargements or additions to, or the replacement of capital assets of the System and for unusual or extraordinaryrepairs thereto, or for the constructionor acquisition of additions, extensions and improvements to the System, or (2) for the purchase or retirement of the Bonds then outstanding. However, if the Consulting Engineer certifies that proceeds are necessary for the purposes stated in part (1) above, such proceeds shall remain in the Renewal and Replacement Fund until such certified requirements are satisfied, and the proceeds shall not be used for any other purpose allowed by the Bond Ordinance. No Free Service Pursuant to the Bond Ordinance, the City will not render or cause to be rendered any free services of any nature by its System, nor will any preferential rates be established for users of the same class. This covenant shall not prevent individual contracts with other governmental entities for the wholesale delivery of services of the System. The City, including its departments, agencies and instrumentalities, shall avail itself of the facilities or services provided by the System or any part thereof, and the same rates, fees or charges applicable to other customers receiving like services under similar circumstances shall be charged to the City and any such department, agency or instrumentality. Such charges shall be paid as they accrue, and the City shall transfer from its general funds sufficient sums to pay such charges. The revenues so received shall be deemed to be Gross Revenues derived from the operation of the System and shall be deposited and accounted for in the same manner as other Gross Revenues derived from such operation of the System. 30 Mandatory Connection To the full extent permitted by law, the City will adopt and keep in force and effect an ordinance requiring that all improved premises with respect to which water or sewer services from the System are available shall connect such premises to the System and shall obtain available water and sewer services only from the System. Climate Change The State of Florida is naturally susceptible to the effects of extreme weather events and natural disasters, including floods, droughts, and hurricanes, which could result in negative economic impacts on coastal communities like the City. Such effects can be exacerbated by a longer-term shift in the climate over several decades (commonly referred to as climate change), including increasing global temperatures, rainfall intensification and rising sea levels. The occurrence of such extreme weather events could damage the local infrastructure that provides essential services to the City, including the System. The economic impacts resulting from such extreme weather events could include a decline in Net Revenues, interruption of service and escalated recovery costs. No assurance can be given as to whether future extreme weather events will occur that could materially impair the financial condition of the City or damage the System. While the City believes that it maintains adequate insurance to cover any loss arising from such natural disasters, there can be no assurance that in severe circumstances such insurance will be adequate to rebuild its facilities. Additionally, there can be no assurance that after experiencing natural disasters, citizens will continue to choose to live in or travel to areas affected by such disasters. Such decisions could have an adverse impact on the revenues of the City. [CLIMATE CHANGE PLAN TO BE PROVIDED] Cybersecurity Computer networks and systems used for data transmission and collection are vital to the efficient operations of the City. City systems provide support to departmental operations and constituent services by collecting and storing sensitive data, including intellectual property, security information, proprietary business process information, information applying to suppliers and business partners, and personally identifiable information of customers, constituents and employees. The secure processing, maintenance and transmission of this information is critical to departmental operations and the provision of citizen services. Increasingly, governmental entities are targeted by cyberattacks seeking to obtain confidential data, disrupt critical services or obtain ransoms. A rapidly changing cyber risk landscape may introduce new vulnerabilities that attackers/hackers can exploit in attempts to effect breaches or service disruptions. Employee error and/or malfeasance may also affect confidentiality, integrity and availability of systems and the information stored there. The potential disruption, access, modification, disclosure or destruction of data could result in interruption of the efficiency 31 of City commerce, initiation of legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, disruptions in operations and the services provided, and the loss of confidence in City operations, ultimately adversely affecting City revenues. The City maintains a comprehensive information security program to protect the confidentiality, integrity, and availability of the City's critical systems and sensitive data. The solution is designed to assess and mitigate current threats and the risk of data breaches to local government. The City also maintains a comprehensive insurance policy covering various aspects related to cybersecurity incidents. [TO BE CONFIRMED BY THE CITY] PENSION AND OTHER POST-EMPLOYMENT BENEFIT LIABILITIES Defined Benefit Pension Plans The City maintains and self-administers two separate single employer defined benefit pension plans. The Employees' Pension Plan covers all permanent, full-time City employees who successfully pass the required physical examination; except for firefighters employed prior to July 1, 1963, and certain unclassified (primarily managerial) employees.The Firefighters' Relief and Pension Plan covers eligible firefighters hired prior to July 1, 1963, and is closed to new entrants. Net Pension Liability/(Asset) for the Employees' Pension Plan and the Firefighters' Relief and Pension Plan for the five years ended on September 30, 2018 was as follows: Total Pension Plan Fiduciary Net Pension Employees' Pension Plan Liability Net Position Liability/(Asset) September 30, 2018 $939,291,240 $1,043,759,224 $(104,467,984) September 30, 2017 $902,629,886 $980,288,359 $(77,658,473) September 30, 2016 $880,355,998 $905,239,823 $(24,883,825) September 30, 2015 $847,358,253 $840,268,849 $7,089,404 September 30, 2014 $819,598,826 $863,589,949 $(43,991,123) Firefighters' Relief and Pension Plan September 30, 2018 $2,709,051 $3,566,898 $(857,847) September 30, 2017 $3,162,699 $3,842,781 $(680,082) September 30, 2016 $3,360,237 $4,360,757 $(1,000,520) September 30, 2015 $3,771,835 $4,615,299 $(843,464) September 30, 2014 $3,797,780 $4,860,303 $(1,062,523) ______________________________Source: The City of Clearwater 32 The Employees' Pension Plan liability was determined by an actuarial valuation as of January 1 updated to September 30 using the following actuarial assumptions applied to all measurement periods: Inflation 2.5% Salary increases 3.5% to 7.9% depending upon service, including inflation Discount rate 7.0% Investment rate of return 7.0% The Firefighters' Relief and Pension liability was determined by an actuarial valuation as of September 30 using the following actuarial assumptions applied to all measurement periods: Inflation 2.0% Salary increases Not applicable Discount rate 3.0% Investment rate of return 3.0% See Note IV D, Employee retirement systems and pension plans, included in the Notes to the Basic Financial Statements in APPENDIX B hereto for more information regarding the City's defined benefit pension plans. Other Post-Employment Benefits (OPEB) The City administers a single-employer defined benefit healthcare plan that provides medical insurance benefits to its employees and their eligible dependents. The City is required by State Statute to provide eligible retirees the opportunity to participate in the plan as the same cost that is applicable to active employees. The City provides no explicit medical insurance subsidy to retirees, only the implicit subsidy required by State Statute. Additionally, the City provides and pays for $1,000 of term life insurance for retirees who retired before October 1, 2008. The City's total OPEB liability and OPEB annual expense since the Fiscal Year 2018 implementation of GASB Statement #75 were as follows: Fiscal Year Ended Total OPEB Cost Total OPEBExpense 9/30/2018 $ 27,262,128 $2,539,925 9/30/2017 $ 26,640,313 unavailable See Note IV E, Post-Employment benefits other than pension, included in the Notes to the Basic Financial Statements in APPENDIX B hereto for a description of the actuarial assumptions applied with respect to the City's actuarial accrued OPEB liability. 33 FINANCIAL STATEMENTS The combined financial statements and Water and Sewer enterprise fund financial statements of the City as of September 30, 2018, are contained in the City's Comprehensive Annual Financial Report for the Fiscal Year ended September 30, 2018, attached hereto as APPENDIX B, which financial statements have been audited by Cherry Bekaert LLP as stated in their report. The consent of Cherry Bekaert LLP to include in this Official Statement the aforementioned report was not requested, and the general purpose financial statements of the City are provided only as publicly available documents. Cherry Bekaert LLP, the City's independent auditor, has not been engaged to perform and has not performed, since the date of its report included herein, any procedures on the financial statements addressed in that report. Cherry Bekaert LLP also has not performed any procedures relating to this Official Statement. INVESTMENT POLICY OF THE CITY Pursuant to the requirements of Section 218.415, Florida Statutes, the City adopted a written investment policy, which applies to all funds held by or for the benefit of the City Council (except for proceeds of bond issues which are deposited in escrow and debt service funds and governed by their bond documents) and funds of Constitutional Officers and other component units of the City. The objectives of the investment policy, listed in order of importance, are: 1.Safety of principal 2.Provision of sufficient liquidity 3.Optimization of return within the constraints of safety and liquidity The investment policy limits the securities eligible for inclusion in the City's portfolio. The City will attempt to maintain a weighted average maturity of its investments at or below three years; however, the average maturity of investments may not exceed five years. To enhance safety, the investment policy requires the diversification of the portfolio to reduce the risk of loss resulting from over-concentration of assets in a specific class of security. The investment policy also requires the preparation of periodic reports for the City Council of all outstanding securities by class or type, book value, income earned and market value as of the report date. Notwithstanding the foregoing, moneys held in the funds and accounts established under the Bond Ordinance may be invested only in Authorized Investments, as described in the Bond Ordinance. 34 LITIGATION In the opinion of the City Attorney, no legal proceedings are pending, as to which the City has received service of process or, to the best of her knowledge, threatened that materially affect the City's ability to perform its obligations to the holders of the Series 2020 Bonds or that materially affect the Pledged Revenues. In the opinion of the City Attorney, there is no litigation or controversy of any nature now pending or, to the City's knowledge, threatened to restrain or enjoin the issuance, sale, execution or delivery of the Series 2020 Bonds or in any way contesting the validity of the Series 2020 Bonds or any proceedings of the City taken with respect to the authorization, sale or issuance of the Series 2020 Bonds or the pledge or application of any moneys provided for the payment of the Series 2020 Bonds. RATINGS [S&P Global Ratings, a business unit of Standard & Poor's Financial Services LLC ("S&P") and Moody's Investors Service ("Moody's")] have assigned ratings of "__" (_______ outlook) and "__" (_______ outlook) respectively, to the Series 2020 Bonds. Such ratings reflect only the views of such organizations and any desired explanation of the significance of such ratings should be obtained from the respective rating agency at the following addresses: [S&P, 55 Water Street, 38th Floor, New York, New York 11238] and [Moody's, 7 World Trade Center, New York, New York 10007]. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by the rating agencies, if in the judgment of such rating agencies, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the Series 2020 Bonds. TAX MATTERS General The Internal Revenue Code of 1986, as amended (the "Code"), establishes certain requirements which must be met subsequent to the issuance of the Series 2020 Bonds in order that interest on the Series 2020 Bonds be and remain excluded from gross income for purposes of federal income taxation. Non-compliance may cause interest on the Series 2020 Bonds to be included in federal gross income retroactive to the date of issuance of the Series 2020 Bonds, regardless of the date on which such non-compliance occurs or is ascertained. These requirements include, but are not limited to, provisions which prescribe yield and other limits within which the proceeds of the Series 2020 Bonds and the other 35 amounts are to be invested and require that certain investment earnings on the foregoing must be rebated on a periodic basis to the Treasury Department of the United States. The City has covenanted in the Resolution to comply with such requirements in order to maintain the exclusion from federal gross income of the interest on the Series 2020 Bonds. In the opinion of Bond Counsel, assuming compliance with certain covenants, under existing laws, regulations, judicial decisions and rulings, interest on the Series 2020 Bonds is excluded from gross income for purposes of federal income taxation. Interest on the Series 2020 Bonds is not an item of tax preference for purposes of the federal alternative minimum tax. Except as described above, Bond Counsel will express no opinion regarding other federal income tax consequences resulting from the ownership of, receipt or accrual of interest on, or disposition of Series 2020 Bonds. Prospective purchasers of Series 2020 Bonds should be aware that the ownership of Series 2020 Bonds may result in collateral federal income tax consequences, including (i) the denial of a deduction for interest on indebtedness incurred or continued to purchase or carry Series 2020 Bonds; (ii) the reduction of the loss reserve deduction for property and casualty insurance companies by fifteen percent (15%) of certain items, including interest on the Series 2020 Bonds; (iii) the inclusion of interest on the Series 2020 Bonds in earnings of certain foreign corporations doing business in the United States for purposes of the branch profits tax; (iv) the inclusion of interest on the Series 2020 Bonds in passive income subject to federal income taxation of certain Subchapter S corporations with Subchapter C earnings and profits at the close of the taxable year; and (v) the inclusion of interest on the Series 2020 Bonds in "modified adjusted gross income" by recipients of certain Social Security and Railroad Retirement benefits for the purposes of determining whether such benefits are included in gross income for federal income tax purposes. As to questions of fact material to the opinion of Bond Counsel, Bond Counsel will rely upon representations and covenants made on behalf of the City in the Resolution, certificates of appropriate officers and certificates of public officials (including certifications as to the use of proceeds of the Series 2020 Bonds and of the property financed or refinanced thereby). PURCHASE, OWNERSHIP, SALE OR DISPOSITION OF THE SERIES 2020 BONDS AND THE RECEIPT OR ACCRUAL OF THE INTEREST THEREON MAY HAVE ADVERSE FEDERAL TAX CONSEQUENCES FOR CERTAIN INDIVIDUAL AND CORPORATE HOLDERS OF THE SERIES 2020 BONDS, INCLUDING, BUT NOT LIMITED TO, THE CONSEQUENCES DESCRIBED ABOVE. PROSPECTIVE HOLDERS OF THE SERIES 2020 BONDS SHOULD CONSULT WITH THEIR TAX SPECIALISTS FOR INFORMATION IN THAT REGARD. 36 Information Reporting and Backup Withholding Interest paid on tax-exempt bonds such as the Series 2020 Bonds is subject to information reporting to the Internal Revenue Service in a manner similar to interest paid on taxable obligations. This reporting requirement does not affect the excludability of interest on the Series 2020 Bonds from gross income for federal income tax purposes. However, in conjunction with that information reporting requirement, the Code subjects certain non-corporate owners of Series 2020 Bonds, under certain circumstances, to "backup withholding" at the rate specified in the Code with respect to payments on the Series 2020 Bonds and proceeds from the sale of Series 2020 Bonds. Any amount so withheld would be refunded or allowed as a credit against the federal income tax of such owner of Series 2020 Bonds. This withholding generally applies if the owner of Series 2020 Bonds (i) fails to furnish the payor such owner's social security number or other taxpayer identification number ("TIN"), (ii) furnished the payor an incorrect TIN, (iii) fails to properly report interest, dividends, or other "reportable payments" as defined in the Code, or (iv) under certain circumstances, fails to provide the payor or such owner's securities broker with a certified statement, signed under penalty of perjury, that the TIN provided is correct and that such owner is not subject to backup withholding. Prospective purchasers of the Series 2020 Bonds may also wish to consult with their tax advisors with respect to the need to furnish certain taxpayer information in order to avoid backup withholding. Other Tax Matters During recent years, legislative proposals have been introduced in Congress, and in some cases enacted, that altered certain federal tax consequences resulting from the ownership of obligations that are similar to the Series 2020 Bonds. In some cases, these proposals have contained provisions that altered these consequences on a retroactive basis. Such alteration of federal tax consequences may have affected the market value of obligations similar to the Series 2020 Bonds. From time to time, legislative proposals are pending which could have an effect on both the federal tax consequences resulting from ownership of the Series 2020 Bonds and their market value. No assurance can be given that legislative proposals will not be enacted that would apply to, or have an adverse effect upon, the Series 2020 Bonds. Prospective purchasers of the Series 2020 Bonds should consult their own tax advisors as to the tax consequences of owning the Series 2020 Bonds in their particular state or local jurisdiction and regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion. Tax Treatment of Original Issue Discount Under the Code, the difference between the maturity amount of the Series 2020 Bonds maturing on ___________ (collectively, the "Discount Bonds"), and the initial 37 offering price to the public, excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers, at which price a substantial amount of the Discount Bonds of the same maturity and, if applicable, interest rate, was sold is "original issue discount." Original issue discount will accrue over the term of the Discount Bonds at a constant interest rate compounded periodically. A purchaser who acquires the Discount Bonds in the initial offering at a price equal to the initial offering price thereof to the public will be treated as receiving an amount of interest excluded from gross income for federal income tax purposes equal to the original issue discount accruing during the period he or she holds the Discount Bonds, and will increase his or her adjusted basis in the Discount Bonds by the amount of such accruing discount for purposes of determining taxable gain or loss on the sale or disposition of the Discount Bonds. The federal income tax consequences of the purchase, ownership and redemption, sale or other disposition of the Discount Bonds which are not purchased in the initial offering at the initial offering price may be determined according to rules which differ from those above. Bondholders of the Discount Bonds should consult their own tax advisors with respect to the precise determination for federal income tax purposes of interest accrued upon sale, redemption or other disposition of the Discount Bonds and with respect to the state and local tax consequences of owning and disposing of the Discount Bonds. Tax Treatment of Bond Premium The difference between the principal amount of the Series 2020 Bonds maturing on _______________ (collectively, the "Premium Bonds"), and the initial offering price to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of such Premium Bonds of the same maturity and, if applicable, interest rate, was sold constitutes to an initial purchaser amortizable bond premium which is not deductible from gross income for federal income tax purposes. The amount of amortizable bond premium for a taxable year is determined actuarially on a constant interest rate basis over the term of each of the Premium Bonds, which ends on the earlier of the maturity or call date for each of the Premium Bonds which minimizes the yield on such Premium Bonds to the purchaser. For purposes of determining gain or loss on the sale or other disposition of a Premium Bond, an initial purchaser who acquires such obligation in the initial offering is required to decrease such purchaser's adjusted basis in such Premium Bond annually by the amount of amortizable bond premium for the taxable year. The amortization of bond premium may be taken into account as a reduction in the amount of tax-exempt income for purposes of determining various other tax consequences of owning such Premium Bonds. Bondholders of the Premium Bonds are advised that they should consult with their own tax advisors with respect to the state and local tax consequences of owning such Premium Bonds. 