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Staff ReportMEETING DATE: 06/16/15 ITEM NO: 2 _ �osoatos COUNCIL AGENDA REPORT DATE: JUNE 8, 2015 TO: MAYOR AND TOWN COUNCIL FROM: LES WHITE, INTERIM TOWN MANAG —A< SUBJECT: POLICE SERVICES CONTRACT BETWEEN THE TOWN OF LOS GATOS AND CITY OF MONTE SERENO A. AUTHORIZE THE INTERIM TOWN MANAGER TO EXECUTE A TEN YEAR AGREEMENT FOR POLICE SERVICES BETWEEN THE TOWN OF LOS GATOS AND CITY OF MONTE SERENO IN THE AMOUNT OF $812,800 FOR FY 2015/16, INCREASING ANNUALLLY THEREAFTER B. AUTHORIZE A FY 2015/16 BUDGET REVENUE ADJUSTMENT OF $140,000 IN CONSIDERATION OF THESE ADDITIONAL REVENUES RECOMMENDATION: 1. Authorize the Interim Town Manager to execute a ten year agreement for police services between the Town of Los Gatos and City of Monte Sereno in the amount of $812,800 for FY 2015/16, increasing annually thereafter. 2. Authorize a FY 2015/16 budget revenue adjustment of $140,000 in consideration of these additional revenues. BACKGROUND: Effective September 1, 1995 the Town of Los Gatos entered into a 29 year, ten month agreement with the City of Monte Sereno to provide police protection services within the city's boundaries through June 30, 2025. However, with the growing complexity of police work combined with the recessionary impacts and reductions incurred by the Town, the Town Council directed staff to analyze the existing agreement for police services and its impact to the Town of Los Gatos. Staff determined that the Los Gatos Monte Sereno police services agreement facilitates more efficient patrol and other police services due to the close proximity of the two communities. Since 2007/08, the revenues received by the Town to cover these services averaged $580,000 annually. These PREPARED BY: T Y d ST Y Chief of Police Director of Fin ce Reviewed by: Assistant Town Manager JADTown Attorney N:AMGRVAdnninWorkFiles\2015 Council RepomUune 16AStaffRepon police services 6- 16.doe PAGE 2 MAYOR AND TOWN COUNCIL SUBJECT: POLICE SERVICES CONTRACT BETWEEN THE TOWN OF LOS GATOS AN CITY OF MONTE SERENO JUNE 8, 2015 BACKGROUND (cont'dl• revenues have been used to help supplement the Town's General Fund and support police services town -wide. Over time, Los Gatos has integrated service delivery to most efficiently provide the services to both communities. Based on an analysis of workload and financial impact, staff concluded that the existing police services agreement is a mutually beneficial arrangement; however the current agreement should be updated to be more fiscally equitable. On April 21, 2015 Town Council directed the Interim Town Manager and Chief of Police to open negotiations and amend the existing agreement language to be more fiscally equitable for the Town while still providing mutual benefits to both communities. DISCUSSION: The Interim Town Manager and Chief of Police met with the City Manager of Monte Sereno on multiple occasions to negotiate terns of a new Police Services agreement. These discussions resulted in a new proposed Police Services Agreement, Attachment 1, totaling $812,800 for FY 2015/16, $141,000 increase over the FY 2014/15 agreement amount. The proposed FY 2015/16 agreement amount of $812,800 is as follows: Monte Sereno Cost of Police Services - FY 2015/16 Service Services Hours provided Monte Sereno Costs (Rounded to nearest 100th)' Patrol & Traffic* 4576 $ 657,440 Investigations 900 $ 119,500 Emergency Operations Center Flat Rate $ 35,860 FY 2015/16 Rate is 512,800 �• »u ­­1 .. — U u U. n uuppwmUuw.I Law trill Urcement SCYVICC YRno (JLENP) honey. Substantive changes and new terms in the proposed agreement are described in detail below and include: • Ten -year service agreement • Agreement increase by Employment Cost of Index for Benefits plus 2 %. • Increase capped at 6% each year. • Unanticipated cost provision • Overhead rate for both patrol and investigative services • Vacancy factor and service hours for both patrol and investigative services • Compensation for use of the Town's Emergency Operations Center (EOC) • Substantive incident compensation reopener in agreement PAGE MAYOR AND TOWN COUNCIL SUBJECT: POLICE SERVICES CONTRACT BETWEEN THE TOWN OF LOS GATOS AN CITY OF MONTE SERENO JUNE 8, 2015 DISCUSSION (cont'd): Ten -Year Service Agreement The Terms of the proposed agreement is ten years, with an initial three -year no- cancellation provision. The agreement is set at a fixed cost, $812,800 for year one of the agreement, beginning July 1, 2015. The base amount of the agreement is $712,800 plus $100,000 in Supplemental Law Enforcement Service Fund (SLESF) money which will automatically be passed to the Town. Per the proposed agreement, the City of