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~Master - December 12, 2023, Regular Meeting of the Ames City Council
1.Proclamation for "Wreaths Across America Day," December 16, 2023 2.Government Finance Officers Association Distinguished Budget Presentation Award 3.Motion approving payment of claims 4.Motion approving Summary of Minutes of the Regular Meeting on November 14 and November 28, 2023 5.Motion approving Report of Change Orders for period November 16-30, 2023 6.Motion approving the renewal of the following Beer Permits, Wine Permits, and Liquor Licenses: a. Class C Retail Alcohol License, Cyclone Liquors, 626 Lincoln Way (Back Room Only) b. Class C Retail Alcohol License, Mickey’s Irish Pub, 109 Welch Avenue c. Class C Retail Alcohol License, Café Beau, 2504 Lincoln Way, Pending Dramshop Review d. Class C Retail Alcohol License, Torrent Brewing Co., 504 Burnett Avenue 7.Resolution approving the list of individuals authorized to sign documents with the USDA related to the City of Ames Watershed-based Nutrient Reduction Program 8.Resolution providing authorization to submit a Certified Local Government (CLG) Grant Application to the Iowa Economic Development Authority, State Historic Preservation Office to fund a National Register Nomination of Chautauqua Park & Ridgewood Historic District 9.Resolution approving of request from Heartland of Story County to Sublease Office Space to Bethany Life and Central Iowa Retired and Senior Volunteer Program at the City-Owned Property located at 205 S Walnut Avenue 10.Resolution approving the Commission on the Arts (COTA) Spring 2024 Special Project Grant Contracts 11.Resolution approving amended Health Insurance Administrative Services Contract documents from Wellmark for administrative services, specific and aggregate excess insurance, and access fees for benefits effective from January 1, 2024, to June 30, 2024 12.Resolution approving Pharmacy Benefit Manager (PBM) Services Contract with Carelon RX effective January 1, 2024 13.Resolution awarding contract to Titan Machinery, of Des Moines, Iowa, for purchase of one 2024 Case 621G-2-XR Wheel Loader for the Street Maintenance Division of the Public Works AGENDA REGULAR MEETING OF THE AMES CITY COUNCIL COUNCIL CHAMBERS - CITY HALL DECEMBER 12, 2023 NOTICE TO THE PUBLIC: The Mayor and City Council welcome comments from the public during discussion. The Standards of Decorum, posted at the door and available on the City website, define respectful conduct for public participation. If you wish to speak, please fill out the form on the tablet outside the door to the Council Chambers or scan the QR Code to the right to fill out the same form on a personal device. When your name is called, please step to the microphone, state your name for the record, and keep your comments brief so that others may have the opportunity to speak. CALL TO ORDER: 6:00 p.m. PROCLAMATIONS: PRESENTATION: CONSENT AGENDA : All items listed under the Consent Agenda will be enacted by one motion. There will be no separate discussion of these items unless a request is made prior to the time the Council members vote on the motion. 1 Department 14.Resolution awarding contract to Altorfer Power Systems of Cedar Rapids, Iowa, for the Caterpillar G379 Methane/Natural Gas Engine Generator Overhaul Project for the base bid plus the bid alternate in a combined total of $167,655.05; and authorizing the transfer of funds from the MG #1 replacement project to the MG2/MG3 Overhaul project 15.Approve Change Order No. 1 in the amount of $178,185.97 to Flowserve Corporation, Chicago, IL, for the Unit 7 Boiler Feedwater Pump No. 2 Inspection and Repair Project 16.Resolution approving contract and bond for 2022/23 Storm Water Erosion Control (Clear Creek Bank Stabilization) with Iowa Earth Works of Huxley, Iowa 17.Resolution accepting CT1 Return to Service project as completed by MMC Contractors National Inc., in the amount of $1,560,232.68 and approving reduction in retainage 18.Resolution accepting the 2020/21 Shared Use Path System Expansion - Vet Med Trail (S.16th Street to S. Grand Avenue) as completed by Jasper Construction Services, Inc. of Newton, Iowa in the amount of $331,372.85 19.Resolution approving partial completion and reducing financial security for public improvements of North Dayton Subdivision to $423,758.25 20.Motion approving/denying Renewal of 12-month Class E Retail Alcohol License - Neighborhood Liquor and Smokes, 3505 Lincoln Way, Suite 105 21.Staff Report regarding Short-Term Housing Task Force Recommendations 22.Hearing on Text Amendments to Ames Municipal Code Chapter 13, (Rental Housing Code), Chapter 29 (Zoning Ordinance), and Chapter 31 (Historic Preservation) to allow Accessory Dwelling Units (ADUs) in residential districts a. First reading of ordinance 23.Staff Report Regarding the Use of Tesla Power Walls in the Ames Electric Services’ System 24.Fitch Family Indoor Aquatic Center Council Questions Follow-Up 25.Budget Issues/Guidelines 26.Second reading of ordinance amending Chapter 28, Division 1 for Eligibility of Customers for Time-of-Use based on Electrical Demand 27.Third reading and adoption of ORDINANCE NO. 4513 on amending the Zoning Text Amendment for Reduced Affordable Housing Parking Requirement 28.Third reading and adoption of ORDINANCE NO. 4514 to amend the Urban Revitalization Area Boundary PUBLIC FORUM : This is a time set aside for comments from the public on topics of City business other than those listed on this agenda. Please understand that the Council will not take any action on your comments at this meeting due to requirements of the Open Meetings Law, but may do so at a future meeting. POLICE: ADMINSTRATION HEARINGS: ELECTRIC: PARKS AND RECREATION: FINANCE: ORDINANCES: 2 DISPOSITION OF COMMUNICATIONS TO COUNCIL: COUNCIL COMMENTS: ADJOURNMENT: Please note that this agenda may be changed up to 24 hours before the meeting time as provided by Section 21.4(2), Code of Iowa. 3 To:Mayor and City Council From:City Clerk's Office Date:December 12, 2023 Subject:Summary of Minutes of the Regular Meeting on November 14 and November 28, 2023 Item No. 4 MEMO Please see the attached minutes for your review and approval. /cmw C23-1114 Summary .pdf C23-1128 Summary.pdf City Clerk's Office 515.239.5105 main 515.239.5142 fax 515 Clark Ave. P.O. Box 811 Ames, IA 50010 www.CityofAmes.org 4 1 SUMMARY OF MINUTES OF THE JOINT MEETING OF THE AMES RESIDENT POLICE ADVISORY COMMITTEE AND THE AMES CITY COUNCIL AMES, IOWA NOVEMBER 14, 2023 The Joint Meeting of the Ames Resident Police Advisory Committee (ARPAC) and the Ames City Council was called to order by Mayor John Haila at 6:00 p.m. on the 14th day of November, 2023, in the City Council Chambers in City Hall, 515 Clark Avenue, pursuant to law. Present were Committee members Edna Clinton, Roberto Dubiel, Tim Rasmussen, Emily Rebollozo, Virginia Speight, and Chunhui Xiang as well as Council Members Bronwyn Beatty-Hansen, Tim Gartin, Rachel Junck, and Anita Rollins. Council Member Amber Corrieri joined the meeting telephonically. Ex officio Jeff Clark was also present telephonically. Council Member Gloria Betcher was absent. PRESENTATION OF THE AMES RESIDENT POLICE ADVISORY COMMITTEE ANNUAL REPORT: Chief of Police Geoff Huff and ARPAC Chair Emily Rebollozo presented the Annual Report. COMMITTEE COMMENTS: None. ADJOURNMENT: Moved by Gartin, seconded by Rollins, to adjourn the meeting at 6:14 p.m. Vote on Motion: 5-0. Motion declared carried unanimously. REGULAR MEETING OF THE AMES CITY COUNCIL The Regular Meeting of the Ames City Council was called to order by Mayor John Haila at 6:18 p.m. on the 14th day of November, 2023, in the City Council Chambers in City Hall, 515 Clark Avenue, pursuant to law. Present were Council Members Bronwyn Beatty-Hansen, Tim Gartin, Rachel Junck, and Anita Rollins. Council Member Amber Corrieri joined the meeting telephonically. Ex officio Jeff Clark was also present telephonically. Council Member Gloria Betcher was absent. PROCLAMATION FOR "CITY OF AMES PHILANTHROPY DAY," Mayor Haila presented the proclamation designating November 16, 2023 as City of Ames Philanthropy day to Charles Weber on behalf of Story County Alliance for Philanthropy. PROCLAMATION FOR "NATIONAL HUNGER AND HOMELESSNESS AWARENESS WEEK," Mayor Haila presented the proclamation designating November 11-18, 2023 as National Hunger and Homelessness Awareness Week to Housing Coordinator Vanessa Baker-Latimer. CONSENT AGENDA: Mayor Haila pulled Item No. 13. Moved by Beatty-Hansen, seconded by Junck, to approve the consent agenda less Item No. 13. 1. Motion approving payment of claims 2. Motion approving Summary of Minutes of Regular Meeting on October 24, 2023, and Special Meeting on October 30, 2023 3. Motion approving Report of Change Orders for period October 16- 31, 2023 5 2 4. Motion approving Civil Service Candidates 5. Motion approving the renewal of the following Beer Permits, Wine Permits & Liquor Licenses: a. Class B Native Wine Permit - Chocolaterie Stam, 230 Main Street b. Class C Liquor License - Time Out Ames, 120 Kellogg Avenue 6. Annual 2023 Urban Renewal Report: a. RESOLUTION NO. 23-592 approving 2023 Urban Renewal Report b. RESOLUTION NO. 23- 572 approving certification of TIF Debt and appropriating payment of a rebate of incremental taxes for the Barilla TIF District 7. RESOLUTION NO. 23-573 approving Quarterly Investment Report for period ending September 30, 2023 8. RESOLUTION NO. 23-574 authorizing purchase of Financial Software Hosting and Maintenance from CentralSquare Technologies, LLC, Lake Mary, Florida, in the amount of $142,305.47 9. RESOLUTION NO. 23-575 approving FY 2022/23 Annual Street Financial Report 10. RESOLUTION NO. 23-576 approving Plat of Survey for 4004 and 4008 Cochrane Parkway and accept sidewalk installation deferral 11. RESOLUTION NO. 23-23-577 approving Minor Subdivision Final Plat for Eastgate Subdivision Plat 2 at 1405 Baltimore Drive 12. RESOLUTION NO. 23-578 approving Professional Services Agreement for 2023/24 Airport Improvement Program (Wildlife Fence Project) 13. RESOLUTION NO. 23-579 approving preliminary plans and specifications for HVAC Replacement at the Power Plant, and set December 20, 2023, as the due date for bids and January 9, 2024, as the date of public hearing and award of contract 14. RESOLUTION NO. 23-580 awarding contract to Play-Pro Recreation, Clive, Iowa for Playground Equipment for Lloyd Kurtz Park in the amount of $60,000 15. RESOLUTION NO. 23-581 awarding contract to Play-Pro Recreation, Clive, Iowa for Playground Equipment for Country Gables Park in the amount of $60,000 16. RESOLUTION NO. 23-582 awarding contract to Play-Pro Recreation, Clive, Iowa for Playground Equipment for Christopher Gartner Park in the amount of $60,000 17. RESOLUTION NO. 23-583 awarding contract to Phillips' Floors, Inc. of Indianola, Iowa for City Hall Interior Improvements (Carpet and Base in Hallways and Conference Rooms) in the amount of $108,082 18. RESOLUTION NO. 23-584 awarding contract to Stiver's Ford of Waukee, Iowa for Fleet Replacement Program, purchase of a 2024 Ford F350 pickup in the amount of $51,996 19. RESOLUTION NO. 23-585 approving Change Order No. 2 with Modern Piping, Inc. for Combustion Turbine Fuel Oil Pipe Installation in the amount of $35,000 20. RESOLUTION NO. 23-586 approving Contract and Bond for the Water Treatment Plant, Southeast Wellfield, Technical Services Complex Security Fence Improvements Project with American Fence Company of Iowa, Inc. 21. 2022/23 & 2023/24 Ames Plan 2040 Water Utility Infrastructure - (Lincoln Way & US Highway 69/South Duff) a. RESOLUTION NO. 23-587 accepting the 2022/23 & 2023/24 Ames Plan 2040 Water Utility Infrastructure - (Lincoln Way & US Highway 69/South Duff) project as completed by Thorpe Contracting, LLC of Adel, Iowa in the amount of $873,954 22. RESOLUTION NO. 23-588 accepting the Emma McCarthy Lee Park Tennis and Pickleball Courts Renovation project as completed by Upper Midwest Athletic Construction, Inc., of Andover, 6 3 Minnesota in the amount of $76,375. Roll Call Vote: 5-0. Motions/Resolutions declared carried/adopted, signed by the Mayor, and hereby made a portion of these Minutes. HVAC REPLACEMENT AT THE POWER PLANT: Director of Electric Services Don Kom clarified that the equipment that was being replaced was the HVAC to the original control room, not the HVAC that was replaced when the control room was expanded. Moved by Gartin, seconded by Beatty-Hansen, to adopt RESOLUTION NO. 23-579 approving preliminary plans and specifications for HVAC Replacement at the Power Plant, and setting December 20, 2023, as the due date for bids and January 9, 2024, as the date of public hearing and award of contract. Roll Call Vote: 5-0. Resolution declared adopted, signed by the Mayor, and hereby made a portion of these Minutes. PUBLIC FORUM: Mayor Haila opened the Public Forum. Richard Deyo, 505 8th Street #102, Ames, shared his concerns with the community. Caitlyn Lien, 621 Carr Drive, Ames, spoke in favor of hiring an individual to handle implementing the Climate Action Plan to advise before the budget processes begin. Valerie Stallbaumer, Crawford Avenue, Ames, spoke in favor of retaining the Fifth Street Brick Piers and Art Reliefs in Downtown Ames. Mayor Haila closed the Public Forum when no one else came forward to speak. REVIEW OF CITY ZONING APPROVAL AND EXCEPTION PROCESS: Planning and Housing Director Kelly Diekmann presented the Staff Report. Moved by Corrieri, seconded by Gartin, that staff come back to the City Council with a combination of Option One and Option Four from the Staff Report that includes feedback from the development community and identified common issues. Vote on Motion: 5-0. Motion declared carried unanimously. AMES/ISU ICE ARENA COMPRESSOR: Director of Parks and Recreation Keith Abraham presented the Council Action Form (CAF). Moved by Beatty-Hansen, seconded by Junck, to adopt RESOLUTION NO. 23-589 waiving City Purchasing Policy and awarding a contract to Johnson Controls, Urbandale, Iowa for the Ames/ISU Ice Arena Compressor Complete Overhaul in the amount of $84,065. Roll Call Vote: 5-0. Resolution declared adopted unanimously, signed by the Mayor, and hereby made a portion of these Minutes. Moved by Rollins, seconded by Junck, to adopt RESOLUTION NO. 23-590 waiving City 7 4 Purchasing Policy and awarding a contract to Johnson Controls for Ames/ISU Ice Arena Compressor Control Panels Replacement in the amount of $74,200. Roll Call Vote: 5-0. Resolution declared adopted unanimously, signed by the Mayor, and hereby made a portion of these Minutes. HEARING ON ZONING TEXT AMENDMENT FOR REDUCED AFFORDABLE HOUSING PARKING REQUIREMENTS: Mayor Haila opened the Public Hearing. Lauris Olson, 1705 Buchanan Drive, Ames, thanked the City Council for addressing the availability of affordable housing through initiatives like the proposed ordinance. Mayor Haila closed the Public Hearing when no one else came forward to speak. Moved by Beatty-Hansen, seconded by Rollins, to approve on first reading an Ordinance on Zoning Text Amendment for Reduced Affordable Housing Parking Requirements. Roll Call Vote: 5-0. Motion declared carried unanimously. HEARING ON BAKER SUBDIVISION: Mayor Haila opened and closed the Public Hearing when no one came forward to speak. Moved by Beatty-Hansen, seconded by Rollins, to adopt RESOLUTION NO. 23-591 approving purchase agreement for the sale of City-Owned Lot 1 (412 S. Wilmoth) in the Baker Subdivision to Habitat for Humanity of Central Iowa. Roll Call Vote: 4-0-1. Gartin abstaining due to conflict of interest. Resolution declared adopted, signed by the Mayor, and hereby made a portion of these Minutes. HEARING ON AMENDMENTS TO THE DOWNTOWN URBAN REVITALIZATION AREA: Mayor Haila opened and closed the Public Hearing when no one came forward to speak. Moved by Gartin, seconded by Rollins, to adopt RESOLUTION NO. 23-570 approving amendment to Urban Revitalization Area Plan. Roll Call Vote: 5-0. Resolution declared adopted unanimously, signed by the Mayor, and hereby made a portion of these Minutes. Moved by Gartin, seconded by Beatty-Hansen, to approve on first reading an Ordinance to amend the Urban Revitalization Area Boundary. Roll Call Vote: 5-0. Motion declared carried unanimously. HEARING ON INTEGRATED SITE PLAN (MAJOR SITE DEVELOPMENT PLAN AND PRELIMINARY PLAT) FOR 3600 UNIVERSITY BOULEVARD: Mayor Haila opened and closed the Public Hearing when no one came forward to speak. Moved by Beatty-Hansen, seconded by Junck, to adopt RESOLUTION NO. 23-593 approving Major Site Development Plan, subject to compliance with the City’s Outdoor Lighting Code. Roll Call Vote: 5-0. Resolution declared adopted unanimously, signed by the Mayor, and hereby made a portion of these Minutes. 8 5 Moved by Rollins, seconded by Beatty-Hansen, to adopt RESOLUTION NO. 23-594 approving Preliminary Plat for the Iowa State University Research Park Phase III Subdivision, Sixth Addition, subject to all requirements of the integrated subdivision for agreements and easements are to be reviewed and approved by the City prior to Final Plat. Roll Call Vote: 5-0. Resolution declared adopted unanimously, signed by the Mayor, and hereby made a portion of these Minutes. HEARING ON 2022/23 STORM WATER EROSION CONTROL (CLEAR CREEK BANK STABILIZATION - UTAH DRIVE): Mayor Haila opened and closed the Public Hearing when no one came forward to speak. Moved by Gartin, seconded by Beatty-Hansen, to accept the report of bids for the Storm Water Erosion Control (Clear Creek Bank Stabilization - Utah Drive) project. Vote on Motion: 5-0. Motion declared carried unanimously. Moved by Gartin, seconded by Beatty-Hansen, to adopt RESOLUTION NO. 23-595 approving the final plans and specifications and awarding the Storm Water Erosion Control (Clear Creek Bank Stabilization - Utah Drive) project to Iowa Earth Works of Huxley, Iowa in the amount of $75,615.40. Roll Call Vote: 5-0. Resolution declared adopted unanimously, signed by the Mayor, and hereby made a portion of these Minutes. SECOND READING OF ORDINANCE AMENDING SECTION 29.1317 RELATED TO ELECTRICAL VEHICLE CHARGERS WITHIN SETBACKS AND PARKING AREAS: Moved by Beatty-Hansen, seconded by Junck, to pass on second reading an ordinance amending Section 29.1317 Related to Electrical Vehicle Chargers within Setbacks and Parking Areas. Roll Call Vote: 5-0. Motion declared carried unanimously. DISPOSITION OF COMMUNICATIONS TO COUNCIL: Mayor Haila noted that there were eleven items for consideration. The first was from Lorna Carroll with Watershed Rebate Program Suggestions. Moved by Beatty-Hansen, seconded by Rollins, to refer to Director of Water and Pollution Control John Dunn to contact Ms. Carroll and explain the project. Vote on Motion: 5-0. Motion declared carried unanimously. Zora Zimmerman wrote addressing her Concerns Regarding Garbage Hauler Operations. Moved by Rollins, seconded by Beatty-Hansen, to refer to Assistant City Manager Brian Phillips respond and explain the Waste to Energy study currently in progress. Vote on Motion: 5-0. Motion declared carried unanimously. Director Abraham submitted a memo for Fitch Family Indoor Aquatic Center Updates. Mayor Haila noted that this item was for informational purposes only. Then, an email from Clare Whalen requesting an Engine Brake Ordinance was considered. Moved by Beatty-Hansen, seconded by Gartin to refer to the City Attorney for a memo back to the 9 6 City Council. Vote on Motion: 5-0. Motion declared carried unanimously. Another email regarding an Engine Brake Ordinance was submitted by Jonah Pedelty. Mayor Haila noted that this item was addressed with the previous motion. Next, Jeremy Withers requested a Speed Limit Reduction on 6th Street. Moved by Beatty-Hansen, seconded by Junck, to request a memo from Traffic Engineer Damion Pregitzer. Vote on Motion: 5-0. Motion declared carried unanimously. Will Determan sent an email regarding concerns with South 16th Street Widening. Moved by Beatty-Hansen, seconded by Junck, to refer to Engineer Pregitzer to explain the safety issues directly to Mr. Determan. Vote on Motion: 5-0. Motion declared carried unanimously. An email from Dan DeGeest with Suggestions Regarding the Ames Waste to Energy Program was next to be discussed. Mayor Haila stated that he would respond directly to the citizen. Then an email from Haven Carlson with Game Day Concerns Regarding South 4th Street Bridge was addressed. Moved by Gartin, seconded by Rollins, to refer to City Manager Schainker and Public Works Director John Joiner to respond. Vote on Motion: 5-0. Motion declared carried unanimously. Anne Taschetta requested Regulation of Occupancy on Private Property. Moved by Gartin, seconded by Rollins, to refer the matter to City Manager Schainker to respond to the citizen and bring a memo back to the City Council. Vote on Motion: 5-0. Motion declared carried unanimously. Lastly, a letter from Crystal Davis regarding Donation of Snowflake for Snow Magic Event was reviewed. Moved by Gartin, seconded by Junck, to place on a future agenda to officially accept the donation of the snowflake and clarify the terms of the donation. Vote on Motion: 5-0. Motion declared carried unanimously. COUNCIL COMMENTS: The Mayor and Council Members reported on various meetings attended, upcoming meetings, community events, and items of interest. Moved by Gartin to devote a workshop to the subject of housing. Motion failed due to a lack of a second. Moved by Rollins, seconded by Gartin to revisit the removal of Fifth Street Brick Piers and Art Reliefs on a future agenda. Vote on Motion: 4-1. Voting Aye: Beatty-Hansen, Junck, Gartin, and Rollins. Voting Nay: Corrieri. Motion declared carried. 10 7 CLOSED SESSION: Mayor Haila asked City Attorney Mark Lambert if there was a legal reason to go into Closed Session. Attorney Lambert replied in the affirmative, citing Section by Section 20.17(3), Code of Iowa, to discuss collective bargaining strategy. Moved by Gartin, seconded by Junck, to go into closed session at 8:16 p.m. Roll Call Vote: 5-0. Motion declared carried unanimously. The City Council reconvened in Regular Session at 8:45 p.m. ADJOURNMENT: Moved by Beatty-Hansen, seconded by Rollins, to adjourn at 8:45 p.m. Vote on Motion: 5-0. Motion declared carried unanimously. __________________________________ ____________________________________ Grace A. Bandstra, Deputy City Clerk John A. Haila, Mayor __________________________________ Renee Hall, City Clerk Subject to change as finalized by the City Clerk. For a final official copy, contact the City Clerk’s Office at 515-239-5105. 11 1 SUMMARY OF MINUTES OF THE REGULAR MEETING OF THE AMES CITY COUNCIL AMES, IOWA NOVEMBER 28, 2023 The Regular Meeting of the Ames City Council was called to order by Mayor John Haila at 6:00 p.m. on the 28th day of November, 2023, in the City Council Chambers in City Hall, 515 Clark Avenue, pursuant to law. Present were Council Members Bronwyn Beatty-Hansen, Gloria Betcher, Amber Corrieri, Tim Gartin, and Rachel Junck. Ex officio Jeff Clark was also present. Council Member Anita Rollins joined the meeting telephonically. CONSENT AGENDA: Council Member Rollins requested to pull Item No. 2. Moved by Corrieri, seconded by Betcher, to approve the consent agenda. 1. Motion approving payment of claims 2. Motion approving Summary of Minutes of Regular Meeting on November 14, 2023 3. Motion approving Report of Change Orders for period November 1 -15, 2023 4. Motion approving Civil Service Candidates 5. Motion approving 5-Day (December 9 – December 13, 2023) Class C Retail Alcohol License – Christiani's Events, 2601 East 13th Street 6. Motion approving addition of Outdoor Service Privilege to Special Class C Retail Alcohol License - Potter's Shoppe & Eatery, 330 5th Street 7. Motion approving the renewal of the following Beer Permits, Wine Permits, and Liquor Licenses: a. Class C Liquor License with Outdoor Service and Catering Privilege, The Café, 616 Northridge Parkway b. Class C Liquor License with Outdoor Service, Aunt Maude’s, 543-547 Main Street c. Class C Liquor License with Outdoor Service, Thumbs Bar, 2816 West Street d. Special Class C Retail Alcohol License, Mongolian Buffet, 1620 South Kellogg Ave #103, Pending Dramshop Review e. Class E Retail Alcohol License, Caseys #4314, 1118 South Duff Avenue f. Class E Retail Alcohol License, Caseys #4315, 3218 Orion Drive g. Class E Retail Alcohol License, AJ's Liquor III, 2401 "A" Chamberlain Street 8. RESOLUTION NO. 23-596 accepting Abstract of Votes for November 7, 2023, Regular City Election 9. RESOLUTION NO. 23-597 approving Encroachment Permit for Mini Split Heat Pump at 300 Main Street 10. RESOLUTION NO. 23-598 approving the Iowa Department of Agriculture and Land Stewardship Funding Agreement for the Ioway Creek-Brookside Water Quality Project revising the completion date to December 31, 2024 11. RESOLUTION NO. 23-599 approving preliminary plans and specifications for the Ash Pond Closure, setting January 24, 2024 as the due date for bids, and setting February 13, 2024 as the date of public hearing and award of contract 12. RESOLUTION NO. 23-600 approving preliminary plans and specifications for the CyRide Security System Upgrade Phase II project, setting January 10, 2024, as the bid 12 2 due date, and January 23, 2024, as the date of Public Hearing 13. RESOLUTION NO. 23-601 awarding contract to RESCO of Ankeny, Iowa for the purchase of pad mount transformers in the amount of $446,639.40 14. RESOLUTION NO. 23-602 approving Change Order to Professional Services Agreement with Dewilt Grant Reckert (DGR) for the 161kV Electric Line Relocation Project related to the Iowa Department of Transportation I-35 Improvements in Polk County 15. RESOLUTION NO. 23-603 approving contract and bond for 2022/23 Traffic Signal Program with Kline Electric d.b.a. Heartland Underground Solutions Roll Call Vote: 6-0. Motions/Resolutions declared carried/adopted unanimously, signed by the Mayor, and hereby made a portion of these Minutes. SUMMARY OF MINUTES OF REGULAR MEETING ON NOVEMBER 14, 2023: Council Member Rollins noted an omission of a motion from “Council Comments” regarding the removal of the Fifth Street Brick Piers and Art Reliefs. Moved by Rollins, seconded by Junck, to delay approval of the Summary of Minutes of the Regular Meeting on November 14, 2023, pending the inclusion of the motion related to the aforementioned art in “Council Comments.” Vote on Motion: 6-0. Motion declared carried unanimously. PUBLIC FORUM: Mayor Haila opened the Public Forum. Richard Deyo, 505 8th Street #2, Ames, shared his passion for art in the community and discussed his personal artwork. He also touched on where his artwork has been kept and displayed. James Bernau, 3511 Oakland Street, Ames, discussed the Ames Climate Action Plan and concerns regarding noncompliance of Tesla Powerwalls with the City’s Interconnect Agreement. He urged the City Council and staff to investigate removing this barrier to support electric vehicle infrastructure. Valerie Stallbaumer, 823 Crawford Avenue, Ames, shared that she and a group of supporters are in favor of maintaining the 16 brick structures with plaques on two sides showing historic information about Ames along 5th Street. Mayor Haila closed the Public Forum when no one else came forward to speak. FITCH FAMILY INDOOR AQUATIC CENTER: Parks and Recreation Director Keith Abraham and Troy Turner of Story Construction presented the update and engaged in questions from the City Council Members. Director Abraham brought the setback requirements to the attention of the City Council, highlighting that Zoning Code requires a 20-foot setback; however, if Add Alternate 1 is awarded, the setback on the east side of the building will be 16 feet. He clarified that by approving Plans and Specifications, the City Council acknowledges that the 16- foot setback is adequate. 13 3 Mayor Haila opened and closed the Public Input when no one came forward to speak. Moved by Gartin, seconded by Corrieri, to adopt RESOLUTION NO. 23-604 approving preliminary plans and specifications for the Fitch Family Indoor Aquatic Center setting January 11, 2024 as bid due date and January 23, 2024 as date of Public Hearing. Roll Call Vote: 6-0. Resolution declared adopted unanimously, signed by the Mayor, and hereby made a portion of these Minutes. Moved by Gartin, seconded by Corrieri, to request staff to return with alternative material options for the walking track and the associated costs of each. Vote on Motion: 6-0. Motion declared carried unanimously. 