38 LEGAL OPINIONS Legal matters incident to the authorization, issuance and sale of the Series 2020 Bonds are subject to the approval of Bryant Miller Olive P.A., Tallahassee, Florida, Bond Counsel, whose approving opinion will be in substantially the form set forth in APPENDIX E. Certain other legal matters will be passed upon for the City by Pamela K. Akin, Esquire, City Attorney and by Nabors, Giblin & Nickerson, P.A., Tampa, Florida, Disclosure Counsel to the City. Nelson Mullins Riley & Scarborough, Orlando, Florida is serving as counsel to the Underwriter. ENFORCEABILITY OF REMEDIES The remedies available to the holders of the Series 2020 Bonds upon an Event of Default under the Bond Ordinance are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, the remedies specified by the Bond Ordinance may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2020 Bonds will be qualified, as to the enforceability of the various legal instruments, by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors enacted before or after such delivery. The remedies granted to the Bondholders under the Bond Ordinance do not include the power to accelerate the principal of the Series 2020 Bonds. FINANCIAL ADVISOR Public Resources Advisory Group, Inc., St. Petersburg, Florida, is serving as Financial Advisor to the City with respect to the sale of the Series 2020 Bonds. The Financial Advisor assisted in the preparation of this Official Statement and in other matters relating to the planning, structuring and issuance of the Series 2020 Bonds. The Financial Advisor is not obligated to undertake and has not undertaken to make an independent verification or to assume responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement and is not obligated to review or ensure compliance with the undertakings by the City to provide continuing secondary market disclosure. Public Resources Advisory Group, Inc., is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal or other public securities. 39 UNDERWRITING The Series 2020 Bonds are being purchased by Raymond James & Associates, Inc. (the "Underwriter") at an aggregate purchase price of $__________ (representing the par amount of the Series 2020 Bonds, plus/minus net original issue premium/discount of $__________ and less Underwriter's discount of $__________), subject to certain terms and conditions set forth in a Bond Purchase Agreement between the City and the Underwriter, including the approval of certain legal matters by Bond Counsel and the existence of no material adverse changes in the condition of the City or the System from that set forth in this Official Statement. The Underwriter is obligated to purchase all the Series 2020 Bonds if any are purchased. Following the initial public offering, the public offering prices may be changed from time to time by the Underwriter. DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS Section 517.051, Florida Statutes, and the regulations promulgated thereunder require that the City make a full and fair disclosure of any bonds or other debt obligations of such entity that have been in default as to principal or interest at any time after December 31, 1975, as provided by rule of the Florida Department of Banking and Finance (the "Department"). Pursuant to Rule 69W-400.003, Florida Administrative Code, the Department has required the disclosure of the amounts and types of defaults, any legal proceedings resulting from such defaults, whether a trustee or receiver has been appointed over the assets of the City, and certain additional financial information, unless the City believes in good faith that such information would not be considered material by a reasonable investor. The City is not and has not been in default on any bond issued since December 31, 1975 which would be considered material by a reasonable investor. The City has not undertaken an independent review or investigation of securities for which it has served as conduit issuer. The City does not believe that any information about any default on such securities is appropriate and would be considered material by a reasonable investor in the Series 2020 Bonds because the City would not have been obligated to pay the debt service on any such securities except from payments made to it by the private companies on whose behalf such securities were issued and no funds of the City would have been pledged or used to pay such securities or the interest thereon. CONTINGENT AND OTHER FEES The City has retained Bond Counsel, Disclosure Counsel, the Financial Advisor and the Underwriter with respect to the authorization, sale, execution and delivery of the Series 2020 Bonds. Payment of the fees of such professionals is contingent upon the issuance of the Series 2020 Bonds. 40 CONTINUING DISCLOSURE In order to comply with the continuing disclosure requirements of Rule 15c2- 12(b)(5) of the Securities and Exchange Commission (the "SEC Rule"), the City and Digital Assurance Certification LLC, as dissemination agent (the "Dissemination Agent") will enter into a Continuing Disclosure Agreement (the "Disclosure Agreement"), the form of which is attached hereto as APPENDIX D. Pursuant to the Disclosure Agreement, the City has covenanted for the benefit of the holders and beneficial owners of the Series 2020 Bonds to provide to the Dissemination Agent certain financial information and operating data relating to the City by not later than April 30 in each year commencing April 30, [2020] (the "Annual Report"), and to provide notices of the occurrence of certain enumerated events, if deemed by the City to be material. The Annual Report will be filed by the Dissemination Agent to the Municipal Securities Rulemaking Board ("MSRB") through its Electronic Municipal Market Access system ("EMMA"). The notices of material events will be filed by the Dissemination Agent with the MSRB. The form of Disclosure Agreement containing the specific nature of the information to be contained in the Annual Report or the notices of material events appears in APPENDIX D. The Disclosure Agreement will be executed by the City and the Dissemination Agent at the time of issuance of the Series 2020 Bonds. The foregoing covenants have been made in order to assist the Underwriter in complying with the SEC Rule. For the Fiscal Year ended 2014, the City failed to update the tables of Average Daily Flow (MGD) for the City's Reclaimed Water System as required continuing disclosures for the City's Water and Sewer Revenue Bonds, Series 2009A and the Series 2011 Bonds. The City filed a Notice to Cure Prior Continuing Disclosure Omission on March 10, 2016, in order to cure the omission. For the Fiscal Year ended 2014, the City inadvertently failed to post the State of Florida and Pinellas County Florida Comprehensive Annual Financial Reports to the MSRB’s EMMA website as required continuing disclosures for the City's Revenue Bonds (Spring Training Facility), Series 2002, appearing under principal CUSIP 185278. The City filed a Notice to Cure Prior Continuing Disclosure Omission on March 10, 2016, in order to cure the omissions. CERTIFICATE CONCERNING OFFICIAL STATEMENT Concurrently with the delivery of the Series 2020 Bonds, the City will furnish its certificate, executed by the Mayor or Vice-Mayor of the City, to the effect that, to the best of his or her knowledge, this Official Statement, as of its date and as of the date of delivery of the Series 2020 Bonds, does not contain any untrue statements of material fact and does not omit to state a material fact, which should be included herein for the purpose for which 41 this Official Statement is to be used, or which is necessary to make the statements contained herein, in light of the circumstances under which they were made, not misleading. MISCELLANEOUS The references, excerpts and summaries of all documents, resolutions and/or ordinances referred to herein do not purport to be complete statements of the provisions of such documents, resolutions and/or ordinances and reference is directed to all such documents, resolutions and/or ordinances for full and complete statements of all matters of fact relating to the Series 2020 Bonds, the security for and the repayment of the Series 2020 Bonds and the rights and obligations of the Holders thereof. Copies of such documents, resolutions and ordinances may be obtained from the City Clerk's Office. So far as any statements made in this Official Statement involve matters of opinion or of estimates, whether or not expressly stated, they are set forth as such and not as representations of fact. No representation is made that any of such statements will be realized. Neither this Official Statement nor any statement which may have been orally or in writing is to be construed as a contract with the holders of the Series 2020 Bonds. [Remainder of Page Intentionally Left Blank] 42 The execution and delivery of this Official Statement by the Mayor of the City has been duly authorized by the City Council. CITY OF CLEARWATER, FLORIDA George N. Cretekos, Mayor William B. Horne, II, City Manager APPENDIX A GENERAL INFORMATION REGARDING THE CITY APPENDIX B COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2018 APPENDIX C COPIES OF BOND ORDINANCE AND RESOLUTION APPENDIX D FORM OF CONTINUING DISCLOSURE AGREEMENT APPENDIX E FORM OF BOND COUNSEL OPINION APPENDIX F FISCAL YEAR 2019 WATER, SEWER AND RECLAIMED WATER REVENUE SUFFICIENCY ANALYSIS (RATE STUDY) APPENDIX G SCHEDULE OF RATES, FEES AND CHARGES 1 CONTINUING DISCLOSURE AGREEMENT This Continuing Disclosure Agreement (the "Disclosure Agreement"), dated as of ___________, 2020, is executed and delivered by and between THE CITY OF CLEARWATER, FLORIDA (the "Issuer") and DIGITAL ASSURANCE CERTIFICATION, L.L.C., as exclusive Disclosure Dissemination Agent (the "Disclosure Dissemination Agent" or "DAC") for the benefit of the Holders (hereinafter defined) of the Bonds (hereinafter defined) and in order to assist Raymond James & Associates, Inc. (the "Underwriter") in processing certain continuing disclosure with respect to the Bonds in accordance with Rule 15c2-12 of the United States Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time (the "Rule"). The services provided under this Disclosure Agreement solely relate to the execution of instructions received from the Issuer through use of the DAC system and do not constitute "advice" within the meaning of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Act"). DAC will not provide any advice or recommendation to the Issuer or anyone on the Issuer’s behalf regarding the "issuance of municipal securities" or any "municipal financial product" as defined in the Act and nothing in this Disclosure Agreement shall be interpreted to the contrary. DAC is not a "Municipal Advisor" as such term is defined in Section 15B of the Securities Exchange Act of 1934, as amended, and related rules. SECTION 1. Definitions. Capitalized terms not otherwise defined in this Disclosure Agreement shall have the meaning assigned in the Rule or, to the extent not in conflict with the Rule, in the Official Statement (hereinafter defined). The capitalized terms shall have the following meanings: "Annual Filing Date" means the date, set in Sections 2(a) and 2(f) hereof, by which the Annual Report is to be filed with the MSRB. "Annual Financial Information" means annual financial information as such term is used in paragraph (b)(5)(i) of the Rule and specified in Section 3(a) of this Disclosure Agreement. "Annual Report" means an Annual Report containing Annual Financial Information and operating data for the System (as defined in the Official Statement) described in and consistent with Section 3 of this Disclosure Agreement. "Audited Financial Statements" means the annual financial statements of the Issuer for the prior fiscal year, certified by an independent auditor as prepared in accordance with generally accepted accounting principles, or otherwise, as such term is used in paragraph (b)(5)(i)(B) of the Rule and specified in Section 3(b) of this Disclosure Agreement. 2 "Bonds" means the bonds as listed on the attached Exhibit A, with the 9-digit CUSIP numbers relating thereto. "Certification" means a written certification of compliance signed by the Disclosure Representative stating that the Annual Report, Audited Financial Statements, Notice Event notice, Failure to File Event notice, Voluntary Event Disclosure or Voluntary Financial Disclosure delivered to the Disclosure Dissemination Agent is the Annual Report, Audited Financial Statements, Notice Event notice, Failure to File Event notice, Voluntary Event Disclosure or Voluntary Financial Disclosure required to be submitted to the MSRB under this Disclosure Agreement. A Certification shall accompany each such document submitted to the Disclosure Dissemination Agent by the Issuer and include the full name of the Bonds and the 9-digit CUSIP numbers for all Bonds to which the document applies. "Disclosure Dissemination Agent" means Digital Assurance Certification, L.L.C, acting in its capacity as Disclosure Dissemination Agent hereunder, or any successor Disclosure Dissemination Agent designated in writing by the Issuer pursuant to Section 9 hereof. "Disclosure Representative" means the Debt Manager of the Issuer or his or her designee, or such other person as the Issuer shall designate in writing to the Disclosure Dissemination Agent from time to time as the person responsible for providing Information to the Disclosure Dissemination Agent. "Failure to File Event" means the Issuer’s failure to file an Annual Report on or before the Annual Filing Date. "Financial obligation" as used in this Disclosure Agreement is defined in the Rule as (i) a debt obligation; (ii) derivative instrument entered into in connection with, or pledged as a security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term "financial obligation" shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. "Force Majeure Event" means: (i) acts of God, war, or terrorist action; (ii) failure or shut-down of the Electronic Municipal Market Access system maintained by the MSRB; or (iii) to the extent beyond the Disclosure Dissemination Agent’s reasonable control, interruptions in telecommunications or utilities services, failure, malfunction or error of any telecommunications, computer or other electrical, mechanical or technological application, service or system, computer virus, interruptions in Internet service or telephone service (including due to a virus, electrical delivery problem or similar occurrence) that affect Internet users generally, or in the local area in which the Disclosure Dissemination Agent or the MSRB is located, or acts of any government, regulatory or any other competent 3 authority the effect of which is to prohibit the Disclosure Dissemination Agent from performance of its obligations under this Disclosure Agreement. "Holder" means any person (a) having the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries) or (b) treated as the owner of any Bonds for federal income tax purposes. "Information" means, collectively, the Annual Reports, the Audited Financial Statements, the Notice Event notices, the Failure to File Event notices, the Voluntary Event Disclosures and the Voluntary Financial Disclosures. "MSRB" means the Municipal Securities Rulemaking Board, or any successor thereto, established pursuant to Section 15B(b)(1) of the Securities Exchange Act of 1934. "Notice Event" means any of the events enumerated in paragraph (b)(5)(i)(C) of the Rule and listed in Section 4(a) of this Disclosure Agreement. "Obligated Person" means any person, including the Issuer, who is either generally or through an enterprise, fund, or account of such person committed by contract or other arrangement to support payment of all, or part of the obligations on the Bonds (other than providers of municipal bond insurance, letters of credit, or other liquidity facilities), as shown on Exhibit A. "Official Statement" means the Official Statement prepared in connection with the issuance of the Bonds. "Voluntary Event Disclosure" means information that is accompanied by a Certification of the Disclosure Representative containing the information prescribed by Section 7(a) of this Disclosure Agreement. "Voluntary Financial Disclosure" means information that is accompanied by a Certification of the Disclosure Representative containing the information prescribed by Section 7(b) of this Disclosure Agreement. SECTION 2. Provision of Annual Reports. (a) The Issuer shall provide, annually, an electronic copy of the Annual Report and Certification to the Disclosure Dissemination Agent not later than the Annual Filing Date. Promptly upon receipt of an electronic copy of the Annual Report and the Certification, the Disclosure Dissemination Agent shall provide an Annual Report to the MSRB not later than April 30 following the end of each fiscal year of the Issuer, commencing with the fiscal year ending September 30, [2019]. Such date and each anniversary thereof is the Annual Filing Date. The Annual Report may be submitted as a 4 single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 3 of this Disclosure Agreement. (b) If on the fifteenth (15th) day prior to the Annual Filing Date, the Disclosure Dissemination Agent has not received a copy of the Annual Report and Certification, the Disclosure Dissemination Agent shall contact the Disclosure Representative by telephone and in writing (which may be by e-mail) to remind the Issuer of its undertaking to provide the Annual Report pursuant to Section 2(a). Upon such reminder, the Disclosure Representative shall either (i) provide the Disclosure Dissemination Agent with an electronic copy of the Annual Report and the Certification no later than two (2) business days prior to the Annual Filing Date, or (ii) instruct the Disclosure Dissemination Agent in writing that the Issuer will not be able to file the Annual Report within the time required under this Disclosure Agreement, state the date by which the Annual Report for such year will be provided and instruct the Disclosure Dissemination Agent to immediately send a Failure to File Event notice to the MSRB in substantially the form attached as Exhibit B, which may be accompanied by a cover sheet completed by the Disclosure Dissemination Agent in the form set forth in Exhibit C-1. (c) If the Disclosure Dissemination Agent has not received an Annual Report and Certification by 10:00 a.m. Eastern time on the Annual Filing Date (or, if such Annual Filing Date falls on a Saturday, Sunday or holiday, then the first business day thereafter) for the Annual Report, a Failure to File Event shall have occurred and the Issuer irrevocably directs the Disclosure Dissemination Agent to immediately send a Failure to File Event notice to the MSRB in substantially the form attached as Exhibit B without reference to the anticipated filing date for the Annual Report, which may be accompanied by a cover sheet completed by the Disclosure Dissemination Agent in the form set forth in Exhibit C-1. (d) If Audited Financial Statements of the Issuer are prepared but not available prior to the Annual Filing Date, the Issuer shall, when the Audited Financial Statements are available, provide at such time an electronic copy to the Disclosure Dissemination Agent, accompanied by a Certification, for filing with the MSRB. (e) The Disclosure Dissemination Agent shall: (i) verify the filing specifications of the MSRB each year prior to the Annual Filing Date; (ii) upon receipt, promptly file each Annual Report received under Sections 2(a) and 2(b) hereof with the MSRB; (iii) upon receipt, promptly file each Audited Financial Statement received under Section 2(d) hereof with the MSRB; (iv) upon receipt, promptly file the text of each Notice Event received under Sections 4(a) and 4(b)(ii) hereof with the MSRB, identifying 5 the Notice Event as instructed by the Issuer pursuant to Section 4(a) or 4(b)(ii) hereof (being any of the categories set forth below) when filing pursuant to Section 4(c) of this Disclosure Agreement: 1. "Principal and interest payment delinquencies;" 2. "Non-Payment related defaults, if material;" 3. "Unscheduled draws on debt service reserves reflecting financial difficulties;" 4. "Unscheduled draws on credit enhancements reflecting financial difficulties;" 5. "Substitution of credit or liquidity providers, or their failure to perform;" 6. "Adverse tax opinions, IRS notices or events affecting the tax status of the security;" 7. "Modifications to rights of securities holders, if material;" 8. "Bond calls, if material, and tender offers;" 9. "Defeasances;" 10. "Release, substitution, or sale of property securing repayment of the securities, if material;" 11. "Rating changes;" 12. "Bankruptcy, insolvency, receivership or similar event of the obligated person;" 13. "Merger, consolidation, or acquisition of the obligated person, if material;" 14. "Appointment of a successor or additional trustee, or the change of name of a trustee, if material;" 15. “Incurrence of a financial obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the obligated person, any of which affect security holders, if material;” 16. “Default, event of acceleration, termination event, modification of terms, or other similar events under the terms 6 of a financial obligation of the obligated person, any of which reflect financial difficulties;” and (v) upon receipt (or irrevocable direction pursuant to Section 2(c) of this Disclosure Agreement, as applicable), promptly file a completed copy of Exhibit B to this Disclosure Agreement with the MSRB, identifying the filing as "Failure to provide annual financial information as required" when filing pursuant to Section 2(b)(ii) or Section 2(c) of this Disclosure Agreement; (f) The Issuer may adjust the Annual Filing Date upon change of its fiscal year by providing written notice of such change and the new Annual Filing Date to the Disclosure Dissemination Agent and the MSRB, provided that the period between the existing Annual Filing Date and new Annual Filing Date shall not exceed one year. (g) Anything in this Disclosure Agreement to the contrary notwithstanding, any Information received by the Disclosure Dissemination Agent before 10:00 a.m. Eastern time on any business day that it is required to file with the MSRB pursuant to the terms of this Disclosure Agreement and that is accompanied by a Certification and all other information required by the terms of this Disclosure Agreement will be filed by the Disclosure Dissemination Agent with the MSRB no later than 11:59 p.m. Eastern time on the same business day; provided, however, the Disclosure Dissemination Agent shall have no liability for any delay in filing with the MSRB if such delay is caused by a Force Majeure Event provided that the Disclosure Dissemination Agent uses reasonable efforts to make any such filing as soon as possible. SECTION 3. Content of Annual Reports. (a) Each Annual Report shall contain Annual Financial Information with respect to the Issuer, including the financial information and operating data of the type included with respect to the Issuer, in the Official Statement, including but not limited to: 1. Updates of the historical financial information set forth in the Official Statement under the principal captions "THE WATER AND SEWER SYSTEM" for the then-immediately preceding five fiscal years and "APPENDIX G - SCHEDULE OF RATES, FEES AND CHARGES." 