Monte Serene, agrees to pay the Town of Los Gatos the $100,000 of SLESF money for traffic services within 30 days of receipt by the City of these monies from the State of California. Should the State of California eliminate SLESF funding, the proposed agreement includes language stipulating that the City of Monte Sereno is required to pay the entire amount or agree to a reduction in police services commensurable with the reduction in $100,000 SLESF funding, [section 5(c), page 5 of Attachment 1]. Annual Agreement Increase Annually, the agreement amount will increase by the Employment Cost Index for Benefits, specific to State and Local Government Workers, for the 12 -month period ending December of the prior calendar year, plus an additional 2 %, with increases capped at 6 %. Over the ten -year agreement period July 1, 2015 through June 30, 2025, staff estimates it would generate approximately $10.1 million in revenue, or $1.4 million to S1.7 million in additional revenue above the current agreement. The additional $1.4 million to $1.7 million in revenues would supplement the Town's General Fund. Unanticipated Costs In the event of unanticipated, substantive increase in costs to the Town, including a change in service hours or other substantive unanticipated costs, the proposed agreement stipulates that the Town Manager of Los Gatos and City Manager of Monte Sereno may negotiate amended terms to the agreement with final authority resting with the Town and City Councils for both jurisdictions [section 5(g), page. 7 Attachment 1]. Overhead Rate An adjustment to the current agreement is an overhead rate for both patrol and investigative services which is consistent with other agreement agency charges. The overhead rates includes salary and benefit as well as supplies, materials, and internal services, including vehicle and facility maintenance, equipment replacement, etc. In addition, the overhead rate accounts for management oversight within the Police department and other departmental staff time. Inclusion of overhead in the hourly rate allows for an equitable distribution of costs and cost sharing for police services to both the Town of Los Gatos and City of Monte Sereno. PAGE 4 MAYOR AND TOWN COUNCIL SUBJECT: POLICE SERVICES CONTRACT BETWEEN THE TOWN OF LOS GATOS AN CITY OF MONTE SERENO JUNE 8, 2015 DISCUSSION (cont'd): An hourly billable rate is not being proposed for traffic hours, although the proposed agreement stipulates that 416 hours (the level currently provided) of traffic enforcement will be provided. Payment for these services is provided by Monte Sereno via pass- through of the City's SLESF monies of$100,000. Vacancy Factor and Services Hours The proposed agreement delineates 4,576 hours of Patrol and Traffic services and 900 hours of Investigative services. In determining these service hours, 10% of patrol and traffic hours are attributable to beat preparation and securing from beat as well as other administrative duties including booking of evidence, report writing, and case follow -up. Under the existing agreement, delineated hours for Patrol and Traffic services account for the physical hours spent patrolling within the City of Monte Sereno. Historically, other administrative and preparation activities described above have been absorbed by the Town. The proposed agreement is fiscally equitable in equally sharing each jurisdictions proportionate share of administrative and beat preparation and securing from beat time. In addition, a vacancy factor of has been built into the agreement amount of $812,800. This vacancy factor is for consideration of holiday, sick, personal and vacation leave for officers. These billing factors are consistent with billing practices of other agreement agencies. Emergency Operations Center The proposed agreement provides a flat annual rate for the cost to the Town to maintain the Emergency Operations Center (EOC) located in the Police Operations Building. The proposed agreement includes a cost of $35,860 in year one of the agreement (FY 2015/16) in exchange for the Town maintaining the EOC facility. Any additional Town Services furnished to Monte Sereno in the event of a disaster or emergency are not covered under the proposed agreement [section 5(b), page 5 of Attachment 1]. In addition, as part of this agreement, the City of Monte Sereno is entitled to use the EOC facility for up to 240 hours within each fiscal year of the agreement, subject to availability. Additional use beyond the 240 hours is billable at a rate of S 124 per day [section 5(h), page 7 Attachment 11. Substantive Incident The terms of the proposed agreement [section 5(d), page 6 Attachment I] include a mechanism