12-MONTH CLASS E RETAIL ALCOHOL LICENSE - NEIGHBORHOOD LIQUOR AND SMOKES, 3505 LINCOLN WAY, SUITE 105: Mayor Haila noted that the applicant for the 12-month Class E Retail Alcohol License - Neighborhood Liquor and Smokes, 3505 Lincoln Way, Suite 105 had withdrawn the license request at the state level and City staff were notified late this afternoon. He concluded that this item no longer required consideration from the City Council. AMES MAIN STREET REQUEST FOR DOWNTOWN AMES MASTER PLAN COST SHARING: Board Members Sam Stagg, Chair; Nicole Rasmussen, Organizational Chair and Secretary; and Crystal Davis, Executive Director, of Ames Main Street presented the proposed scope of services and request for funding match. Moved by Gartin, seconded by Beatty-Hansen, to adopt RESOLUTION NO. 23-605 allocating $25,000 from Council Contingency for a Downtown Ames Master Plan. Roll Call Vote: 6-0. Resolution declared adopted unanimously, signed by the Mayor, and hereby made a portion of these Minutes. Moved by Beatty-Hansen, seconded by Junck, to adopt RESOLUTION NO. 23-606 approving an agreement with Ames Main Street to reimburse 50% of the actual cost to produce a Downtown Master Plan, up to an amount not-to-exceed $25,000. Roll Call Vote: 6-0. Resolution declared adopted unanimously, signed by the Mayor, and hereby made a portion of these Minutes. DEFERRAL REQUEST OF SIDEWALK INSTALLATION AND CONNECTION DISTRICT PAYMENTS FOR ALLIANT ENERGY SUBDIVISION SITE ON EAST LINCOLN WAY: Planning and Housing Director Kelly Diekmann explained that though this was a unique request, with a subdivision configuration that allows for the eventual development of the site in its entirety, partial deferrals as requested by Alliant are appropriate because of the proposed utility use. The Public Input was opened and closed by Mayor Haila when no one came forward to speak. Moved by Betcher, seconded by Junck, to approve Alternative 1: Direct staff to prepare an agreement to be considered along with the Final Plat approval to allow for an alternative 14 4 schedule of connection fee payments and deferral of the sidewalk installation. Vote on Motion: 6-0. Motion declared carried unanimously. REQUEST FROM AMES MAIN STREET TO ACCEPT UNCONDITIONAL GIFT OF OUTDOOR DECORATIVE SNOWFLAKE: Assistant City Manager Brian Phillips noted that Ames Main Street is proposing that the City take ownership of an outdoor decorative snowflake, emphasizing that the acceptance of the gift would be unconditional before reviewing acceptable locations for placement. Mayor Haila opened and closed the Public Input when no one came forward to speak. Moved by Beatty-Hansen, seconded by Junck, to adopt RESOLUTION NO. 23-607 accepting unconditional gift of snowflake. Roll Call Vote: 6-0. Resolution declared adopted unanimously, signed by the Mayor, and hereby made a portion of these Minutes. Moved by Junck, seconded by Beatty-Hansen, to direct staff to determine location, timing, and placement of the snowflake. Vote on Motion: 6-0. Motion declared carried unanimously. BATTERY ELECTRIC BUS PURCHASE: Director of CyRide Barb Neal and Assistant Director of CyRide Fleet and Facilities James Rendall presented the Council Action Form and reviewed the funding sources. The Public Input was opened and closed by Mayor Haila when no one came forward to speak. Moved by Junck, seconded by Betcher, to adopt RESOLUTION NO. 23-608 awarding contract to Gillig LLC of Livermore, California, for the purchase of five 40’ battery electric buses in a total amount not to exceed $5,789,480. Roll Call Vote: 6-0. Resolution declared adopted unanimously, signed by the Mayor, and hereby made a portion of these Minutes. NORTH RIVER VALLEY WELL FIELD AND PIPELINE PROJECT: Director of Water and Pollution Control John Dunn presented the Council Action Form. Mayor Haila opened and closed the Public Input when no one came forward to speak. Moved by Beatty-Hansen, seconded by Betcher, to adopt RESOLUTION NO. 23-609 awarding contract to In Situ Archaeological Consulting of Eden Prairie, Minnesota, for archaeological monitoring during construction of the North River Valley Well Field and Pipeline Project in the amount of $134,924. Roll Call Vote: 6-0. Resolution declared adopted unanimously, signed by the Mayor, and hereby made a portion of these Minutes. Moved by Beatty-Hansen, seconded by Betcher, to adopt RESOLUTION NO. 23-610 approving Change Order No. 2 for North River Valley Well Field and Pipeline Project. 15 5 Roll Call Vote: 6-0. Resolution declared adopted unanimously, signed by the Mayor, and hereby made a portion of these Minutes. HEARING ON AMENDING THE CONTRACT REZONING AGREEMENT AT 4605 HYDE AVENUE (AUBURN TRAIL) RESULTING IN TIME EXTENSION FOR SHARED USE PATH CONSTRUCTION: Mayor Haila opened and closed the Public Hearing when no one came forward to speak. Moved by Betcher, seconded by Corrieri, to adopt RESOLUTION NO. 23-611 approving the amendment to the Contract Rezoning Agreement for Auburn Trail Subdivision to extend the timeline for constructing the Hyde shared use path. Roll Call Vote: 6-0. Resolution declared adopted unanimously, signed by the Mayor, and hereby made a portion of these Minutes. OAKWOOD ROAD SPEED LIMIT: The Public Input was opened and closed by Mayor Haila when no one came forward to speak. Moved by Betcher, seconded by Corrieri, to pass on First reading an ordinance updating speed limit on Oakwood Road. Roll Call Vote: 6-0. Motion declared carried unanimously. Moved by Corrieri, seconded by Betcher, to waive the rules. Roll Call Vote: 6-0. Motion declared carried unanimously. Moved by Corrieri, seconded by Beatty-Hansen, to pass on Second reading an ordinance updating speed limit on Oakwood Road. Roll Call Vote: 6-0. Motion declared carried unanimously. Moved by Betcher, seconded by Corrieri, to pass on Third reading and adopt ORDINANCE NO. 4512 updating speed limit on Oakwood Road. Roll Call Vote: 6-0. Motion declared carried unanimously. LARGE ELECTRIC CUSTOMER TIME-OF-USE RATES: Director of Electric Services Don Kom presented the Council Action Form. Mayor Haila opened and closed Public Input when no one came forward to speak. Moved by Corrieri, seconded by Betcher, to pass on First reading an ordinance amending Chapter 28, Division 1 for eligibility of customers for time-of-use rates based on electrical demand. Roll Call Vote: 6-0. Motion declared carried unanimously. SECOND READING OF ORDINANCE ON AMENDING THE ZONING TEXT AMENDMENT FOR REDUCED AFFORDABLE HOUSING PARKING REQUIREMENT: Moved by Beatty-Hansen, seconded by Betcher, to pass on Second reading an ordinance to amending the zoning text amendment for Reduced Affordable Housing Parking 16 6 Requirement. Roll Call Vote: 6-0. Motion declared carried unanimously. SECOND READING AN ORDINANCE TO AMEND THE URBAN REVITALIZATION AREA BOUNDARY: Moved by Beatty-Hansen, seconded by Betcher, to pass on Second reading an ordinance to amend the Urban Revitalization Area Boundary. Roll Call Vote: 6-0. Motion declared carried unanimously. THIRD READING AND ADOPTION OF ORDINANCE NO. 4511 AMENDING SECTION 29.1317 FOR THE PURPOSE OF EXCEPTION FOR ELECTRICAL VEHICLE CHARGERS WITHIN SETBACKS AND PARKING AREAS: Moved by Betcher, seconded by Beatty-Hansen, to pass on Third reading and adopt of ORDINANCE NO. 4511 amending Section 29.1317 for the purpose of exception for Electrical Vehicle Chargers within setbacks and parking areas. Roll Call Vote: 6-0. Motion declared carried unanimously. DISPOSITION OF COMMUNICATIONS TO COUNCIL: Mayor Haila noted that there were three items to consider. The first was from Ryan Berg requesting same-side parking on Garden Road. Moved by Gartin, seconded by Corrieri, to refer the item to staff for a memo. Vote on Motion: 6-0. Motion declared carried unanimously. The second item was a collection of feedback regarding the deaccession of the Downtown Brick Pillars. Mayor Haila asked the City Council to take this item under advisement for discussion of the topic at a future meeting. Mayor Haila announced the third item, which was an email from Mr. Bernau regarding Tesla Powerwalls as mentioned in Public Forum. City Manager Steve Schainker noted that this important topic was being addressed by staff. Moved by Junck, seconded by Beatty-Hansen, to place the aforementioned issue on the December 12, 2023, agenda. Vote on Motion: 6-0. Motion declared carried unanimously. COUNCIL COMMENTS: The Mayor and Council Members reported on various meetings attended, upcoming meetings, community events, and items of interest. Moved by Gartin, seconded by Beatty-Hansen, to place review of the sidewalk maintenance ordinance on a future agenda. Vote on Motion: 6-0. Motion declared carried unanimously. Moved by Gartin, seconded by Betcher, to invite Mr. Jeffs of Kate Mitchell Elementary School along with his team to an upcoming City Council meeting to recognize the achievement of students and staff of being in the top 1% of Iowa schools. Vote on Motion: 6-0. Motion declared carried unanimously. 17 7 ADJOURNMENT: Moved by Betcher, seconded by Corrieri, to adjourn the meeting at 8:10 p.m. __________________________________ ____________________________________ Carly M. Watson, Deputy City Clerk John A. Haila, Mayor __________________________________ Renee Hall, City Clerk Subject to change as finalized by the City Clerk. For a final official copy, contact the City Clerk’s Office at 515-239-5105. 18 REPORT OF CONTRACT CHANGE ORDERS Department General Description of Contract Contract Change No. Original Contract Amount Contractor/ Vendor Total of Prior Change Orders Amount this Change Order Change Approved By Purchasing Contact (Buyer) Public Works 2021/22 Shared Use Path Expansion (Ioway Creek) 1 $967,655.92 Caliber Concrete, LLC $0.00 $2,590.00 J. Joiner KS Electric Services Boiler Tube Spray Coating and Related Services and Supply Contract 1 $435,000.00 Integrated Global Services Inc. $0.00 $25,000.00 B. Phillips AM Electric Services Engineering Services for Compliance with EPA CCR Standard 2 $135,000.00 SCS Engineers $12,523.06 $2,965.00 D. Kom AM Public Works 2020/21 Shared Use Path Expansion (Vet Med Trail - S. 16th to S. Grand) 1 $333,928.60 Jaspering Construction Svcs Inc $0.00 $-(2,555.75)J. Joiner KS Public Works 2022/23 Ames Plan 2040 Water Utility Infrastructure 3 $705,672.00 Thorpe Contracting LLC $159,010.00 $9,272.00 T.Peterson KS Water & Pollution Control North River Valley Well Field & Pipeline Project 1 $10,200,955.80 Keller Excavating Inc.$0.00 $30,125.00 B.Phillips KS Period:1st – 15th 16th – End of Month Month & Year:November 2023 For City Council Date:December 12, 2023 19 To:Mayor John Haila and Ames City Council Members From:Lieutenant Mike Arkovich, Ames Police Department Date:November 11, 2023 Subject:Beer Permits & Liquor License Renewal Reference City Council Agenda Item No. 6 MEMO A review of police records for the past 12 months found no liquor law violations for Cyclone Liquors, Café Beau, and Torrent Brewing Co. The Ames Police Department recommends the license renewal for these businesses. A review of police records for the past 12 months found 7 Minors on-premise violations at Mickey’s Irish Pub. Of those 7, 5 involved fake IDs, or about 71% of the on-premise violations. Other establishments are putting safeguards in place to better identify patrons attempting to use fake IDs. The Police Department will encourage Mickey’s to utilize these same safeguards, such as scanner use, training, conducting their own compliance checks, management training and accountability, etc. In addition, the Police Department will continue to monitor the above location by conducting regular foot patrols, bar checks, evaluating their use of safeguards and educating the bar staff through monthly ID t r ainin g . Mickey’s Irish Pub has passed all compliance checks. The Ames Police Department recommends the license renewal for the business. City Clerk's Office 515.239.5105 main 515.239.5142 fax 515 Clark Ave. P.O. Box 811 Ames, IA 50010 www.CityofAmes.org 20 ITEM #:7 DATE:12-12-23 DEPT:W&PC SUBJECT:AUTHORIZED SIGNATURES FOR WATERSHED-BASED NUTRIENT REDUCTION PROGRAM COUNCIL ACTION FORM BACKGROUND: The Ames Water Pollution Control Facility is underway with an upgrade that will significantly increase the nutrient removal efficiency of the facility. When complete, the facility will meet the goals of the Iowa Nutrient Reduction Strategy. The City Council authorized the Watershed-based Nutrient Reduction Program as a hedge against future changes in the goals of the strategy that would require a level of nutrient removal that the treatment plant was not designed for. This program, funded in the Water Pollution Control Facility's Capital Improvement Plan at $200,000 per year, depends heavily on outside partners for assistance, both technical and financial. A key partner has been the US Department of Agriculture - Natural Resource Conservation Service (USDA-NRCS). To facilitate the processing of documents associated with these programs, the USDA-NRCS has requested that the Ames City Council approve via resolution a list of individuals authorized to sign documents with the USDA. Below is the listing that staff recommends that the Council authorize. New memoranda of agreement and major modifications to existing memoranda of agreement; award of construction contracts, professional service agreements, and change orders exceeding $50,000: Ames Mayor John Haila on behalf of the Ames City Council Minor modifications to existing memoranda of agreement; acceptance of payment assignment; award of construction contracts, professional service agreements, and change orders totaling less than $50,000: Director of Water and Pollution Control John Dunn, Assistant Director of Water and Pollution Control (currently vacant), or an Assistant City Manager (Brian Phillips or after 1/25/24, Pa Vang Goldbeck), as otherwise consistent with the City’s financial and purchasing policies Payment on construction contracts and professional service agreements; agreements with land owners: Director of Water and Pollution Control John Dunn, Assistant Director of Water and Pollution Control (currently vacant), City Environmental Specialist (Dustin Albrecht), or City Environmental Engineer (Matthew Jacob or Daria Dilparic) Documents related to the process of transferring funds to and from the City: Finance Director Corey Goodenow or City Treasurer Roger Wisecup 21 ALTERNATIVES: 1. Authorize the above list of positions, and the current incumbents of those positions, to sign documents with the USDA-NRCS associated with the Watershed-based Nutrient Reduction Program. 2. Do not approve the list of authorized positions. This would greatly slow the processing of documents with the USDA-NRCS, and could mean that the USDA would no longer participate as a funding partner. CITY MANAGER'S RECOMMENDED ACTION: The success of the Watershed-based Nutrient Reduction Program depends on maximizing the number of best management practices that can be installed each year. By leveraging the City's $200,000, additional partners are willing to participate, dramatically increasing the number of practices that can be installed. The USDA-NRCS has requested a list of City employees who are authorized to sign documents on behalf of the City related to the Watershed-based Nutrient Reduction Program. While is no downside to the Council approving the list provided by staff, there is considerable benefit in maintaining the USDA as a participating partner in this program.. Therefore, it is the recommendation of the City Manager that the City Council approve Alternative 1, as described above. 22 ITEM #:8 DATE:12-12-23 DEPT:P&H SUBJECT:AUTHORIZATION TO SUBMIT CERTIFIED LOCAL GOVERNMENT (CLG) GRANT APPLICATION TO IEDA STATE HISTORIC PRESERVATION OFFICE TO FUND NATIONAL REGISTER NOMINATION FOR CHAUTAUQUA PARK & RIDGEWOOD HISTORIC DISTRICT COUNCIL ACTION FORM BACKGROUND: On October 24, 2023, the City Council reviewed a staff report for pursuit of a grant application for a Chautauqua Park-Ridgewood Historic District nomination to the National Register of Historic Places. Members of the neighborhood had requested City Council initiate a nomination of their recently surveyed neighborhood. Council directed staff to prepare a grant application in 2023/24 and upon notice of grant award, to implement the project in FY 2024/25. The intent of the grant request is for financial assistance to hire a qualified historic consultant to prepare the nomination forms. Staff has completed the draft application and is now requesting authorization to submit it to the Iowa Economic Development Authority, State Historic Preservation Office (See Attachment A). The deadline for the Fall Certified Local Government (CLG) Grant period is December 15, 2023. The Certified Local Government grant program is open only to Iowa cities, counties and land use districts that have signed a Certified Local Government Agreement with the State of Iowa and National Park Service. In addition, in order to be eligible to apply for this grant opportunity, the CLG must be in good standing and current in their submission of Iowa CLG annual reports. The proposed project is to complete a nomination to the National Register of Historic Places for the Chautauqua Park - Ridgewood Historic District. The City of Ames completed a survey in 2022 and determined that the area retains its historic contextual significance and integrity as per National Register standards. The proposed district includes 150 single-family properties located in Ames, between 6th & 13th Streets, and between Ioway Creek [& Brookside Park] & the Union Pacific Railroad tracks. Successful listing of the neighborhood on the National Register does not in and of itself establish any specific preservation standards; it is solely a recognition of its historic status. The City of Ames is listed as the recipient of the grant and would administer the grant. The majority of work would be completed by a consultant who meets the Secretary of the Interior ’s Standards and Guidelines – Professional Qualification Standards for historic preservation practice under 36 CFR Part 61 (History and/or Architectural History areas). The grant request of $12,000 would fund the majority of the consultant’s fee. The City’s obligation is a 40% local match. The match includes an estimated $4,000 to supplement the consultant’s fee and $6,000 in staff time for administrative costs. Funding would be included within the adjusted Fiscal Year 2023/24 Budget as match to the grant. Grant recipients are expected to be announced in March 2024. After the notice of award, a formal grant agreement between the City and the State is required; this would likely occur in April 2024. If awarded, the project would start after execution of the grant agreement and notice to proceed is received. However, consultant services would not begin until the start of the new fiscal year (July 1, 2024). 23 Submittal of the final nomination for review by the State Nominations Review Committee (SNRC) would occur in spring 2025. Listing on the National Register of Historic Places, by the National Park Service would likely not occur until December 2025, if approved. A copy of the CLG Grant Application is included as Attachment ‘A’. ALTERNATIVES: 1. Authorize the Mayor to sign a letter approving the grant application and the City’s commitment to the match noted on the budget page. 2. Do not pursue the grant opportunity for the project. 3. Refer the CLG grant application back to City staff for additional information and/or changes. Note that with this option, the December 15th Grant Deadline would be missed. CITY MANAGER'S RECOMMENDED ACTION: The application for a 2024 CLG grant from the Iowa Economic Development Authority, State Historical Preservation Office has been prepared by City Planning staff. Staff has submitted the draft for review by SHPO and incorporated their preliminary comments. The grant application is consistent with the goals and objectives of the Ames Comprehensive Historic Preservation Plan and with the HPC 2023 Work Plan. The grant requires a 40% match. The City’s obligation for the match will be a combination of cash and staff time. If the City is awarded the grant by the State of Iowa, the grant agreement would then be placed on the agenda for Council action in March or April 2024 for acceptance and final approval. Therefore, it is the recommendation of the City Manager that the City Council adopt Alternative #1. ATTACHMENT(S): Ames CLG Grant Application 12-07-23.pdf 24 1 ATTACHMENT A: 2024 CLG GRANT APPLICATION Iowa Economic Development Authority State Historic Preservation Office SHPO CLG Applicant Information 1. Name of Project - Nomination of Chautauqua Park-Ridgewood Historic District 2. Applicant Name - City of Ames 3. Applicant Type - City Government 4. Is your CLG in Good Standing? Yes 5. Federal Employer ID - 6. Unique Entity ID - 7. Applicant Address - 515 Clark Avenue, P.O. Box 811 8. Applicant City - Ames 9. Applicant County - Story 10. Applicant State - Iowa 11. Applicant Zip Code - 50010 12. First name of the person who prepared the grant application - Eloise 13. Last name of the person who prepared the grant application - Sahlstrom 14. Email address of the person who prepared the grant application - eloise.sahlstrom@cityofames.org 15. Phone number of the person who prepared the grant application - (515) 239-5447 16. Title of your chief elected official - Mayor 17. First name of your chief elected official - John 18. Last name of your chief elected official - Haila 19. Chief elected official's email address - John.Haila@cityofames.org 20. Chief elected official's phone number - (515) 239-5436 21. First name of the CLG staff person - Ray 22. Last name of the CLG staff person - Anderson 23. CLG staff person's email - Ray.Anderson@cityofames.org 24. CLG staff person's phone number - (515) 239-5270 25. First name of local project manager - Eloise 26. Last name of local project manager - Sahlstrom 27. Local project manager's email address - Eloise.Sahlstrom@cityofames.org 28. Local project manager's phone number - (515) 239-5447 29. Iowa Congressional District - 4 30. Iowa Senate District - 23 31. Iowa House District - 46 25 2 SHPO CLG Project Information and Scope of Work 1. Summary of the Project - Prepare a nomination for the National Register of Historic Places for the Chautauqua Park - Ridgewood Historic District. The City of Ames completed a survey in 2022 and determined that the area retains its historic contextual significance and integrity as per National Register standards. The proposed district includes 150 single-family properties located in Ames, between 6th & 13th Streets, and between Ioway Creek [& Brookside Park] & the Union Pacific Railroad tracks. 2. Type of Project - Nomination 2.1. Provide the amount of acreage to be surveyed - approximately 52 acres 2.2. Provide the number of contributing and noncontributing resources to be nominated - Of the 150 principal buildings included within a 2022 Intensive Survey, 123 were considered contributing and 27 were non-contributing. 2.3. Do you have a letter of consent from the property owner(s) to demonstrate support for this National Register nomination - Yes 2.4. Consent Letter (attached) 2.5. Has the National Register eligibility of this property been evaluated? Yes 3. Scope of Work - The Chautauqua Park - Ridgewood Additions is a proposed historic district comprised of 150 single-family residential properties that were platted in 1910 and 1916. Each addition illustrates different, but distinctive features, as evident within the design of the plat and still observable today. The location and development of the subdivisions are important to the history of Ames due to its proximity to Downtown as well as to the growing Iowa Agriculture and Iowa State College (now known as Iowa State University). The additions retain a high level of integrity as per National Register standards for their association with events that have made a significant contribution to the broad patterns of Ames’ history. They illustrate the influence of forward-thinking ideas of this time period in community planning, departing from the status quo. Both additions promoted a connection to nature and direct connections to park space, as popularized by Fredrick Law Olmsted, Sr. Park land conveyed by these additions would be the genesis of Brookside Park, Ames second public park. The subdivisions included winding curvilinear streets with decorative intersections that are signature features of the neighborhood today. The additions also illustrate the transition of early 20th century residential development in response to the influence of the automobile as well the influence that the expansion of Iowa State University (previously Iowa Agricultural College and Iowa State College) had upon those who would choose to live there, in part due to its close proximity. Eligibility for the National Register is bolstered with the relative intactness of the neighborhoods. Of the 150 principal buildings included within the Intensive Survey, 123 were considered contributing and 27 were non-contributing. There is also very strong neighborhood support for proceeding with a National Register nomination. It is hoped that the current momentum and community interest coupled with grant funds will result in the addition of another National Register district in Ames and leave a valuable legacy for future generations. A professional consultant who meets the Secretary of the Interior’s Standards and Guidelines – Professional Qualification Standards for historic preservation practice under 36 CFR Part 61 (in the area of History and/or Architectural History) will be hired to complete the work of the nomination. 26 3 Activities that will be completed: Execute Grant in Aid Agreement (Contract) and return it to SHPO. [local project director] Work with SHPO on all aspects of the project through phone, email consultation, and submission of quarterly progress reports. Submit draft Request for Proposal (RFP) and consultant contract to SHPO for review and comment; SHPO returns draft RFP and consultant contract with recommended revisions, if needed. [local project director] City advertises RFP and sends RFP to a minimum of three consultants. A team of city representatives reviews proposals, conducts interviews (if needed), and selects consultant. Consultant contract executed; copy provided to SHPO [local project director] Local project director schedules kick-off meeting. Kick-off meeting held with consultant, local project director, and SHPO [via Teams] to go over project goals, schedule, research design, allocation of responsibilities and go over consultant’s input on the best way to do the project. Quarterly reports prepared and sent to SHPO. [local project director] The consultant’s primary role will be to prepare the draft and final National Register nominations and photographs following the process described in the Iowa Department of Cultural Affairs National Register of Historic Places Nomination Guide (iowaeda.com). Project research design discussing the project activities and methodology. [consultant] Needed research. [consultant] Updated determination of contributing and noncontributing buildings. [consultant] Regular updates provided to Historic Preservation Commission. [local project director] Regular website page updates. [local project director] Provide publicity about the project, including a public engagement meeting on draft historic district nomination. [local project director] Draft nomination submitted to SHPO. [consultant] Consultant revises draft nomination based upon comments. Revised draft nomination submitted to SHPO. [consultant] Final National Register Nomination submitted to State Nominations Review Committee (SNRC), if no further SHPO comments. [consultant] PowerPoint presentation prepared and presented to SNRC. [consultant] Revision of final nomination based SNRC comments, submitted to SHPO and forwarded to NPS. [consultant] Nomination listed on National Register of Historic Places. [National Park Service] A National Register listing will provide confirmation of the value and integrity of the specific historic resources in this area. Public support and awareness will encourage the upkeep and maintenance of the identified historic resources. Listing will also provide the opportunity for property owner use of incentives that can help maintain the character of the area and historic resources. The community as a whole will benefit from this nomination by expanding the understanding of historic resources. The only residential district in Ames (Old Town) to be nominated to the National Register was in 2004. The nomination of the Chautauqua Park - Ridgewood Historic District will help familiarize the community with the National Register and how it differs from a local district. Seeing another neighborhood take this step may inspire others to follow suit. 27 4 The nomination will highlight implementation of early 20th century forward-thinking community planning concepts and their significance in the development of this place and their impact in Ames's history as an example of sustainable land use practices. It will help the Ames community better understand the value and benefits of historic preservation and deepen the connection with places and people of the past. It will be a source of appreciation and pride, not only residents of the district, but for the city in recognizing the pieces of history that are still observable today. Furthermore, owners/residents in the district will be introduced to protection options and state tax incentives that will help encourage and promote historic preservation in the community. 