2. Description of any additional indebtedness payable in whole or in part from the Net Revenues (as defined in the Ordinance). 3. Any other financial information or operating data of the type included in the Official Statement which would be material to a holder or prospective holders of the Bonds. (b) Audited Financial Statements will be included in the Annual Report. If Audited Financial Statements are not available, then unaudited financial statements, 7 prepared in accordance with GAAP will be included in the Annual Report. In such event, Audited Financial Statements (if any) will be provided pursuant to Section 2(d). Any or all of the items listed above may be included by specific reference from other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the Rule), which have been previously filed with the Securities and Exchange Commission or available on the MSRB Internet Website. If the document incorporated by reference is a final official statement, it must be available from the MSRB. The Issuer will clearly identify each such document so incorporated by reference. If the Annual Financial Information contains modified operating data or financial information different from the Annual Financial Information agreed to in this continuing disclosure undertaking related to the Bonds, the Issuer is required to explain, in narrative form, the reasons for the modification and the impact of the change in the type of operating data or financial information being provided. SECTION 4. Reporting of Notice Events. (a) The occurrence of any of the following events with respect to the Bonds constitutes a Notice Event: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults, if material; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; 7. Modifications to rights of Bond holders, if material; 8. Bond calls, if material, and tender offers; 9. Defeasances; 8 10. Release, substitution, or sale of property securing repayment of the Bonds, if material; 11. Rating changes; 12. Bankruptcy, insolvency, receivership or similar event of the Obligated Person; Note to subsection (a)(12) of this Section 4: For the purposes of the event described in subsection (a)(12) of this Section 4, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an Obligated Person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Obligated Person, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Obligated Person. 13. The consummation of a merger, consolidation, or acquisition involving an Obligated Person or the sale of all or substantially all of the assets of the Obligated Person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; 14. Appointment of a successor or additional trustee or the change of name of a trustee, if material; 15. Incurrence of a financial obligation of the Borrower, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the Borrower, any of which affect security holders, if material; and 16. Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the Borrower, any of which reflect financial difficulties. The Issuer shall, in a timely manner not later than nine (9) business days after its occurrence, notify the Disclosure Dissemination Agent in writing of the occurrence of a 9 Notice Event. Such notice shall instruct the Disclosure Dissemination Agent to report the occurrence pursuant to subsection (c) and shall be accompanied by a Certification. Such notice or Certification shall identify the Notice Event that has occurred (which shall be any of the categories set forth in Section 2(e)(iv) of this Disclosure Agreement), include the text of the disclosure that the Issuer desires to make, contain the written authorization of the Issuer for the Disclosure Dissemination Agent to disseminate such information, and identify the date the Issuer desires for the Disclosure Dissemination Agent to disseminate the information (provided that such date is not later than the tenth business day after the occurrence of the Notice Event). (b) The Disclosure Dissemination Agent is under no obligation to notify the Issuer or the Disclosure Representative of an event that may constitute a Notice Event. In the event the Disclosure Dissemination Agent so notifies the Disclosure Representative, the Disclosure Representative will within two business days of receipt of such notice (but in any event not later than the tenth business day after the occurrence of the Notice Event, if the Issuer determines that a Notice Event has occurred), instruct the Disclosure Dissemination Agent that either (i) a Notice Event has not occurred and no filing is to be made or (ii) a Notice Event has occurred and the Disclosure Dissemination Agent is to report the occurrence pursuant to subsection (c) of this Section 4, together with a Certification. Such Certification shall identify the Notice Event that has occurred (which shall be any of the categories set forth in Section 2(e)(iv) of this Disclosure Agreement), include the text of the disclosure that the Issuer desires to make, contain the written authorization of the Issuer for the Disclosure Dissemination Agent to disseminate such information, and identify the date the Issuer desires for the Disclosure Dissemination Agent to disseminate the information (provided that such date is not later than the tenth business day after the occurrence of the Notice Event). (c) If the Disclosure Dissemination Agent has been instructed by the Issuer as prescribed in subsection (a) or (b)(ii) of this Section 4 to report the occurrence of a Notice Event, the Disclosure Dissemination Agent shall promptly file a notice of such occurrence with MSRB in accordance with Section 2 (e)(iv) hereof. This notice may be filed with a cover sheet completed by the Disclosure Dissemination Agent in the form set forth in Exhibit C-1. SECTION 5. CUSIP Numbers. The Issuer will provide the Dissemination Agent with the CUSIP numbers for (i) new bonds at such time as they are issued or become subject to the Rule and (ii) any Bonds to which new CUSIP numbers are assigned in substitution for the CUSIP numbers previously assigned to such Bonds; provided, however, that a failure to do so shall not be a breach by the Issuer of this Disclosure Agreement. SECTION 6. Additional Disclosure Obligations. The Issuer acknowledges and understands that other state and federal laws, including but not limited to the Securities Act of 1933 and Rule 10b-5 promulgated under the Securities Exchange Act of 1934, may apply to the Issuer, and that the duties and responsibilities of the Disclosure 10 Dissemination Agent under this Disclosure Agreement do not extend to providing legal advice regarding such laws. The Issuer acknowledges and understands that the duties of the Disclosure Dissemination Agent relate exclusively to execution of the mechanical tasks of disseminating information as described in this Disclosure Agreement. SECTION 7. Voluntary Filing. (a) The Issuer may instruct the Disclosure Dissemination Agent to file a Voluntary Event Disclosure with the MSRB from time to time pursuant to a Certification of the Disclosure Representative. Such Certification shall identify the Voluntary Event Disclosure, include the text of the disclosure that the Issuer desires to make, contain the written authorization of the Issuer for the Disclosure Dissemination Agent to disseminate such information, and identify the date the Issuer desires for the Disclosure Dissemination Agent to disseminate the information. If the Disclosure Dissemination Agent has been instructed by the Issuer as prescribed in this Section 7(a) to file a Voluntary Event Disclosure, the Disclosure Dissemination Agent shall promptly file such Voluntary Event Disclosure with the MSRB. This notice may be filed with a cover sheet completed by the Disclosure Dissemination Agent in the form set forth in Exhibit C-2. (b) The Issuer may instruct the Disclosure Dissemination Agent to file a Voluntary Financial Disclosure with the MSRB from time to time pursuant to a Certification of the Disclosure Representative. Such Certification shall identify the Voluntary Financial Disclosure, include the text of the disclosure that the Issuer desires to make, contain the written authorization of the Issuer for the Disclosure Dissemination Agent to disseminate such information, and identify the date the Issuer desires for the Disclosure Dissemination Agent to disseminate the information. If the Disclosure Dissemination Agent has been instructed by the Issuer as prescribed in this Section 7(b) hereof to file a Voluntary Financial Disclosure, the Disclosure Dissemination Agent shall promptly file such Voluntary Financial Disclosure with the MSRB. This notice may be filed with a cover sheet completed by the Disclosure Dissemination Agent in the form set forth in Exhibit C-3. (c) The parties hereto acknowledge that the Issuer is not obligated pursuant to the terms of this Disclosure Agreement to file any Voluntary Event Disclosure pursuant to Section 7(a) hereof or any Voluntary Financial Disclosure pursuant to Section 7(b) hereof. (d) Nothing in this Disclosure Agreement shall be deemed to prevent the Issuer from disseminating any other information through the Disclosure Dissemination Agent using the means of dissemination set forth in this Disclosure Agreement or including any other information in any Annual Report, Audited Financial Statements, Notice Event notice, Failure to File Event notice, Voluntary Event Disclosure or Voluntary Financial Disclosure, in addition to that required by this Disclosure Agreement. If the Issuer chooses to include any information in any Annual Report, Audited Financial Statements, Notice Event notice, Failure to File Event notice, Voluntary Event Disclosure or 11 Voluntary Financial Disclosure in addition to that which is specifically required by this Disclosure Agreement, the Issuer shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report, Audited Financial Statements, Notice Event notice, Failure to File Event notice, Voluntary Event Disclosure or Voluntary Financial Disclosure. SECTION 8. Termination of Reporting Obligation. The obligations of the Issuer and the Disclosure Dissemination Agent under this Disclosure Agreement shall terminate with respect to the Bonds upon the legal defeasance, prior redemption or payment in full of all of the Bonds, when the Issuer is no longer an obligated person with respect to the Bonds, or upon delivery by the Disclosure Representative to the Disclosure Dissemination Agent of an opinion of counsel expert in federal securities laws to the effect that continuing disclosure is no longer required. SECTION 9 . Disclosure Dissemination Agent. The Issuer has appointed Digital Assurance Certification, L.L.C. as exclusive Disclosure Dissemination Agent under this Disclosure Agreement. The Issuer may, upon thirty days written notice to the Disclosure Dissemination Agent, replace or appoint a successor Disclosure Dissemination Agent. Upon termination of DAC’s services as Disclosure Dissemination Agent, whether by notice of the Issuer or DAC, the Issuer agrees to appoint a successor Disclosure Dissemination Agent or, alternately, agrees to assume all responsibilities of Disclosure Dissemination Agent under this Disclosure Agreement for the benefit of the Holders of the Bonds. Notwithstanding any replacement or appointment of a successor, the Issuer shall remain liable to the Disclosure Dissemination Agent until payment in full for any and all sums owed and payable to the Disclosure Dissemination Agent. The Disclosure Dissemination Agent may resign at any time by providing thirty days’ prior written notice to the Issuer. SECTION 10. Remedies in Event of Default. In the event of a failure of the Issuer or the Disclosure Dissemination Agent to comply with any provision of this Disclosure Agreement, the Holders’ rights to enforce the provisions of this Agreement shall be limited solely to a right, by action in mandamus or for specific performance, to compel performance of the parties' obligation under this Disclosure Agreement. Any failure by a party to perform in accordance with this Disclosure Agreement shall not constitute a default on the Bonds or under any other document relating to the Bonds, and all rights and remedies shall be limited to those expressly stated herein. SECTION 11. Duties, Immunities and Liabilities of Disclosure Dissemination Agent. (a) The Disclosure Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement. The Disclosure Dissemination Agent’s obligation to deliver the information at the times and with the contents described herein shall be limited to the extent the Issuer has provided such information to the Disclosure Dissemination Agent as required by this Disclosure Agreement. The 12 Disclosure Dissemination Agent shall have no duty with respect to the content of any disclosures or notice made pursuant to the terms hereof. The Disclosure Dissemination Agent shall have no duty or obligation to review or verify any Information or any other information, disclosures or notices provided to it by the Issuer and shall not be deemed to be acting in any fiduciary capacity for the Issuer, the Holders of the Bonds or any other party. The Disclosure Dissemination Agent shall have no responsibility for the Issuer’s failure to report to the Disclosure Dissemination Agent a Notice Event or a duty to determine the materiality thereof. The Disclosure Dissemination Agent shall have no duty to determine, or liability for failing to determine, whether the Issuer has complied with this Disclosure Agreement. The Disclosure Dissemination Agent may conclusively rely upon Certifications of the Issuer at all times. The obligations of the Issuer under this Section shall survive resignation or removal of the Disclosure Dissemination Agent and defeasance, redemption or payment of the Bonds. (b) The Disclosure Dissemination Agent may, from time to time, consult with legal counsel (either in-house or external) of its own choosing in the event of any disagreement or controversy, or question or doubt as to the construction of any of the provisions hereof or its respective duties hereunder, and shall not incur any liability and shall be fully protected in acting in good faith upon the advice of such legal counsel. The reasonable fees and expenses of such counsel shall be payable by the Issuer. (c) All documents, reports, notices, statements, information and other materials provided to the MSRB under this Agreement shall be provided in an electronic format and accompanied by identifying information as prescribed by the MSRB. SECTION 12. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Issuer and the Disclosure Dissemination Agent may amend this Disclosure Agreement and any provision of this Disclosure Agreement may be waived, if such amendment or waiver is supported by an opinion of counsel expert in federal securities laws acceptable to both the Issuer and the Disclosure Dissemination Agent to the effect that such amendment or waiver does not materially impair the interests of Holders of the Bonds and would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule; provided neither the Issuer or the Disclosure Dissemination Agent shall be obligated to agree to any amendment modifying their respective duties or obligations without their consent thereto. Notwithstanding the preceding paragraph, the Disclosure Dissemination Agent shall have the right to adopt amendments to this Disclosure Agreement necessary to comply with modifications to and interpretations of the provisions of the Rule as announced by the Securities and Exchange Commission from time to time by giving not less than 20 days written notice of the intent to do so together with a copy of the proposed 13 amendment to the Issuer. No such amendment shall become effective if the Issuer shall, within 10 days following the giving of such notice, send a notice to the Disclosure Dissemination Agent in writing that it objects to such amendment. SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Issuer, the Disclosure Dissemination Agent, the Underwriter, and the Holders from time to time of the Bonds, and shall create no rights in any other person or entity. SECTION 14. Governing Law. This Disclosure Agreement shall be governed by and construed in accordance with the laws of the State of Florida without regard to any conflict of laws provisions thereof. SECTION 15. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. [Remainder of page intentionally left blank.] 14 The Disclosure Dissemination Agent and the Issuer have caused this Continuing Disclosure Agreement to be executed, on the date first written above, by their respective officers duly authorized. DIGITAL ASSURANCE CERTIFICATION LLC, as Disclosure Dissemination Agent By:___________________________________ Name:_________________________________ Title:__________________________________ THE CITY OF CLEARWATER, FLORIDA as Issuer By:___________________________________ Name:_________________________________ Title:__________________________________ A-1 EXHIBIT A NAME AND CUSIP NUMBERS OF BONDS Name of Issuer The City of Clearwater, Florida Obligated Person(s) The City of Clearwater, Florida Name of Bond Issue: The City of Clearwater, Florida Water and Sewer Revenue Refunding Bonds, Series 2020 Date of Issuance: _______________ Date of Official Statement _________________ CUSIP Numbers: B-1 EXHIBIT B NOTICE TO MSRB OF FAILURE TO FILE ANNUAL REPORT Issuer: The City of Clearwater, Florida Obligated Person: The City of Clearwater, Florida Name(s) of Bond Issue(s): The City of Clearwater, Florida Water and Sewer Revenue Refunding Bonds, Series 2020 Date of Issuance: _________________ Date of Disclosure _________________ Agreement: CUSIP Numbers: B-2 NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by the Disclosure Agreement between the Issuer and Digital Assurance Certification, L.L.C., as Disclosure Dissemination Agent. The Issuer has notified the Disclosure Dissemination Agent that it anticipates that the Annual Report will be filed by ______________. Dated: _____________________________ Digital Assurance Certification, L.L.C., as Disclosure Dissemination Agent, on behalf of the Issuer ______________________________________ cc: C-1 EXHIBIT C-1 EVENT NOTICE COVER SHEET This cover sheet and accompanying "event notice" may be sent to the MSRB, pursuant to Securities and Exchange Commission Rule 15c2-12(b)(5)(i)(C) and (D). Issuer’s and/or Other Obligated Person’s Name: The City of Clearwater, Florida Issuer’s Six-Digit CUSIP Number: _______________________________________________________________________ _______________________________________________________________________ or Nine-Digit CUSIP Number(s) of the bonds to which this event notice relates: _______________________________________________________________________ Number of pages attached: _____ ____ Description of Notice Events (Check One): 1. "Principal and interest payment delinquencies;" 2. "Non-Payment related defaults, if material;" 3. "Unscheduled draws on debt service reserves reflecting financial difficulties;" 4. "Unscheduled draws on credit enhancements reflecting financial difficulties;" 5. "Substitution of credit or liquidity providers, or their failure to perform;" 6. "Adverse tax opinions, IRS notices or events affecting the tax status of the security;" 7. "Modifications to rights of securities holders, if material;" 8. "Bond calls, if material, and tender offers;" 9. "Defeasances;" 10. "Release, substitution, or sale of property securing repayment of the securities, if material;" 11. "Rating changes;" 12. "Bankruptcy, insolvency, receivership or similar event of the obligated person;" 13. "Merger, consolidation, or acquisition of the obligated person, if material;" 14. "Appointment of a successor or additional trustee, or the change of name of a trustee, if material;" 15. “Incurrence of a financial obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the obligated person, any of which affect security holders, if material;” C-2 16. “Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the obligated person, any of which reflect financial difficulties;” and 17. “Termination, revocation or non-renewal of the Charter, or material amendments or changes thereto.” ____ Failure to provide annual financial information as required. I hereby represent that I am authorized by the Issuer or its agent to distribute this information publicly: Signature: _______________________________________________________________________ Name: ___________________________ Title: _________________________________ Digital Assurance Certification, L.L.C. 315 E. Robinson Street Suite 300 Orlando, FL 32801 407-515-1100 Date: C-3 EXHIBIT C-2 VOLUNTARY EVENT DISCLOSURE COVER SHEET This cover sheet and accompanying "voluntary event disclosure" may be sent to the MSRB, pursuant to the Disclosure Dissemination Agent Agreement dated as of ______________ between the Issuer and DAC. Issuer’s and/or Other Obligated Person’s Name: The City of Clearwater, Florida Issuer’s Six-Digit CUSIP Number: _______________________________________________________________________ _______________________________________________________________________ or Nine-Digit CUSIP Number(s) of the bonds to which this notice relates: _______________________________________________________________________ Number of pages attached: _____ ____ Description of Voluntary Event Disclosure: I hereby represent that I am authorized by the Issuer or its agent to distribute this information publicly: Signature: _______________________________________________________________________ Name: ___________________________ Title: _________________________________ Digital Assurance Certification, L.L.C. 315 E. Robinson Street Suite 300 Orlando, FL 32801 407-515-1100 Date: C-4 EXHIBIT C-3 VOLUNTARY FINANCIAL DISCLOSURE COVER SHEET This cover sheet and accompanying "voluntary financial disclosure" may be sent to the MSRB, pursuant to the Disclosure Dissemination Agent Agreement dated as of _____________, between the Issuer and DAC. Issuer’s and/or Other Obligated Person’s Name: The City of Clearwater, Florida Issuer’s Six-Digit CUSIP Number: _______________________________________________________________________ _______________________________________________________________________ or Nine-Digit CUSIP Number(s) of the bonds to which this notice relates: _______________________________________________________________________ Number of pages attached: _____ ____ Description of Voluntary Financial Disclosure: I hereby represent that I am authorized by the Issuer or its agent to distribute this information publicly: Signature: _______________________________________________________________________ Name: ___________________________ Title: _________________________________ Digital Assurance Certification, L.L.C. 315 E. Robinson Street Suite 300 Orlando, FL 32801 407-515-1100 Date: BOND PURCHASE AGREEMENT January __, 2020 City of Clearwater, Florida 100 South Myrtle Avenue, 3rd Floor Clearwater, Florida 33756 Re: $[_____] City of Clearwater, Florida Water and Sewer Revenue Refunding Bonds, Series 2020 (the “Series 2020 Bonds”) Ladies and Gentlemen: Raymond James & Associates, Inc. (the “Underwriter”) offers to enter into this Bond Purchase Agreement (the “Purchase Contract”) with the City of Clearwater, Florida (the “Issuer”), which, upon the Issuer's acceptance hereof, will be binding upon the Issuer and upon the Underwriter. This offer is made subject to the Issuer's acceptance by execution of this Purchase Contract and its delivery to the Underwriter on or before 6:00 P.M., Clearwater, Florida time, on the date hereof. Terms not otherwise defined herein shall have the same meanings ascribed to them in the Bond Ordinance and the Official Statement as each is described below. 