to track substantive incidents in Monte Sereno, defined as a homicide, kidnapping, hostage event, serial assault/robbery, and /or other high level critical incident. If any substantive event generates 320 hours or more and annual investigative services exceed 900 hours, the City of Monte Sereno agrees to pay for the additional hours above the 900 provided for in the agreement. PAGE 5 MAYOR AND TOWN COUNCIL SUBJECT: POLICE SERVICES CONTRACT BETWEEN THE TOWN OF LOS GATOS AN CITY OF MONTE SERENO JUNE 8, 2015 DISCUSSION (cont'd): Staff believes that the Town has accounted for additional investigative hours needed for most large scale events within the 900 hour base amount. It is the understanding and intent of both the City of Monte Sereno and Town of Los Gatos that the 900 hours of investigative services are provided at a flat rate included in the annual base amount of the agreement. CONCLUSION: Staff believes that the police service agreement with Monte Sereno is mutually beneficial to both jurisdictions. Under the terms of the proposed agreement the fiscal disparities that existed under the current agreement would be addressed, allowing for a more equitable sharing of services. The City of Monte Sereno will continue to benefit from the policing provided by the Town's Police Department. Correspondingly, the Town will be compensated for these services at a rate which accounts for investigative costs, Town -wide overhead, vehicle and facilities maintenance, equipment replacement, and administrative and beat preparation time associated with providing police services in Monte Serene. ALTERNATIVES: The Council has three alternatives to consider for this matter: A. Do not accept the proposed agreement and direct staff to renegotiate additional changes to the proposed agreement language B. Do not accept the proposed agreement and continue with the existing agreement. C. Do not accept the proposed agreement and commence agreement tennination process for the existing agreement. For each alternative, the advantages and disadvantages are provided as well as to why the alternative is not recommended. Alternative A: Do not accept the proposed agreement and direct staff to renegotiate additional changes to the proposed agreement language There is no advantage to this alternative at this time. Staff believes additional negotiations will not result in any further changes or compensation to the Town other than the amounts and terms included in the proposed agreement. The disadvantage of not accepting the proposed agreement is that the Town will not receive the additional revenue provided for under the terms of the proposed agreement. This alternative is not recommended as staff believes agreement negotiations were successful and that no additional revenues will be obtained or agreement terms changes as a result of additional negotiations. PAGE 6 MAYOR AND TOWN COUNCIL SUBJECT: POLICE SERVICES CONTRACT BETWEEN THE TOWN OF LOS GATOS AN CITY OF MONTE SERENO JUNE 8, 2015 Alternative B: Do not accept the proposed agreement and continue with the existing agreement. There is no advantage to this alternative at this time. The disadvantage of not accepting the proposed agreement is that the Town will not receive the additional revenue provided for under the terms of the proposed agreement while continuing to provide the existing level of police services to the City of Monte Sereno. This alternative is not recommended as staff believes that the proposed agreement language is fair, in alignment with other agreement agencies billing practices, and mutually beneficial to both communities. Alternative C: Do not accept the proposed agreement and commence agreement termination process for the existing agreement. There is no advantage to this alternative at this time. The disadvantages are that the Town would need to begin to determine service modifications and possible service reductions, staff reductions, and a phasing plan for implementation. Specific service modifications include reconfiguring the interwoven geographic beats and the staffing shifts; pulling apart the current joint emergency preparedness with appropriate reassignments; and determining other service changes to Los Gatos given reduced resources. Given the economies of scale and efficiencies that have developed over time, without the agreement, the Town would either need a budget augmentation to supplement the lost revenue to maintain current service levels or reduce current service levels and operating expenses. The disadvantages for Monte Sereno include, but are not limited to: the residents would lose the officers experienced with local concerns, lose the prevention and community policing