4. Coordination City Staff / Local Project Director: City staff will oversee the advertising and selection of a consultant through the RFP process and will oversee the award of the consultant contract, in conformity with city policies and SHPO guidance (State review and comment on the RFP and contract): Develop a satisfactory request for proposals (RFP) to advertise and to send to no less than three consultants. Establish criteria for selecting a consultant. Develop a contract for hiring the consultant. Hire a consultant. A planner with the City of Ames Department of Planning and Housing will serve as the local project director. The local project director will schedule a kick-off meeting with the consultant and the state project manager to go over project goals, schedule, research design, allocation of project responsibilities, and get consultant’s input on the best way to do the project. City staff will provide the consultant with copies of all project files and applicable city resources. The local project director will provide general project administration, including documentation of local in-kind match contributions and volunteer hours. The local project director will submit the timely filing of SHPO quarterly reports to SHPO and will provide quarterly updates to the HPC. The local project director will review and provide feedback on all work product of the consultant and will review the consultant’s payment requests, and forward approved requests to city staff for payment. City staff will create and regularly update a project webpage to keep neighborhood residents and citizens informed about the project and help build community support for historic preservation. At the time of initial submittal to SHPO, the draft nomination will be posted to the city’s website. The local project director will support the consultant with outreach to Chautauqua Park & Ridgewood neighborhood. City staff also will organize and participate in a public engagement meeting around the draft nomination. City staff will send a postcard mailing to property owners, noticing the meeting. City staff will photograph the project in progress. At the conclusion of the grant contract, the local project director will submit a request for reimbursement along with documentation to the State CLG Coordinator. 28 5 Consultant: The consultant will participate in a kick-off meeting with the city and the state project manager to go over project goals, schedule, research design, allocation of project responsibilities and give input on the best way to do the project. With the Chautauqua Park & Ridgewood Intensive Survey already complete, the consultant will verify the validity of previously gathered information, revise, and supplement it as necessary. The consultant’s primary role will be to prepare the draft and final National Register nominations and photographs following the process described in the Iowa Department of Cultural Affairs National Register of Historic Places Nomination Guide (iowaeda.com). The consultant will be an active participant at the public engagement meeting on the draft nomination and answer questions from the public. The consultant will submit the draft nomination to the SHPO for review and comment. The consultant will incorporate the State’s feedback into the nomination, in preparation for the State Nominations Review Committee (SNRC) meeting. The consultant will prepare a PowerPoint presentation and represent the nomination when it goes before the SNRC. The consultant will complete the nomination by incorporating any needed revisions based upon the comments and by submitting the revised nomination back to the SHPO. Volunteers / Neighborhood Ad-Hoc Committee: The neighborhood ad-hoc committee was formed from members of the Chautauqua Park and Ridgewood Addition neighborhoods to determine community interest in the pursuit of a National Register of Historic Places (NRHP) nomination. During the summer, the ad-hoc committee made contact with each of the homeowners and received positive feedback about pursuing a National Register nomination. One of the members of the neighborhood ad-hoc committee is also on the Historic Preservation Commission. The neighborhood ad-hoc committee will augment the city’s correspondence with the homeowners to keep them informed of the process. Regular email correspondence updates will build momentum for the nomination. Members of the neighborhood ad-hoc committee will also help promote and attend the public engagement meeting on the draft nomination. 5. Work Products - Tangible Products: Request for Proposals (local project director) Consultant Contract (local project director) Project research design discussing project activities and methodology [consultant] Updated determination of contributing/noncontributing buildings [consultant] Draft National Register Nomination based upon nomination guidelines (multiple drafts may be required) [consultant] Final National Register Nomination Form [consultant] Current property owner spreadsheet [local project director] Ten to twelve photographs of the project in progress [local project director & consultant] Photo log to be submitted with forms [consultant] 5-minute PowerPoint Presentation [for SNRC] [consultant] Revised Final National Register Nomination [consultant] Quarterly Progress Reports [local project director] 29 6 Request for Reimbursement with documentation of expenditures and match [local project match] Additional Products or Benefits: Local support for further historic preservation activities. National recognition of the historic and architectural significance of the Chautauqua Park - Ridgewood Additions. 6. Schedule March 2024: Grant recipients announced. April 2024: Execution of Grant in Aid Agreement from State Historic Preservation Office (SHPO) and executed by Mayor; SHPO issues Notice to Proceed. City submits draft Request for Proposal (RFP) and consultant contract to SHPO for review and comment; SHPO returns draft RFP and consultant contract with any recommended revisions. April 2024: City advertises and sends final RFP to a minimum of three consultants. May 2024: Review RFPs, select consultant who meets the Secretary of the Interior’s Professional Qualifications for architectural historian and /or historian. June 2024: Consultant contract executed; copy sent to SHPO. Local project director schedules Kick-off Meeting. Jul. 1, 2024: Local project director submits quarterly progress report to SHPO. July 2024: Kick-off meeting via Teams with consultant, local project director, and SHPO to discuss project and schedule. City staff will photograph the project as it progresses. Project update provided to Ames Historic Preservation Commission (HPC) by local project director. July to August 2024: Consultant proceeds with scope of work as outlined and conducts research necessary to complete a draft of the historic district nomination and any necessary photography. Sept. 30, 2024: Local project director submits quarterly progress report to SHPO. September to November 2024: Consultant prepares draft nomination and support materials and submits to city for review and comment. Project update provided to HPC by local project director. November 2024: Consultant submits the draft historic district nomination to city for initial review. Consultant revises draft nomination based on comments provided by city. City posts a copy of the initial draft nomination on the city’s website and emails a link to property owners and the neighborhood ad-hoc committee. Public Engagement Meeting on draft historic district nomination. City schedules a meeting for the consultant to discuss the draft historic district nomination with property owners and residents. Draft Historic District Nomination submitted to SHPO for first review. December 2024: SHPO evaluates the draft nomination and sends comments within 60 days to the consultant. SHPO indicates whether another draft will be required. And forwards a final 30 7 nomination packet to the consultant. Dec. 31, 2024: Local project director submits quarterly progress report to SHPO. January to February 2025: Consultant revises draft nomination as needed based on comments from SHPO and resubmits second draft to SHPO, if needed, for additional review and comment. Project update provided to HPC by local project director. Monday, March 10, 2025: Deadline for final draft submittal to SHPO. Monday, March 24, 2025: Deadline for final SHPO comments to consultant. Monday, March 31, 2025: Deadline for Final Nomination documents for State Nominations Review Committee (SNRC). The nomination will be completed and submitted to the State for preliminary staff review. Local project director submits quarterly progress report to SHPO. April 2025: Local project director emails property owners and the neighborhood ad-hoc committee of pending review of a potential nomination by the Iowa State Nominations Review Committee (SNRC) and provides a link to the nomination on the city’s website. Project update provided to HPC by the local project director. May 12, 2025: Review of nomination for National Register by HPC and City Council. Meeting noticed to property owners. National Register Nomination Evaluation Report Form with recommendation sent to SHPO, for SNRC. Friday, June 13, 2025: State Nominations Review Committee Meeting (SNRC). Consultant describes the project in a 5-minute PowerPoint presentation and answers questions. Jun. 30, 2025: Local project director submits quarterly progress report to SHPO. July 2025: Project update provided to HPC by the local project director. August 2025: State sends meeting minutes to consultant with recommended/required revisions. September 2025: Consultant submits revised nomination with all revisions completed, based upon instructions provided. SHPO reviews to ensure all revisions have been completed. Consultant provides copy to the city. Local project director posts the final historic district nomination on the city’s website and emails a link to property owners and the neighborhood ad- hoc committee. Contract with consultant is completed. Local project director prepares and submits Request for Reimbursement(s) through SlideRoom with accompanying documentation of expenses and match. October 2025: State Historic Preservation Officer signs nomination and forwards to the National Park Service for consideration. The National Park Service has a 45-day response period, which includes a 15-day period for public comment. 31 8 December 2025: Chautauqua Park - Ridgewood Historic District listed on the National Register of Historic Places by the National Park Service. Owners and all interested parties notified by SHPO of the formal listing. 7. Connection with local and State Preservation Plans - The concept of identifying additional historic districts within Ames is part of the Ames Comprehensive Historic Preservation Plan (ACHPP) adopted in 2021. To this end, the Ames Historic Preservation Commission identified this neighborhood as a priority and initiated work on an Intensive Survey of this area in 2022. The nomination proposal is the logical next step continuing from the Intensive Survey work. The proposed work for nomination of the Additions for the National Register will align with both the State 2013 plan, Broadening Preservation's Reach, and the ACHPP. Both plans outline goals specific to identifying and promoting preservation of historic resources. Within the ACHPP: GOAL #1. Acknowledge the role of historic preservation in encouraging civic pride, neighborhood identity, economic vitality, and community sustainability. Objective 1A: Adopt strategies to conserve historic neighborhoods, which reflect their organic development, historical roles and traditions, modern needs, and economic health and stability. [The nomination will produce additional documentation informing the neighborhood, and the community, of the importance of the history of the Chautauqua Park - Ridgewood area.] GOAL #2. Promote the preservation of historically, architecturally and archaeologically significant resources in the community. Objective 2B: Promote economic incentive opportunities to encourage the preservation of historic buildings and neighborhoods. [Owners/residents in the district will be introduced to protection options and state tax incentives that will help encourage and promote historic preservation in the community.] Objective 2D: Encourage private support and commitment for preservation undertakings. [Correspondence with residents will focus on the historic significance of the Chautauqua Park - Ridgewood Additions and encourage continued support for the National Register listing.] GOAL #3. Enhance municipal policies to protect historic resources and implement policies. Objective 3C: Continue to designate local historic districts, local landmarks, and properties for listing on the National Register of Historic Places [The nomination will follow work completed with the Intensive Survey. The listing of an additional (second) residential neighborhood on the National Register will significantly increase recognition of historic preservation in Ames.] GOAL #4. Educate the public concerning the value and benefit of historic preservation. Objective 4B: Utilize website/on-line presence. [The project will include a webpage that is regularly updated to include information on the nomination process and notification of the neighborhood meeting that will introduce participants to the draft nomination to the National Register. Social media publicity will also broaden awareness of historic preservation efforts in the community.] 32 9 Within the State’s Preservation Plan, Broadening Preservation’s Reach: GOAL #2. Expand and deepen the connection to and appreciation of historic resources. Strategy 4h - Fund historic preservation through continued targeted use of existing programs at the Federal, State, and local levels. [Moreover, the nomination of the Chautauqua Park - Ridgewood Additions Historic District will help the Ames community better understand the value and benefits of historic preservation and foster a sense of connection with places and people of the past.] SHPO CLG Past Grant Contract Performance Please answer the question below about your CLGs previous grant experience. 1. Previous CLG grant experience - Our community has received a CLG grant and successfully completed our grant funded project in the past. 2. Specifically address the successes or challenges with previous CLG grant projects -The City of Ames has an outstanding record of completing grant programs successfully. The city has never cancelled a grant project. Ames takes its obligations seriously and understands that when a grant is not completed, it not only reflects upon the local government, but may have negative implications for the state historic preservation office as well. Therefore, the city does not embark upon this request lightly. Ames is committed to moving this project forward to a successful National Register nomination submittal should our request for grant funding be awarded. Ames success record has been linked to a strong commitment to historic preservation, as well as having a clear understanding of the grant obligations, including scope of work, project deliverables, and timeline. Part of this commitment is displayed in the timely filing of quarterly reports. 2022: Just last year (2022), the City of Ames successfully completed a CLG grant-funded project to conduct an intensive survey of the Chautauqua Park and Ridgewood Additions. The total grant amount was $14,000 and included an in-kind match of more than 400 volunteer hours. The project was envisioned with a unique approach- that of relying upon Historic Preservation Committee member's expertise and the use of graduate students in historic preservation to develop the research and information for the survey, which lead to some challenges. The graduate students were hired as city temporary employees to do the investigative work. Historic Preservation Commission members participated in the project with a focus on review of consistency with the Department of the Interior Standards as historic preservation professionals. The project was managed through the Ames Planning and Housing Department. The complicated roles and supervisory responsibilities of project components did cause disruption to the project, but ultimately the work was completed as generally intended. Quarterly reports were regularly filed with SHPO and the city maintained good communication with the state project manager. A well-received Neighborhood Meeting was held in October 2022 to discuss the findings with the neighborhood. An initial survey of those in attendance indicated support for pursuing a National Register nomination. Despite internal challenges, the final inventory was successfully completed to the satisfaction of 33 10 SHPO and within the anticipated timeline. The report found that the Chautauqua Park and Ridgewood Additions retain their historic contextual significance and integrity under Criteria A are therefore suitable for inclusion on the National Register of Historic Places. Of the 150 principal buildings surveyed, 123 are contributing and 27 are non-contributing. One of the issues for the city with the project was the unanticipated amount of hours required of city staff when HPC volunteers became unavailable. Although the opportunity to provide a hands-on learning experience for one or two students in historic preservation was achieved with the Intensive Survey, the city believes it best to utilize a professional consultant trained in historic preservation to complete the next step- nomination to the National Register. The grant request is to assist in the funding of a professional consultant to complete the nomination work. 2009: Prior to the 2022, the City of Ames had not undertaken a CLG grant-funded project since 2009, when a CLG grant was received for a historic masonry restoration workshop entitled, "Mortar Matters: A Joint Masonry Workshop.” The workshop was held March 26-27, 2010. It was undertaken jointly by the City of Ames Historic Preservation Commission [HPC] and the City of Mount Vernon HPC. The project required the teamwork of the two communities' volunteers and the State Historic Preservation Office [SHPO]. Written evaluations from attendees indicated that they felt the event was well-planned and that the experts presented valuable information. The experience of working on a joint grant project was a valuable one. Each community had approximately 60 registrants for its part of the workshop and the work was fairly distributed leading up to the event. The joint workshop and grant project were both successes. 2008: Additionally, the City of Ames received a 2008 CLG Grant for Intensive Survey of historical and architectural resources in the College Heights Neighborhood. The Grant funded $17,145. The total estimated cost of the project was $29,528 including cash and in-kind match. The survey was completed by consultant, William Page, in 2009. There were no issues with the completion of the project and all materials were submitted by the required deadline. 1995: City of Ames has been a Certified Local Government since 1995. The city continues in good standing and has consistently met its obligations as a Certified Local Government through fulfilling grant obligations and through timely submittal of annual reports. SHPO CLG Budget CLG grants require applicants to contribute at least 40% of the total project costs. In the budget form below, please provide sufficient detail to demonstrate the project can be completed for the amount requested. More information can be found in the grant application guidelines. 1. Budget Form 34 11 Expense Detail Consultant Fee ($) City Staff Benefits & Wages ($) Total ($) CLG Grant Request 12000 12000 City of Ames Match In-Kind 4000 6000 10000 Budget 16000 6000 22000 2. Total Grant Request - 12000 3. Total Cash Match Contribution - 4000 4. Total In-kind (Contribution) Match - 6000 5. Total Project Budget – 22000 CLG Minority Impact Statement Pursuant to 2008 Iowa Acts, HF 2392, Iowa Code Section 8.11, grant applications submitted to the State of Iowa shall include a Minority Impact Statement. This is the state’s mechanism to require grant applicants to consider the potential impact of the grant project’s proposed programs or policies on minority groups. 1. Please choose the statement that pertains to this grant application. Complete all the information requested for the chosen statement - The proposed grant project program or policies are not expected to have a disproportionate or unique impact on minority persons. 1.1 Present the rational for determining no impact – A nomination to the National Register of Historic Places is not an activity that would impact a minority group or person any more than a group or person outside a minority group. Certification I hereby certify that the information on this form is complete and accurate, to the best of my knowledge. - Eloise Sahlstrom Attachments Signed letter from chief official - This is needed. National Register nomination permission/support If you propose to nominate an individual property to the National Register, please provide a letter from the owner stating that they give permission for the nomination. ‘If you propose to nominate a historic district, please provide documentation that you have held a public meeting and that there is local support and among the property owners for the nomination. (We will be attaching the ad-hoc neighborhood letter, staff report of 10-24-23 and minutes.) Portfolio (We will be attaching Photos & Maps) 35 ITEM #:9 DATE:12-12-23 DEPT:City Manager SUBJECT:APPROVAL OF REQUEST FROM HEARTLAND OF STORY COUNTY TO SUBLEASE OFFICE SPACE COUNCIL ACTION FORM BACKGROUND: In February 2022, the City entered into a fifty year land lease with Heartland allowing the construction of a new building to be constructed on City property with the stipulation that it be used solely for the purpose of providing senior services to the public. In order to assure that this restriction is maintained, the lease prohibits Heartland from sub-leasing any portion of the building or site to a third party without the prior approval of the City. The City Council received the attached request from Heartland's Associate Executive Director seeking approval to sublease a portion of the space in their new building to Bethany Life and Central Iowa Retired and Senior Volunteer Program. These two agencies share a common goal with Heartland to support people 60+ to participate in the community and remain in their homes as long as possible. The term of the proposed subleases coincides with the length of the land lease term between the City and Heartland of Story County. The City Attorney has reviewed the two subleases and is satisfied that terms restrict their use of space to the same use as required in the City's land lease. Therefore, it is the recommendation of the City Manager that the City Council adopt Alternative #1 and thereby approve the ability for Heartland to sublease a portion of its new building to Bethany Life and Central Iowa Retired and Senior Volunteer Program. ALTERNATIVES: 1. Approve Heartland of Story County's request to sublease a portion of its new building to Bethany Life and Central Iowa Retired and Senior Volunteer Program. 2. Approve Heartland of Story County's request to sublease a portion of its new building to Bethany Life only. 3. Approve Heartland of Story County's request to sublease a portion of its new building to Central Iowa Retired and Senior Volunteer Program only. 4. Deny Heartland of Story County's request to sublease to either party. CITY MANAGER'S RECOMMENDED ACTION: The new facility being built by Heartland of Story County will result in a broader array of much needed programs being available to our residents over 60 years of age. The two agencies that are seeking to lease space in this new building are committed to the same broad mission of Heartland. Therefore, in accordance with Paragraph 14 of the attached land lease, it is the recommendation of the City Manager that the City Council approve Alternative #1 and thereby authorize Heartland to sublease a portion of its new building to Bethany Life and Central Iowa Retired and Senior Volunteer Program. 36 ATTACHMENT(S): Heartland Lease Agreement.pdf Sublease Request to City.pdf 37 38 39 40 41 42 ITEM #:10 DATE:12-12-23 DEPT:Admin. SUBJECT:SPRING 2024 COMMISSION ON THE ARTS (COTA) SPECIAL GRANTS COUNCIL ACTION FORM BACKGROUND: On November 6, the Commission on the Arts (COTA) finalized its recommendations for the Spring 2024 Special Project Grants. These grants are in amounts up to $1,000 for unforeseen or unique opportunities that support arts in the community. This season, six grant requests were received, totaling $11,515 in requests. COTA has $5,228 in funding available for these grants. Based on the merits of each application and the criteria established for the special grants, COTA recommended the allocations indicated below. Contracts were sent to the awarded organizations for approval and have been returned. The contracts are now presented for City Council’s approval. ORGANIZATION PROJECT REQUEST AWARD Ames Desi Drama Association Indiran Chandiran 1,000 1,000 Ames Writers Collective Langston Hughes Project –Poetry Master Class 1,000 1,000 Creative Artists’ Studios of Ames Fiber Arts Node 6,120 428 D.M. Metro Opera Guild – Ames Chapter Children’s Opera 1,595 1,000 India Cultural Association “Run-g Munch” Holi 5k Run 1,000 1,000 Story Theater Company Royal Academy 800 800 Total $ 11,515 $ 5,228 ALTERNATIVES: 1. Approve the COTA special project grant contracts as recommended. 2. Refer the contracts to COTA for further information. 3. Do not approve the contracts. CITY MANAGER'S RECOMMENDED ACTION: These projects help advance participation in and awareness of the arts in the Ames community, which is a key goal of the Commission on the Arts. COTA has reviewed the requests and has recommended the approval of the contracts now presented to the City Council. Therefore, it is the recommendation of the City Manager that the City Council adopt Alternative No. 1, as described above. 43 ITEM #:11 DATE:12-12-23 DEPT:HR SUBJECT:AMENDING WELLMARK CONTRACT WITHOUT PHARMACY BENEFIT MANAGER SERVICES COUNCIL ACTION FORM BACKGROUND: For almost twenty years, Wellmark Blue Cross Blue Shield of Iowa has been the City’s provider for administrative services and excess coverage for the self-insured health and pharmacy programs. Wellmark was originally awarded this contract after a competitive Request for Proposals. Wellmark has advantageous contractual relationships with medical providers in Ames and throughout Iowa that allow the City to receive significant discounts on services received. Wellmark has a proven record of being able to administer the existing plans and has been a willing and capable partner in our efforts to improve the health status of employees and their families through quality programs and health promotion. As the costs in prescription drugs have continued to increase over the last 7 years, the City engaged in a recent RFP process for a Pharmacy Benefit Manager (PBM). After reviewing multiple proposals, the City selected a different vendor (Carelon Rx) to manage drug costs as PBM. This means as of January 1, 2024 Wellmark will administer medical claims and stop loss insurance coverage, but not pharmacy claims. With this change in PBM, the City will experience substantial savings to the overall program as compared to Wellmark’s projected pharmacy claims. However, in order to “carve out” pharmacy benefits and continue to share medical claim information, Wellmark charges a carve out fee of $1.75 per person per month, which is included in the administrative and access fees below. The expected savings will more than offset this increase in fees from Wellmark. ADMINISTRATIVE AND ACCESS FEES: In amending the administrative agreement for the last 6 months of FY 2023/24, Wellmark will charge $52.59 per member per month in administrative and access fees, effective January 1, 2024. This is a per-member, per-month increase of 1.0% compared to first 6 months of FY 2023/24. Administrative and Access Fees (With Carve Out Fees Added) FY 2023/24 first 6 months FY 2023/24 last 6 months # of Covered Members 551 551 Per Member, Per Month Fee $51.94 $52.59 TOTAL COST $343,427 $347,725 44 ALTERNATIVES: 1. Accept the amended documents from Wellmark for administrative services, specific and aggregate excess insurance, and access fees for benefits effective from January 1, 2024, to June 30, 2024. 