1. Purchase and Sale of the Bonds. Subject to the terms and conditions and in reliance upon the representations, warranties and covenants set forth herein, the Underwriter hereby agrees to purchase from the Issuer for offering to the public, and the Issuer hereby agrees to sell to the Underwriter for such purpose, all (but not less than all) of the aggregate principal amount of the $[_____] City of Clearwater, Florida Water and Sewer Revenue Refunding Bonds, Series 2020 (the “Series 2020 Bonds”). If any of the Series 2020 Bonds are purchased pursuant to this Purchase Contract, the Underwriter is obligated to purchase all of the Series 2020 Bonds. The aggregate purchase price of the Series 2020 Bonds (the “Purchase Price”) shall be $[_____] (calculated as $[_____] principal amount of the Series 2020 Bonds, [plus][less] an original issue [premium][discount] of $[_____], less an Underwriter’s discount of $[_____]). The Purchase Price shall be payable to the Issuer on the Closing Date (as such term is hereinafter defined), by wire transfer of federal funds as provided in Section 8 below. 2. Description and Purpose of the Bonds. The Series 2020 Bonds shall be issued pursuant to the Constitution and the laws of the State of Florida, including particularly the charter of the City, Chapter 166, Part II, Florida Statutes, as amended, and other provisions of law, and Ordinance No. 3674-84 enacted by the City on August 2, 1984, as amended and supplemented by Ordinance No. 6915-01, enacted November 15, 2001, as further amended and supplemented by Ordinance No. 8620-14, enacted on December 4, 2014 (collectively, the “Bond Ordinance”), and as 4835-6435-8058 v.5 2 further supplemented by Resolution No. 19-37, adopted by the City on December 19, 2019 (the “Resolution). The Series 2020 Bonds are being issued to provide funds, together with other legally available funds, to (i) refund all of the City’s Outstanding Water and Sewer Revenue Refunding Bond, Series 2014 (the “Refunded Bond”), and (ii) pay costs of issuing the Series 2020 Bonds. The Series 2020 Bonds are special limited obligations of the Issuer, secured and payable solely by a pledge of and lien on the Net Revenues of the System (as defined in the Bond Ordinance) in amounts sufficient to pay the principal of and interest on the Series 2020 Bonds, all in the manner and to the extent provided in the Bond Ordinance and the Resolution. The Series 2020 Bonds shall mature, bear interest and be subject to redemption as set forth in Exhibit A attached hereto, and have all such other terms and provisions, as set forth in the Bond Ordinance and as described in the Official Statement (as hereinafter defined). The information required by Section 218.385(6), Florida Statutes, to be provided by the Underwriter is set forth in Exhibit B attached hereto. Further, in order to assist the Issuer in complying with Section 218.385(2) and (3), Florida Statutes, the Underwriter is providing the Issuer with a completed truth-in-bonding statement as set forth in Exhibit B. The Issuer, by its acceptance hereof, accepts such disclosure and agrees that it does not require any further disclosure from the Underwriter prior to the delivery of the Series 2020 Bonds with regard to the matters set forth in Section 218.385, Florida Statutes. 3. Good Faith Deposit. Upon execution of this Purchase Contract, the Underwriter shall deliver to the Issuer a check in the amount of $[_____] ([_____]) (the “Good Faith Deposit”), as security for the performance by the Underwriter of its obligation to accept and pay for the Series 2020 Bonds on the Closing Date in accordance with the provisions of this Purchase Contract. In the event the Issuer does not accept this offer, such check shall be immediately returned to the Underwriter. If the offer made hereby is accepted, the Issuer agrees to hold the check uncashed until the Closing (as such term is hereinafter defined), as security for the performance by the Underwriter of its obligation to accept and pay for the Series 2020 Bonds, and in the event of its compliance with such obligations, such check shall be returned to the Underwriter at the Closing. In the event of failure by the Issuer to deliver the Series 2020 Bonds at the Closing, or if the Issuer shall be unable to satisfy the conditions of the Closing contained herein, or if the obligations of the Underwriter shall be terminated for any reason permitted by this Purchase Contract, such check shall be immediately returned to the Underwriter and such return shall constitute a full release and discharge of any claims the Underwriter may have against the Issuer arising out of the transactions contemplated hereby. In the event that the Underwriter fails (other than for a reason permitted hereunder) to accept and pay for the Series 2020 Bonds at the Closing as herein provided, such check shall be retained and cashed by the Issuer as and for full liquidated damages for such failure and for any defaults hereunder on the part of the Underwriter, and the Issuer’s collection and retention of such check shall constitute a full release 3 and discharge of all claims by the Issuer against the Underwriter arising out of the transactions contemplated hereby. 4. Delivery of Official Statement and Other Documents. (a) Prior to the date hereof, the Issuer has prepared for use in connection with the public offering, sale and distribution of the Series 2020 Bonds, and has provided to the Underwriter for its review, the Preliminary Official Statement dated December [__], 2019 (including the cover page, inside cover pages and appendices thereto, the “Preliminary Official Statement”). The Issuer hereby represents and warrants that the Preliminary Official Statement was deemed final by the Issuer as of its date, except for the omission of such information which is dependent upon the final pricing of the Series 2020 Bonds for completion, all as permitted to be excluded by Section (b)(1) of Rule 15c2-12 under the Securities and Exchange Act of 1934, as amended (the “Rule”). Such Preliminary Official Statement, as amended to delete preliminary language and reflect the final terms of the Series 2020 Bonds together with such supplements and amendments as approved by the Issuer and agreed to by the Underwriter, is herein referred to as the “Official Statement.” If the Issuer makes any changes to the Official Statement that are not also approved by the Underwriter, and if such changes result in the Official Statement omitting material information or containing information that is materially misleading, then the Underwriter may, in its discretion, terminate this Purchase Contract. (b) The Issuer shall deliver, or cause to be delivered, at its expense, to the Underwriter, within seven (7) business days after the date hereof or within such shorter period as may be reasonably requested by the Underwriter, and in no event later than required to enable the Underwriter to comply with its responsibilities under applicable rules of the Municipal Securities Rulemaking Board (“MSRB”): (i) sufficient copies of the Official Statement to enable the Underwriter to fulfill its obligations pursuant to the securities laws of the State of Florida and the United States, in form and substance satisfactory to the Underwriter, and (ii) an executed original counterpart or certified copy of the Official Statement at Closing. In determining whether the number of copies to be delivered by the Issuer are reasonably necessary, at a minimum, the number shall be sufficient to enable the Underwriter to comply with the requirements of the Rule, all applicable rules of the MSRB, and to fulfill its duties and responsibilities under Florida and federal securities laws generally. (c) The Underwriter agrees to file the Official Statement with the Electronic Municipal Market Access system (“EMMA”) (accompanied by a completed Form G-32) by the date of Closing. The filing of the Official Statement with EMMA shall be in accordance with the terms and conditions applicable to EMMA. 4 (d) From the date hereof until the earlier of (i) ninety days from the “end of the underwriting period” (as defined in the Rule), or (ii) the time when the Official Statement is available to any person from the MSRB (but in no case less than twenty-five (25) days following the end of the underwriting period), if any event occurs or a condition or circumstance exists which may make it necessary to amend or supplement the Official Statement so that it will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Issuer shall promptly notify the Underwriter (and for the purposes of this clause provide the Underwriter with such information as they may from time to time request) and if, in the reasonable opinion of the Issuer or the reasonable opinion of the Underwriter, such event requires the preparation and publication of an amendment or supplement to the Official Statement, the Issuer, at its expense, promptly will prepare an appropriate amendment or supplement thereto, in a form and in a manner reasonably approved by the Underwriter (and file, or cause to be filed, the same with the MSRB, and mail such amendment or supplement to each record owner of the Series 2020 Bonds) so that the statements in the Official Statement, as so amended or supplemented, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The Issuer will promptly notify the Underwriter of the occurrence of any event of which it has knowledge or the discovery of such conditions or circumstance, which, in its reasonable opinion, is an event described in the preceding sentence. If such notification shall be subsequent to the Closing, the Issuer shall furnish such legal opinions, certificates, instruments and other documents as the Underwriter may deem necessary to evidence the truth and accuracy of such supplement or amendment to the Official Statement. Unless the Issuer is otherwise notified by the Underwriter in writing prior to the Closing Date, the end of the underwriting period will be deemed to be the Closing Date. (e) (i) The Underwriter agrees to make a bona fide public offering of substantially all of the Series 2020 Bonds to the public at initial public offering prices not greater than (or yields not less than) the initial public offering prices (or yields) set forth in Exhibit A hereto; provided, however, that the Underwriter reserves the right to make concessions to certain dealers, certain dealer banks and banks acting as agents and to change such initial public offering prices as the Underwriter shall deem necessary in connection with the marketing of the Series 2020 Bonds. (ii) The Underwriter agrees to assist the Issuer in establishing the issue price of the Series 2020 Bonds and shall execute and deliver to the Issuer at Closing an “issue price” or similar certificate substantially in the form attached hereto as Exhibit C, together with the supporting pricing wires or equivalent communications, with modifications to such certificate as may be deemed appropriate or necessary, in the reasonable judgment of the Underwriter, the Issuer and Bryant Miller Olive P.A. as bond 5 counsel (the “Bond Counsel”), to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Series 2020 Bonds. (iii) Except as set forth in Exhibit A attached hereto, the Issuer will treat the first price at which 10% of each maturity of the Series 2020 Bonds (the “10% test”) is sold to the public as the issue price of that maturity. At or promptly after the execution of this Purchase Contract, the Underwriter shall report to the Issuer the price or prices at which the Underwriter has sold to the public each maturity of the Series 2020 Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Series 2020 Bonds, the Underwriter agrees to promptly report to the Issuer the prices at which the Series 2020 Bonds of that maturity have been sold by the Underwriter to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until the 10% test has been satisfied as to the Series 2020 Bonds of that maturity or until all Series 2020 Bonds of that maturity have been sold to the public, provided that, the Underwriter’s reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Issuer or Bond Counsel. For purposes of this Section, if Series 2020 Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Series 2020 Bonds. (iv) The Underwriter confirms that the Underwriter has offered the Series 2020 Bonds to the public on or before the date of this Purchase Contract at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A attached hereto, except as otherwise set forth therein. Exhibit A also sets forth, as of the date of this Purchase Contract, the maturities, if any, of the Series 2020 Bonds for which the 10% test has not been satisfied and for which the Issuer and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the Issuer to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of each such maturity as of the sale date as the issue price of that maturity (the “hold-the-offering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the Series 2020 Bonds, the Underwriter will neither offer nor sell unsold Series 2020 Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following: (1) the close of the fifth (5th) business day after the sale date; or (2) the date on which the Underwriters have sold at least 10% of that maturity of the Series 2020 Bonds to the public at a price that is no higher than the initial offering price to the public. The Underwriter will advise the Issuer promptly after the close of the fifth (5th) business day after the sale date whether it has sold 10% of that maturity of the Series 2020 6 Bonds to the public at a price that is no higher than the initial offering price to the public. The Issuer acknowledges that, in making the representation set forth in this subsection, the Underwriter will rely on (i) the agreement of each Underwriter to comply with the hold-the-offering-price rule, as set forth in an agreement among underwriters and the related pricing wires, (ii) in the event a selling group has been created in connection with the initial sale of the Series 2020 Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the hold-the-offering-price rule, as set forth in a selling group agreement and the related pricing wires, and (iii) in the event that an Underwriter is a party to a retail distribution agreement that was employed in connection with the initial sale of the Series 2020 Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the hold-the-offering- price rule, as set forth in the retail distribution agreement and the related pricing wires. Subject to compliance with the provisions of subsection (v) below, the Issuer further acknowledges that each Underwriter shall be solely liable for its failure to comply with its agreement regarding the hold-the-offering-price rule and that no Underwriter shall be liable for the failure of any other Underwriter, or of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a retail distribution agreement, to comply with its corresponding agreement regarding the hold-the-offering-price rule as applicable to the Series 2020 Bonds. (v) The Underwriter confirms that: (1) any agreement among underwriters, any selling group agreement and each retail distribution agreement (to which the Underwriter is a party) relating to the initial sale of the Series 2020 Bonds to the public, together with the related pricing wires, contains or will contain language obligating each Underwriter, each dealer who is a member of the selling group, and each broker-dealer that is a party to such retail distribution agreement, as applicable, to (A) report the prices at which it sells to the public the unsold Series 2020 Bonds of each maturity allotted to it until it is notified by the Underwriter that either the 10% test has been satisfied as to the Series 2020 Bonds of that maturity or all Series 2020 Bonds of that maturity have been sold to the public, and (B) comply with the hold-the-offering-price rule, if applicable, in each case if and for so long as directed by the Underwriter and as set forth in the related pricing wires, and (2) any agreement among underwriters relating to the initial sale of the Series 2020 Bonds to the public (as such term is defined below), together with the related pricing wires, contains or will contain language obligating each Underwriter that is a party to a retail distribution agreement to be employed in connection with the initial sale of the Series 2020 Bonds to the public to require each broker-dealer that is a party to such retail distribution agreement to (A) report the prices at which it sells to the public the unsold 7 Series 2020 Bonds of each maturity allotted to it until it is notified by the Underwriter or the Underwriter that either the 10% test has been satisfied as to the Series 2020 Bonds of that maturity or all Series 2020 Bonds of that maturity have been sold to the public, and (B) comply with the hold-the-offering-price rule, if applicable, in each case if and for so long as directed by the Underwriter or the Underwriter and as set forth in the related pricing wires. (vi) The Underwriter acknowledges that sales of any Series 2020 Bonds to any person that is a related party to the Underwriter shall not constitute sales to the public for purposes of this section. Further, for purposes of this section: (1) “public” means any person other than an underwriter or a related party; (2) “underwriter” means (A) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Series 2020 Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Series 2020 Bonds to the public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Series 2020 Bonds to the public); (3) a purchaser of any of the Series 2020 Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (A) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (B) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and (4) “sale date” means the date of execution of this Purchase Contract by all parties. (f) The Issuer hereby authorizes the Underwriter to use the forms or copies of the Bond Ordinance, the Resolution, the Continuing Disclosure Agreement related to the Series 8 2020 Bonds (the “Continuing Disclosure Agreement”) and the Official Statement and the information contained therein in connection with the public offering and sale of the Series 2020 Bonds and ratifies and confirms its authorization of the distribution and use by the Underwriter prior to the date hereof of the Preliminary Official Statement in connection with such public offering and sale. The Underwriter agrees that it will not confirm the sale of any Series 2020 Bonds unless the confirmation of sale requesting payment is accompanied or preceded by the delivery of a copy of the Official Statement. The Issuer hereby confirms that it does not object to the distribution of the Official Statement in electronic form. The Underwriter shall notify the Issuer of the occurrence of the “end of the underwriting period”, as such term is defined in the Rule, and of the passage of the date after which the Underwriter no longer remains obligated to deliver Official Statements pursuant to paragraph (b)(4) of the Rule. 5. Representation of the Underwriter as to Authority. The Underwriter is duly authorized to execute this Purchase Contract and has been duly authorized to act hereunder in connection with the issuance of the Series 2020 Bonds. 6. Underwriter not Acting as Agent or Fiduciary. The Issuer acknowledges and agrees that (i) the purchase and sale of the Series 2020 Bonds pursuant to this Purchase Contract is an arm’s-length commercial transaction between the Issuer and the Underwriter, (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as principal and is not acting as municipal advisor, financial advisor, agent or fiduciary to the Issuer, (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the Issuer with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter or any of its respective affiliates have provided other services or is currently providing other services to the Issuer on other matters) and the Underwriter has no obligation to the Issuer with respect to the offering contemplated hereby except the obligations expressly set forth in this Purchase Contract, (iv) the Underwriter has financial and other interests that differ from those of the Issuer and (v) the Issuer has consulted its own legal, financial and other advisors to the extent it has deemed appropriate. 