programs, and lose the efficiency of joint emergency preparedness. This alternative is not recommended because the negative impacts to both communities outweigh the maintenance of the existing agreement. COORDINATION: The contents of this staff report were drafted in collaboration with the Department of Police, Finance and Town Manager's Office and reviewed by the Town Attorney. These topics have also been discussed and negotiated with the City Manager of Monte Sereno. PAGE 7 MAYOR AND TOWN COUNCIL SUBJECT: POLICE SERVICES CONTRACT BETWEEN THE TOWN OF LOS GATOS AN CITY OF MONTE SERENO JUNE 8, 2015 FISCAL IMPACT: The proposed new agreement provides increased revenue to the Town, with estimates ranging from $1.4 million to $1.7 million over the term of the agreement, inclusive of a $140,000 revenue augmentation to the Proposed FY 2105/16 Operating Budget. In total, the town anticipates the new agreement to generate approximately $10.1 million over the ten year period. This revenue would supplement the Town's General Fund and law enforcement services provided Town -wide. ENVIRONMENTAL ASSESSMENT: The proposed agreement is not a project defined under CEQA, and no further action is required. Attachments: 1. Proposed Agreement for Law Enforcement Services Between the Town of Los Gatos and City of Monte Sereno 7111DA AGREEMENT FOR LAW ENFORCEMENT SERVICES This Agreement for Law Enforcement Services ( "Agreement') is entered into by and between the TOWN OF LOS GATOS ( "Los Gatos" hereinafter) and the CITY OF MONTE SERENO ( "Monte Sereno" hereinafter), both municipal corporations and general law cities located in the County of Santa Clara, State of California. RECITALS A. Los Gatos has its own police department and Monte Sereno does not. B. Monte Sereno has contracted with Los Gatos since 1995 for police services and desires to continue services through an amended and restated contract and provide for police protection within its boundaries pursuant to this Agreement. C. This Agreement is entered into pursuant to provisions of Government Code Sections 55631 through 55634, and any and all other applicable authority. D. Los Gatos and Monte Sereno desire to enter into a 10 (ten) year agreement effective July 1, 2015. NOW, THEREFORE, in consideration of the recitals and the mutual promises contained herein, Los Gatos and Monte Sereno agree as follows: AGREEMENT 1. GENERAL PROVISIONS. (a) This Agreement for Law Enforcement Services is effective July 1, 2015, and thereafter the provisions herein supersede and replace any previous Agreement or Amendments executed by the parties. (b) In this agreement the word "Chief' means Chief of Police of the Town of Los Gatos. (c) The Chief of Police of Los Gatos and his staff shall have authority and control over the overall operations and the procedural manner in which the police services are performed under this agreement. On or before the 1 st day of April of each year of this Agreement, the Chief of Police of Los Gatos shall consult with the Monte Sereno City Manager on service level issues and the parties may modify this Agreement as necessary to meet the needs of Monte Sereno subject to approval by the City and Town Council of each entity. Page 1 of 9 (d) The Chief or a member of the Chief's staff will attend Monte Sereno City Council meetings on a bi- annual basis and provide performance measures to the City of Monte Sereno City Council. These performance measures shall include crime statistics, response times and traffic enforcement trends and /or significant crime report summaries as well as patrol service hours provided for the prior six month period. In addition, the Chief of Police or a member of the Chief's staff shall submit reports at least quarterly, unless otherwise agreed to by the parties, to the Monte Sereno City Manager detailing the incidence of crime in the City of Monte Sereno and the hours of service provided to Monte Sereno. (e) Los Gatos and Monte Sereno shall cooperate in the preparation and submission of applications for government law enforcement grants for police services in and for the City of Monte Sereno. Los Gatos and Monte Sereno agree that there is a mutual benefit to such efforts. Los Gatos and Monte Sereno also agree that either may independently pursue grants and shall be individually responsible therefore. (f) Responsibility for the selection, assignment and discipline of Police personnel and other matters incident to the performance of services and the control of personnel shall remain exclusively with Los Gatos. Formal complaints regarding the conduct of Los Gatos Police personnel may be submitted by the Monte Sereno City Manager to the Chief of Police. Such complaints shall be promptly investigated and the outcome communicated to the complainant. (g) Employee relations and related issues, including but not limited to Los Gatos employee salaries and benefits, shall be the sole and exclusive responsibility of Los Gatos. 