2. Do not accept the amendment to the City’s health insurance administrative services contract with Wellmark. CITY MANAGER'S RECOMMENDED ACTION: Wellmark has been an effective administrator of the City’s health care administrative services. Wellmark’s services are cost-effective, and they have a strong working relationship with the City’s other health care partners. Renewal of this contract will provide the best value to the City in administering its health insurance program. Therefore, it is the recommendation of the City Manager that the City Council adopt Alternative #1, as described above. ATTACHMENT(S): City of Ames AltMktgExhibitSF 1-1-24 HMO Advantage.pdf City of Ames AltMktgExhibitSF 1-1-24 Classic Blue.pdf City of Ames AltMktgExhibitSF 1-1-24 PPO Alliance Select.pdf Carve Out Binder updated.pdf 45 Alternate Benefit Offering Enrollment Stop Loss Terms OBS #159898-29 / #Drugs Excluded (MV3)150 Single Contract: 12/18 Blue Advantage 401 Family Monthly Aggregate Option: No Deductible: $0/$0 Payment Terms: Actual Weekly Coinsurance: 10% OPM: $1,000 / $2,000 551 Total Office Visit Copay: $10 Drugs Excluded Level Fee/Contract Estimated Annual Premium Based on Current Enrollment Individual Stop Loss $125,000 $161.66 $1,068,896 Aggregate Stop Loss 120%$2.49 $16,464 Administrative Fees - Health w/weekly settlement $43.89 $290,201 Administrative Fees - Pharmacy Vendor Coordination Fee $1.75 $11,571 Consultant Fee $0.00 $0 Total Administrative Fees $209.79 $1,387,131 Network Access Fee $6.95 $45,953 Single Family Annual Projection Expected Claims $631.06 $1,701.91 $9,325,499 Administrative, NAF & Stop Loss Fees $96.98 $261.54 $1,433,094 Estimated Suggested Rates*$728.04 $1,963.45 $10,758,593 Attachment Points $757.28 $2,042.31 $11,190,700 Administrative, NAF & Stop Loss Fees $96.98 $261.54 $1,433,094 Estimated Maximum Liability to Fund*$854.26 $2,303.85 $12,623,794 *Actual results may vary. Also, rates provided include administrative costs based on the entire group population. Individual Stop Loss includes coverage for Health and Drug and is based on a lifetime maximum of unlimited. Aggregate Stop Loss includes coverage for Health and Drug. The maximum Aggregate reimbursement is unlimited. Employer Signature: ____________________________________________________ Date: _______________ Comments: Self Funded FINAL Alternate Rates Group Name:City of Ames Account Key:00017124 Rating Period:07/01/2023 to 06/30/2024 (Benefit Changes Effective 01/01/2024 to 06/30/2024) v50887 Independent Licensee of the Blue Cross and Blue Shield Association Proposal Date: 9/15/2023 46 Minimum Value Assessment MV1: Benefit MEETS minimum value requirements MV2: Benefit DOES NOT MEET minimum value requirements MV3: Benefit CANNOT BE CERTIFIED by Wellmark Employer or group health plan is solely responsible for establishing employee compensation and employee health plan contribution amounts. When Minimum Value Assessment does not meet requirements or cannot be certified, the employer or group health plan must offer an alternative plan option to its eligible employees which meets minimum value requirements. Failure to offer a plan option that meets minimum value may result in penalties under 26 U.S.C. §4980H of the Internal Revenue Code. The Employer or group health plan is solely responsible for any penalties arising from the failure to offer minimum essential coverage that meets both minimum value and affordability requirements. Wellmark makes no representations regarding plan affordability or the eligibility of employees or related individuals for premium tax credits under 26 C.F.R. § 1.36B-2. Consultant fee, if applicable, is an amount determined by the consultant and employer, and included here for the convenience of the employer to understand the total cost of services from Wellmark and the consultant. The consultant fee will be invoiced by Wellmark pursuant to agreement between Wellmark, Employer and Consultant. Wellmark is not providing any legal or professional advice with regard to compliance of any federal or state law, regulations, or guidance. Law, regulations and guidance on specific provisions has been and will continue to be provided by the appropriate federal and state agencies and regulators. The information provided reflects Wellmark’s understanding of the most current information and is subject to change without further notice. Please note that plan benefits, rates, renewal rate adjustments, and rating impact calculations are subject to change and may be revised during a plan’s rating period based on guidance and regulations issued by the appropriate federal and state agencies and regulators. Wellmark makes no representation as to the impact of plan changes on a plan’s grandfathered status or interpretation or implementation of any other provisions of law or regulation. Wellmark will not determine whether coverage is discriminatory or otherwise in violation of Internal Revenue Code Section 105(h). Wellmark also will not provide any testing for compliance with Internal Revenue Code Section 105(h). Wellmark will not be held liable for any penalties or other losses resulting from any employer offering coverage in violation of section 105(h). Wellmark will not determine whether any change in an Employer Administered Funding Arrangement affects a health plan's grandfathered health plan status under ACA or otherwise complies with ACA. Wellmark will not be held liable for any penalties or other losses resulting from any Employer Administered Funding Arrangement. For purposes of this paragraph, an "Employer Administered Funding Arrangement" is an arrangement administered by an employer in which the employer contributes toward the member's share of benefit costs (such as the member's deductible, coinsurance, or copayments) in the absence of which the member would be financially responsible. An Employer Administrative Funding Arrangement does not include the employer's contribution to health insurance premiums or rates. The subrogation and third-party liability recovery vendor(s) retain a service fee calculated as a percentage of the recovered amount after deductions for attorneys’ fees and costs. For subrogation or third-party liability cases initiated during the Rating Period, the subrogation/third-party liability recovery vendor’s service fee is 19.5% of the recovered amount. This fee is subject to change. The final recovered amount received from the vendor is credited to Account. Wellmark’s agreement with the subrogation and third-party liability recovery vendor may from time to time allow for the application of no vendor service fees to amounts recovered during that period of time. Any subrogation or third-party liability recovery amount obtained by the vendor on behalf of the Account during that time period will be provided to Account without application of the vendor service fee. Self Funded FINAL Alternate Rates Group Name:City of Ames Account Key:00017124 Rating Period:07/01/2023 to 06/30/2024 (Benefit Changes Effective 01/01/2024 to 06/30/2024) v50887 Independent Licensee of the Blue Cross and Blue Shield Association Proposal Date: 9/15/2023 47 Alternate Benefit Offering Enrollment Stop Loss Terms OBS #159907-29 / #Drugs Excluded (MV3)150 Single Contract: 12/18 Classic Blue 401 Family Monthly Aggregate Option: No Deductible: $100 / $200 Payment Terms: Actual Weekly Coinsurance: 10% OPM: $1,000 / $2,000 551 Total Office Visit Copay: $0 Drugs Excluded Level Fee/Contract Estimated Annual Premium Based on Current Enrollment Individual Stop Loss $125,000 $161.66 $1,068,896 Aggregate Stop Loss 120%$2.49 $16,464 Administrative Fees - Health w/weekly settlement $43.89 $290,201 Administrative Fees - Pharmacy Vendor Coordination Fee $1.75 $11,571 Consultant Fee $0.00 $0 Total Administrative Fees $209.79 $1,387,131 Network Access Fee $6.95 $45,953 Single Family Annual Projection Expected Claims $692.36 $1,867.23 $10,231,358 Administrative, NAF & Stop Loss Fees $96.98 $261.54 $1,433,095 Estimated Suggested Rates*$789.34 $2,128.77 $11,664,453 Attachment Points $830.83 $2,240.67 $12,277,598 Administrative, NAF & Stop Loss Fees $96.98 $261.54 $1,433,095 Estimated Maximum Liability to Fund*$927.81 $2,502.21 $13,710,693 *Actual results may vary. Also, rates provided include administrative costs based on the entire group population. Individual Stop Loss includes coverage for Health and Drug and is based on a lifetime maximum of unlimited. Aggregate Stop Loss includes coverage for Health and Drug. The maximum Aggregate reimbursement is unlimited. Employer Signature: ____________________________________________________ Date: _______________ Comments: Self Funded FINAL Alternate Rates Group Name:City of Ames Account Key:00017124 Rating Period:07/01/2023 to 06/30/2024 (Benefit Changes Effective 01/01/2024 to 06/30/2024) v50887 Independent Licensee of the Blue Cross and Blue Shield Association Proposal Date: 9/15/2023 48 Minimum Value Assessment MV1: Benefit MEETS minimum value requirements MV2: Benefit DOES NOT MEET minimum value requirements MV3: Benefit CANNOT BE CERTIFIED by Wellmark Employer or group health plan is solely responsible for establishing employee compensation and employee health plan contribution amounts. When Minimum Value Assessment does not meet requirements or cannot be certified, the employer or group health plan must offer an alternative plan option to its eligible employees which meets minimum value requirements. Failure to offer a plan option that meets minimum value may result in penalties under 26 U.S.C. §4980H of the Internal Revenue Code. The Employer or group health plan is solely responsible for any penalties arising from the failure to offer minimum essential coverage that meets both minimum value and affordability requirements. Wellmark makes no representations regarding plan affordability or the eligibility of employees or related individuals for premium tax credits under 26 C.F.R. § 1.36B-2. Consultant fee, if applicable, is an amount determined by the consultant and employer, and included here for the convenience of the employer to understand the total cost of services from Wellmark and the consultant. The consultant fee will be invoiced by Wellmark pursuant to agreement between Wellmark, Employer and Consultant. Wellmark is not providing any legal or professional advice with regard to compliance of any federal or state law, regulations, or guidance. Law, regulations and guidance on specific provisions has been and will continue to be provided by the appropriate federal and state agencies and regulators. The information provided reflects Wellmark’s understanding of the most current information and is subject to change without further notice. Please note that plan benefits, rates, renewal rate adjustments, and rating impact calculations are subject to change and may be revised during a plan’s rating period based on guidance and regulations issued by the appropriate federal and state agencies and regulators. Wellmark makes no representation as to the impact of plan changes on a plan’s grandfathered status or interpretation or implementation of any other provisions of law or regulation. Wellmark will not determine whether coverage is discriminatory or otherwise in violation of Internal Revenue Code Section 105(h). Wellmark also will not provide any testing for compliance with Internal Revenue Code Section 105(h). Wellmark will not be held liable for any penalties or other losses resulting from any employer offering coverage in violation of section 105(h). Wellmark will not determine whether any change in an Employer Administered Funding Arrangement affects a health plan's grandfathered health plan status under ACA or otherwise complies with ACA. Wellmark will not be held liable for any penalties or other losses resulting from any Employer Administered Funding Arrangement. For purposes of this paragraph, an "Employer Administered Funding Arrangement" is an arrangement administered by an employer in which the employer contributes toward the member's share of benefit costs (such as the member's deductible, coinsurance, or copayments) in the absence of which the member would be financially responsible. An Employer Administrative Funding Arrangement does not include the employer's contribution to health insurance premiums or rates. The subrogation and third-party liability recovery vendor(s) retain a service fee calculated as a percentage of the recovered amount after deductions for attorneys’ fees and costs. For subrogation or third-party liability cases initiated during the Rating Period, the subrogation/third-party liability recovery vendor’s service fee is 19.5% of the recovered amount. This fee is subject to change. The final recovered amount received from the vendor is credited to Account. Wellmark’s agreement with the subrogation and third-party liability recovery vendor may from time to time allow for the application of no vendor service fees to amounts recovered during that period of time. Any subrogation or third-party liability recovery amount obtained by the vendor on behalf of the Account during that time period will be provided to Account without application of the vendor service fee. Self Funded FINAL Alternate Rates Group Name:City of Ames Account Key:00017124 Rating Period:07/01/2023 to 06/30/2024 (Benefit Changes Effective 01/01/2024 to 06/30/2024) v50887 Independent Licensee of the Blue Cross and Blue Shield Association Proposal Date: 9/15/2023 49 Alternate Benefit Offering Enrollment Stop Loss Terms OBS #171233-26 / #Drugs Excluded (MV3)150 Single Contract: 12/18 Alliance Select 401 Family Monthly Aggregate Option: No Deductible: $100 / $200 Payment Terms: Actual Weekly Coinsurance: 10% / 20% OPM: $1,000 / $2,000 551 Total Office Visit Copay: $0 Drugs Excluded Level Fee/Contract Estimated Annual Premium Based on Current Enrollment Individual Stop Loss $125,000 $161.66 $1,068,896 Aggregate Stop Loss 120%$2.49 $16,464 Administrative Fees - Health w/weekly settlement $43.89 $290,201 Administrative Fees - Pharmacy Vendor Coordination Fee $1.75 $11,571 Consultant Fee $0.00 $0 Total Administrative Fees $209.79 $1,387,131 Network Access Fee $6.95 $45,953 Single Family Annual Projection Expected Claims $698.21 $1,883.01 $10,317,822 Administrative, NAF & Stop Loss Fees $96.98 $261.54 $1,433,095 Estimated Suggested Rates*$795.19 $2,144.55 $11,750,917 Attachment Points $837.85 $2,259.60 $12,381,325 Administrative, NAF & Stop Loss Fees $96.98 $261.54 $1,433,095 Estimated Maximum Liability to Fund*$934.83 $2,521.14 $13,814,420 *Actual results may vary. Also, rates provided include administrative costs based on the entire group population. Individual Stop Loss includes coverage for Health and Drug and is based on a lifetime maximum of unlimited. Aggregate Stop Loss includes coverage for Health and Drug. The maximum Aggregate reimbursement is unlimited. Employer Signature: ____________________________________________________ Date: _______________ Comments: Self Funded FINAL Alternate RatesSelf Funded FINAL Alternate Rates Group Name:Group Name:City of AmesCity of Ames Account Key:Account Key:00017124 00017124 Rating Period:Rating Period:07/01/2023 to 06/30/2024 (Benefit Changes Effective 01/01/2024 to 06/30/2024)07/01/2023 to 06/30/2024 (Benefit Changes Effective 01/01/2024 to 06/30/2024) v50887 Independent Licensee of the Blue Cross and Blue Shield Association Proposal Date: 9/15/2023 50 Minimum Value Assessment MV1: Benefit MEETS minimum value requirements MV2: Benefit DOES NOT MEET minimum value requirements MV3: Benefit CANNOT BE CERTIFIED by Wellmark Employer or group health plan is solely responsible for establishing employee compensation and employee health plan contribution amounts. When Minimum Value Assessment does not meet requirements or cannot be certified, the employer or group health plan must offer an alternative plan option to its eligible employees which meets minimum value requirements. Failure to offer a plan option that meets minimum value may result in penalties under 26 U.S.C. §4980H of the Internal Revenue Code. The Employer or group health plan is solely responsible for any penalties arising from the failure to offer minimum essential coverage that meets both minimum value and affordability requirements. Wellmark makes no representations regarding plan affordability or the eligibility of employees or related individuals for premium tax credits under 26 C.F.R. § 1.36B-2. Consultant fee, if applicable, is an amount determined by the consultant and employer, and included here for the convenience of the employer to understand the total cost of services from Wellmark and the consultant. The consultant fee will be invoiced by Wellmark pursuant to agreement between Wellmark, Employer and Consultant. Wellmark is not providing any legal or professional advice with regard to compliance of any federal or state law, regulations, or guidance. Law, regulations and guidance on specific provisions has been and will continue to be provided by the appropriate federal and state agencies and regulators. The information provided reflects Wellmark’s understanding of the most current information and is subject to change without further notice. Please note that plan benefits, rates, renewal rate adjustments, and rating impact calculations are subject to change and may be revised during a plan’s rating period based on guidance and regulations issued by the appropriate federal and state agencies and regulators. Wellmark makes no representation as to the impact of plan changes on a plan’s grandfathered status or interpretation or implementation of any other provisions of law or regulation. Wellmark will not determine whether coverage is discriminatory or otherwise in violation of Internal Revenue Code Section 105(h). Wellmark also will not provide any testing for compliance with Internal Revenue Code Section 105(h). Wellmark will not be held liable for any penalties or other losses resulting from any employer offering coverage in violation of section 105(h). Wellmark will not determine whether any change in an Employer Administered Funding Arrangement affects a health plan's grandfathered health plan status under ACA or otherwise complies with ACA. Wellmark will not be held liable for any penalties or other losses resulting from any Employer Administered Funding Arrangement. For purposes of this paragraph, an "Employer Administered Funding Arrangement" is an arrangement administered by an employer in which the employer contributes toward the member's share of benefit costs (such as the member's deductible, coinsurance, or copayments) in the absence of which the member would be financially responsible. An Employer Administrative Funding Arrangement does not include the employer's contribution to health insurance premiums or rates. The subrogation and third-party liability recovery vendor(s) retain a service fee calculated as a percentage of the recovered amount after deductions for attorneys’ fees and costs. For subrogation or third-party liability cases initiated during the Rating Period, the subrogation/third-party liability recovery vendor’s service fee is 19.5% of the recovered amount. This fee is subject to change. The final recovered amount received from the vendor is credited to Account. Wellmark’s agreement with the subrogation and third-party liability recovery vendor may from time to time allow for the application of no vendor service fees to amounts recovered during that period of time. Any subrogation or third-party liability recovery amount obtained by the vendor on behalf of the Account during that time period will be provided to Account without application of the vendor service fee. Self Funded FINAL Alternate Rates Group Name:City of Ames Account Key:00017124 Rating Period:07/01/2023 to 06/30/2024 (Benefit Changes Effective 01/01/2024 to 06/30/2024) v50887 Independent Licensee of the Blue Cross and Blue Shield Association Proposal Date: 9/15/2023 51 Amendment to Binder dated: 7/1/2023 © 2019 Wellmark Inc. All rights reserved. Wellmark Blue Cross and Blue Shield of Iowa, Wellmark Health Plan of Iowa, Inc., Wellmark Blue Cross and Blue Shield of South Dakota, Wellmark Value Health Plan, Inc., and Wellmark Administrators, Inc. are independent licensees of the Blue Cross and Blue Shield Association. ACCOUNT INFORMATION AND BINDER AGREEMENT AMES CITY OF 1/1/2024 00017124 000076000 Account Legal Name Effective Date Account Key Group Number Physical Address Address Line 1 Address Line 2 City State Zip Billing Address (if different than physical address) Alternate Location 3rd Party Billing Service (If checked, account acknowledges the Wellmark Group Statement or premium invoice, delivered periodically to any third party service provider, can be viewed by account, by registering for electronic billing at Wellmark.com.) Address Line 1 Address Line 2 City State Zip Authorized Health Plan Representatives An authorized health plan representative is an employee of the Account (not the Producer) who is authorized to request and receive the minimum necessary protected health plan information about the group health plan©s members in order to perform their day-to-day job functions of administering benefits for participants of the plan. The following individual employees are authorized health plan representatives. Effective Date Name Title Email Phone 1 52 Authorized Health Plan Representatives (continued) Name Title Email Phone Producer Designation Designation of Primary Producer Account requests that Wellmark recognize the following individual and firm as the designated employee benefits and insurance producer. Designation of Producer Effective Date Primary Producer Name Producer Firm Name Producer Number Producer Firm Address 1 City State Zip Primary Contact Name Email Phone Authorization to Release Group Health Plan Information and Protected Health Information to Consultant By signing below, the Employer hereby authorizes and directs Wellmark, Inc. to disclose to the above, designated Consultant certain group health plan information and Protected Health Information regarding participants in the employer-sponsored group health plan for the purpose of the Consultant©s administration of the Employer©s group health plan. The Employer authorizes Wellmark to disclose such information via secure online access through Wellmark©s website, including the following website applications which contain information the Employer considers necessary to provide to the Consultant in order to conduct operations of the Employer©s group health plan: l Member Maintenance/Update Member Information l Employer Reports l Update Other Insurance Information/Coordination of Benefits l Check Claims Status l eBilling Services l Eligibility Verification Benefits Information (EVBI) Yes, I authorize my Consultant to access this information. 2 53 Producer Designation (continued) By signing below, the Employer authorizes Wellmark to provide the Consultant access to this information on an ongoing basis without further authorization. The Employer represents and agrees that 1) The Consultant is considered a Business Associate of the Employer, not Wellmark, Inc., 2) The information to be disclosed is considered confidential, 3) The Consultant has provided satisfactory assurance to the Employer that the Consultant will properly safeguard and not further disclose the information, 4) Wellmark shall not be liable or responsible for any misuse or wrongful disclosure of such information by the Employer or its Consultant, 5) The Employer agrees to indemnify and hold Wellmark harmless from and against any claim, cause of action, liability, damage, cost or expense, including attorney's fees and court or proceeding costs, arising out of, or in connection with, any misuse or wrongful disclosure of the information by the Employer, or its Consultant. The Employer acknowledges that the Consultant will be required to agree to Wellmark's website terms and conditions upon registering for access to such information. No, I do not authorize my Consultant to access this information. Secondary Consultant There is no secondary consultant on file. You may add one below. Secondary Consultant Name Email Address Phone Authorization to Release Protected Health Information for Third-Party Explanation of Benefits Not Applicable General Account Information Wellmark Account Manager Rep ID# Contact Month Plan Year Month Unique Alpha Prefix Wellmark IS the Exclusive Carrier Enrollment Method Open Enrollment Period* *Enrollment Period is the period in which employees can enroll within a plan or plans, and/or when written application materials are provided to employees, if sooner. The account will hold an open enrollment: YES NO If YES, fill in open enrollment period dates: Starting date Ending date Funding Arrangement This self-funded account will be developing our own SBCs to distribute. (If you modify or opt out of using the standard, Wellmark-provided SBCs, please be aware that Wellmark will not be able to retain or distribute your customized SBCs to your employees.) 3 54 General Account Information (continued) Funding Arrangement Stop Loss Carrier Stop Loss Terms/Lines of Business Terminal Rider applies: YES NO (If yes, Signed exhibit page attached.) Value Based Program elected : YES NO Product Health Pharmacy Dental A group health plan may designate a state benchmark plan other than Iowa or South Dakota for purpose of determining compliance with essential health benefit (EHB) requirements. Benchmark Exception for EHB? YES NO If yes, list State Guarantees Not Applicable Health Care Management Services See Attached Rate Exhibit Representation of Grandfathered Status under the Affordable Care Act Not Applicable COBRA Not Applicable 4 55 This Large Group Account Information and Binder Agreement (ªBinder Agreementº) serves solely as evidence of Wellmark's agreement to provide the health insurance coverage or administrative services and to provide services for any applicable stop loss insurance coverage indicated above. The Account agrees to the terms and payment obligations stated herein and agrees to pay Wellmark the applicable rates, administrative fees, and/or stop loss premium stated in the attached documentation. Execution of the Binder Agreement by the Account authorizes Wellmark to implement the administration of this coverage including the processing and settlement of claims for members of the Account's group health plan incurred within the Rating Period stated in the attached Rating Exhibit. On or about the effective date of coverage, Wellmark shall issue and execute a definitive agreement which may be a Group Insurance Policy, Administrative Services Agreement and or Stop Loss Policy, depending on the nature of the group health plan. The definitive Agreement will set forth the rights and responsibilities of Wellmark and the Account. Account's payment to Wellmark of the applicable fees as of the effective date is evidence of Account's agreement to the terms specified in the definitive agreement. Signatures on this Binder Agreement confirm that the Binder Agreement and the subsequent definitive agreement are issued for delivery in either Iowa or South Dakota, as applicable. Account understands and agrees that Wellmark defines a National Account as any company headquartered in Wellmark's service area of Iowa or South Dakota but which also has employees working at locations in other states whose claims are processed through the Blue Cross and Blue Shield Association's Blue Card program. If the Account is not headquartered in Wellmark's service area, coverage may be limited to employees associated with Account locations in Wellmark's service, and coverage will be void for any persons associated with Account locations outside Wellmark's Service Area unless express consent is obtained from the local Blue Cross or Blue Shield licensee. Account acknowledges and agrees that it has reviewed and approved this Binder Agreement and all attachments. Account acknowledges Wellmark will rely on the information contained in this Binder Agreement, and all of the attachments hereto, including but not limited to the SBC Employer Data Form, Medicare Secondary Payer Addendum, Rate Exhibits, Health and Care Management rates, Online Benefit Summary (OBS), COBRA Agreements, representations of grandfathered status and any performance guarantee information. Account represents to Wellmark that the information contained herein is correct. This Binder Agreement shall expire upon Wellmark's issuance and execution of the definitive agreement (either the Group Insurance Policy, or Administrative Services Agreement and Stop Loss Policy, if applicable), EXCEPT that any COBRA Agreements, Health and Care Management Programs/Services Rating Exhibit, will remain in effect and become a part of the definitive agreement. It is understood that the Wellmark may continue to rely on the designations of individuals and authorizations made herein until the Account withdraws such designations or authorizations or provides updated designations and authorizations. It is understood and agreed that the terms and conditions of the definitive agreement and benefits document(s) issued by Wellmark to the Account, and the terms and conditions of the definitive stop loss policy issued by stop loss carrier, if any, shall govern and control the terms stated in this Binder. Any inconsistency between this Binder Agreement, including attachments, and any subsequently issued definitive agreement(s) shall be construed in favor of the subsequently issued definitive agreement. This Binder Agreement shall be governed in accordance with Iowa Law. ACCOUNT: By (sign here)Printed Name Title Date For Internal Use Only Notes 56 ITEM #:12 DATE:12-12-23 DEPT:HR SUBJECT:APPROVAL OF PHARMACY BENEFIT MANAGER (PBM) AS SEPARATE VENDOR COUNCIL ACTION FORM BACKGROUND: For almost twenty years, Wellmark Blue Cross Blue Shield of Iowa has been the City’s provider for administrative services and excess coverage for the self-insured health and pharmacy programs. As the Pharmacy Benefits Manager (PBM) this third party company functions as an intermediary between insurance providers, such as Wellmark, and pharmaceutical manufacturers. PBMs negotiate rebates with manufacturers, process claims, create pharmacy networks, review drug utilization, and manage mail-order specialty pharmacies. Since pharmaceutical costs are a significant portion of the overall costs incurred by the City’s Health Insurance Fund, the terms that can be negotiated by a PBM can result in significant impacts to the City’s costs. Because pharmacy costs are the fastest growing portion of the City's health care costs, staff decided to enlist Gallagher Benefit Services, Inc. to conduct a Request for Proposals (RFP) earlier this year seeking cost savings from a competitive process for a PBM. This process sought to create a service unbundled from the services currently provided by Wellmark. Gallagher Benefit Services, Inc. considered five proposals and identified Carelon Rx as the preferred vendor for the PBM, with its services starting January 1, 2024. The proposal submitted by Carelon Rx provided better transparency regarding drug rebates and better pricing for drugs than the other proposals. Pricing with Carelon Rx is projected to be approximately $1.5 million less than Wellmark’s projected costs over a period of 3 years. Wellmark will continue to serve as the City's third party administrator for medical insurance for City employees and their families. ALTERNATIVES: 1. Accept the contract documents from Carelon Rx to serve as the City's Pharmacy Benefit Manager b y negotiating rebates with manufacturers, processing claims, creating pharmacy networks, reviewing drug utilization, and managing mail-order specialty pharmacies for benefits effective January 1, 2024, for 3 years. 