7. Representations, Warranties and Covenants of the Issuer. The Issuer hereby represents and warrants to and covenants with the Underwriter that: (a) The Issuer has reviewed the information in the Preliminary Official Statement. Except for information which is permitted to be omitted pursuant to the Rule, the Preliminary Official Statement (excluding the information regarding DTC and its book-entry system of registration, as to which no representations or warranties are made), as of its date and as of the date hereof was and is true and correct in all material respects and did not and does not contain any untrue or misleading statement of a material fact or omit to state any material fact 9 necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (b) The Official Statement (excluding the information regarding DTC and its book-entry only system of registration, as to which no representations or warranties are made) is, as of its date and (unless the Official Statement is amended or supplemented pursuant to paragraph (d) of Section 4 of this Purchase Contract) at all times subsequent thereto during the period up to and including the Closing Date will be, true and correct in all material respects and will not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (c) If the Official Statement is supplemented or amended pursuant to paragraph (d) of Section 4 of this Purchase Contract, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto during the period up to and including the Closing Date, the Official Statement, as so supplemented or amended, will not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (d) The Issuer is, and will be on the Closing Date, a duly organized and validly existing municipal corporation under the laws of the State of Florida, with the powers and authority set forth in the Act and with full legal right, power and authority to enact the Bond Ordinance and the Resolution, to issue, sell and deliver the Series 2020 Bonds to the Underwriter as provided herein, to refund the Refunded Bond, to pledge the Net Revenues as provided in the Bond Ordinance, and to execute, deliver and perform its obligations, as the case may be, under this Purchase Contract, the Bond Ordinance, the Resolution, the Series 2020 Bonds, the Registrar and Paying Agent Agreement, and the Continuing Disclosure Agreement (collectively, the “Issuer Documents”), and to otherwise carry out the transactions contemplated by each of the Issuer Documents and the Official Statement. (e) The Issuer has duly enacted the Bond Ordinance and Resolution in accordance with the Act, and each is in full force and effect and has not been amended, modified or repealed. Concurrently with or prior to the acceptance hereof, the Issuer has (i) duly authorized and approved the execution and delivery of the Series 2020 Bonds and the Issuer Documents, (ii) duly authorized and approved the Official Statement and the distribution thereof and has deemed the Preliminary Official Statement as of its date to be “final” for purposes of the Rule, (iii) duly authorized and approved the sale of the Series 2020 Bonds to the Underwriter, (iv) duly authorized the refunding of the Refunded Bond, and (v) duly authorized and approved the consummation by the Issuer of all other transactions contemplated by the Official Statement and this Purchase Contract. The Issuer Documents, when executed by the Issuer, and assuming the due 10 authorization and execution by the other parties thereto, if any, will each constitute the legal, valid and binding limited obligations of the Issuer enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency or other laws affecting creditors’ rights and remedies generally and to general principles of equity. (f) As of the time of acceptance hereof and as of the Closing Date, except as otherwise disclosed in the Official Statement, the Issuer is not and will not be in breach of or in default under any applicable constitutional provision, law or administrative regulation of the State of Florida or the United States relating to the Issuer or any applicable judgment or decree or any trust agreement, loan agreement, indenture, bond, note, resolution, ordinance, certificate, agreement or other instrument to which the Issuer is a party or to which the Issuer or its assets is otherwise subject, and no event has occurred and is continuing which constitutes or with the passage of time or the giving of notice, or both, would constitute a default or event of default by the Issuer under any of the foregoing; the consequence of any of which or the correction of any of which would materially and adversely affect the operations or financial condition of the Issuer, or the collection or application of Net Revenues as of such dates; and, as of such times and except as disclosed in the Official Statement, the execution and delivery of the Series 2020 Bonds, the Issuer Documents and the enactment of the Bond Ordinance and Resolution and compliance with the provisions on the Issuer’s part contained in each such document do not and will not conflict with or constitute a breach of or default under any applicable constitutional provision, law or administrative regulation of the State of Florida or the United States or a breach of any applicable judgment, decree, trust agreement, loan agreement, indenture, bond, note, resolution, ordinance, agreement or other instrument to which the Issuer is a party or to which the Issuer or its assets is otherwise subject, nor will such enactment, adoption, execution, delivery, authorization or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the Issuer, or under the terms of any law, administrative regulation, ordinance, resolution or instrument, except as expressly provided by the Bond Ordinance. The Issuer has not, as of the date hereof or as of the Closing Date, failed to pay principal (and premium, if any) or interest when due on any of its outstanding indebtedness. (g) On the Closing Date, all approvals, authorizations, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization of, which would constitute a condition precedent to, or the absence of which would materially adversely affect the due performance by the Issuer of its obligations under the Bond Ordinance or the other Issuer Documents will have been duly obtained. (h) The financial statements and other financial information regarding the Issuer, in the Official Statement fairly present the financial position and results of the Issuer, 11 including the Net Revenues as of the dates and for the periods therein set forth, and there are no material liabilities, contingent or otherwise, of the Issuer that have not been disclosed in the Official Statement. Between the date of the Official Statement and the Closing, there will be no adverse change of a material nature in such financial position, results of operations or condition, financial or otherwise, of the Issuer, including the Net Revenues. The Issuer is not a party to any litigation or other proceedings pending or, to its knowledge, threatened which, if decided adversely to the Issuer, would have a materially adverse effect on the financial condition of the Issuer. (i) Except as described in the Official Statement, there is no legislation, action, suit, proceeding, inquiry, or investigation at law or in equity before or by any court, government agency, public board or body pending or, to the best knowledge of the Issuer, after having made due inquiry with respect thereto, threatened against the Issuer, affecting the existence of the Issuer or the titles of its members and officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Series 2020 Bonds or the collection and receipt of any of the Net Revenues or in any way contesting or affecting the validity or enforceability of the Series 2020 Bonds, the Issuer Documents or any other material agreement or instrument to which the Issuer is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby or by the Official Statement or contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto, or contesting the powers of the Issuer or any authority for the issuance of the Series 2020 Bonds, the enactment of the Bond Ordinance, the adoption of the Resolution or the execution and delivery of the Issuer Documents, nor, to the best knowledge of the Issuer, is there any basis therefor wherein an unfavorable decision, ruling or finding could materially adversely affect the validity or enforceability of the Series 2020 Bonds, the Bond Ordinance, the Resolution, the other Issuer Documents or any of them. The Issuer shall advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise affecting the use of the Preliminary Official Statement or the Official Statement in connection with the offering, sale or distribution of the Series 2020 Bonds. (j) Between the date of this Purchase Contract and the Closing Date, the Issuer will not, without the prior written consent of the Underwriter, offer or issue any bonds, notes or other obligations for borrowed money or incur any material liabilities, direct or contingent, payable from or secured by any of the revenues or assets which will secure or otherwise support the payment of the Series 2020 Bonds. (k) The Issuer has complied, and at the Closing will be in compliance, in all respects, with the terms of the Act and with the obligations on its part in connection with the issuance of the Series 2020 Bonds and contained in the Issuer Documents. 12 (l) When delivered to and paid for by the Underwriter at the Closing in accordance with the provisions of this Purchase Contract, the Series 2020 Bonds will have been duly authorized, executed, issued and delivered and will constitute valid and binding obligations of the Issuer in conformity with the Act and the Bond Ordinance, enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and subject to general principles of equity as to enforceability. (m) The Issuer will not take or omit to take any action which action or omission will in any way cause the proceeds from the sale of the Series 2020 Bonds to be applied in a manner contrary to that provided for in the Bond Ordinance and as described in the Official Statement. (n) Other than as described in the Official Statement, since December 31, 1975, and at all times subsequent thereto up to and including the Closing Date, the Issuer has not been and will not be in default with respect to payment of the principal of, or interest on, any bonds or other debt obligations that it has issued or will issue or that it has guaranteed or will guarantee (excluding bonds or other debt obligations for which it has served as a conduit issuer). (o) The Issuer has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that the Issuer is a bond issuer whose arbitrage certifications may not be relied upon. (p) Except as disclosed in the Official Statement, within the last five (5) years, the Issuer has not failed to comply in all material respects with any continuing disclosure undertaking made by it pursuant to the Rule in connection with outstanding bond issues for which the Issuer has agreed to undertake continuing disclosure obligations. (q) No representation or warranty by the Issuer in this Purchase Contract, nor any statement, certificate, document or exhibit furnished to or to be furnished by the Issuer pursuant to this Purchase Contract or the Official Statement or in connection with the transactions contemplated hereby contains, or will contain on the Closing Date, any untrue statement of material fact or omits or will omit to state a material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading. 8. The Closing. At or before 1:00 p.m., New York time, on [_______], 2020, or at such other time or on such earlier or later business day as shall have been agreed upon by the Issuer and the Underwriter (the “Closing” or the “Closing Date”), the Issuer shall deliver, or cause to be delivered, subject to the terms and conditions hereof: (i) the Series 2020 Bonds, bearing proper CUSIP numbers, to the Underwriter, in definitive form, duly executed and authenticated by the Bond Registrar, via the FAST system as described below, and (ii) the closing documents hereinafter mentioned. The Underwriter, subject to the terms and conditions hereof, will accept 13 such delivery and pay the Purchase Price as set forth in Section 1 hereof by wire transfer of federal funds to the order of the Issuer. The Series 2020 Bonds shall bear proper CUSIP numbers and shall be in typewritten form, with a single bond for each maturity and interest rate of the Series 2020 Bonds, each such bond to be in a principal amount equal to the principal amount thereof maturing on each such date. The Series 2020 Bonds shall be registered in the name of Cede & Co., as nominee of DTC, will be made available for inspection and checking by the Underwriter not later than 3:00 P.M., New York City time, on the business day prior to the Closing Date and will be delivered through the DTC FAST system. 9. Closing Conditions. The Underwriter is entering into this Purchase Contract in reliance upon the representations, warranties, covenants and agreements of the Issuer contained herein, and in reliance upon the representations, warranties, covenants and agreements to be contained in the documents and instruments to be delivered at the Closing, and upon the performance by the Issuer of its obligations hereunder, both as of the date hereof and as of the Closing Date. Accordingly, the Underwriter’s obligations hereunder to purchase and pay for the Series 2020 Bonds shall be subject to the performance by the Issuer of its obligations to be performed hereunder and under such other documents and instruments to be delivered at or prior to the Closing, and shall also be subject to the following additional conditions, including the delivery by the Issuer of such documents as are enumerated herein, in form and substance reasonably satisfactory to the Underwriter: (a) The representations and warranties of the Issuer contained herein shall be true, complete and correct in all material respects as of the date hereof and at the time of the Closing, as if made at the time of the Closing, and the statements made in all certificates and other documents delivered to the Underwriter at the Closing shall be true, complete and correct as of the Closing Date and the Issuer shall be in compliance with each of the agreements made by it in this Purchase Contract as of the Closing Date. (b) At the time of the Closing (i) the Bond Ordinance and Resolution shall be in full force and effect and shall not have been amended, modified or supplemented after the date of this Purchase Contract except with the prior written approval of the Underwriter; (ii) the Issuer Documents shall each have been duly executed and delivered by the Issuer and the other parties thereto and shall not have been amended, modified or supplemented after the date of this Purchase Contract (other than to conform to the description contained in the Official Statement) except with the prior written approval of the Underwriter; and (iii) the Issuer shall perform or have performed all of its obligations required under or specified in this Purchase Contract and the other Issuer Documents to be performed at or before the Closing. (c) The Issuer shall not be in default in the payment of principal or interest on any of its bonds, notes, or other debt obligations. 14 (d) At the time of the Closing, there shall not have occurred any change or any development involving a prospective change in the condition, financial or otherwise, or in Net Revenues or operations of the Issuer, from that set forth in the Official Statement that, in the reasonable judgment of the Underwriter, is material and adverse and that makes it, in the judgment of the Underwriter, impracticable to market the Series 2020 Bonds on the terms and in the manner contemplated in the Official Statement. (e) All steps to be taken and all instruments and other documents to be executed, and all other legal matters in connection with the transaction contemplated by this Purchase Contract shall be reasonably satisfactory in legal form and effect to the Underwriter. (f) The Underwriter shall have the right to terminate this Purchase Contract by notification to the Issuer if, after the execution hereof and prior to the Closing any of the following events shall occur in the sole and reasonable judgment of the Underwriter: (i) an event shall occur which makes untrue or incorrect in any material respect, as of the time of such event, any statement or information contained in the Official Statement or which is not reflected in the Official Statement but should be reflected therein in order to make the statements contained therein in the light of the circumstances under which they were made not misleading in any material respect and, in either such event, (1) the Issuer refuses to permit the Official Statement to be supplemented to supply such statement or information in a manner satisfactory to the Underwriter, or (2) the effect of the Official Statement as so supplemented is, in the reasonable judgment of the Underwriter, to materially adversely affect the market price or marketability of the Series 2020 Bonds or the ability of the Underwriter to enforce contracts for the sale, at the contemplated offering prices (or yields), of the Series 2020 Bonds; or (ii) legislation shall be introduced in, enacted by, reported out of committee, or recommended for passage by Florida, either House of the Congress, or recommended to the Congress or otherwise endorsed for passage (by press release, other form of notice or otherwise) by the President of the United States, the Treasury Department of the United States, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or legislation is proposed for consideration by either such committee by any member thereof or presented as an option for consideration by either such committee by the staff of such committee or by the staff of the Joint Committee on Taxation of the Congress of the United States, or a bill to amend the Code (which, if enacted, would be effective as of a date prior to the Closing) shall be filed in either House, or a decision by a court of competent jurisdiction shall be 15 rendered, or a regulation or filing shall be issued or proposed by or on behalf of the Department of the Treasury or the Internal Revenue Service of the United States, or other agency of the federal government, or a release or official statement shall be issued by the President, the Department of the Treasury or the Internal Revenue Service of the United States, in any such case with respect to or affecting (directly or indirectly) the federal or state taxation of interest received on obligations of the general character of the Series 2020 Bonds which, in the reasonable judgment of the Underwriter, materially adversely affects the market price or marketability of the Series 2020 Bonds or the ability of the Underwriter to enforce contracts for the sale, at the contemplated offering prices (or yields), of the Series 2020 Bonds; or (iii) a stop order, ruling, regulation, proposed regulation or statement by or on behalf of the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, offering, sale or distribution of obligations of the general character of the Series 2020 Bonds (including any related underlying obligations) is in violation or would be in violation of any provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended or the Trust Indenture Act of 1939, as amended; or (iv) legislation introduced in or enacted (or resolution passed) by the Congress or an order, decree, or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary, or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Series 2020 Bonds, including any or all underlying arrangements, are not exempt from registration under or other requirements of the Securities Act of 1933, as amended (the “Securities Act”), or that the Bond Ordinance is not exempt from qualification under the Trust Indenture Act of 1939, as amended, or that the issuance, offering, or sale of obligations of the general character of the Series 2020 Bonds, including any or all underlying arrangements, as contemplated hereby or by the Official Statement or otherwise, is or would be in violation of the federal securities law as amended and then in effect; or (v) there shall have occurred (1) any outbreak or escalation of hostilities, declaration by the United States of a national or international emergency or war, or (2) any other calamity or crisis in the financial markets of the United States or elsewhere; or (3) a downgrade of the sovereign debt rating of the United States by any major credit rating agency or payment default on United States Treasury obligations which, in the reasonable judgment of the Underwriter, materially adversely affects the market price or marketability of the Series 2020 Bonds or the ability of the Underwriters to enforce 16 contracts for the sale, at the contemplated offering prices (or yields), of the Series 2020 Bonds; or (vi) there shall have occurred a general suspension of trading, minimum or maximum prices for trading shall have been fixed and be in force or maximum ranges or prices for securities shall have been required on the New York Stock Exchange or other national stock exchange whether by virtue of a determination by that Exchange or by order of the Securities and Exchange Commission or any other governmental agency having jurisdiction or any national securities exchange shall have: (1) imposed additional material restrictions not in force as of the date hereof with respect to trading in securities generally, or to the Series 2020 Bonds or similar obligations, or (2) materially increased restrictions now in force with respect to the extension of credit by or the charge to the net capital requirements of underwriters or broker-dealers which, in the reasonable judgment