2. SERVICE PROVISIONS. A. General Services. Los Gatos shall provide police protection services to Monte Sereno for and during the term of this Agreement and any extension or extensions thereof. Services shall be the same as those provided to the Town of Los Gatos and include the following: i. The enforcement of State Statutes and Municipal Ordinances of Monte Sereno, except such Municipal Ordinances of the type which would Page 2 of 9 require special training of officers or of a type of enforcement that is contracted by Los Gatos to a third party or other public agency. Nothing herein contained shall preclude enforcement by Los Gatos personnel of the above - excepted ordinances; ii. Patrol officer services for an average of 80 hours per week' *; iii. Traffic enforcement' *; iv. Community Service Officer services; V. Investigations by detectives of all cases meeting the assignment criteria being used by Los Gatos; Vi. 24 -hour per day communications services to include: a. 9 -1 -1 service b. Police dispatching c. After -hours dispatching of non - police services Vii. Police Records Specialist service; Viii. Collateral Specialty Teams and Additional Programs /Resources offered in the Town of Los Gatos including, but not limited to, Crime Scene Investigations, Traffic Investigation Team, Volunteers in Policing, Neighborhood Watch, Vacation Check Program, and Reserve Officer Program; ix. Coordination of police resources in the event of a major disaster or emergency that necessitates the activation of the Emergency Operations Center ( "EOC ") in the Town of Los Gatos as more specifically detailed in Section 2b below. B. Emergency Preparedness. In the event of a major disaster or emergency in Monte Sereno that necessitates the activation of the E.O.C., the Town of Los Gatos shall open the E.O.C. for use by Monte Sereno and activate the E.O.C. based on the needs of the disaster. A Police Department representative shall immediately be 'Patrol and Traffic hours include activity and patrol time expended in Monte Sereno, and all other related administrative duties including, but not limited to, booking of evidence, report writing, case follow -up for cases originating in Monte Sereno. Service hours shall also include "beat preparation" time and "securing from beat' time at the rate of ten percent (10 %) of the above references hours. Page 3 of 9 dispatched to the E.O.C. and report to the Monte Sereno Director of Emergency Services (City Manager). A Command Officer will respond as soon as possible and will assume responsibility of working with Monte Sereno City officials as needed. The Town of Los Gatos shall maintain the E.O.C. and the E.O.C. infrastructure. For the purpose of performing all of the services provided for in this Agreement, Los Gatos shall provide personnel, supervision, communications, equipment and supplies necessary to maintain the services to be rendered; provided, however, if in the sole judgment of the Chief or his /her designee, an emergency arises in Los Gatos which requires temporary diversion of officers and vehicles from Monte Sereno, the same may be diverted to Los Gatos on an emergency basis, and to the extent emergencies in Monte Sereno require additional police support, the Chief or the Chief's staff may divert personnel and vehicles from Los Gatos to Monte Sereno for any emergencies. 3. AUTHORITY (a) The authority for assignment, control and discipline of Los Gatos officers and employees and other matters incident to the performance of services by Los Gatos under this Agreement, and the control of Los Gatos personnel shall remain with Los Gatos. (b) Monte Sereno shall designate the Los Gatos Chief as its Chief in order to satisfy the provisions of Part I, Division 3, Title 4 of the California Government Code (sections 36501, et seq.). 