2. Do not accept this new vendor for carved out Pharmacy Benefit Manager services and remain with Wellmark as the City's PBM. CITY MANAGER'S RECOMMENDED ACTION: Carelon Rx’s services are cost-effective, and they have a strong working reputation in the local market with other public employers as a health care partner. Approving of this contract will provide the best value to the City in administering its Pharmacy Benefit Manager services. Therefore, it is the recommendation of the City Manager that the City Council adopt Alternative #1, as described above. ATTACHMENT(S): City of Ames - PBM Agreement (CarelonRx 11-21-2023)v2.docx 57 58 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 1 CARELONRX, INC. PHARMACY BENEFIT MANAGEMENT AGREEMENT This PHARMACY BENEFIT MANAGEMENT AGREEMENT together with any exhibits and attachments hereto (collectively, the “Agreement”) is entered into between CarelonRx, Inc. (“PBM”) and City of Ames (“Client”) and is effective January 1, 2024 (the “Effective Date”). PBM and Client shall be individually referred to as “Party” and collectively as “Parties.” RECITALS WHEREAS, PBM provides comprehensive pharmacy benefit management and administration services; WHEREAS, Client provides one or more plans or programs under which eligible individuals receive certain prescription drugs and healthcare related products and services or has contracted to process or participate in providing services to plans or programs that offer such healthcare products and services; WHEREAS, both Parties desire PBM to be the exclusive provider of pharmacy benefit management services in support of Client’s Plan(s), under the terms and conditions set forth herein; NOW, THEREFORE, for and in consideration of the mutual promises and obligations contained in this Agreement, the Parties, intending to be legally bound, agree as follows: ARTICLE I DEFINITIONS 1.1 Defined Terms. Unless otherwise defined in this Agreement or any addendum or amendment hereto, capitalized terms used in this Agreement (including its exhibits and attachments hereto) shall have the meanings specified in Exhibit A (Defined Terms). ARTICLE II OBLIGATIONS OF PBM 2.1 Provision of Services. PBM will provide Services as set forth in Exhibit B (Services) and in any exhibits, attachments, addenda, and amendments to this Agreement in accordance with this Agreement. PBM may make changes to its Services so long as such changes do not materially alter any of the provisions of this Agreement. ARTICLE III OBLIGATIONS OF CLIENT 3.1 Implementation Information. Client shall provide PBM with the required information and documentation one hundred eighty (180) days prior to the Implementation Date in a format required by PBM, including Eligibility File and data, completed Plan Document and other governing plan documents, Client information related to benefit structure, system requirements, operational requirements, refill files, claims history files, open prior authorization files, and such other information required by PBM with respect to Services to be provided hereunder. 3.2 Plan Information. Client shall provide PBM with timely, accurate, complete, and ongoing information necessary for PBM to implement and provide the Services, in a format and at a frequency required by PBM, including but not limited to a current copy of Client’s Plan Documents, and other appropriate materials and information, with respect to Services to be provided hereunder. Client shall 59 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 2 provide PBM with prior written notification of any and all pertinent Plan changes no later than ninety (90) days prior to the effective date of such change. 3.3 Therapy/Product Exclusions. If Client has expressly excluded a specific therapy class or product, products in such excluded classes will automatically be deemed excluded from coverage and will reject as "NDC Not Covered." Client must notify PBM in writing if it wants to exclude a product from coverage. Upon such notice from Client, PBM will review and provide Client with updated pricing within fifteen (15) Business Days from receipt of such notice from Client. The exclusion will be implemented within ten (10) Business Days after the date of PBM's receipt of Client’s approval of such change in pricing terms. There will not be any retroactive denials for Paid Claims processed prior to PBM's implementation of the exclusion as provided above and Client will be responsible for the payment of such Paid Claims processed prior to the rejection of coverage. 3.4 Eligibility Information. Client shall make all initial and ongoing Member eligibility and coverage status determinations. Client is responsible for determining eligibility of individuals and shall advise PBM of eligible Members through an electronically transmitted Eligibility File or other method agreed upon in writing by the Parties. The Eligibility File and other Member eligibility information shall be timely, accurate, complete, and ongoing and provided to PBM in a format and at a frequency required by PBM. PBM will load Member eligibility data no later than three (3) Business Days after receipt from Client. 3.5 Reliance on Client Information. Client shall be solely responsible for ensuring the accuracy and completeness of the information provided to PBM (including implementation information, Plan and Member information, and Eligibility Files) and shall be obligated to pay for Claims approved by PBM based on that information (e.g., Client shall be responsible for reimbursement to PBM for all Paid Claims where PBM was provided with inaccurate eligibility information or notified of a retroactive change in enrollment). Client acknowledges and agrees that PBM, Participating Pharmacies, and Vendors are entitled to rely on the accuracy and completeness of the information provided by Client in connection with this Agreement and the Services provided hereunder. PBM shall have no obligation to verify the accuracy or completeness of information provided by Client. PBM shall have the right to rely on instructions from Client in connection with the provision of Services hereunder. This does not give Client the right to impose requirements on PBM beyond those specified in this Agreement. 3.6 Performance Guarantees. To the extent any PBM Performance Guarantee set forth in this Agreement, including without limitation Exhibit B (Services) hereto relies on Client’s fulfilment of the obligation(s) set forth in Sections 3.1 through 3.4 herein and/or Exhibit B (Services) and Client fails to fulfill such obligation(s), PBM reserves the right to: 1) suspend its obligations under such Performance Guarantees until such time as Client has fulfilled the obligation(s) applicable to that Performance Guarantee, and PBM’s period for performance under the Performance Guarantee shall be extended accordingly; and/or 2) nullify its obligations under such Performance Guarantees in the event Client fails to fulfill its obligation(s) applicable to that Performance Guarantee. 3.7 Member Materials and Authorizations. Except as otherwise specified herein, Client shall prepare and distribute to Members all materials related to Member benefits including but not limited to summary plan descriptions, summary annual reports, and all notices or summaries of changes or material modifications to the Plan. Client has obtained, or will obtain, all Member authorizations required by Law for PBM to perform the Services provided for in this Agreement or in any amendment or addendum hereto, as well as for PBM to contact Members, their physicians, and Participating Pharmacies in order to perform any of the activities contemplated by this Agreement. 3.8 Modifications/Approvals of Communications. Client shall not modify any of the contents of any communication prepared by PBM for Client, Participating Pharmacies, Members, physicians, or other third parties without the prior written approval of PBM. Further, Client shall not alter, remove, or impair any 60 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 3 copyright, trademark, and/or similar notices on any communication prepared by PBM, which approval will not be unreasonably withheld. All external communications prepared by Client regarding PBM must be approved by PBM in writing prior to distribution. 3.9 Review of Reports, Statements, and Invoices. Upon receipt from PBM of reports, statements and invoices by Client or its designee(s), Client shall be responsible for promptly reviewing and confirming that the reports, statements, and invoices are accurate and complete to the best of their knowledge and for promptly notifying PBM in writing of any errors or objections to such reports, statements, and/or invoices. Unless Client notifies PBM in writing of any errors or objections within ninety (90) days from receipt of such report, statement, and/or invoice, all the information contained therein will be deemed accurate, complete, and acceptable to Client. 3.10 Non-Routine Inquiries. Each Party shall promptly notify the other in writing in accordance with Section 13.9 (Notices) of this Agreement of all non-routine inquires by Governmental Bodies (including insurance departments and other regulatory bodies), attorneys, Members, and/or others regarding this Agreement or Services provided hereunder to the extent permissible. Any response to such inquiries by Client is subject to the confidentiality provisions contained in Article VI (Confidentiality) of this Agreement. 3.11 Change in Client Information/Status. Client shall give written notice to PBM of the expected occurrence of any of the following events (including a description of the event), with such notice to be given at least sixty (60) days prior to the effective date of the event, unless such advance notice is prohibited by Law or contract, in which case, notice will be provided as soon as practicable: (i) Change of Client’s name; (ii) any merger between or consolidation with another entity where, after such merger or consolidation, Client is not the controlling entity; (iii) the sale or other transfer of all or substantially all of the assets of either Client or any of Client Affiliates or the sale or other transfer of the equity of Client or any of Client Affiliates, or; (iv) any bankruptcy, receivership, insolvency or inability of Client to pay its debts as they become due. ARTICLE IV COMPENSATION AND PAYMENT 4.1 Fees. In consideration of the Services provided by PBM to Client, Client agrees to pay the invoiced Claim amounts, Administrative Service Fees, Taxes, and any other applicable charge or fee pursuant to the terms set forth in this Agreement or in a corresponding attachment, addendum, work order, or amendment to this Agreement, all of which are incorporated by reference into this Agreement (collectively, “Fees”). 4.2 Billing. PBM will invoice Client weekly for Claims and monthly for Fees, including without limitation Administrative Services Fees and Ancillary Fees. 4.3 Payment. Client shall pay the full amount of the invoice to PBM by ACH transfer, within three (3) Business Days for Claims and within thirty (30) calendar days for Administrative Service Fees and Ancillary Fees from the date of Client’s receipt of each PBM invoice. 4.4 Payment Disputes. Client must notify PBM as soon as practicable in writing of the amount Client disputes and furnish a detailed statement in support of the dispute and the parties shall work in good faith to resolve any disputed Fees on such applicable invoice. 4.5 Failure to Pay Timely. In the event Client fails to pay or fund any amount due under this Agreement as set forth herein, in addition to all other rights and remedies under this Agreement and at Law and in equity, PBM shall have the following right and remedies: 61 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 4 4.5.1 Interest and Other Charges. Client shall pay a late payment penalty for each day the payment is late, calculated at the rate of twelve percent (12%) simple interest per annum (365 days), not to exceed any amounts allowed by applicable Law, which such late payment penalty amount shall be paid by no later than payment of the next invoice. If applicable, Client agrees to reimburse PBM for any expenses charged to PBM by a financial institution or Vendor due to Client’s failure to maintain sufficient funds in a designated bank account. Client shall be responsible for all costs of collection and shall reimburse PBM for all such costs and expenses, including reasonable attorneys’ fees. Any acceptance by PBM of late payments shall not be deemed a waiver of its rights to terminate this Agreement for any future failure of Client to make timely payments. 4.5.2 Suspension of Services. PBM may suspend Services to Client in the event Client is five (5) days past due in its payment obligations pursuant to Section 4.3 above of Claims fees upon written notice to Client provided all past due amounts (including interest) have not been cured in full within forty- eight (48) hours after receiving such written notice. 4.5.3 Security Deposits. In the event Client fail to pay the amount due under this Agreement within the time frames set forth herein for three (3) or more occasions within a four (4) month period, PBM shall have the right to require Client to provide PBM a deposit in an amount equal to twice the average invoice amount over the previous three (3) months, or, if there is less than three (3) months billing history, then such deposit shall be twice the average invoice over the actual billing history. Any such deposit shall be provided to PBM within five (5) Business Days of PBM’s request. If Client gives PBM a deposit, PBM may apply the deposit to past due balances and shall return the remaining deposit, if any, after the termination of this Agreement and the payment of all amounts payable to PBM hereunder. 4.6 Offset. PBM has the right to offset, withhold, deduct, or recoup from future amounts owed or reimbursable to Client under this Agreement (including Client deposits and/or Rebates) any amounts Client owes to PBM (including payment defaults, interest, and collection costs). 4.7 Member Hold Harmless. PBM will not and will ensure its Participating Pharmacies, Vendors, and agents do not, seek payment directly or indirectly from any Member for performance of any Service or other obligation of Client under this Agreement. This does not prohibit a Participating Pharmacy from collecting the appropriate cost share amount or payment for prescriptions from any Member in accordance with their benefits. 4.8 Taxes. Any applicable Taxes will be the sole responsibility of Client. Such Tax amounts may be included on invoices provided to Client, which Client shall pay in accordance with this Article IV (Compensation and Payment). Otherwise, Taxes shall be paid by Client within five (5) Business Days of receipt of notice from PBM of such Tax amounts due. 4.9 Not Plan Assets. Client acknowledges and agrees that Client, the Plan, and Members do not have a property interest in any amounts paid to and/or retained by PBM under or in connection with this Agreement and no such amounts are assets of Client, Plan, and/or Members. 4.10 Retail Network Pricing. PBM shall retain the difference, if any, between the amount invoiced to Client and the amount paid to PBM’s Vendor and/or a dispensing pharmacy for Covered Drugs dispensed to Members. 4.11 Market Check. After the Effective Date, once at eighteen (18) month mark, Client, through its consultant experienced in pharmacy benefit management services and after the consultant has executed a reasonable non-disclosure agreement with PBM, shall review the financial terms of the PBM Agreement and compare it to financial offerings available in the marketplace for comparable clients. Client’s consultant shall confirm Client’s pricing is competitive with that of reasonably similar clients that have reasonably 62 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 5 similar PBM services, plan design, financial assumptions, lines of business and other similar terms and conditions as Client (“Comparable Clients”). The market check will be compiled by Client’s consultant by benchmarking against other pricing rates of reasonably Comparable Clients. No later than July 1st of the market check year, Client will submit to PBM a market check report providing information that allows PBM to evaluate in sufficient detail the Comparable Clients to substantiate the market check conclusion. The market check report will be blinded as to the clients. PBM will respond to Client within thirty (30) calendar days of receipt of the market check report. Client’s market check must include no less than three (3) Comparable Clients and the average pricing rates of the Comparable Clients will be used to measure the annualized savings. If the market check validates an annualized savings of greater than one percent (1.00%) of total drug costs and PBM is unable or unwilling to offer new terms and conditions that provide the market check savings, then Client shall retain the right to terminate this Agreement effective July 1st of the following calendar year upon providing PBM ninety (90) days written notice. Any revisions to pricing resulting from the market check will be effective January 1st of the following contract year, so long as the parties have executed an amendment to the PBM Agreement reflecting the revised pricing. ARTICLE V RECORDS MAINTENANCE AND USE 5.1 HIPAA. PBM is not a “Covered Entity” under HIPAA. For purposes of this Agreement, PBM is deemed to be a “Business Associate” of Client as such term is defined under HIPAA. The Parties shall treat as private and confidential, in accordance with all applicable Laws, rules and regulations governing the privacy and confidentiality and disclosure requirements of individually identifiable health information, including the applicable provisions of HIPAA, all individually identifiable health information used or disclosed pursuant to this Agreement. The parties shall execute a Business Associate Agreement as set forth in Exhibit G (Business Associate Agreement), attached hereto and made a part hereof. 5.2 Record Retention. PBM shall maintain books and records (including Claim records) arising out of this Agreement for the period of time required by applicable Law. 5.3 Third Party Data Access. If Client requests PBM to provide a data extract or report to any consultants, auditors, and other third parties engaged by Client (each a “Plan Contractor”) for use on Client’s behalf: (i) to the extent such extract or report includes protected health information (“PHI”) as defined in HIPAA, PBM’s disclosure of the PHI and Plan Contractor’s subsequent obligations with respect to the protection, use, and disclosure of the PHI will be governed by Client’s applicable business associate agreements with PBM and the Plan Contractor; and (ii) to the extent such data or report includes PBM’s Confidential Information, Client acknowledges and agrees that Plan Contractor shall be subject to the restrictions set forth in Article VI (Confidentiality) of this Agreement and shall enter into a confidentiality agreement with PBM (or amend an existing one, as applicable) prior to PBM’s release of the extract or report. ARTICLE VI CONFIDENTIALITY 6.1 Confidential Information. Each Party retains ownership of its Confidential Information and neither conveys ownership rights in its Confidential Information nor acquires ownership rights in the other Party’s Confidential Information by entering into this Agreement or performing its obligations hereunder. Nothing in this Agreement shall impair or limit a Party’s right to use and disclose its Confidential Information for its own lawful business purposes. Each Party shall maintain the other Party’s Confidential Information in strict confidence and shall institute commercially reasonable safeguards to protect it. 6.2 Use and Disclosure of Confidential Information. 63 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 6 6.2.1 Client shall use PBM’s Confidential Information solely for the purpose of Client’s administration of its Plan. Client shall not, without PBM’s advance written consent: (1) use or disclose PBM’s Confidential Information, or reports or summaries thereof, for any purpose other than administering the Plan; (2) combine PBM’s Confidential Information with other data to create or add to any aggregated database that will or could be made available to any third party; (3) combine PBM’s Confidential Information provided for a particular purpose with PBM’s Confidential Information provided for another purpose; or (4) sell or disclose PBM’s Confidential Information to any other person or entity except as expressly permitted by this Article VI (Confidentiality). 6.2.2 Client may disclose PBM’s Confidential Information to a Plan Contractor solely for the purpose of such Plan Contractor’s administration of services related to this Agreement, and may disclose only the minimum amount of PBM’s Confidential Information necessary for Client’s Plan Contractor to provide such services, provided that: (1) each recipient needs to know such Confidential Information in order to provide services to Client; (2) Client shall require the recipient to comply with the restrictions contained in this Article VI (Confidentiality); and (3) prior to such disclosure, each such third party shall enter into a confidentiality agreement (or an appropriate amendment to an existing one, as applicable) with PBM with respect to the planned disclosure. Client shall be responsible for any breach of this Article VI (Confidentiality) by any third party to which it provides PBM’s Confidential Information. 6.2.3 This Agreement shall not be construed to restrict the use or disclosure of information that: (1) is public knowledge other than as a result of a breach of this Agreement; (2) is independently developed by a Party not in violation of this Agreement; (3) is made available to a Party by any person other than the other Party, provided the source of such information is not subject to any confidentiality obligations with respect to it; or, (4) is required to be disclosed pursuant to Law or judicial or administrative process, but only to the extent of such required disclosures and after reasonable notice to the other Party. 6.2.4 PBM and PBM Affiliates shall have the right to use and disclose Claim-related data collected in the performance of services under this Agreement or any other agreement between the Parties, provided: (1) the data is de-identified in a manner consistent with the requirements of HIPAA; or (2) the data is used or disclosed for research, health oversight activities, or other purposes permitted by Law; or (3) a Member has consented to the release of his or her individually identifiable data. The data used or disclosed shall be used for a variety of lawful purposes including, but not limited to, research, monitoring, benchmarking and analysis of industry and health care trends. 6.3 Confidential Information upon Termination. Upon termination of this Agreement, each Party shall return or destroy the other Party’s Confidential Information or retain the Confidential Information in accordance with its reasonable record retention policies and procedures; provided however that each Party shall continue to comply with the provisions of this Article VI (Confidentiality) for as long as it retains the other Party’s Confidential Information. ARTICLE VII AUDIT AND RECOVERIES 7.1 Client Audits. Client may audit PBM directly or through a third party auditor mutually acceptable to PBM to audit PBM's performance under this Agreement to ensure compliance with the terms of this Agreement. 7.1.1 Notice of Audit. Client must provide at least sixty (60) days prior written notice to PBM of its intent to conduct an audit of PBM's performance under this Agreement and applicable Laws. 7.1.2 Scope of Audit. The scope of an audit including time, place, type and duration of all audits must be mutually agreed to in writing by the parties prior to the commencement of the audit. Client may 64 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 7 conduct an audit once each contract year and such audit may only relate to the last two (2) preceding contract years from the current contract years (the “Audit Period”). Neither Client nor anyone acting on Client’s or the Plan’s behalf shall have a right to audit for the period prior to the Audit Period. Client shall not be permitted to audit any contract between PBM and Participating Pharmacies or Vendors. Client acknowledges and agrees that Client is not entitled to audit:(i) documents that are identified as proprietary or trade secret; and (ii) documents that PBM is barred from disclosing by law. All information and records reviewed pursuant to this Article VI shall be considered Confidential Information for purposes of this Agreement. 7.1.3 Rebate Audits. Client, through an independent third-party auditor shall be entitled to perform a review of up to ten (10) pharmaceutical company contracts directly related to Client’s Rebates or the number of pharmaceutical company contracts that account for at least 75% of the Client’s total Rebate revenue generated per year, whichever is less. PBM will share such contracts with Client’s third-party auditor during an onsite audit. Client’s auditor shall not be permitted to retain or copy (including through handwritten notes, etc.) any pharmaceutical company contracts or related documentation provided by PBM during such audit. However, Client’s auditor shall be permitted to document, and retain as necessary, any identified errors. Such documentation made by auditor shall be subject to PBM’s review. Such review of pharmaceutical company contracts may include formulary and Rebate provisions to the extent permitted by such contracts and shall be limited to information necessary for validating the accuracy of the Rebate amounts remitted to Client by PBM. 7.1.4 Audit Procedures. 7.1.4.1 Any such audit shall be contingent upon Client’s third-party auditor executing PBM’s nondisclosure agreement prior to conducting an audit. 7.1.4.2 No Audit Period may be audited twice unless required by a Governmental Body. An audit performed pursuant to this Agreement shall be the final audit for the Audit Period and for any prior Audit Period unless otherwise agreed to in writing by the Parties; however, Claims may be re-audited if Client is required to conduct an audit by a Governmental Body with which it has a Government Contract. 7.1.4.3 Onsite audits and access to claims processing systems will not be permitted except as otherwise provided herein. 7.1.4.4 Client shall provide to PBM copies of all final audit reports within thirty (30) days of the end or the audit or at the same time as they are made available by the third-party auditor to Client. PBM shall have a minimum of sixty (60) days to review and respond to each audit finding. Client or its respective auditor shall have thirty (30) days to respond to PBM's response to each audit finding. If Client or its respective auditor fails to provide a final audit report within the timeframe set forth above or fails to respond within thirty (30) days of PBM’s response, the audit will be considered closed. 7.1.4.5 Any errors identified and/or amounts identified as owed to Client as the result of the audit shall be subject to PBM’s review and approval prior to initiating any recoveries pursuant to this Agreement. 