of the Underwriter, materially adversely affects the market price or marketability of the Series 2020 Bonds or the ability of the underwriters to enforce contracts for the sale, at the contemplated offering prices (or yields), of the Series 2020 Bonds; or (vii) a general banking moratorium shall have been declared by federal or New York or Florida state authorities or a major financial crisis or a material disruption in commercial banking or securities settlement or clearances services shall have occurred which, in the reasonable judgment of the Underwriter, materially adversely affects the market price or the marketability for the Series 2020 Bonds or the ability of the Underwriter to enforce contracts for the sale, at the contemplated offering prices (or yields), of the Series 2020 Bonds; or (viii) a downgrading or suspension of any rating (without regard to credit enhancement) by [S&P Global Ratings, a business unit of Standard & Poor’s Financial Services LLC (“S&P”) or Moody’s Investors Service (“Moody’s)] of any debt securities issued by the Issuer which are secured by the Net Revenues, or there shall have been any official statement as to a possible downgrading (such as being placed on “credit watch” or “negative outlook” or any similar qualification) of any rating by [S&P or Moody’s] of any debt securities issued by the Issuer which are secured by the Net Revenues, including the Series 2020 Bonds, which, in the reasonable judgment of the Underwriter, materially adversely affects the market price or marketability of the Series 2020 Bonds or the ability of the Underwriter to enforce contracts for the sale, at the contemplated offering prices (or yields), of the Series 2020 Bonds. (g) At or before the Closing, the Underwriter shall receive the following documents: 17 (1) The Official Statement, and each supplement or amendment thereto, if any, executed on behalf of the Issuer by its Mayor and City Clerk, or such other official as may have been agreed to by the Underwriter; (2) Certified copy of the Bond Ordinance; (3) Certified copy of the Resolution; (4) Each of the other Issuer Documents, fully executed by the respective parties thereto; (5) A copy of the Letter of Representations with DTC; (6) The approving opinion of Bond Counsel, as to the Series 2020 Bonds, dated the Closing Date, substantially in the form attached to the Official Statement together with a letter of Bond Counsel addressed to the Underwriter, and dated the Closing Date, to the effect that such bond approving opinion may be relied upon by the Underwriter to the same extent as if such opinion were addressed to the Underwriter; (7) A supplemental opinion of Bond Counsel, dated the Closing Date, addressed to the Underwriter, to the effect that, (i) the statements contained in the Official Statement under the captions “PLAN OF REFUNDING”, “DESCRIPTION OF THE SERIES 2020 BONDS” (except for the information relating to DTC and its book-entry system of registration, as to which no view need be expressed), and “SECURITY FOR THE SERIES 2020 BONDS”, insofar as such information purports to summarize portions of the Bond Ordinance, the Resolution, and the Series 2020 Bonds, constitute a summary of the information purported to be summarized therein, and the statements contained under the caption “TAX MATTERS” are accurate statements or summaries of the matters therein set forth, (ii) the Series 2020 Bonds are exempt from registration under the Securities Act of 1933, as amended, (iii) the Bond Ordinance is exempt from qualification under the Trust Indenture Act of 1939, as amended and (iv) to the effect that, in reliance on schedules provided by the Financial Advisor, the pledge of and lien created by the Bond Ordinance in favor of holders of the Refunded Bond, shall no longer be in effect; (8) An opinion of Pamela K. Akin, Esquire, City Attorney, dated the Closing Date and addressed to the Underwriter, to the effect that: (A) the Issuer is a municipal corporation of the State of Florida (the “State”), duly created, organized and validly existing under the laws of the State, and has full legal right, power and authority under the Act and the Bond Ordinance (1) to enter into, execute and deliver the Issuer Documents and all documents 18 required hereunder and thereunder to be executed and delivered by the Issuer, (2) to sell, issue and deliver the Series 2020 Bonds to the Underwriter as provided herein, (3) to pledge the Net Revenues as provided in the Bond Ordinance, (4) to refund the Refunded Bond, and (5) to carry out and consummate the transactions contemplated by the Issuer Documents and the Official Statement, and the Issuer has complied, and will at the Closing be in compliance in all respects, with the terms of the Act and the Issuer Documents as they pertain to such transactions; (B) by all necessary official action of the Issuer prior to or concurrently with the acceptance hereof, the Issuer has duly authorized all necessary action to be taken by it for (1) the enactment of the Bond Ordinance and Resolution and the issuance and sale of the Series 2020 Bonds, (2) the approval, execution and delivery of, and the performance by the Issuer of the obligations on its part contained in the Series 2020 Bonds and the Issuer Documents, (3) the pledge of the Net Revenues as provided in the Bond Ordinance, and (4) the consummation by it of all other transactions contemplated by the Official Statement, the Issuer Documents and any and all such other agreements and documents as may be required to be executed, delivered and/or received by the Issuer in order to carry out, give effect to, and consummate the transactions contemplated herein and in the Official Statement; (C) the Bond Ordinance was duly and validly enacted by the Issuer and is in full force and effect and has not been amended, modified or repealed; the Bond Ordinance and all other proceedings pertinent to the validity and enforceability of the Series 2020 Bonds and the receipt of the Net Revenues and all Issuer required actions to receive all of the Net Revenues have been duly and validly adopted or undertaken in compliance with all applicable procedural requirements of the Issuer and in compliance with the Constitution and laws of the State, including the Act; (D) the Issuer Documents have been duly authorized, executed and delivered by the Issuer, and constitute legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their respective terms, except to the extent limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws and equitable principles of general application relating to or affecting the enforcement of creditors’ rights; and the Series 2020 Bonds, when issued and delivered and paid for in accordance with the Bond Ordinance and this Purchase Contract, will constitute legal, valid and binding obligations of the Issuer entitled to the benefits of the Bond Ordinance and enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws and principles of equity relating to or affecting the enforcement of creditors’ rights; upon the issuance, authentication and delivery of the Series 19 2020 Bonds as aforesaid, the Bond Ordinance will provide, for the benefit of the holders, from time to time, of the Series 2020 Bonds, the covenant to levy and collect the Net Revenues it purports to create as set forth in the Bond Ordinance; (E) the information in the Preliminary Official Statement and the Official Statement under the captions “THE WATER AND SEWER SYSTEM”, “PENSION AND OTHER POST-EMPLOYMENT BENEFIT LIABILITIES”, “INVESTMENT POLICY OF THE CITY”, and “LITIGATION” is true and complete in all material respects, and with respect to the other information in the Preliminary Official Statement and the Official Statement, based upon her review of the Preliminary Official Statement and the Official Statement as counsel to the Issuer and without having undertaken to determine independently the accuracy or completeness of the contents of such other portions of the Preliminary Official Statement and the Official Statement, she has no reason to believe that such other portions of the Preliminary Official Statement, as of its date, and the Official Statement, as of its date and the Closing Date (in each case, except for the financial and statistical data contained therein and the information relating to DTC and its book-entry system of registration, as to which no view need be expressed) contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading; (F) the use of the Preliminary Official Statement by the Underwriter for the purpose of offering the Series 2020 Bonds for sale has been duly authorized and ratified by the Issuer; (G) the Official Statement has been duly authorized, executed and delivered by the Issuer and the Issuer has consented to the use thereof by the Underwriter; (H) the enactment of the Bond Ordinance and Resolution and the authorization, execution and delivery of the Issuer Documents and the Series 2020 Bonds and compliance with the provisions hereof and thereof, will not conflict with, or constitute a breach of or default under, any constitutional provision, law or administrative regulation, or to the best of her knowledge, any consent decree, ordinance, resolution or any agreement or other instrument to which the Issuer was or is subject, as the case may be, nor will such adoption, execution, delivery, authorization or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the 20 property or assets of the Issuer, or under the terms of any law, administrative regulation, ordinance, resolution or instrument; (I) to the best of her knowledge, all approvals, authorizations, licenses, permits, consents, and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction in any matter which would constitute a condition precedent to the performance by the Issuer of its obligations hereunder and under the Issuer Documents have been obtained and are in full force and effect; (J) except as disclosed in the Official Statement, there is no legislation, action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the best of her knowledge, threatened, against the Issuer, affecting the existence of the Issuer or the titles of its members and officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Series 2020 Bonds or the collection and receipt of any of the Net Revenues, or in any way contesting or affecting the validity or enforceability of the Series 2020 Bonds, the Issuer Documents or any other material agreement or instrument to which the Issuer is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby or by the Official Statement or contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto, or contesting the powers of the Issuer or any authority for the issuance of the Series 2020 Bonds, the enactment of the Bond Ordinance, or the execution and delivery of the Issuer Documents, nor, to the best of her knowledge, is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Series 2020 Bonds or the Issuer Documents; (9) A certificate of the Issuer dated the Closing Date signed by its Mayor or Vice Mayor and attested to by the City Clerk, in form and substance satisfactory to the Underwriter, to the effect that (i) the representations, covenants, agreements and warranties of the Issuer contained herein are true and correct in all material respects on and as of the Closing Date as if made on the Closing Date; (ii) except as disclosed in the Official Statement, no litigation or proceeding against it is pending or, to the best of his knowledge, threatened in any court or administrative body nor is there a basis for litigation which would (A) contest the right of the members or officials of the Issuer to hold and exercise their respective positions, (B) contest the due organization and valid existence of the Issuer, (C) contest the validity, due authorization and execution of the Series 2020 Bonds or the Issuer Documents, (D) attempt to limit, enjoin or otherwise restrict or prevent the Issuer from levying and collecting Net 21 Revenues, (E) contest in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto, or (F) which may result in any material adverse change in the business, properties, assets or financial condition of the Issuer; (iii) the Bond Ordinance is in full force and effect and has not been amended, modified or repealed; (iv) to the best of his knowledge, no event affecting the Issuer has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which is necessary to disclose therein in order to make the statements and information therein, in light of the circumstances under which made, not misleading in any respect as of the time of Closing; (v) Except for the information provided by DTC or the Underwriter (as to which no representations are made), the Preliminary Official Statement did not, as of its date, and the Official Statement did not as of its date, and does not as of the Closing Date, contain any untrue statement of a material fact or omit to state a material fact which should be included therein for the purposes for which such Official Statements are to be used, or which is necessary in order to make the statements contained therein, in light of the circumstances in which they were made, not misleading; (vi) the Issuer has complied or is presently in compliance with all agreements related to the Series 2020 Bonds and has satisfied all conditions on its part to be observed or satisfied under the Bond Ordinance and this Purchase Contract as of the Closing Date; (vii) the Issuer Documents have been duly authorized, executed and delivered by one or more duly authorized officers of the Issuer and each of the Issuer Documents is a legal, valid and binding obligation of the Issuer enforceable in accordance with its terms, except as such enforceability may be limited by (A) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors' rights generally, and (B) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and (viii) since September 30, 2018, no material adverse change has occurred in the financial position or results of the operations of the Issuer, except as disclosed in the Official Statement; (10) Evidence that the rating agencies who have rated the Series 2020 Bonds have issued ratings of not lower than the respective ratings on the Series 2020 Bonds which are published in the Official Statement and that such ratings are in full force and effect as of the Closing Date; (11) A certificate executed by the appropriate officer of the Issuer, delivered pursuant to Rule 15C2-12 under the Securities Exchange Act of 1934, deeming the Preliminary Official Statement to be final as of its date; (12) An opinion of Disclosure Counsel, dated the Closing Date and addressed to the Issuer, together with a letter addressed to the Underwriter authorizing the Underwriter to rely upon the letter addressed to the Issuer, to the effect that in accordance with their understanding with the Issuer, as Disclosure Counsel such firm has rendered legal advice and 22 assistance to the Issuer in the course of the preparation of the Official Statement; that assistance involved, among other things, inquiries concerning various legal and related matters, their review of certain records, documents and proceedings, participation in discussions with representatives of the Issuer, the Issuer’s Financial Advisor, and others concerning the contents of the Official Statement and related matters; that in accordance with their understanding with the Issuer, they are not passing upon, and do not assume responsibility for, the accuracy, completeness or fairness of the contents of the Official Statement; that, however, they can advise that, in their capacity as Disclosure Counsel and on the basis of the information that has come to their attention, and in reliance on the certificates, opinions and documents they have reviewed in the course of their performance of the services referred to above, and without having undertaken to verify independently the accuracy, completeness or fairness of the contents of the Official Statement, nothing has come to their attention which leads them to believe that the Official Statement, as of its date and the Closing Date (in each case, excluding the financial and statistical data included in the Official Statement and the appendices thereto, and the information relating to DTC or its book-entry only system), as of its date and as of the Closing Date, contained or contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading; (13) An opinion of Underwriter’ Counsel, dated the Closing Date and addressed to the Underwriter, to the effect that: (i) the Series 2020 Bonds are not subject to the registration requirements of the Securities Act; (ii) based upon their participation in the preparation of the Preliminary Official Statement and the Official Statement as counsel to the Underwriter and without having undertaken to determine independently the accuracy or completeness of the statements contained in the Preliminary Official Statement or the Official Statement, as of the Closing Date, nothing has come to the attention of such counsel that causes them to believe that the Preliminary Official Statement, as of its date, and the Official Statement as of its date and as of the Closing Date (in each case, excluding the financial statements, and the reports, financial and statistical data and forecasts included therein, and the information regarding DTC and its book-entry system of registration, as to all of which no opinion need be expressed) contained or contains any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; and (iii) based upon their review of the appropriate documents regarding the Continuing Disclosure Agreement as it relates to continuing disclosure under the Rule, the requirements of the Rule have been satisfied; (14) A Blue Sky Memorandum, issued by Underwriter’s Counsel; (15) A certificate of U.S. Bank National Association, in its capacity as Registrar and Paying Agent, dated the Closing Date, in a form reasonably satisfactory to the Underwriter; 23 (16) Such additional certificates, legal opinions, instruments, proceedings and other documents as the Underwriter or its counsel may reasonably deem necessary to evidence the truth and accuracy as of the time of the Closing of the representations of the Issuer, the compliance of the Issuer with legal requirements and the due performance or satisfaction by the Issuer on or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Issuer. By its execution of this Purchase Contract, the Issuer consents to the use by the Underwriter of the documents listed above, including specifically the Official Statement, the Bond Ordinance and the information contained therein, in connection with the public sale of the Series 2020 Bonds. If the Issuer shall be unable to satisfy the conditions contained in this Purchase Contract, or if the obligations of the Underwriter shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and an amount equal to the Good Faith Deposit shall be returned by the Issuer to the Underwriter as provided in Section 3, and neither the Underwriter nor the Issuer shall be under further obligation hereunder except as expressly set forth in Sections 11.(a), (b) and (c) below. 10. The Issuer covenants with the Underwriter to cooperate with them in qualifying the Series 2020 Bonds for offer and sale under the securities or “Blue Sky” laws of such states as the Underwriter may request; provided that in no event shall the Issuer be obligated to take any action which would subject it to general service of process in any state where it is not now so subject or qualify to do business in connection with any such qualification or determination in any jurisdiction. It is understood that the Issuer is not responsible for compliance with or the consequences of failure to comply with applicable “Blue Sky” laws, or for any expenses incurred in such compliance. 11. (a) The Issuer shall pay (i) the cost of the preparation and printing or other reproduction (for distribution on or prior to the date hereof) of the Official Statement; (ii) the fees and expenses of Bond Counsel, Disclosure Counsel, the Registrar and Paying Agent, and the Issuer's Financial Advisor, and any other experts or consultants retained by the Issuer; (iii) the costs and fees of the rating agencies; and (iv) out-of-pocket expenses of the Issuer. The Issuer shall reimburse the Underwriter for actual expenses incurred or paid by the Underwriter on behalf of the Issuer which are directly related to the marketing, issuance, and delivery of the Series 2020 Bonds, including, but not limited to, transportation, lodging, and meals for Issuer’s employees and representatives; provided, however, that (x) reimbursement for such expenses shall not exceed an ordinary and reasonable amount for such expenses and (y) such expenses are not related to the entertainment of any person and not prohibited from being reimbursed from the proceeds of an 24 offering of municipal securities under the MSRB’s Rule G-20. Such reimbursement may be in the form of inclusion in the expense component of the Underwriter’s discount. The provisions of this paragraph shall not obligate the Issuer to pay any fees or expenses that are contingent upon the occurrence of the Closing, unless a successful Closing occurs. The Issuer’s obligations to pay expenses incurred by the Underwriter on behalf of the Issuer and its staff related to food and lodging survive even if the underlying transaction fails to close or consummate. (b) The Underwriter shall pay expenses related to the initial purchase and sale of the Series 2020 Bonds as follows (which may be included as an expense component of the Underwriter’s discount) (x) the cost of printing or other reproduction of this Purchase Contract and the cost of preparation and printing of the Blue Sky report, if any, to be used by them; (y) all advertising expenses in connection with the public offering of the Series 2020 Bonds; and (z) all other expenses incurred by them in connection with the public offering and distribution of the Series 2020 Bonds, including the fees and expenses of counsel retained by it and the fees of Digital Assurance Certification, L.L.C. for a continuing disclosure undertaking compliance review. (c) If the Series 2020 Bonds are sold to the Underwriter pursuant to this Purchase Contract, the Issuer shall pay, from the proceeds of the sale of the Series 2020 Bonds or from other funds available to it, the costs of issuance with respect to the Series 2020 Bonds. If the Issuer shall be unable to, or shall otherwise fail to, satisfy the conditions to the obligation of the Underwriter to purchase, accept delivery of, and pay for the Series 2020 Bonds pursuant to the terms of this Purchase Contract, or if the obligation of the Underwriter to purchase, accept delivery of and pay for the Series 2020 Bonds shall be terminated for any reason permitted by this Purchase Contract, then the Issuer shall reimburse the Underwriter for all out-of-pocket expenses (including the fees and expenses of its counsel) reasonably incurred by the Underwriter in connection with this Purchase Contract or the offering contemplated hereunder. 