4. WORKERS' COMPENSATION LIABILITY AND INSURANCE PROVISIONS (a) Monte Sereno shall not be liable for payment of salaries, wages or other forms of compensation to any Los Gatos personnel performing services hereunder, including personnel performing indirect services hereunder, such as police management personnel, watch commanders, background investigators, community service officers, police communications personnel and police clerical personnel. It is understood and agreed that for such purposes all such Los Gatos personnel performing either direct or indirect services to Monte Sereno hereunder shall be deemed employees of Los Gatos while acting in or for Monte Sereno pursuant to this Agreement. Los Gatos shall Page 4 of 9 maintain Workers' Compensation Insurance covering all Los Gatos personnel performing services under this Agreement. (b) Los Gatos shall indemnify, defend, and hold harmless Monte Sereno, its officers, agents and employees from any loss, liability, claim, injury or damage arising out of, or in connection with, performance of the duties and obligations of Los Gatos and its employees as set forth in this Agreement. (c) Monte Sereno shall indemnify, defend, and hold harmless Los Gatos its officers, agents and employees from any loss, liability, claim, injury or damage arising out of, or in connection with, performance of the duties and obligations of Monte Sereno and its employees as set for in this Agreement. (d) Los Gatos and Monte Sereno shall each maintain its own liability insurance coverage, through self- insurance or otherwise, against any claim of civil liability arising out of the performance of this Agreement. However, the maintenance of such insurance shall in no way reduce the obligation of either party to indemnify, defend and hold harmless either party or its officers, agents and employees. 5. PAYMENT FOR SERVICES (a) A year, for the purposes of this Agreement, is the period beginning on July 1 st and ending on June 30th. (b) Annual Base Rate. For the services outlined in Section 2 above, beginning July 1, 2015, Monte Sereno agrees to pay Los Gatos the annual base rate of $712,787.00 ( "Base Rate "). The Base Rate includes an overhead rate built into annual base amount and includes but is not limited to: supplies, materials, facilities and vehicle costs, as well as administrative time for the Town Attorney, Town Manager's Office, Human Resources Department and Finance Department. Included in the Base Rate is $35,853.84 for the cost to maintain the EOC facility, the EOC infrastructure and for activation of the EOC in the event of a disaster or emergency as required in Section 2b. Any additional Town services furnished to Monte Sereno in the event of a disaster or emergency are not covered under this agreement. (c) Supplemental Law Enforcement Services Fund. In the event the City of Monte Sereno is awarded monies from the Supplement Law Enforcement Services Page 5 of 9 Fund (SLESF) from the State of California, Monte Sereno will grant those funds to Los Gatos for additional police services agreed upon by the parties within 30 days of receipt of the monies from the State of California. Los Gatos will provide 416 hours of additional traffic enforcement within the city limits of Monte Sereno in exchange for the $100,000.00 awarded by the State of California. Should SLESF funding not be awarded to Monte Sereno, or if SLESF funding is eliminated from the State budget, then Monte Sereno shall be required to pay Los Gatos an additional $100,000.00 above the Base Rate or agree to a reduction in police services commensurable with the reduction in $100,000.00 funding from SLESF. (d) Significant Crimes. In the event of a significant crime or crimes in Monte Sereno which includes, but is not limited to, kidnapping, homicide, hostage event, serial assault/robbery and /or other high level critical incident, Los Gatos will track incident time for these events. When it appears to the Chief of Police, in his /her sole discretion, that the a significant crime or crimes will involve 320 hours or more of investigative hours in a year, the Chief of Police will so inform the Monte Sereno City Manager and discuss the necessary staffing levels. If the investigative hours required for a significant crime or crimes result in Los Gatos performing more than 900 hours of investigative work in a Year, Los Gatos shall provide Monte Sereno with an accounting of the total investigative hours broken down between the significant crime or crimes and general investigations and Monte Sereno agrees to pay for any additional investigative services over 320 hours for the significant crime or crimes in a year at the actual cost to Los Gatos to provide the services. (e) Los Gatos shall provide the Monte Sereno City Manager with a monthly statement for 1/12 of the Base Rate in the monthly amount of $59,398.92 and the same shall be due and payable on or before the fifteenth (15th) day of the month next succeeding the month during which any such statement is mailed or delivered. All such statements shall be delivered to Monte Sereno as is specified in Section 7 (b) of this Agreement. (f) The Base Rate set forth in 5(b) shall increase yearly based on the Average Annual Consumer Price Index for benefits for the 12 -month period ending December of