7.1.4.6 PBM reserves the right to terminate any audit being performed by or for Client if PBM determines that the confidentiality of its information is not properly being maintained or if PBM determines that Client or auditor is not following PBM’s audit policy. 65 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 8 7.1.5 Third-Party Auditors. Third-party auditors must be independent and objective with no breach of PBM’s Confidential Information. Any Client requests for a third-party auditor to audit will constitute Client's direction and authorization to PBM to disclose Client-specific information, including Member information and PHI, to Client’s auditor. PBM will provide Client's auditor with access to all applicable Client-specific information reasonably necessary to determine the accuracy of Claims payments and verify PBM’s performance under this Agreement, subject to PBM's third party confidentiality obligations. 7.2 Audits by Governmental Bodies and Accreditation Organizations. PBM shall allow Governmental Bodies and any applicable accreditation organizations and their respective designees to audit, inspect and evaluate PBM’s records and operations in connection with this Agreement as required by applicable Law. Client shall provide PBM prompt written notice upon learning of any Governmental Body or accreditation organization audit and provide to PBM a copy of the audit request received from the Governmental Body and/or accreditation organization (portions not relevant to PBM may be redacted). PBM shall cooperate with, and provide reasonable assistance to Client, in connection with audits, inspections and/or investigations of Client conducted by Governmental Bodies and accreditation organizations with respect to the Services provided pursuant to this Agreement. 7.3 Audit Costs. Audits shall be conducted at Client’s expense. 7.4 Recoveries. 7.4.1 Overpayment Recoveries Due To Error. In the event of an error by PBM resulting in an overpayment or overcharge of a Paid Claim, PBM shall notify Client and reimburse Client such overpayment, which reimbursement may include but not be limited to Paid Claim adjustments or in the form of a credit on Client’s next invoice. ARTICLE VIII INDEMNIFICATION AND LIMITATION OF LIABILITY 8.1 Indemnification. Each of PBM and Client shall hold harmless, indemnify and defend the other Party, and its directors, officers, shareholders, employees, agents and affiliates, from and against any third- party losses, claims, damages, liabilities, costs and expenses (including without limitation, reasonable attorneys' fees and costs) imposed upon or incurred by the indemnified Party arising out of or as a result of the negligence or willful misconduct of the indemnifying Party or its Vendors or subcontractors in the performance of the obligations under this Agreement. The obligation to provide indemnification under this Agreement shall be contingent upon the Party seeking indemnification: (1) providing the indemnifying Party with prompt written notice of any claim for which indemnification is sought, (2) allowing the indemnifying Party to control the defense and settlement of such claim; provided, however, that the indemnifying Party agrees not to enter into any settlement or compromise of any claim or action in a manner that admits fault or imposes any restrictions or obligations on an indemnified Party without that indemnified Party's prior written consent, which consent will not be unreasonably withheld; and (3) cooperating fully with the indemnifying Party in connection with such defense and settlement. Failure to provide prompt notice as set forth herein, shall only constitute a violation of this Section 8.1 to the extent such failure materially prejudices the indemnifying Party with respect to its obligations to defend and indemnify pursuant to this Section 8.1. 8.2 Limitation of Liability. Each party shall be responsible for its direct damages. In no event shall either Party or any of their respective directors, officers, shareholders, employees, agents, or affiliates be liable for any indirect, special, incidental, consequential, exemplary or punitive damages, or any damages for lost profits, arising out of or related to this Agreement or breach hereof, even if a Party has been advised of a possibility thereof. Additionally, PBM will not be responsible for any claims, losses, or damages sustained as a result of the actions, or inactions, by any Participating Pharmacy, Manufacturers or other Providers pursuant to this Agreement. 66 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 9 8.3 Database Limitations. PBM relies on Medi-Span, First Databank, and/or other industry comparable databases in providing Client with claims adjudication, drug utilization review, and other Services under this Agreement. The data available from PBM through such databases and the Services provided hereunder are limited by the amount, type, and accuracy of information made available to PBM by the databases, Client, Participating Pharmacies, Members, and prescribers. PBM does not warrant the accuracy of the data contained in such databases. The clinical information contained in these databases and the Formulary is intended as a supplement to, and not a substitute for, the knowledge, expertise, skill, and judgment of physicians, pharmacists, and/or other healthcare professionals involved in Members’ care. The absence of a warning for a given drug or drug combination shall not be construed to indicate that the drug or drug combination is safe, appropriate, or effective for any Member. ARTICLE IX DISPUTE RESOLUTION 9.1 Dispute Resolution. The Parties agree that they will use reasonable efforts to resolve any dispute that may arise under this Agreement. For any dispute that cannot be resolved by the Parties in the ordinary course of performing this Agreement, the disputing Party shall submit written notice of the dispute to the non-disputing Party and if the Parties are unable to resolve such dispute within sixty (60) days of receiving the written notice, either Party may, by notice to the other, have such dispute referred to a senior officer of each Party or such other senior employee designated by a Party. Such officers shall attempt to resolve the dispute by good faith negotiation within thirty (30) days after receipt of such notice. If the designated officers are not able to resolve such dispute within such thirty (30) day period, the dispute shall be referred to and finally settled by binding arbitration, as set forth below in Section 9.2. 9.2 Binding Arbitration. 9.2.1 Arbitration. Except as otherwise provided in this section, all disputes that arise from or relate to this Agreement shall be decided exclusively by binding, non-appealable arbitration in New York City, New York under the JAMS Rules, provided, however, the Parties may agree in writing to further modify the rules. The dispute shall be decided by a panel of three (3) arbitrators, who shall be retired or former judges or attorneys with at least ten (10) years of experience in the health care industry, and be mutually acceptable to the Parties. The panel of arbitrators shall be selected as follows: Each Party shall select an arbitrator and the two arbitrators shall together designate a third to serve with them on such panel. The arbitrator panel shall issue a written statement setting forth its decision and reasons therefore. The Parties agree that the arbitrator panel’s award shall be final, and may be filed with and enforced as a final judgment by any court of competent jurisdiction. 9.2.2 Arbitration Costs and Fees. Each Party initially will bear its own attorneys’ fees and its own costs and expenses (including filing fees), and will also bear one half of the total arbitrator’s and other administrative fees of arbitration. 9.2.3 No Power to Alter Agreement. The arbitrator shall have no power to alter any of the provisions of this Agreement. Either Party may seek interim measures of protection concerning any subject matter of the dispute subject to arbitration, including but not limited to interim injunctive relief. ARTICLE X COMPLIANCE 10.1 Compliance with Law. Each Party shall comply with all applicable Laws related to their respective obligations under this Agreement and shall maintain in effect at all times all applicable permits, licenses 67 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 10 and governmental and board authorizations and approvals as necessary for business operations. If a Party's performance under this Agreement is prohibited by or conflicts with any applicable Law, then the Party whose performance is owed or required will be required to perform, but only to the extent permitted by applicable Law. PBM shall have no obligation to advise Client about Client’s compliance with any applicable Law. Client acknowledges and agrees that it is responsible for reporting and remittance obligations with respect to escheatment/unclaimed property Laws (e.g., in connection with returned/uncashed payments related to Members and Participating Pharmacies for amounts directly related to Claims). If this Agreement, or any part hereof, is found not to be in compliance with applicable Law, then the parties shall renegotiate this Agreement for the sole purpose of correcting the non- compliance. 10.2 Compliance with Regulatory Requirements. The Parties agree to comply with the regulatory requirements set forth in Exhibit H (Regulatory Requirements). In the event of a conflict between the provisions contained in Exhibit H (Regulatory Requirements) and any provision elsewhere in this Agreement, the applicable provisions set forth in Exhibit H (Regulatory Requirements) shall control as and to the extent required by Law. 10.3 Accreditation. PBM will maintain at least one of the following accreditations during the Term of this Agreement: (a) National Committee for Quality Assurance (“NCQA”) accreditation; (b) Utilization Review Accreditation Commission (“URAC”) Pharmacy Benefit Management accreditation; and/or (c) such other NCQA certifications and URAC accreditations applicable to the Services provided hereunder. 10.4 Delegated Activities. Exhibit I (Delegation Requirements) sets forth requirements associated with accreditation standards pertaining to PBM’s performance of certain Client-delegated activities under this Agreement. ARTICLE XI RELATIONSHIP OF THE PARTIES 11.1 Exclusivity. During the Term of this Agreement, Client agrees that PBM shall be the sole and exclusive provider and administrator to Client for each of the types of Services described in this Agreement. 11.2 PBM Status. To the extent applicable, Client acknowledges that it or its designee(s) serves as the “plan sponsor, “plan administrator” and “named fiduciary” as those terms are defined in ERISA. Client has all discretionary authority and control over the management of the Plan, and all discretionary authority and responsibility for the administration of the Plan except as otherwise specifically delegated to PBM in this Agreement. PBM does not serve as “plan sponsor’, “plan administrator” or as the Plan’s “named fiduciary.” Client retains all final authority and responsibility for the Plan and its operation and PBM is empowered to act on behalf of Client in connection with the Plan only as expressly stated in this Agreement or as otherwise agreed to by the Parties in writing. Client acknowledges and agrees that neither it nor any Plan intends PBM to be a fiduciary (as defined under state or federal Law, including ERISA), and neither will name PBM or any of PBM’s affiliates as a plan fiduciary. PBM is not an insurer, plan sponsor, provider of health services, or a fiduciary, and PBM shall have no responsibility for: (i) any funding of Client benefits; (ii) any insurance coverage relating to Client, any Plan, or Members; (iii) the nature or quality of professional health services rendered to Members; or (iv) management or disposition of assets of the Plan, if any exist. The Parties acknowledge that PBM, in making decisions regarding the scope of coverage of services under the Plan, is not engaged in the practice of medicine. Upon ninety (90) days written notice (or if such notice is not practicable, as much notice as is reasonable under the circumstances), PBM will have the right to terminate Services to any Plan (or, if applicable, Members) located in a state requiring a pharmacy benefit manager to be a fiduciary to Plan Sponsor, a Plan, or a Member in any capacity. 11.3 Use of Subcontractors. PBM may use Vendors to perform PBM’s obligations under this 68 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 11 Agreement. PBM will be responsible for such Services to the same extent that PBM would have been had it performed those Services without the use of a Vendor. Any reference to a PBM system or process herein may include the system and/or process of a Vendor. 11.4 Performance Outside of the United States. Client acknowledges and agrees that Services may be performed at a location outside of the United States. Services performed at a location outside of the United States shall comply with applicable Law, including HIPAA/HITECH. 11.5 Independent Contractors. Client and PBM are independent entities and nothing in this Agreement shall be construed or be deemed to create a relationship of employer and employee, principal and agent, franchiser and franchisee, joint venturers, or any relationship, fiduciary or otherwise, other than that of independent parties contracting with each other solely for the purpose of carrying out the provisions of this Agreement. 11.6 Insurance. Each Party shall maintain: (a) during, and for a reasonable period of time after the Term, reasonable and customary insurance (whether through third party carriers or self-insured arrangements or retentions), as to type, policy limits and other coverage terms, to cover the risks of loss with respect to the activities in which such Party engages pursuant to this Agreement; and (b) all insurance coverage,bonds, security and financial assurances as required by applicable Law. Each Party shall provide to the other Party evidence of its compliance of the requirements of this section upon request. ARTICLE XII TERM AND TERMINATION 12.1 Term. The Services under this Agreement will be implemented as of January 1, 2024 (“Implementation Date”) and will continue for a period of 3 Years (“Initial Term”), and may be terminated earlier or extended in accordance with the terms of this Article XII (Term and Termination). After the Initial Term, this Agreement may be renewed as follows (each a “Renewal Term”) (the Initial Term and any Renewal Term(s) will be referred to as the “Term”): Following the Initial Term, the Agreement shall automatically renew for additional one (1) year terms, with each Party subject to the same rights, obligations, and duties as applied under this Agreement in Contract Year 3, unless either Party provides written notice of termination no later than ninety (90) days prior to expiration of the Term. 12.2 Termination Without Cause or At Will. After completion of the first year of this Agreement, the Client may terminate this Agreement with or without cause. Any termination under this Section 12.2 requires at least ninety (90) days prior written notice to the PBM and shall not be effective prior to January 1, 2025. 12.3 Termination for Breach. Either Party may give the other Party written notice of a material, substantial and continuing breach of this Agreement (“Breach Notice”). If the breaching Party has not cured the breach within thirty (30) days from the date the Breach Notice was received, the non-Breaching Party may terminate this Agreement. The Parties may agree in writing to extend the cure period beyond thirty (30) days, however such extension period shall not exceed an additional thirty (30) days. 12.4 Termination Due to Impairment. Notwithstanding any other provision in this Agreement, this Agreement may be terminated upon written notice by PBM: (i) if any court or governmental or regulatory agency issues Client an order or finding of impairment or insolvency or issues an order to cease and desist from doing business; (ii) if Client fails to obtain required regulatory approvals in connection with Client and/or the Plan; (iii) if Client makes an assignment for the benefit of creditors, has a voluntary or involuntary petition filed under Title 11 of the United States Code (or any similar statute now or hereafter in effect), or has a receiver, custodian, conservator, or trustee appointed with respect to all or a substantial part of its property; or (iv) if Client has a proceeding commenced against it which substantially impairs its performance 69 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 12 hereunder. This Agreement shall terminate on the effective date of any Governmental Body’s action that prohibits all activities contemplated under this Agreement. 12.5 Obligations Upon Termination. All further obligations of the Parties under this Agreement shall terminate, effective the termination date, except for obligations relating to any rights and obligations of the Parties accruing prior to the effective date of such termination. Client will continue to pay PBM in accordance with this Agreement for Services provided during the Term and any applicable Claims Runout Period. 12.5.1 Notification to Members. In the event this Agreement is terminated, Client is responsible for notifying Members of the procedure to be followed to retain or obtain Plan coverage. 12.5.2 Claims Runout Period. Claims Runout Services shall be provided for the sixty (60) days following the date of termination of this Agreement. During the Claims Runout Period, the applicable terms of this Agreement shall continue to apply as it relates to the processing of Claims. Pricing guarantees set forth in Exhibit D (Retail Pharmacy Network, Mail Order Pharmacy Network and Specialty Pharmacy Network Prescription Drug Claims Pricing) and Rebate guarantees set forth in Exhibit E (Rebate Guarantees) shall not apply during the Claims Runout Period. Pricing guarantees set forth in Exhibit D (Retail Pharmacy Network, Mail Order Pharmacy Network and Specialty Pharmacy Network Prescription Drug Claims Pricing) will be reconciled and paid to Client within ninety (90) days following the date of termination, and Rebate guarantees set forth in Exhibit E (Rebate Guarantees) will be reconciled and paid to Client within twenty-four (24) months following the date of termination. PBM shall have no obligation to process or pay any Claims or forward Claims to Client beyond the Claims Runout Period unless otherwise required by Law. Any amounts recovered beyond the Claims Runout Period shall be retained by PBM as reasonable compensation for Services under this Agreement. PBM shall, however, return any recoveries for which PBM had received monies, but had not processed the recovery prior to the end of the Claims Runout Period. In addition, Client shall have no obligation to reimburse PBM for any amounts paid by PBM due to adjustments to Claims after the end of the Claims Runout Period. The fee for providing Claims Runout Services during the Claims Runout Period, if applicable, is provided in Attachment 1 to Exhibit C (Fees and Compensation). Fees that (i) are associated with Claims processed or reviewed during the Claims Runout Period including without limitation subrogation fees, Claims prepayment analysis fees, recovery fees, network access fees; or (ii) apply to the Term but were not billed during the Term, will also be billed and payable during the Claims Runout Period. Payment is due to PBM in accordance with Section 4.3 of this Agreement. Paid Claims and the fee for providing Claims Runout Services shall be invoiced and paid in the same manner as provided in Exhibit C (Fees and Compensation), unless otherwise provided or agreed to in writing by the Parties. 12.5.3 Formulary. Upon termination of this Agreement, unless mutually agreed to in writing by the Parties, Client shall cease adoption and use of PBM’s Formulary as part of its Plan and agrees that it shall not copy, distribute, or sell PBM’s Formulary. 12.5.4 Transition Plan. Upon notice of termination of this Agreement for any reason, the Parties will mutually develop a transition plan that includes but is not limited to: (i) a schedule of transition activities and timelines for completion; (ii) a detailed description of the respective roles of PBM and Client; and (iii) such other information and planning as necessary to ensure that the transition takes place according to an agreed upon schedule and with minimum disruption to Members. The transition plan shall be subject to written approval by both Parties. PBM will continue filing for Rebates for Claims incurred prior to the termination date and will pay Client Rebates for such Claims in accordance with the Rebate payment schedule set out herein, subject to a final reconciliation of any outstanding amounts owed to PBM. Notwithstanding any other provision of this Agreement, PBM shall not be obligated to provide post-transition services following the transition to the successor pharmacy benefit manager. 70 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 13 12.6 Remedies for Early Termination. If Client terminates before the end of the Term for a reason other than PBM’s material breach under Section 12.3, PBM shall have the right to charge an early termination fee as set forth in Section 2 of Exhibit C. The existence of this right will not preclude PBM from seeking or receiving injunctive and/or other relief and does not give Client termination rights beyond those specified in this Article XII (Term and Termination). 12.7 Change of PBMs. PBM shall not be responsible for any adverse consequences resulting from Client’s decision to terminate this Agreement or to change from one pharmacy benefit administrator to another pharmacy benefit administrator. 12.8 Remedies Not Exclusive. A Party's right to terminate this Agreement under this Article XII (Term and Termination) is not exclusive of any other remedies available to the terminating Party under this Agreement or otherwise, at Law or in equity. 12.9 Survival. The Parties rights and obligations under Articles IV through VI, VIII through X, Sections 12.5, 12.6, 12.7, 13.4, and any other provision which by its nature survives termination, shall survive the termination of this Agreement for any reason. ARTICLE XIII GENERAL PROVISIONS 13.1 Entire Agreement. This Agreement, including all exhibits and attachments hereto (all of which are incorporated herein, constitutes the entire understanding and agreement of the Parties hereto and supersedes any prior oral or written communication between the Parties with respect to the subject matter hereof. 13.2 Amendment. No modification, alteration, or waiver of any term, covenant, or condition of this Agreement will be valid unless in writing and signed by duly authorized representatives of the Parties, except as may be otherwise permitted pursuant to the terms and conditions of this Agreement, including any exhibit or attachment hereto; provided, however, PBM shall be entitled to amend this Agreement without the written agreement of Client as follows: 13.2.1 Upon thirty (30) days prior written notice to Client if the amendment is required for PBM to comply with Law or Governmental Body requirements, and such amendment shall be effective as of the effective date set forth in the amendment. If Client: (a) disagrees with PBM’s interpretation of the applicable Law or Governmental Body requirement and therefore disagrees that the proposed amendment is necessary, or (b) disagrees that the proposed amendment would assure compliance with such applicable Law or Governmental Body requirement, then Client may object to the amendment by written notice not later than fifteen (15) days following Client’s receipt of the amendment. In the event Client fails to object in writing to PBM’s proposed amendment within the fifteen (15) day period, the amendment shall be deemed accepted. In the event PBM timely receives Client’s objection, the Parties shall negotiate in good faith to resolve such objection and the proposed amendment shall not take effect prior to such resolution. If the Parties are unable to resolve the objection, either Party shall be entitled to terminate this Agreement upon thirty (30) days’ written notice, and the proposed amendment shall not take effect. 13.2.2 Government Action. In the event any action of any Governmental Body is initiated (“Action”) against a Party to this Agreement and such Action materially and adversely affects such Party’s performance of its obligations under this Agreement, the affected Party shall notify the other Party in writing of the nature of the Action, and to the extent permitted by Law, provide copies of all documents relevant to the Action. If a modification to this Agreement is needed as a result of the Action, the Parties shall meet within thirty (30) days from the date the notice was sent by the affected Party and shall, in good faith, attempt to negotiate a modification to this Agreement that minimizes or eliminates the impact of the Action. 71 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 14 If the Parties are unable to minimize or eliminate the impact of the Action, then either Party may terminate this Agreement by giving at least ninety (90) days’ notice of termination. This Agreement may be terminated sooner if agreed to by the Parties or required by the Governmental Body initiating or taking the Action. 13.3 Assignment. A Party may not assign, delegate or transfer this Agreement (whether by operation of Law or otherwise) without the prior written consent of the other Party; provided, however, that PBM may assign this Agreement to any affiliate upon thirty (30) days’ written notice to Client. This Agreement will bind the Parties and their respective successors and assigns and will inure to the benefit of the parties and their respective permitted successors and assigns. 13.4 Trademarks. PBM and Client acknowledge and agree that each Party has the sole and exclusive ownership of their respective trade names, commercial symbols, trademarks, and servicemarks, whether presently existing or later established. Except as may be explicitly set forth in this Agreement, nothing herein shall be construed as an implied license by a Party to use the other Party’s name, trademarks, domain names, or other intellectual property. Neither Party shall use the name, trademarks, domain names, or any other name or mark of the other Party in any press release, printed form, advertising or promotional materials or otherwise, without the prior written consent of the other Party. 13.5 Force Majeure. Except for payment obligations, neither Party shall be deemed to be in violation of this Agreement if such Party or Vendor is prevented from performing any of its obligations hereunder for any reason beyond its reasonable control, including without limitation, acts of God, natural or man-made disasters, declared emergencies, epidemic or pandemic, lockouts or labor stoppage, failures or fluctuations in electrical power or telecommunications, acts of any public enemy, statutory or other laws, regulations, rules, orders, or actions of the federal, state, or local government or any agency thereof (“Force Majeure”). 13.6 Waiver. No failure or delay by either Party to exercise any right or to enforce any obligation herein, and no course of dealing between Client and PBM, shall operate as a waiver of such right or obligation or be construed as or constitute a waiver of the right to enforce or insist upon compliance with such right or obligation in the future. Any single or partial exercise of any right or failure to enforce any obligation shall not preclude any other or further exercise or the right to exercise any other right or enforce any other obligation. 13.7 Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under applicable Law, order, judgment or settlement, such provision shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms and will be construed to preserve the intent and purpose of this Agreement. The Parties agree to negotiate in good faith to modify any invalidated provisions to preserve each Party’s anticipated benefits under this Agreement. 13.8 Governing Law. Except to the extent preempted by ERISA or any other applicable provisions of federal Law, this Agreement shall be governed by and construed in accordance with the laws of New York without regard to its conflict of laws and rules. 13.9 Notices. Any notice required to be given pursuant to the terms and provisions of this Agreement shall be in writing and shall be delivered by registered or certified mail (return receipt requested), hand delivery via courier, or overnight delivery with confirmation capability. Notice shall be deemed to be effective: (a) when delivered by hand, (b) upon receipt by registered or certified mail, postage prepaid, (c) on the next Business Day if transmitted by national overnight courier. If to PBM, at the following address: CarelonRx, Inc. 72 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 15 Attention: President 108 Leigus Rd. Wallingford, CT 06492 With copies to: Lead Business Contact: Chief Sales Officer, CarelonRx Lead Attorney: Chief Legal Officer, CarelonRx If to Client, at the following address: City of Ames 515 Clark Ave.