12. Any notice or other communication to be given to the Issuer under this Purchase Contract shall be given by delivering the same in writing to the Issuer at City of Clearwater, Florida, 100 South Myrtle Avenue, 3rd Floor, Clearwater, Florida 33756, Attention: City Manager. Any notice or other communication to be given to the Underwriter under this Purchase Contract shall be given by delivering the same in writing to Raymond James & Associates, Inc., 880 Carillon Parkway, St. Petersburg, Florida 33716, Attention: Rick W. Patterson. 13. This Purchase Contract shall constitute the entire agreement between the Issuer and the Underwriter and is made solely for the benefit of the Issuer and the Underwriter (including their respective successors or assigns). No other person shall acquire or have any rights hereunder or by virtue hereof. All representations, warranties and agreements of the Issuer in this Purchase Contract shall remain operative and in full force and effect, regardless of (a) any investigation made by or on behalf of any of the Underwriter, and (b) the delivery of and payment for the Series 25 2020 Bonds hereunder. 14. This Purchase Contract may not be amended without the written consent of the Issuer and the Underwriter. 15. The validity, interpretation and performance of this Purchase Contract shall be governed by the internal laws of the State of Florida, without regard to conflict of law principles. IN WITNESS WHEREOF, the parties hereto have caused this Purchase Contract to be duly executed by their duly authorized officers as of the day and year first above written. [Remainder of page intentionally left blank] [Counterpart Signature Page to Bond Purchase Agreement, dated [_____ __], 2020] RAYMOND JAMES & ASSOCIATES, INC. By: Rick W. Patterson Managing Director [Counterpart Signature Page to Bond Purchase Agreement, dated [_____ __], 2020] Accepted: CITY OF CLEARWATER, FLORIDA By: George N. Cretekos, Mayor ATTEST: Approved as to form: By: __________ By: ________________________________ Rosemarie Call, City Clerk Pamela K. Akin, City Attorney Exhibit A-1 EXHIBIT A MATURITY SCHEDULE City of Clearwater, Florida Water and Sewer Revenue Refunding Bonds, Series 2020 $[_____] Serial Bonds Maturity (December 1) Principal Amount Interest Rate Yield Price 2020 $ % % 2021 % % 2022 % % 2023 % % 2024 % % 2025 % % 2026 % % 2027 % % 2028 % % 2029 % % 2030 % % 2031 % % 2032 % % $[_____] [_____]% Term Bond due December 1,[_____]; Yield [_____]%, Price [_____] $[_____] [_____]% Term Bond due December1, [_____]; Yield [_____]%, Price [_____] Exhibit A-2 REDEMPTION PROVISIONS Optional Redemption. The Series 2020 Bonds maturing on or before [_____] are not subject to optional redemption prior to their respective dates of maturity. The Series 2020 Bonds maturing on or after [_____], shall be subject to redemption at the option of the City prior to their stated dates of maturity, in whole or in part, and if in part from such maturities selected by the City (and by lot within a maturity if less than a full maturity), on [_____] or any date thereafter, at a redemption price equal to 100% of the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption. Mandatory Sinking Fund Redemption. The Series 2020 Bonds maturing on [_____] in the year [_____] are subject to mandatory redemption prior to maturity, in part, by lot, at a redemption price equal to the unpaid principal amount of the Series 2020 Bonds to be redeemed, plus interest accrued thereon to the date of redemption, on [_____] 1 of each year in the following Amortization Installments and in the years specified: Year Amortization Installment [_____]* $[_____] Exhibit B-1 EXHIBIT B FORM OF DISCLOSURE LETTER PURSUANT TO SECTION 218.385, FLORIDA STATUTES [_____ __], 2020 City of Clearwater, Florida 100 South Myrtle Avenue, 3rd Floor Clearwater, Florida 33756 Re: $[_____] City of Clearwater, Florida Water and Sewer Revenue Refunding Bonds, Series 2020 (the “Series 2020 Bonds”) Ladies and Gentlemen: In connection with the proposed issuance by the City of Clearwater, Florida (the “Issuer”), of $[_____] aggregate principal amount of its Water and Sewer Revenue Refunding Bonds, Series 2020 (the “Series 2020 Bonds”) Raymond James & Associates, Inc. (the “Underwriter”) has agreed to underwrite a public offering of the Series 2020 Bonds. Arrangements for underwriting the Series 2020 Bonds will include a Bond Purchase Agreement (the “Contract”) between the Issuer and the Underwriter that will embody the negotiations in respect thereof. The purpose of this letter is to furnish, pursuant to the provisions of Section 218.385, Florida Statutes, certain information in respect of the arrangements contemplated for the underwriting of the Series 2020 Bonds as follows: (a) The underwriting spread, including the management fee, expected to be realized is as follows: ITEM $/1,000 AMOUNT Average Takedown $[_____] $[_____] Underwriter’s Expenses [_____]* [_____] Total Underwriting Spread $[_____]* $[_____] ______________ *May not add due to rounding. (b) The nature and estimated amounts of expenses to be incurred by the Underwriter in connection with the purchase and offering of the Bonds are set forth in Schedule I attached hereto. Exhibit B-2 (c) There are no “finders,” as defined in Section 218.386, Florida Statutes, who have been retained or who will be paid by the Underwriter in connection with the issuance of the Series 2020 Bonds. (d) No other fee, bonus or other compensation is estimated to be paid by the Underwriter in connection with the issuance of the Series 2020 Bonds to any person not regularly employed or retained by the Underwriter, except as specifically enumerated as expenses referred to in paragraph (a) above to be incurred by the Underwriter as set forth in Schedule I attached hereto. (e) The name and address of the Underwriter is set forth below: Raymond James & Associates, Inc. 880 Carillon Parkway St. Petersburg, Florida 33716 (f) Based on representations of the Issuer, it is our understanding that the Issuer is proposing to issue $[_____] in aggregate principal amount of the Series 2020 Bonds for the purposes of refunding all of the outstanding Refunded Bond, as described in the Bond Ordinance, and paying certain costs and expenses relating to the issuance of the Series 2020 Bonds. The Series 2020 Bonds are expected to be repaid over a period of approximately [_____] years. At a True Interest Cost of approximately [_____]%, total interest paid over the life of the Series 2020 Bonds will be $[_____]. (g) Based on representations of the Issuer, it is our understanding that the Series 2020 Bonds will be payable solely from the Net Revenues in amounts sufficient to pay the principal of and interest on the Series 2020 Bonds, in the manner provided in the Bond Ordinance. The Series 2020 Bonds carry an average annual debt service of approximately $[_____]. Assuming the Issuer pays debt service on the Series 2020 Bonds from the Net Revenues, such funds equal to an average of $[_____] that will not be available to finance the other services of the Issuer each year that the Series 2020 Bonds will be outstanding, which is approximately [_____] years. Notwithstanding the foregoing, we are not accountants or actuaries, nor are we engaged in the practice of law. Accordingly, while we believe the above-described calculations to be correct, we do not warrant them to be so. We understand that you do not require any further disclosure from the Underwriter pursuant to Section 218.385, Florida Statutes. Exhibit B-3 Very truly yours, RAYMOND JAMES & ASSOCIATES, INC. By: Rick W. Patterson Managing Director Exhibit B- 4 SCHEDULE I ESTIMATED EXPENSES ITEM $/1,000 AMOUNT Underwriter's Counsel $ $ Dalcomp Dayloan CUSIP Fee DTC Fee DAC Expense Travel / Miscellaneous TOTAL $ $ Exhibit C- 1 EXHIBIT C ISSUE PRICE CERTIFICATE The undersigned, Raymond James & Associates, Inc. (the “Underwriter”), hereby certifies as set forth below with respect to the sale and issuance by the City of Clearwater, Florida (the “Issuer”) of its $[_____] Water and Sewer Revenue Refunding Bonds, Series 2020 (the “Issue”). [Select appropriate provisions below:] 1. [Alternative 115 – All Maturities Use General Rule: Sale of the Bonds. As of the date of this certificate, for each Maturity of the Bonds, the first price at which at least 10% of such Maturity of the Bonds was sold to the Public is the respective price listed in Schedule A.][Alternative 216 – Select Maturities Use General Rule: Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity of the Bonds was sold to the Public is the respective price listed in Schedule A.] 2. Initial Offering Price of the [Bonds][Hold-the-Offering-Price Maturities]. (a) [Alternative 117 – All Maturities Use Hold-the-Offering-Price Rule: The Underwriting Group offered the Bonds to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B.] [Alternative 218 – Select Maturities Use Hold-the-Offering-Price Rule: The Underwriting Group offered the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B.] 15 If Alternative 1 is used, delete the remainder of paragraph 1 and all of paragraph 2 and renumber paragraphs accordingly. 16 If Alternative 2 is used, delete Alternative 1 of paragraph 1 and use each Alternative 2 in paragraphs 2(a) and (b). 17 If Alternative 1 is used, delete all of paragraph 1 and renumber paragraphs accordingly. 18 Alternative 2(a) of paragraph 2 should be used in conjunction with Alternative 2 in paragraphs 1 and 2(b). Exhibit C- 2 (b) [Alternative 1 – All Maturities use Hold-the-Offering-Price Rule: As set forth in the Purchase Contract, the Underwriters have agreed in writing that, (i) for each Maturity of the Bonds, they would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the- offering-price rule”), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold-the-offering-price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Bonds at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period. [Alternative 2 - Select Maturities Use Hold-the-Offering-Price Rule: As set forth in the Purchase Contract, the members of the Underwriting Group have agreed in writing that, (i) for each Maturity of the Hold-the-Offering-Price Maturities, they would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the- offering-price rule”), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold-the-offering-price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Hold-the-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period. 3. Total Issue Price. The total of the issue prices of all the Maturities is $__________. 4. Defined Terms. [(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”] [(b) Hold-the-Offering-Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.”] [(c) Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date (__________, 2020), or (ii) the date on which the Underwriters have sold at least 10% of such Hold-the-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity.] (d) Issuer means the City of Clearwater, Florida. (e) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities. (f) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Exhibit C- 3 Underwriter. The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is __________, 2020. (h) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the Underwriter’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the [Tax Certificate] and with respect to compliance with the federal income tax rules affecting the Bonds, and by Bond Counsel in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of Internal Revenue Service Form 8038-G, and other federal income tax advice it may give to the Issuer from time to time relating to the Bonds. [Signature page to follow] Exhibit C- 4 RAYMOND JAMES & ASSOCIATES, INC. By: James A. Wright Managing Director–Municipal Underwriting Dated: [_____ __], 2020. Schedule A SALE PRICES OF THE GENERAL RULE MATURITIES AND INITIAL OFFERING PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES (Attached) Schedule B PRICING WIRE OR EQUIVALENT COMMUNICATION (Attached) BMO Draft #3 PAYING AGENT AND REGISTRAR AGREEMENT THIS PAYING AGENT AND REGISTRAR AGREEMENT (this "Agreement") is entered into as of [January __], 2020 by and between the City of Clearwater, Florida (the "Issuer"), and U.S. Bank National Association ("Bank"), as Paying Agent and Registrar. RECITALS WHEREAS the Issuer has duly authorized and provided for the issuance of its Bonds, entitled Water and Sewer Revenue Refunding Bonds, Series 2020 (the "Bonds") in an aggregate principal amount of $__________ to be issued as fully registered bonds without coupons; WHEREAS the Issuer will ensure all things necessary to make the Bonds the valid obligations of the Issuer, in accordance with their terms, will be done upon the issuance and delivery thereof; WHEREAS the Issuer and the Bank wish to provide the terms under which Bank will act as Paying Agent to pay the principal, redemption premium (if any) and interest on the Bonds, in accordance with the terms thereof, and under which the Bank will act as Registrar for the Bonds; WHEREAS the Bank has agreed to serve in such capacities for and on behalf of the Issuer and has full power and authority to perform and serve as Paying Agent and Registrar for the Bonds; WHEREAS the Issuer has duly authorized the execution and delivery of this Agreement; and all things necessary to make this Agreement a valid agreement have been done. NOW, THEREFORE, it is mutually agreed as follows: ARTICLE ONE DEFINITIONS Section 1.01. Definitions. All capitalized undefined terms shall have the same meanings as set forth in the Resolution. In addition, the following terms, unless the context otherwise requires, shall have the meanings specified in this Section: "Bank" means U.S. Bank National Association, a national banking association organized and existing under the laws of the United States of America. "Bond Register" means the book or books of registration kept by the Bank in which are maintained the names and addresses and principal amounts registered to each Registered Owner. 2 "Fiscal Year" means the fiscal year of the Issuer ending on September 30 of each year. "Issuer" means the City of Clearwater, Florida. "Paying Agent" means the Bank when it is performing the function of paying agent for the Bonds. "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of a government or any entity whatsoever. "Registered Owner" means a Person in whose name a Bond is registered in the Bond Register. "Registrar" means the Bank when it is performing the function of registrar for the Bonds. “Resolution” means, collectively, Ordinance No. 3674-84, Ordinance No. 6915-01, Ordinance No. 8620-14 and Resolution No. 19-37. "Stated Maturity" when used with respect to any Bond means the date specified in the Bond as the date on which the principal of such Bond is due and payable. ARTICLE TWO APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR Section 2.01. Appointment and Acceptance. The Issuer hereby appoints the Bank to act as Paying Agent with respect to the Bonds, to pay to the Registered Owners in accordance with the terms and provisions of this Agreement the principal of, redemption premium (if any), and interest on all or any of the Bonds. The Issuer hereby appoints the Bank as Registrar with respect to the Bonds. As Registrar, the Bank shall keep and maintain for and on behalf of the Issuer, books and records as to the ownership of the Bonds and with respect to the transfer and exchange thereof as provided. The Bank hereby accepts its appointment, and agrees to act as Paying Agent and Registrar. Section 2.02. Compensation. As compensation for the Bank's services as Paying Agent and Registrar, the Issuer hereby agrees to pay the Bank a one-time fee of $2,250.00 on the date of closing of the Bonds. 3 In addition, the Issuer agrees to reimburse the Bank, upon its request, for all reasonable out-of-pocket expenses, disbursements, and advances, including without limitation the reasonable fees, expenses, and disbursements of its agents and attorneys, incurred or made by the Bank in connection with entering into and performing under this Agreement or in connection with investigating and defending itself against any claim or liability hereunder. ARTICLE THREE PAYING AGENT Section 3.01. Duties of Paying Agent. As Paying Agent, the Bank, provided sufficient collected funds have been deposited for such purpose by or on behalf of the Issuer in the account designated by the Bank hereunder (the “Account”), shall pay on behalf of the Issuer the principal of, redemption premium, if any, and interest on each Bond in accordance with the provisions of the Bond. The Bank has no obligation to draw upon any account or pursuant to any letter of credit, insurance policy or other agreement or take any other action to assist the Issuer to comply with its obligations except to the extent expressly set forth in this Agreement. Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal of, redemption premium (if any) and interest on the Bonds on the dates specified in the Bond, from the Account to the extent such amounts are on deposit in the Account. The Bank shall not be required to pay interest on any funds of the Issuer for any period during which such funds are held by the Bank awaiting the presentation of the Bonds for payment. Section 3.03 Receipt of Funds. The Issuer shall deposit or cause to be deposited with the Bank sufficient funds from the funds pledged for the payment of the Bonds under the Resolution to pay when due and payable the principal of, premium, if any, and interest on the Bonds as follows: (1) payment by check must be received by the Paying Agent at least 5 business days prior to payment date and (2) payment by wire must be received by Paying Agent no later than 11:00AM EST on each Payment Date. 4 ARTICLE FOUR REGISTRAR Section 4.01. Initial Delivery of Bonds. The Bonds will be initially registered and delivered to the purchaser designated by the Issuer as one Bond for each maturity. If such purchaser delivers a written request to the Bank not later than five business days prior to the date of initial delivery, the Bank will, on the date of initial delivery, deliver Bonds of authorized denominations, registered in accordance with the instructions in such written request. Bonds issued as book-entry DTC bonds will be held by the Registrar/Paying Agent and transferred electronically to DTC under the FAST system. Section 4.02. Duties of Registrar. The Bank shall provide for the proper registration of transfer, exchange and replacement of the Bonds. Every Bond surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, the signature on which has been guaranteed by an eligible guarantor institution, in form acceptable to the Bank, duly executed by the Registered Owner thereof or such Registered Owner’s agent. The Registrar may request any supporting documentation it deems necessary or appropriate to effect a re-registration. Section 4.03. Unauthenticated Bonds. The Issuer shall provide to the Bank on a continuing basis, an adequate inventory of unauthenticated Bonds to facilitate transfers. The Bank agrees that it will maintain such unauthenticated Bonds in safekeeping. Section 4.04. Form of Bond Register. The Bank as Registrar will maintain its records as Registrar in accordance with the Bank's general practices and procedures in effect from time to time. Section 4.06. Cancelled Bonds. All Bonds surrendered for payment, redemption, transfer, exchange, or replacement, if surrendered to the Bank, shall be promptly cancelled by it and, if surrendered to the Issuer, shall be delivered to the Bank and, if not already cancelled, shall be promptly cancelled by the Bank. The Issuer may at any time deliver to the Bank for cancellation any Bonds previously authenticated and delivered which the Issuer may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Bank. All cancelled Bonds held by the Bank for its retention period then in effect and shall thereafter be destroyed and evidence of such destruction furnished to the Issuer upon its written request. 5 Section 4.07. Mutilated, Lost, Stolen or Destroyed Bonds. In case any Bond shall become mutilated or be destroyed, stolen or lost, the Bank shall deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of any such mutilated Bond or in lieu of and in substitution for any such Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Bank in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing by the owner with the Bank of evidence satisfactory to the Bank that such Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Bank of an appropriate bond of indemnity in form, substance and amount as may be required by law and as is otherwise satisfactory to the Bank. All Bonds so surrendered to the Bank shall be canceled by it and evidence of such cancellation shall be given to the Issuer. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new Bond prior to payment, provided that the owner shall first provide the Bank with a bond of indemnity as set forth above. ARTICLE FIVE THE BANK Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth herein, each of which is ministerial and non-fiduciary in nature. No implied duties or obligations shall be read into this Agreement against the Bank. The Bank hereby agrees to use the funds deposited with it for payment of the principal of and interest on the Bonds to pay the same as it shall become due and further agrees to establish and maintain such accounts and funds as may be required for the Bank to function as Paying Agent. Section 5.02. Reliance on Documents, Etc. (a) The Bank may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on certificates or opinions expressed therein, on certificates or opinions furnished to the Bank by the Issuer. (b) The Bank shall not be liable for any error of judgment made in good faith. The Bank shall not be liable for other than its gross negligence or willful misconduct in connection with any act or omission hereunder. (c) No provision of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers. (d) The Bank may rely, or be protected in acting or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, 6 order, bond, note, security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Bank need not examine the ownership of any Bond, but shall be protected in acting upon receipt of Bonds containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the Registered Owner or agent of the Registered Owner. (e) The Bank may consult with counsel, and the written advice or opinion of counsel shall be full authorization and protection with respect to any action taken, suffered or omitted by it hereunder in good faith reliance thereon. (f) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys and shall not be liable for the actions of such agent or attorney if appointed by it with due care. Section 5.03. Recitals of Issuer. The recitals contained in the Bonds shall be taken as the statements of the Issuer, and the Bank assumes no responsibility for their correctness. Section 5.04. May Own Bonds; Other Transactions. The Bank, in its individual or any other capacity, may become the owner or pledgee of Bonds with the same rights it would have if it were not the Paying Agent and Registrar for the Bonds. The Bank may engage in or be interested in any financial or other transaction with the Issuer, any Bond owner or any other Person. Section 5.05. Money Held by Bank. Money held by the Bank hereunder need not be segregated from other funds. The Bank shall have no duties with respect to investment of funds deposited with it and shall be under no obligation to pay interest on any money received by it hereunder. Any money deposited with or otherwise held by the Bank for the payment of the principal, redemption premium (if any) or interest on any Bond and remaining unclaimed, by the Registered Owner (or by the Issuer (which claim by the Issuer shall be made in writing) after maturity and prior to escheatment) will be escheated pursuant to the applicable state law. If funds are returned to the Issuer, the Issuer and the Bank agree that the Registered Owner of such Bond shall thereafter look only to the Issuer for payment thereof, and that all liability of the Bank with respect to such moneys shall thereupon cease. Section 5.06. Interpleader. The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim, demand, or controversy over its person as well as funds on deposit, in a court of competent jurisdiction. The Issuer and the Bank further agree that the Bank has the right to file an action in interpleader in any court of competent jurisdiction to determine the rights of any person claiming any interest herein. 7 Section 5.07. Indemnification. To the extent authorized by law, the Issuer shall indemnify the Bank, its officers, directors and employees ("Indemnified Parties") for, and hold them harmless against any loss, cost, claim, liability or expense arising out of or in connection with the Bank's acceptance or administration of the Bank's duties hereunder (except any loss, liability or expense as may be adjudged by a court of competent jurisdiction to have been caused by the Bank's negligence or willful misconduct), including the cost and expense (including its counsel fees) of defending itself against any claim or liability in connection with the exercise or performance of any of its powers, rights or duties under this Agreement. Such indemnity shall survive the termination or discharge of this Agreement or discharge of the Bonds. The Issuer is a governmental agency and is entitled to the benefits of Sovereign Immunity and the limited waiver thereof as provided in Florida Statutes, Section 768.28, and common law. Nothing contained in this Agreement shall be construed as a waiver of any immunity or limitation of liability the Issuer may be entitled to under the doctrine of Sovereign Immunity or section 768.28, Florida Statutes. ARTICLE SIX MISCELLANEOUS PROVISIONS Section 6.01. Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereto. Section 6.02. Assignment This Agreement may not be assigned by either party without the prior written consent of the other party. Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent, waiver or other document provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed, faxed, sent pdf or delivered to the Issuer or the Bank, respectively, at the address shown below, or such other address as may have been given by one party to the other by fifteen (15) days written notice: If to the Issuer: City of Clearwater Municipal Services Building 100 S. Myrtle Avenue Clearwater, Florida 33756-5520 Attention: Brian Jay Ravins, Finance Director Phone: (727) 562-4538 Email: jay.ravins@myclearwater.com 8 If to the Bank: U.S. Bank Global Corporate Trust 225 East Robinson Street, Suite 250 Orlando, FL 32801 Attention: Valerie Barreto Phone: (407) 835-3804 Email: Valerie.barreto@usbank.com Section 6.04. Effect of Headings. The Article and Section headings herein are for convenience of reference only and shall not affect the construction hereof. Section 6.05. Successors and Assigns. All covenants and agreements herein by the Issuer and the Bank shall bind their successors and assigns, whether so expressed or not. Section 6.06. Severability. If any provision of this Agreement shall be determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby. Section 6.07. Benefits of Agreement. Except with respect to the Indemnified Parties, this Agreement is intended to be for the benefit of or to be enforceable by only the Issuer and the Bank, and no third party shall be entitled to claim that it is a third party beneficiary hereof. Section 6.08. Entire Agreement. This Agreement shall constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent and Registrar. Section 6.09. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. Section 6.10. Term and Termination. This Agreement shall be effective from and after its date and until the Bank resigns; provided, however, that no such termination shall be effective until a successor has been appointed and has accepted the duties of the Bank hereunder. 9 The Bank may resign at any time by giving written notice thereof to the Issuer. If the Bank shall resign, or become incapable of acting, the Issuer shall promptly appoint a successor Paying Agent and Registrar. If an instrument of acceptance by a successor Paying Agent and Registrar shall not have been delivered to the Bank within thirty 30 days after the Bank gives notice of resignation, the Bank may petition any court of competent jurisdiction at the expense of the Issuer for the appointment of a successor Paying Agent and Registrar. In the event of resignation of the Bank as Paying Agent and Registrar, upon the written request of the Issuer and upon payment of all amounts owing to the Bank hereunder the Bank shall deliver to the Issuer or its designee all funds in the Account and unauthenticated Bonds and a copy of the Bond Register. The provisions of Section 2.02 and Section 5.07 hereof shall survive and remain in full force and effect following the termination of this Agreement. Section 6.11. Governing Law and Venue. This Agreement shall be construed in accordance with and shall be governed by the laws of the State of Florida, with venue for any action in Pinellas County, Florida. . Section 6.12. Documents to be delivered to Bank. At the time of the Bank's appointment as Paying Agent and Registrar, the Issuer shall deliver to the Bank the following documents: (a) a specimen Bond; (b) a copy of the opinion of bond counsel provided to the Issuer in connection with the issuance of the Bonds; and (c) such other information that the Bank may request. Section 6.13. Patriot Act Compliance. To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. For a non-individual person such as a business entity, a charity, a trust or other legal entity we will ask for documentation to verify its formation and existence as a legal entity. The Bank may also ask to see financial statements, licenses, identification, and authorization documents from individuals claiming authority to represent the entity or other relevant documentation. Section 6.14 Non-appropriation. The obligations of the Issuer as to funding for any cost and expenses pursuant to this Agreement shall be limited to an obligation in any given year to budget, appropriate and pay from legally available funds, after monies for essential Issuer services have been budgeted and appropriated, sufficient monies for the funding that is required during that year. [Remainder of page intentionally left blank – Signature page follows] S-1 IN WITNESS WHEREOF, the Issuer and the Bank have caused this Agreement to be executed in their respective names by their duly authorized representatives, as of the day and year first above written, in two counterparts, each of which shall be deemed an original. CITY OF CLEARWATER, FLORIDA By: ___________________________ Name: George N. Cretekos Title: Mayor By: ___________________________ Name: William B. Horne, II Title: City Manager ATTEST: BY: ___________________________ Rosemarie Call, City Clerk Approved as to Form: By: _____________________________ Pamela K. Akin, City Attorney [Issuer signature page to Paying Agent and Registrar Agreement] S-2 U.S. BANK NATIONAL ASSOCIATION By: ___________________________ Name: Valerie Barreto Title: Assistant Vice President [Bank signature page to Paying Agent and Registrar Agreement] Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7218 Agenda Date: 12/19/2019 Status: City Manager ReportVersion: 1 File Type: Action ItemIn Control: Gas System Agenda Number: 10.3 SUBJECT/RECOMMENDATION: Accept a Natural Gas Easement over, under, across and through a portion of property conveyed by NNP-BEXLEY, LLC, whose principal address is 777 South Harbour Island Blvd, Tampa, FL, given in consideration of receipt of $1.00 and the benefits to be derived therefrom, and adopt Resolution 19-41. SUMMARY: NNP-BEXLEY, LLC (Grantor) has granted a non-exclusive five-foot wide natural gas easement, on three separate parcels (17-26-18-0000-00100-0012, 16-26-18-0000-00100-0050 and 15-26-18-0000-00200-0040) located along Tower Road (aka Bud Bexley Parkway), just east of Ballantrae Blvd and west of Sunlake Blvd in Pasco County. These easements are for the installation of a natural gas distribution line. This main line will run along the Tower Road corridor and ultimately serve residential customers located within the Del Webb subdivision, north of Tower Road. The easement grant is sufficient for the City to maintain and replace its facilities as necessary in perpetuity, or until such time as the City determines to abandon its use. APPROPRIATION CODE AND AMOUNT: N/A USE OF RESERVE FUNDS: N/A Page 1 City of Clearwater Printed on 12/19/2019 Resolution No. 19-41 RESOLUTION NO. 19-41 A RESOLUTION OF THE CITY OF CLEARWATER, FLORIDA ACCEPTING A GAS UTILITY EASEMENT FROM NNP-BEXLEY, LLC FOR THE CONSTRUCTION, INSTALLATION, AND MAINTENANCE OF CITY GAS UTILITY FACILITIES; PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Clearwater needs a gas utility easement from NNP-BEXLEY, LLCfor the construction, installation and maintenance of certain gas utility facilities; and WHEREAS,by this Resolution, the City Council of the City of Clearwater wishes to accept said grant of easement; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CLEARWATER FLORIDA: Section 1. The City Council of the City of Clearwater hereby accepts the Gas Utility Easement, a copy of which is attached hereto and incorporated herein as Exhibit “A” to Resolution 19-41. Section 2. This resolution shall take effect immediately upon adoption. PASSED AND ADOPTED this ______ day of _________________, 2019. ________________________________George N. Cretekos Mayor Approved as to form:Attest: ___________________________________________________________Laura Mahony Rosemarie Call Assistant City Attorney City Clerk Exhibit "A" to Resolution 19-41 Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7220 Agenda Date: 12/19/2019 Status: City Manager ReportVersion: 1 File Type: Action ItemIn Control: Gas System Agenda Number: 10.4 SUBJECT/RECOMMENDATION: Accept a Natural Gas Easement over, under, across and through a portion of property conveyed by Bryan Craig Bexley, Successor Trustee of the Bexley Ranch Land Trust, whose principal address is P.O. Box 10, Sumterville, FL, given in consideration of receipt of $1.00 and the benefits to be derived therefrom, and adopt Resolution 19-19. SUMMARY: Bryan Craig Bexley (Grantor) has granted a non-exclusive five-foot wide natural gas easement, on parcel #16-26-18-0000-00100-0000, located along Tower Road (aka Bud Bexley Parkway), just east of Olde Lanark Dr and west of Sunlake Blvd, in Pasco County. These easements are for the installation of a natural gas distribution line. This main line will run along the Tower Road corridor and ultimately serve residential customers located within the Del Webb subdivision, north of Tower Road. The easement grant is sufficient for the City to maintain and replace its facilities as necessary in perpetuity, or until such time as the City determines to abandon its use. APPROPRIATION CODE AND AMOUNT: N/A USE OF RESERVE FUNDS: N/A Page 1 City of Clearwater Printed on 12/19/2019 Resolution No. 19-19 RESOLUTION NO. 19-19 A RESOLUTION OF THE CITY OF CLEARWATER, FLORIDA ACCEPTING A GAS UTILITY EASEMENT FROM BRYAN CRAIG BEXLEY, AS SUCCESSOR TRUSTEE OF THE BEXLEY RANCH LAND TRUST, FOR THE CONSTRUCTION, INSTALLATION, AND MAINTENANCE OF CITY GAS UTILITY FACILITIES; PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Clearwater needs a gas utility easement from BRYAN CRAIG BEXLEY for the construction, installation and maintenance of certain utility facilities; and WHEREAS,by this Resolution, the City Council of the City of Clearwater wishes to accept said grant of easement; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CLEARWATER FLORIDA: Section 1. The City Council of the City of Clearwater hereby accepts the Gas Utility Easement, a copy of which is attached hereto and incorporated herein as Exhibit “A” to Resolution 19-19. Section 2. This resolution shall take effect immediately upon adoption. PASSED AND ADOPTED this ______ day of _________________, 2019. ________________________________ George N. Cretekos Mayor Approved as to form:Attest: ___________________________________________________________ Laura Mahony Rosemarie CallAssistant City Attorney City Clerk 16-26-18-0000-00100-0000 Exhibit "A" to Resolution 19-19 B U D B E X L E Y P A R K W A Y SUNLAKE BOULEVARDDUKE FIRTH STREETAERO AVENUE S H R E WB UR Y P L A C ETUBULAR RUNTERRAZZO WAY OLDE LANARK DRIVEFRAME BEND STORNOWAY DRIVEMOUNT BANDON DRIVECADENCE LOOPFENDERS WAY ARCHBOARD PLACETRISTRAM LOOP Clearwater Gas SystemNatural & Propane Gas 400 NORTH MYRTLE AVENUECLEARWATER, FL 33755PINELLAS COUNTY AND PASCO COUNTY Bud Bexley Parkway (Tower Road) EasementBexley Ranch Land Trust¶0 375 750 1,125 1,500187.5 Feet Sec A-A Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7196 Agenda Date: 12/19/2019 Status: City Manager ReportVersion: 1 File Type: Action ItemIn Control: Parks & Recreation Agenda Number: 10.5 SUBJECT/RECOMMENDATION: Approve co-sponsorship and waiver of requested city fees and service charges for Fiscal Year 2019/20 for a new event sponsored by Clearwater High School, the Unity Walk, in the amount of $3,330 and authorize the appropriate officials to execute same. SUMMARY: On April 18, 2019, the City Council approved the annual co-sponsorship list and funding for Fiscal Year (FY) 2019/20 for budget purposes. In the event additional money is required beyond what was approved in the FY 19/20 budget, City Council approval will be required. Clearwater High School has requested that the City partner with them to put on a new special event, the Unity Walk, to be held in downtown Clearwater on Tuesday, January 28, 2020. The Civil Rights Ambassadors of Clearwater High School in conjunction with the Pinellas County School Board are developing a civil rights event that will encourage students in Clearwater and Pinellas County to engage in civil rights education. The intent of the event is to recognize key people that have stood for equality or human rights, celebrate their impact, and inspire others to continue their work. A civil rights lesson will be created and provided to all the public high schools and 30 students from 19 Pinellas County Schools will be attending the event. The event will begin in downtown Clearwater near Station Square Park and end with a walk to Coachman Park. Staff is requesting that this event be included in the FY 2019/20 budget as a city co-sponsored event. Cost associated with the event is $1,500 for police and $1,830 for parks and recreation totaling $3,330. APPROPRIATION CODE AND AMOUNT: The in-kind cost associated with this event will be covered by each department in their approved fiscal year 2019/20 budgets. USE OF RESERVE FUNDS: N/A Page 1 City of Clearwater Printed on 12/19/2019 Citizen Comment Card Name: c ZI,V‘iA '5 (,6 ) Address: 112-2 ` tj J/L "W City: Ue iyi Zip: 3-3_7.5-2- Telephone 37$2 Telephone Number: 672.7) 6; 5* / .30 Email Address: di C% xiii'Mab('it0) fiai 6.6t,124 Speaking under citizens to be heard re items not on the agenda? Agenda item(s) to which you wish to speak. What is your position on the item? For Against Citizen Comment Card Name: y(`O\ \ Address: \31/4\ -Th C C3M. City: P(t C X Zip: Telephone Number: SV? Email Address: IYS \\C'S. - c 1CC ,`W- ‘.\. CCM Speaking under citizens to be heard re items not on the agenda? Agenda item(s) to which you wish to speak. \X -VA\ CO -1\C - What is your position on the item? For Against INDIVIDUAL SPEAKER Citizen Comment Card Name: Address: VI e - r is City: `‘ '' ocrtex Zip: cg-; Telephone Number: --fi" " '''?$ "1 (306 Email Address: ! 'a°,rtr•19-'ls! vi coma, 1. Q ) Speaking under citizens to be heard re items not on the agenda? Agenda item(s) to which you wish to speak: What is your position on the item? For V Against CLEARWATER BRIGHT AND BEAUTIFUL • BAY TO BFAC I I Name: Citizen Comment Card Ch U j d Address: City: C,1 Ca kt) Telephone Number: Zip: 7T 3c7L Email Address: (And tr_cfct ,cpia c-6,, Speaking under citizens to be heard re items not on the agenda? Agenda item(s) to which you wish to speak. / What is your position on the item? For Against Citizen Comment Card Name: Cdr i 1\-Q\I Address: 15N Eormr v i r-eJ2 City: et -eon -vim- Fl Zip: 755 Telephone Number: Email Address: 721 Noo ezae Carl NMI 110i 633N161i1 ,CON Speaking under citizens to be heard re items not on the agenda? Agenda item(s) to which you wish to speak. / What is your position on the item? For Against Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#19-7270 Agenda Date: 12/18/2019 Status: City Manager ReportVersion: 1 File Type: Action ItemIn Control: City Council Agenda Number: 10.6 SUBJECT/RECOMMENDATION: Imagine Clearwater - Public Input Survey Page 1 City of Clearwater Printed on 12/19/2019 |1CITY OF CLEARWATER Imagine Clearwater 30% Design Public Survey Input December 2019 |2CITY OF CLEARWATER Public Information Sessions: 400+ attendees at Clearwater Main Library 3 Dec. at Countryside Library 4 Dec. at Countryside Mall 7 Dec. at North Greenwood Recreation Center 10 Dec. at Clearwater Sailing Center 16 Dec. Survey Goals •Enable simple, quick feedback on the 30% design •Provide opportunity for open comments •Inform design changes and future public input opportunities Participation 514 Unique visits; 452 responses Spent 9 minutes on average 196 desktop/166 mobile/90 tablet 367 “open” comments or 81% of respondents Average Scores 1 -3 •The Amphitheater & Green: 2.4 •The Civic Plaza: 2.3 •The Lake: 2.3 •The Playground & Garden: 2.4 •The Bluff Walk: 2.4 •The Library: 2.4 Comments PARK DESIGN PARK USE FINANCIAL IMPACT Park Design Preserve views of the water More shade and green space Accessibility for wheels – bicycle, strollers, wheelchairs More environmental sustainability Nagano connection unclear Addressing Design Comments In the 60% design, will look at opportunities to provide more: •Shade •Environmental sustainability features like native landscaping, solar power •Opportunities to commission public art, for example commissioning artist from Nagano vs building pagoda •Making accessibility for "wheels" clearer Park Use Amphitheater use: Type of shows and frequency Strong desire for restaurant uses within and near the park Positive about overall park activation (light/sound) Parking needs for special events LOVE the playground Need more details on marina use Addressing Use Comments Additional information to provide in the next phase: •Types of special events and daily activation and programming support for the park •Information on parking at the park and in downtown for special events as well as other transportation options •Information on what kinds of uses we expect the private market to build on the bluff properties •How staff will ensure the safety of park visitors Financial Impact Will a variety of residents and visitors use this park? The project, especially the amphitheater, costs too much money Programming should benefit downtown overall Would like cultural activities, restaurants and housing on the bluff Addressing Financial Comments In the next phase, we will provide: •Financial model for amphitheater •Request For Qualifications for the redevelopment of bluff properties •Additional information on who will maintain and operate the park (city entity,conservancy, etc) Coachman Commons? •Average Score of 1.9 •Like the idea of the park having one name and belonging to the community •Concerned that "commons" sounds too old, too northeastern or like a commercial development •Respondents requested citizen involvement in renaming the park See the results: •https://admin.typeform.com/form/qSOO0W /reports •More information at www.imagineclearwater.com |15CITY OF CLEARWATER Imagine Clearwater 30% Design Public Survey Input December 2019