the proceeding calendar year plus 2 %. Parties agree to use the U.S. Page 6 of 9 Department of Labor, Bureau of Labor Statistics Employment Cost Index, and Benefit Index for State and Local Government Workers. In no event shall the annual increase exceed 6.0 percent. (g) In the event of a substantive change in personnel costs to the Town of Los Gatos, including the reduction in police department workforce, such that the services provided to Monte Sereno are affected, the parties may negotiate for amended terms to this agreement. (h) E.O.C. Pursuant to Section 2, Monte Sereno is entitled to use the E.O.C. for 240 hours within each Year of the contract. Use is defined based on any single occupancy of the facility, regardless of length of time, and subject to availability. Monte Sereno is entitled to first priority to use the E.O.C. second only to Los Gatos. In the event the need for the E.O.C. is based on a disaster or emergency that effects Los Gatos and Monte Sereno, the parties agree to work cooperatively to share the E.O.C. and the E.O.C. infrastructure. Additional use of the E.O.C. beyond the 240 hours will be billed to Monte Sereno at a rate of $124.00 per day, regardless of length of time and subject to availability. This daily rate will increase at a rate of 3% each year. (i) Crime laboratory fees, booking fees, and fees associated with the Santa Clara County Automated Fingerprint System (Cal ID), charged by the County of Santa Clara, or any other city, county or state agency, for incidents originally occurring in Monte Sereno shall be paid by the City of Monte Sereno, directly to the County of Santa Clara or applicable public agency and are not included in this Agreement. Q) No other costs of any kind, including but not limited to capital projects, construction, equipment, or unforeseen personnel actions, will be added to the costs of the services unless specifically addressed in this Agreement. (k) Any and all property acquired by Los Gatos under and pursuant to this Agreement shall be and at all times remain the property and responsibility of Los Gatos without any division or distribution thereof upon termination of this Agreement, except as otherwise agreed upon in writing. Property acquired by Monte Sereno shall remain the property and responsibility of Monte Sereno, except as Monte Sereno cedes such property to Los Gatos for the performance of services under this Agreement. Page 7 of 9 (I) The consideration provided to be paid to Los Gatos will not result in any surplus money and no monies shall be subject to refund to Monte Sereno at any time during or after the termination of this Agreement, unless there is overpayment. This Agreement shall be effective July 1, 2015 and be operative through June 30, 2025, subject to the following cancellation provision: (a) The Town of Los Gatos commits to providing law enforcement services for a three year period July 1, 2015 — June 30, 2018. (b) During the period July 1, 2018 — June 30, 2025 either Los Gatos or Monte Sereno may unilaterally with or without cause cancel this Agreement upon at least one year written notice to the other party. (c) This Agreement may also be canceled or amended as of any date by written mutual agreement of both parties. 7. MISCELLANEOUS (a) No person is intended to or shall be a third party beneficiary to this Agreement. (b) Any notice required by this Agreement shall be mailed or delivered to the Town of Los Gatos at 110 E. Main Street, Los Gatos, California 95032, Attention: Chief and to the City of Monte Sereno, 18041 Saratoga -Los Gatos Road, Monte Sereno, California, 95030, Attention: City Manager. A party's address may be modified by addressee's giving written notice of such modification to the other party calling specific attention to this Agreement. (c) If any provision of this Agreement shall be held to be invalid, such provision shall be severable and such invalidity shall not impair the validity of any other provision of this Agreement. (d) The waiver of either party of any violation of any term or condition of this Agreement shall not be deemed to be a waiver of any other term or condition contained herein or a waiver of any subsequent reach or violation of the same term or condition. Page 8 of 9 (e) In any legal action or proceeding brought for enforcement of this Agreement, the successful party shall be entitled to recover reasonable attorney's fees and other costs incurred in that action or proceeding, in addition to any other relief to which the successful party may be entitled. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the last day and year set forth below. CITY OF MONTE SERENO TOWN OF LOS GATOS Date Date Page 9 of 9