____________ Ames, IA 50010___________ ________________________ Either Party may at any time change its address for notification purposes by providing a notice in accordance with this provision, stating the change and setting forth the new address. 13.10 No Third-Party Beneficiaries. This Agreement is solely for the benefit of each Party hereto and their respective successors or permitted assigns. This Agreement is not a third-party beneficiary contract and does not confer any such rights upon any third-party (including, without limitation, any Member). 13.11 Construction. The Parties acknowledge that each Party and its counsel have reviewed and revised this Agreement and that consequently any rule of construction to the effect that any ambiguities are to be resolved against the drafting party is not applicable in the interpretation of this Agreement or any amendments or exhibits hereto. 13.12 Interpretation of Agreement. The headings of articles, sections, and exhibits contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. As used herein, the singular shall include the plural and the plural the singular, and the use of any gender shall be applicable to all genders. Any reference to any federal, state, local or foreign statute or law shall be deemed to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. As used in this Agreement, the word “including” shall mean including without limitation, unless the context requires otherwise. 13.13 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be deemed an original, and all of which together shall constitute one and the same instrument, effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party, it being understood that all Parties need not sign the same counterpart. 13.14 Further Assurances. Each Party represents and warrants that it has the necessary power and authority to enter into this Agreement, and the person signing this Agreement on behalf of either Party has been duly authorized and empowered to enter into this Agreement on behalf of such Party. 73 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 16 IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by affixing the signatures of duly authorized officers. CarelonRx, Inc.City of Ames By:By: Name:Name: Title:Title: Date:Date: 74 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 17 EXHIBIT A DEFINED TERMS 1.1 340B Claims means Claims submitted by 340B Pharmacies for Covered Drugs that price at the 340B price, dispensed to 340B eligible members, pursuant to a dispensing pharmacy’s participation under Section 340B of the Public Health Service Act, 42 U.S.C. §256b. When a Claim is classified as a 340B Claim, it shall be considered a 340B Claim for all purposes under this Agreement (e.g., a Claim classified as a 340B Claim for purposes of Rebates must also be classified as a 340B Claim for purposes of pharmacy pricing). 1.2 340B Pharmacies means Participating Pharmacies contracted with a 340B Covered Entity as defined in Section 340B of the Public Health Service Act to dispense 340B drugs to patients covered under the 340B program in accordance with the HRSA guidelines. 1.3 Administrative Services Fees means the amount per final net paid claim, if any, payable to PBM for the performance of services. Administrative Services Fees are exclusive and separate from any ingredient cost dispensing fees, pharmacy related fees, ancillary service fees, or optional service fees, if any, payable to PBM. 1.4 Annualized Adjusted Prescription Drug Claims means the annualized sum of the total number of: (i) retail Covered Drug Claims with less than 84 days’ supply; (ii) retail Covered Drug Claims with greater than or equal to eighty-four (84) days’ supply multiplied by a factor of 3; (iii) mail order Prescription Drug Claims multiplied by a factor of 3; and (iv) Specialty Covered Drug Claims. 1.5 ASES means ancillary supplies, equipment, and services provided or coordinated by a Specialty Pharmacy in connection with a Specialty Pharmacy’s dispensing of Specialty Drugs. ASES may include all or some of the following: telephonic and/or in-person training, nursing/clinical services, in-home infusion and related support, patient monitoring, medication pumps, tubing, syringes, gauze pads, sharps containers, lancets, test strips, other supplies, and durable medical equipment. The aforementioned list is for illustrative purposes only and may include other supplies, equipment, and services based on the Member’s needs, prescriber instructions, payer requirements, and/or the Specialty Drug manufacturer’s requirements. 1.6 Authorized Generics means prescription drugs that are produced by an innovator (i.e., the brand manufacturer) under a New Drug Application (NDA), or licensed to be produced by a generic company under the New Drug Application (NDA), and are marketed, sold and/or distributed as generics under private label. Further, an Authorized Generic is identical to its brand counterpart in dosage form, safety, strength, route of administration, intended use, active and inactive ingredients and, as applicable, size, shape, color, taste, smell and mouth feel. 1.7 AWP means the “average wholesale price” for a Covered Drug based on the most current pricing information published by MediSpan for the date and time the Covered Drug is dispensed by the pharmacy. The AWP of a Covered Drug will be the AWP unit price as published by MediSpan for the 11 digit NDC. PBM shall not allow adjudication of NDCs of licensed re-packagers where the data source identifies the licensed re-packagers AWP is greater than the original pharmaceutical AWP. PBM shall update AWP data no less than weekly. 1.8 Brand MAC means a Brand Drug that is included on the Maximum Allowable Cost (“MAC”) list and paid at the MAC cost basis. 75 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 18 1.9 Brand Drug or Brand shall mean a Covered Prescription Service that is defined as a by Medi- Span as a “M”, "N", "O", with exception of Authorized Generics. The Parties agree that when a drug is classified as a Brand Drug, it shall be considered a Brand Drug for all purposes under the Agreement, therapeutic classification, pricing and all related Pharmacy performance guarantees. 1.10 Branded Generic Claims means multi-source Brand Drugs that were submitted to Client at the Generic Drug cost. 1.11 Business Associate Agreement means the agreement set forth on Exhibit G (Business Associate Agreement). 1.12 Business Day means all days except Saturday, Sundays, and federal holidays, and other holidays mutually agreed upon by the Parties. All references to “day(s)” in this Agreement are to calendar days unless “Business Day” is specified. 1.13 Claim(s)means those Claims processed for payment for Members. 1.14 Claims Runout Services means the processing and payment of Claims that are incurred but unreported and/or unpaid as of the date this Agreement terminates. 1.15 Claims Runout Period means the period of time, as specified in Section 12.5.2, that Claims Runout Services shall be provided. 1.16 Client Affiliates means entities affiliated with Client that are participating in the Plan and which, along with Client constitute a single “control group” as that term is used in the Internal Revenue Code. 1.17 Compound Drug means a claim where two or more solid, semi-solid, or liquid medications are mixed together. The end product must not be available in an equivalent commercial form. The product will not be considered a Compound Drug if it is reconstituted or if, to the active ingredient, only water, alcohol, flavoring, coloring, or sodium chloride solutions are added. Compound Drugs shall be priced using the NCPDP D.0 standard which shall capture each ingredient used in the medication. 1.18 Confidential Information means the following: (i) With respect to Client, non-public information about the systems, procedures, methodologies and practices used by Client to run its operations and the Plan and other non-public information about Client; and (ii) With respect to PBM, non-public, trade secret, commercially valuable, or competitively sensitive information, or other material and information relating to the products, business, or activities of PBM or a PBM Affiliate, including but not limited to: (1) information about PBM’s Network, Participating Pharmacy negotiated fees, Participating Pharmacy discounts, and Participating Pharmacy contract terms; (2) information about the systems, procedures, methodologies, and practices used by PBM, PBM Affiliates, and Vendors in performing services such as underwriting, Claims processing, Claims payment, and health care management activities; and (3) combinations of data elements that could enable information of this kind to be derived or calculated. PBM’s Confidential Information also includes information that PBM, PBM Affiliate, or Vendor is obligated by Law or contract to protect, including but not limited to: (1) Social Security numbers; (2) Provider tax identification numbers (TINs); (3) National Provider Identification Numbers (NPIs); (4) Provider names, Provider addresses, and other identifying information about Providers; and (5) drug enforcement administration (DEA) numbers, pharmacy numbers, and other identifying information about pharmacies. 1.19 Cost Share the amount which a Member is required to pay for a Covered Drug in accordance with the plan design. Eligible Member Cost Share includes any coinsurance (the percentage or portion of the cost of care or service that an Member may be obligated to pay for a Covered Drug at the time the care and/or service is provided), copayment/ copay (the fixed dollar amount that an Member may be obligated 76 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 19 to pay for a Covered Drug at the time the Covered Drug is provided), or deductible (the amount of out-of- pocket expenses that an Member is responsible to pay for Covered Drug prior to being eligible to receive benefits from the Client’s prescription drug plan). 1.20 Covered Drug means any drug or product that are included in the U.S. Pharmacopeia and that are required to be dispensed pursuant to a prescription or that are otherwise included on the Formulary (e.g., certain over-the-counter products, devices, and supplies) which are dispensed by a pharmacy and are eligible for reimbursement under this Agreement and the Plan pursuant to the terms of the Plan Documents, and shall include all services usually and customarily rendered by a pharmacy in the normal course of business. 1.21 Dispensing Fee means the service fee or amount payable to a pharmacy to cover the cost of dispensing a Covered Drug. The Dispensing Fee is added to the discounted AWP or MAC. No Dispensing Fee is added to the U&C. 1.22 Eligibility File means electronic communication supplied to PBM or its Vendor by Client (or its designee) which identifies the Members covered under the Plan Document, along with other eligibility information required by PBM for PBM to provide Services. 1.23 ERISA means the Employee Retirement Income Security Act of 1974, as amended, and regulations promulgated thereunder. 1.24 FDA means the United States Food and Drug Administration. 1.25 Formulary means the list of pharmaceutical products and supplies, quantity limits, prior authorization guidelines, and clinical guidelines for detailing coverage of such products. 1.26 Generic Drug or Generic shall mean is a Covered Prescription Drug Service , as defined by Medi- Span as a “Y”. Generic Drugs also shall include Brand Drugs that are treated as “house” generic drugs (DAW5) by the Network Pharmacy, Single Source Generic Drugs, and Authorized Generics. The Parties agree that when a drug is classified as a Generic Drug, it shall be considered a Generic Drug for all purposes under the Pharmacy Services Schedule, therapeutic classification, pricing and all related Pharmacy performance guarantees. 1.27 Government Contract means any contract between Client and a Governmental Body. 1.28 Government Reimbursement Claims means Claims submitted by any Governmental Body or person or entity acting on behalf of a Governmental Body under Medicaid, Medicare, or similar federal or state government health care programs for which Client is deemed to be the primary payer as defined by applicable Laws. 1.29 Governmental Body means any government or quasi-governmental entity or municipality or political or other subdivision thereof, whether federal, state, city, county, regional, local, provincial, foreign, or multinational, or any agency, district, division, department, board, self-regulating authority, bureau, branch, commission authority, official, or instrumentality of any of the foregoing, or any court, tribunal, or arbitrator, including the U.S. Department of Health and Human Services, the U.S. Comptroller General, Centers for Medicare and Medicaid Services, and the State Departments of Health and Insurance, or applicable state licensing boards. 1.30 HIPAA means the Health Insurance Portability and Accountability Act of 1996, as amended, including by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), and the regulations promulgated thereunder, including but not limited to the transaction code, security 77 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 20 standards, and patient privacy rules, each as may be modified, amended, supplemented, renumbered, revised, and interpreted from time to time. 1.31 Home Infusion Claims means a Claim submitted by a Home Infusion Pharmacy. For purposes of this definition, a Home Infusion Pharmacy shall mean: (a) a duly and appropriately licensed pharmacy that satisfies the requirements as set out in 42 C.F.R.§ 423.120(a)(4) and that is contracted with PBM or a PBM’s Vendor; and (b) is identified by a National Council for Prescription Drug Program’s (NCPDP) dispenser type code of 6. 1.32 Identification Card means a card that is used by Members as a method of identifying themselves to the Participating Pharmacies as eligible for coverage under the Plan. 1.33 Ingredient Cost means mean the component of the price that represents the cost of the Covered Drug, excluding the Dispensing Fee and taxes. 1.34 Law means any and all international, federal, state, and local act, statute, law, code, ordinance, rule, regulation, standard, or order, licenses, permits, or sub-regulatory guidance promulgated by any Governmental Body with jurisdiction over a Party; any requirements under a Government Contract applicable to a Party, this Agreement or the Services provided hereunder; and any guidance or requirements of any Governmental Body in whatever form, including any requirements, instructions, policies, and guidance, as interpreted and required by a Governmental Body with jurisdiction over a Party. 1.35 Limited Distribution Drug means a drug on the Specialty Drug pricing list that is supplied by a limited number of Specialty Service Pharmacies as determined by the drug manufacturer on the Specialty Drug pricing list. Multiple Specialty Service Pharmacies wholly owned by an entity or affiliated shall be considered one pharmacy for purposes of this definition. 1.36 Long Term Care (LTC) Claim means a Claim submitted by a LTC Pharmacy. For purposes of this definition, a LTC Pharmacy shall mean a Retail Pharmacy that primarily dispenses Covered Drugs to Members residing within an intermediate or skilled nursing facility and is identified by a NCPDP dispenser type code of 4. 1.37 Mail Order Pharmacy means a duly licensed pharmacy that primarily dispenses prescriptions (but not primarily Specialty Drugs) through mail delivery service that is contracted with and/or owned or operated by PBM. 1.38 Manufacturer means a pharmaceutical, biotech, medical equipment, or medical device manufacturer, and/or any other entity that performs sales, distribution, and/or marketing functions (including wholesalers and distributors) with respect to any such manufacturer’s products. 1.39 Manufacturer Administrative Fees means amounts received by PBM directly or indirectly through its Vendor from Manufacturers for administering, allocating, and collecting Rebates that are attributable to Covered Drugs. 1.40 Manufacturer Service Fees means amounts received by PBM directly or indirectly through its Vendor from Manufacturer for providing certain services which include but are not limited to Provider and Member education programs that promote clinically appropriate and safe dispensing and use of Covered Drugs. Such amounts shall not be considered Rebates. 78 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 21 1.41 Maximum Allowable Cost or MAC means the unit price that has been established by PBM for a Brand Drug or Generic Drug included on PBM's MAC list, which may be amended from time to time by PBM. 1.42 Member means a person covered under any of the Client's prescription drug plans. 1.43 Member Pay the Difference Claims are those where the Plan’s benefit structure requires the Member to pay a penalty to a Provider for a Covered Drug when the Member or the Member’s Provider requests that a Brand Drug be dispensed when a Generic Drug is available. 1.44 Member Submitted Claim means a manual/paper claim submitted by an Eligible Member for Covered Product dispensed by a pharmacy for which the Eligible Member paid cash. 1.45 Multi-Source Brand Drug shall mean a Brand Drug that is no longer subject to patent exclusivity and is available in both brand and generic form from more than one manufacturer or labeler. 1.46 Network means the network of Participating Pharmacies. 1.47 Non-Specialty Drug means a Covered Drug that is not a Specialty Drug. 1.48 Out-of-Network Claims means a Claim submitted by a non-Participating Pharmacy. 1.49 Paid Claim means a Claim that was adjudicated on behalf of Client, including Client paid and Member paid Claims, as applicable. Paid Claims shall not include any duplicate Claims, denied or reversed Claims or Claims that have been rejected, withdrawn, or otherwise backed out of PBM’s claims processing system. With respect to any Paid Claim, if the Paid Claim is adjusted in any way, the Paid Claim shall constitute only one Paid Claim. 1.50 Participating Pharmacy Mail Order Pharmacy, Retail Pharmacy or Specialty Pharmacy or other facility that is duly licensed to operate as a pharmacy at its location and to dispense Covered Drugs to Members and has entered into a Participating Pharmacy Agreement with PBM or its Vendor to dispense Covered Drugs to Members. 1.51 Participating Pharmacy Agreement means the contractual arrangement between PBM and/or its Vendor and a Participating Pharmacy whereby the Participating Pharmacy agrees to dispense Covered Drugs to Members for a negotiated price. 1.52 PBM Affiliate means an entity controlling, under common control with or controlled by PBM. 1.53 Performance Guarantees shall mean performance standards/service levels, their corresponding amounts at risk, and the terms and conditions set forth in Exhibit F (Operational Performance Guarantees). 1.54 PHI or Protected Health Information shall have the meaning given to such term by HIPAA. 1.55 Plan means the health benefit plan(s) offered or administered by Client pursuant to which Covered Drugs are provided to Members. 1.56 Plan Documents means the documents that set forth the terms of the Plan as provided by Client to PBM. 79 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 22 1.57 Powder Claims means Claims for Covered Drugs where the dosage form, as identified by Medi- span database or other nationally recognized pricing source selected by PBM in its sole discretion from time to time, is powder. 1.58 PMPM means per Member per month. 1.59 Provider means a practitioner or other individual, organization and/or facility that provides health services or supplies within the scope of an applicable license and/or certification. 1.60 Pricing Source means Medi-Span (or other nationally recognized third-party pricing source selected by PBM in its sole discretion from time to time). 1.61 Rebates means any rebate, Manufacturer Administrative Fees and price protection payment associated with such utilization that PBM receives that is contingent upon and related directly to a Member’s use of a Covered Drug during the Term. Rebate does not include any discount, price concession, or other direct or indirect remuneration PBM receives for the purchase of a Covered Drug or for the provision of any products or services to Manufacturer(s). 1.62 Retail Pharmacy means any type of pharmacy other than a Mail Order Pharmacy or Specialty Pharmacy, and includes any independent pharmacies, supermarket pharmacies, chain pharmacies or mass merchandiser pharmacies having a state license to dispense medications to the general public. 1.63 Secondary Claims means Claims where Client is the secondary payer due to coordination of benefits (COB) with one or more other payers. 1.64 Services mean the services described in this Agreement, including Exhibit B (Services), the Performance Guarantees, and any addendum or amendment hereto. 1.65 Single Source Generics means those Generic Drugs that are provided by three or fewer Manufacturers or such Generic Drugs that are in the market with supply limitations or competitive restrictions. 1.66 Specialty Drug means a Covered Drug that: (a) is injected, infused, orally or topically administered, or inhaled for the ongoing treatment of complex, chronic conditions; (b) requires extensive patient education, risk assessment, mitigation strategies, and/or clinical monitoring; (c) may require temperature-controlled shipping or other special handling and careful adherence to treatment; and (d) meets CMS Requirements for placement on the specialty tier of a Medicare Formulary, if applicable. When a drug is identified as Specialty Drug, it shall be considered a Specialty Drug for all purposes, including Eligible Member Cost Share, therapeutic classification, pricing and all related guarantees. 1.67 Specialty Pharmacy means a pharmacy network or individual pharmacy that primarily dispenses Specialty Drugs and provides specialty services. 1.68 Starter Fills means a prescription dispensed to members who are initiating treatment on select medications for which the days’ supply is typically limited to two (2) weeks or less. 1.69 Subrogation Claims means a claim submitted by any state or a person or entity acting on behalf of a state under Medicaid or similar United States or state government health care programs, for which the Client is deemed to be the primary payor by operation of applicable federal or state laws. 80 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 23 1.70 Tax(es)means any applicable sales, use, excise, or other similarly assessed and/or administered tax, surcharge, and/or fees imposed on PBM, a Participating Pharmacy, or Vendor by a Governmental Body related to Services hereunder. 1.71 United States means the fifty (50) states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and all other U.S. territories and possessions unless otherwise specified in a written agreement between PBM and Client. 1.72 U&C means the lowest price, including any Dispensing Fee, a pharmacy would charge a customer without any insurance coverage if such customer were paying cash for the identical drug on the date dispensed. This includes any applicable discounts, including but not limited to, senior discounts, frequent shopper discounts, and other special discounts offered to customers. 1.73 Vaccine means a product that stimulates a person’s immune system to produce immunity to a specific disease, protecting the person from that disease. Vaccines are usually administered through needle injections, but can also be administered by mouth or sprayed into the nose. 1.74 Vendor means a person or entity, including a PBM Affiliate, providing services or supplies for the Plan pursuant to a contract with PBM. 81 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 24 EXHIBIT B SERVICES Unless otherwise agreed to by the Parties, commencing on the Implementation Date, PBM will provide the following Services set forth in this Exhibit B (Services) in accordance with the terms of the Agreement. 1.Claims Processing. 1.1 Claims Processing. PBM shall perform claims processing services for Client in accordance with PBM’s standard claim processing policies and procedures. PBM will pay, on Client's behalf, only Claims that are: (1) timely submitted by Participating Pharmacies through PBM’s point-of-sale service system; and (2) properly submitted by Members as requests for reimbursement for Covered Drugs. Client may request that PBM, on an exception basis, to process and pay Claims that were denied by PBM. PBM may process requests subject to system override capability and payment by Client of an additional processing fee as set forth in this Agreement or otherwise set by PBM at the time of the request. PBM shall not be responsible for any liability associated with any act or omission undertaken at the direction of, or in accordance with, instructions received from Client. 1.2 Administrative Overrides. PBM will implement and process administrative overrides (e.g., requests for lost/stolen drugs and vacation supplies) consistent with the Plan Documents. 1.3 Payment to Members and Participating Pharmacies. PBM will disburse to Member and Participating Pharmacies payments that it determines to be due according to the Plan Documents, Participating Pharmacy Agreements, and this Agreement. 1.4 Member Submitted Claim Denials. In the event PBM denies a Member Submitted Claim, PBM will provide notice in writing of the denial (including, if applicable, denial a prior authorization request), which notice shall set forth the reasons for the denial and the right to a full and fair review of the denial under the terms of the Plan as and to the extent required by applicable Law governing the notice of a denied Claim. 1.5 Government Reimbursement Claims. Client acknowledges that Governmental Bodies and/or their agents may seek eligibility or similar data from PBM regarding Members. Additionally, Governmental Bodies and/or their agents may submit to PBM Government Reimbursement Claims. Client authorizes PBM to provide such data as requested by Governmental Bodies or their agents and further authorizes PBM to process and pay such Government Reimbursement Claims. Client acknowledges that PBM may advance payment for Government Reimbursement Claims on behalf of Client. Client will reimburse PBM, in accordance with Client's payment obligations under this Agreement, for all amounts advanced by PBM for payment of Government Reimbursement Claims. Government Reimbursement Claims may be paid regardless of the format of the Government Reimbursement Claim, failure to present proper documentation at the point-of sale, or other procedural Plan requirements. Client shall also reimburse PBM for any adjustments or reconciliations to previously processed Government Reimbursement Claims that may be payable to Governmental Bodies in accordance with applicable Laws. 1.6 Coordination of Benefits. PBM will provide pharmacy coordination of benefit services for the fee set forth in Attachment 1 to Exhibit C (Fees and Compensation). Client shall be responsible for providing other party insurance liability information for Members on its Eligibility File. If the Eligibility File provided by Client indicates that coverage under this Agreement is deemed secondary, the Member Claim will reject at point of sale and instruct the Member to submit the Claim to the third party payer that is deemed primary. PBM shall coordinate benefits with the third party payers as appropriate. 2.Network Pharmacy Services. 82 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 25 2.1 Network Access. PBM will provide Client access to a Network of Participating Pharmacies through which Members may obtain Covered Drugs. If a Member obtains a Covered Drug from a pharmacy that is not in the Network, the Member shall be responsible for the total cost of the Covered Drug as defined under the Member’s out of network benefit. 2.2 Network Composition/Changes. PBM shall determine, in its sole discretion, which pharmacies shall be in the Network, and the composition of the Network may change from time to time. Client acknowledges that the availability of Covered Drugs is subject to market conditions and that PBM cannot, and does not, assure the availability of any Covered Drug from a Participating Pharmacy. 2.3 Participating Pharmacy Credentialing. PBM will establish and maintain credentialing criteria, requirements, and processes applicable to Participating Pharmacies in compliance with applicable Law. PBM shall require each Participating Pharmacy to comply with network participation requirements and to be duly licensed in accordance with applicable Laws in the state or other jurisdictions in which the Participating Pharmacy dispenses Covered Drugs. 2.4 Participating Pharmacy Audits. PBM and/or its Vendors performs routine periodic onsite and field audits not related to any specific client of certain PBM-selected Participating Pharmacies to verify compliance with the terms and conditions of the Pharmacies’ Participating Pharmacy Agreements. In the event one of PBM’s routine audits results in a recovery due to Client, PBM will apply one hundred percent (100%) of the amounts PBM recovers, minus a 0.00% recovery fee as a credit to invoices. These audits are separate and distinct from daily claims review audit, for which there is no additional fee and is included in the list of services offered as part of the Administrative Service Fee as set forth on Exhibit C (Fees and Compensation). Client may reasonably request an audit of specific Participating Pharmacies. In the event Client requests such an audit, Client will be financially responsible for all expenses incurred by PBM. 2.5 Member Hold Harmless. Pursuant to the terms of the Participating Pharmacy Agreement, Participating Pharmacies shall be prohibited from charging, collecting a deposit from, or having any recourse against a Member for the Covered Drugs other than applicable Cost Shares, including in the event of breach of this Agreement by Client or insolvency of Client. This provision shall survive the termination of this Agreement for any Covered Drug provided to a Member prior to such termination. 2.6 Pharmacy Help Desk. PBM shall operate a toll-free call center (“Pharmacy Help Desk”) to respond to inquiries from Participating Pharmacies and other providers regarding Services provided by PBM under this Agreement, including technical and Claims processing issues and Member eligibility verification. The Pharmacy Help Desk shall be available twenty-four (24) hours a day, seven (7) days a week, three hundred sixty-five (365) days a year. 2.7 Relationship to Participating Pharmacies. Client acknowledges and agrees that, except for Participating Pharmacies that are owned and/or controlled by PBM, Participating Pharmacies are independent contractors and not subcontractors or agents of PBM, and PBM does not exercise control over the professional judgment of any pharmacist dispensing prescriptions or otherwise providing pharmaceutical related services at a Participating Pharmacy. Nothing in this Agreement shall be construed to supersede the dispensing pharmacist’s professional judgment with regard to dispensing or refusal to dispense any Covered Drug to a Member. Client agrees that PBM shall have no liability to Client or any Member for a claim resulting from any act or omission of any Participating Pharmacy or its agents or employees, and PBM shall not be held liable or responsible for the accuracy, efficacy, or timely receipt of Covered Drugs, prescription orders, or any other directions issued by Providers to supply Covered Drugs to a Member. 83 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 26 3.Mail Order Pharmacy Services. 3.1 Mail Order Pharmacy Services. PBM shall offer Client a program through which Members may receive Covered Drugs through a Mail Order Pharmacy. PBM shall provide the information and forms for Members to obtain Covered Drugs through a Mail Order Pharmacy. 3.2 Mail Order Pharmacy Fulfillment. The Mail Order Pharmacy shall dispense new and refill prescription orders for Covered Drugs upon receipt from a Member of (i) a valid prescription order and (ii) the applicable Cost Share. The Covered Drug shall be mailed or shipped to the designated Member address so long as such address is within the United States, a United States territory or an APO/FPO address, subject to applicable requirements. Additional fees for express mail, shipping or handling may be charged to Members. Subject to applicable Law, PBM reserves the right to suspend such services to a Member if Member fails to remit any applicable Cost Share due, and take any appropriate action to collect such amounts due. 3.3 Retail Pharmacy Delivery Services. PBM may offer Client a program through which Members may receive delivery of Covered Drugs by a Retail Pharmacy to the Member’s home or residence. For purposes of clarification, delivery of Covered Drugs does not include mailing or shipping Covered Drugs to Members utilizing the United States Postal Service and/or other common shipping carrier, including FedEx and/or United Parcel Service. PBM shall provide the information and forms for Members to obtain retail delivery of Covered Drugs. Client will not be held responsible for unpaid Member balances. Increases in shipping and handling or postage will not result in any increases in fee or other pricing components. 4.Specialty Pharmacy Services. 4.1 Specialty Pharmacy Services. PBM shall offer Client a Specialty Pharmacy program through which Members may receive Specialty Pharmacy services. PBM shall provide necessary information to enable Members to obtain these Specialty Pharmacy services. If Client is participating in PBM’s “Exclusive Specialty Pharmacy Program,” Members may receive designated Specialty Drugs exclusively from the Specialty Pharmacies and not from any other Participating Pharmacy. If Client is participating in PBM’s “Open Specialty Pharmacy Program,” Members may receive Specialty Drugs from any Participating Pharmacy. 4.2 Specialty Pharmacy Fulfillment. The Specialty Pharmacy shall dispense new and refill prescription orders for Specialty Drug upon receipt from a Member of (i) a valid prescription order and (ii) the applicable Cost Share. The Specialty Drug shall be mailed to the designated Member or Provider address so long as such address is within the United States, a United States territory or an APO/FPO address, subject to applicable requirements. Additional fees for express mail, shipping or handling may be charged to Members. Subject to applicable Law, PBM reserves the right to suspend such services to a Member if Member fails to remit any applicable Cost Share due, and take any appropriate action to collect such amounts due. 4.3 New Specialty Drugs. PBM will periodically notify Client of Specialty Drugs added to or deleted from the Specialty Drug List, which notice shall be sent no more frequently than monthly. 4.4 Ancillary Supplies, Equipment, and Services. For Specialty Drugs filled through a Specialty Pharmacy only, Members may receive the following services from a Specialty Pharmacy, depending on the particular therapy class or disease state: ASES; patient intake services; pharmacy dispensing services and/or social services (patient advocacy, hardship reimbursement support, and indigent and patient assistance programs). Subject to applicable prior authorization requirements and at the rates set forth in Exhibit C (Fees and Compensation), PBM will provide or coordinate ASES for Members through Specialty Pharmacies or other Vendors of ASES when ASES is required. PBM may engage a 84 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 27 Vendor to provide ASES. PBM does not direct or exercise any control over such Vendor in administering Specialty Drugs or otherwise providing ASES. In the event that ASES is provided or coordinated in connection with the dispensing of Specialty Drugs at Participating Pharmacies (excluding Specialty Pharmacies; e.g., limited distribution products not then available through Specialty Pharmacy or overrides), the cost, if any, may be billed to Client at the cost charged to PBM, unless such ASES provided or coordinated are included in the Ingredient Cost of the Specialty Drug. 5.Formulary Management. 5.1 PBM Formulary. PBM will furnish and maintain its Formulary for use with the Plan, which may be updated by PBM periodically. Client adopts PBM’s Formulary as part of the design of the Plan. Upon request by Client or Member, the Formulary will be promptly provided in a mutually acceptable format for distribution by Client to Members. PBM will provide Client notification and a list of impacted Members resulting from negative Formulary changes no later than 60 days prior to change, and impacted Members will be notified no later than 30 days prior to change. Notification will not be provided for changes provided by Medispan or PBM’s Vendor (e.g. when the Brand/Generic indicator of a drug changes to Multi-Source Brand). 5.2 Formulary Notifications. Except as otherwise mutually agreed to by the Parties, PBM will notify Members and Client of any removal of a Covered Drug from Formulary, in accordance with such time period required by Law. 5.3 Formulary Exception. In the event a Member or Provider believes that a Covered Drug or supply not included on the Formulary is medically necessary to treat a specific Member’s individual condition, the Member or Provider may submit a written request to PBM requesting a Formulary exception. When making a Formulary exception determination, PBM may consider a variety of factors which include, but are not limited to, prescription drugs previously tried and failed by the Member to treat a particular diagnosis or condition, whether the Member is clinically stable on the prescription drug, and/or whether switching to a Covered Drug would result in a clinically significant adverse reaction or other harm to the Member. 6.Utilization and Clinical Management Programs. 6.1 Concurrent Drug Utilization Review (“DUR”) Services. PBM will provide its concurrent drug utilization program that assists Participating Pharmacies in identifying potential drug interactions, incorrect drug dosage, and clinical abuse/misuse. The DUR program utilizes real-time Member health and safety protocols designed to monitor and screen each Claim against the Member’s prescription drug profile and is designed to help promote appropriate Covered Drug use and help prevent adverse Member reactions. 6.2 Utilization/Clinical Management Programs. PBM offers additional programs and services to help ensure clinically appropriate use of Covered Drugs and to effectively manage the cost of care that may include drug edits (e.g. prior authorization, step therapy, quantity limits, and dose optimization), enhanced fraud waste and abuse program, and medication review. Client shall pay the applicable fees for any additional programs selected by Client in accordance with Exhibit C (Fees and Compensation) and shall furnish any information requested by PBM prior to PBM initiating the additional programs/services. Client shall comply with all applicable requirements, policies, and procedures of the programs/services selected, including without limitation providing PBM-requested information prior to PBM initiating the program/service. 6.2.1. Prior Authorization. If delegated to PBM by Client, PBM shall perform prior authorization services (“Prior Authorization Services”) in accordance PBM’s applicable policies and 85 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 28 procedures and in compliance with applicable Law. Fees for such Prior Authorization Services are set forth in Exhibit C (Fees and Compensation). PBM will provide Prior Authorization Services as specified and directed by Client for Covered Drugs. Prior authorized drugs must meet PBM-approved guidelines, or as otherwise agreed to by the Parties, before they are deemed to be Covered Drugs. In determining whether to authorize coverage of such drug under the Prior Authorization Services program, PBM will apply Client approved guidelines and may rely entirely upon information about the Member and the diagnosis of the Member's condition provided to it from the prescribing Provider. PBM will not undertake to determine medical necessity, make diagnoses or substitute PBM’s judgment for the professional judgment and responsibility of the prescribing Provider. 6.2.2. Appeals. If delegated to PBM by Client, PBM shall perform first and second level reviews of clinical and administrative appeals by Members of adverse benefit determinations; in accordance with PBM’s policies and procedures, Client’s Plan and applicable Laws. In performing such first and second level reviews, PBM shall not exercise any discretionary authority over the Plan or act as a fiduciary of the Plan. Specific Fees for such reviews, and if selected by Client, reviews by Independent Review Organizations (“IROs”) are set forth in Exhibit C (Fees and Compensation) hereto. 6.3 Pilot Initiatives. PBM may offer from time to time pilot initiatives as part of PBM's ongoing effort to find innovative ways to make available quality and more affordable healthcare services (“Pilot Initiatives”). A Pilot Initiative may affect some, but not all Members under the Plan. Pilot Initiatives will not result in the payment of benefits which are not provided by the Plan, unless otherwise agreed to by Client. PBM reserves the right to discontinue a Pilot Initiative at any time without advance notice to Client. 7.Rebate Administration. 7.1 Rebate Programs. PBM and/or its Vendor has negotiated programs with Manufacturers for Rebates on certain Covered Drugs dispensed to Members (“Rebate Programs”). PBM has entered into such Rebate Programs on its own behalf and not on behalf of Client, and therefore retains all rights, title, and interest to any and all actual Rebates it receives from Manufacturers and/or its Vendor. Such Rebate Programs are not based solely on the Covered Drug utilization of one client or plan, but rather are based on the prescription drug utilization of all individuals enrolled in PBM programs. The Rebates are conditioned on certain Covered Drugs being included on the Formulary. PBM shall pay Client Rebates as described in Exhibit E (Rebate Guarantees). Client acknowledges and agrees that it shall not have a right to interest on, or the time value of, any Rebate payments received by PBM or monies under this Agreement. Further, Client acknowledges and agrees that PBM shall not be obligated to remit Rebates or a Rebate credit to Client unless the Parties have executed this Agreement. 7.2 Rebate Collections. PBM will use reasonable efforts to negotiate and collect Rebates from Manufacturers. PBM shall not be required to institute litigation to collect Rebates from Manufacturers. If PBM or its designee does elect to bring suit to recover Rebates from Manufacturers, PBM shall be entitled to deduct all reasonable attorney’s fees and other expenses incurred in such litigation prior to payment of Rebates to Client. Neither Party shall be responsible to the other Party, its affiliates, directors, employees, agents, successors, or permitted assigns for any claim arising from: (i) any failure by a Manufacturer to pay any Rebates; (ii) any breach of an agreement relating to the transactions contemplated by or otherwise relating to this Agreement by any Manufacturer; or (iii) any negligence or misconduct of any Manufacturer. 7.3 Rebate Exclusivity. During the term of this Agreement, Client shall not contract, directly or indirectly, with a Manufacturer and/or any third-party (e.g.,rebate aggregators and/or intermediaries) for rebates, discounts, or other financial incentives on Paid Claims that are eligible for Rebates under this Agreement. In the event that PBM determines Client has violated this provision, Client shall be deemed 86 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 29 ineligible to earn Rebates, the Rebate Program for Client will be suspended, and Client shall be required to reimburse PBM for any Rebates that were previously earned. If Client fails to reimburse PBM for such Rebates within ten (10) Business Days of PBM’s request, PBM shall have the right to recover said amounts by offsetting such amounts against any amounts PBM owes Client under this Agreement or any other agreement between Client and PBM. Additionally, PBM reserves the right to amend the guarantees and/or any pricing terms of this Agreement in the event Client violates this Section 7.3. 7.4 Rebate Changes. Without limiting rights and obligations set forth elsewhere in this Agreement, Client acknowledges and agrees that Rebates and Rebate guarantees are subject to change for reasons including but not limited to: 7.4.1 Rebate eligibility is modified under an agreement between PBM and/or its Vendor and a Manufacturer; 7.4.2 Laws affecting the distribution or the amount of Rebates available or payable; or 7.4.3 Any action(s) or inaction(s) by Manufacturer that impacts the availability or amount of Rebate earned, that includes, but is not limited to, Manufacturer’s discontinuation of a Covered Drug. If any condition set forth in this Section 7.4 occurs, PBM may provide written notice to Client of the occurrence of such condition and notify Client of the revision to or elimination of such Rebates. PBM reserves the right to amend the financial terms of the Agreement to account for the impact of such reduction or elimination of the Rebate payment in a manner that preserves PBM’s economic position as existed immediately before the effective date such change, including but not limited to a change in the Administrative Services Fee, a change in the percentage of Rebates retained by PBM, a change in the pricing terms outlined in Exhibit D (Retail Pharmacy Network, Mail Order Pharmacy Network and Specialty Pharmacy Network Prescription Drug Claims Pricing) and/or a change in the Rebate guarantees as described in Exhibit E (Rebate Guarantees). 7.5 Rebate Overpayments. In the event that PBM, its Vendor, and/or Manufacturer identifies through audit or other means that Client has received an overpayment or an erroneous Rebate payment, Client shall immediately refund such amounts to PBM. If Client fails to do so, PBM shall have the right to recover said amounts by offsetting such amounts against any amounts PBM owes Client under this Agreement or any other agreement between Client and PBM. 7.6 Anti-Kickback Statute. Rebates paid pursuant to this Agreement are intended to be treated as “discounts” pursuant to the Federal Anti-Kickback Statute set forth at 42 C.F.R. § 1320a-7b and implementing regulations. 8.Pharmacy Services and Benefits During Emergency/Disaster. If a catastrophic event (whether weather-related, caused by a natural disaster, or caused by war, terrorism, or similar event) occurs that affects Members in one or more locations, and such catastrophic event prevents or interferes with PBM’s ability to conduct its normal business with respect to such Members or prevents or interferes with Members’ ability to access their benefits, PBM shall have the right, without first seeking consent from Client, to take reasonable and necessary steps to process Claims and benefits and provide pharmacy benefit management services in a manner that may be inconsistent with the Plan Documents in order to minimize the effect such catastrophic event has on Members. As soon as practicable after a catastrophic event, PBM shall report its actions to Client. Client shall reimburse PBM for amounts paid in good faith under the circumstances and such amounts shall constitute Paid Claims, even if the charges incurred were not for services otherwise covered under the Plan Documents. 87 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 30 9.Account Management. PBM shall make available PBM designated pharmacy account team support, which shall include at minimum, a Pharmacy Account Manager, Pharmacy Program Manager (clinical), and Pharmacy Services Coordinator. Such account management team will timely respond to Client’s requests, inquiries and other communications. 10.Customer Service. 10.1 Customer Service Availability. PBM will make available a (i) toll-free telephone number and interactive voice response (IVR) customer service support 24-hours/day, 7-days/week; and (ii) such other customer service support capabilities as technology advances, including secure email via Client’s portal and website live chat customer service support 24-hours/day, 7-days/week; to respond to and resolve inquiries from Client, Members and their authorized representatives, and prescribers about matters (other than matters PBM must route to Client) related to Member issues, including Member eligibility, benefits verification, Claims processing, Participating Pharmacy location, and Participating Pharmacy access and use. PBM will make available, 24 hours/day, 7-days/week, such telephone customer service support on a live basis staffed with customer service associates trained specific to Client’s Plan Documents and Formulary. PBM will respond to written hard copy inquiries from Members and their authorized representative made via regular mail/fax, email, or other electronic transmission through the Member website about matters related to the Services provided hereunder (other than matters PBM must route to Client). 10.2 Customer Service Performance. PBM will: 10.2.1 provide TDD/TTY services to hearing or visually impaired Members; 10.2.2 make available translation services for Member inquiries to the toll-free number for non- or limited-English speaking Members and their authorized representatives; 10.2.3 track and maintain records of Member inquiries made to the toll-free number, including call arrival through transfer or completion, the reason for the call, first call resolution, and escalated calls; 10.2.4 warm transfer Member calls made to the toll-free number as Client requests that (i) require input or assistance from another Service area or (ii) pertain to a Client function or service not delegated to PBM or delegated to another vendor by Client, in accordance with Plan Documents. 10.2.5 digitally record all Member calls made to the toll-free number and ensure those digital recordings are retrievable for Client as promptly as practicable, but no more than five (5) Business Days after receipt of Client request. 11.Reporting Services. 11.1 Standard Reports. PBM will provide Client with PBM’s standard management and utilization reporting package in connection with the Services provided pursuant to this Agreement. 11.2 Custom and Ad Hoc Reports. At Client’s expense, PBM may prepare and provide custom and ad hoc reports within an agreed-upon time and format, at the rate set forth in Exhibit C (Fees and Compensation) of this Agreement. 11.3 Report Format. Prior to PBM providing data or reports to Client, the Parties must mutually agree to the types, format, content and purpose of the reports requested. 88 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 31 12.Identification Cards. PBM shall issue Identification Cards to Members as applicable. PBM may charge an additional fee for the re-issuance of Identification Cards or custom Identification Cards. 13.Drug Recall/Withdrawal. PBM will provide communications to Client and applicable Members and providers regarding drug recalls or withdrawals. 14. Information Security. PBM engages in periodic security assessments, audits, and/or evaluations of its security program as it relates to the protection of PHI. Consistent with PBM’s information security program, these activities include relevant third party evaluation of PBM’s security program, such as HITRUST CSF assessment and certification. Such reviews also include periodic internal and authorized third party network testing, such as vulnerability scans and penetration tests. 15. Custom Application Programming Interface (API)/IT Programming. At Client’s expense, PBM may provide custom API and/or IT programming support within an agreed-upon time and format, at the rate set forth in Exhibit C (Fees and Compensation) of this Agreement. 89 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 32 EXHIBIT C FEES AND COMPENSATION If there are any inconsistencies between the terms of the Agreement and this Exhibit C (Fees and Compensation), the terms of this Exhibit C (Fees and Compensation) shall control. Section 1.Administrative Services Fees $0.00 Section 2.Ancillary Fees Refer to Attachment 1 to Exhibit C – Ancillary Fee Schedule for all Ancillary Fees PBM Services Early Termination Fee In consideration of the special pricing arrangements under this Agreement, Client shall pay PBM an “Early Termination Fee” (as described in this paragraph) if Client terminates the Agreement before January 1, 2025 for any reason other than termination by Client for material breach under Section 12.2. The Early Termination Fee shall be calculated by multiplying $3.00 PEPM by (i) the average monthly Member count for the six (6) months immediately prior to termination; multiplied by (ii) the number of months remaining in the Term. Section 3.Credits/Allowances PRE-IMPLEMENTATION CREDIT PBM shall provide a credit totaling $15,000.00 to Client for use from January 1, 2024 through December 31, 2024 as a credit to defray applicable implementation costs incurred. This full credit amount only applies if Client’s enrollment does not decrease more than 20% from 1,551 Members on January 1, 2024 and throughout the first contract year, January 1, 2024 through December 31, 2024. In the event that Client’s enrollment drops more than 20% below 1,551 Members, the credit amount shall decrease proportionally. On or after January 1, 2025, if enrollment is more than 20% below 1,551 Members, PBM shall not require that Client refund previously paid credits. For any applicable services outlined below that are provided by a vendor, Client’s written request to PBM for application of credit for vendor’s services must be accompanied by copies of vendor’s invoices to Client. PBM will not reimburse Client’s vendors directly. Services provided by a vendor that is a direct competitor of PBM are not eligible for reimbursement. The credit can be used for the following implementation expenses directly related to transitioning, administering, implementing, and managing the pharmacy benefit: Custom communication services provided by either PBM or an outside vendor; Claim audits; Clinical program fees; Custom reporting; Data feeds; Third-party wellness programs; Implementation expenses; and 90 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 33 Any other implementation expense not referenced above that PBM approves in advance. Personnel expenses, programming expenses that are not directly related to implementation of pharmacy benefits and travel are not reimbursable. Client acknowledges and agrees that PBM will report the payment or credit where required by Law to do so. Client will submit to PBM documentation of Client expenses and costs adequate to support PBM’s reimbursement of those expenses and costs from the implementation credit provided by PBM under this Exhibit C (Fees and Compensation). PBM will reimburse Client from the implementation credit for reimbursable expenses and costs incurred by Client no later than thirty (30) days after PBM’s receipt of substantiated expense and cost documentation and until the implementation allowance is exhausted. Any funds remaining twelve (12) months after January 1, 2024 in the implementation allowance provided by PBM under this Exhibit C (Fees and Compensation) will be retained by PBM. It is the intention of the parties that, for the purposes of the Federal Anti-Kickback Statute, this implementation credit shall constitute and shall be treated as a discount against the price of drugs within the meaning of 42 U.S.C. 1320a-7b(b)(3)(A). To the extent required by Laws or contractual commitment, Client agrees to fully and accurately disclose and report any such discount, rebate, credit or allowance to Medicare, Medicaid or other government health care programs as a discount against the price of the Covered Drugs provided under this Agreement. GENERAL ALLOWANCE Flat Fee - Plan Program Credit. PBM will provide a Plan Program Credit in the amount of $2.00 PMPY for Contract Year 2 and Contract Year 3. The Plan Program Credit is only available from January 1, 2025 through December 31, 2025 for Contract Year 2 and January 1, 2026 through December 31, 2026 for Contract Year 3 and, subject to PBM approval, may be applied towards any documented expenses related to the combination of the following: Plan Communications, Clinical Programs, Pre or Post Implementation Audit, Claims Audit, and Additional Reporting or Data Feeds. The Plan Program Credit does not apply towards programming expenses that are not directly related to administration of pharmacy benefits, personnel expenses, travel, and incentives. Client shall submit all requests for reimbursement under the Plan Program Credit noted above to PBM with documentation of Client expenses and costs no later than thirty (30) days after the close of the then current contract year noted above. PBM shall reimburse Client within thirty (30) days of receipt of Client’s request and supporting documentation. Any funds remaining after the end of each Contract Year may be rolled over to be used for the following Contract Year. Any funds remaining sixty (60) days after the end of the Initial Term or any renewal term of this Agreement will be retained by PBM. It is the intention of the parties that, for the purposes of the Federal Anti-Kickback Statute, this Plan Program Credit shall constitute and shall be treated as a discount against the price of drugs within the meaning of 42 U.S.C. 1320a-7b(b)(3)(A). To the extent required by Laws or contractual commitment, Client agrees to fully and accurately disclose and report any such discount, rebate, credit or allowance to Medicare, Medicaid or other government health care programs as a discount against the price of the Covered Drugs provided under this Agreement. 91 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 34 Section 4.Broker or Consultant Base Compensation Contract Year 2 (January 1, 2025 through December 31, 2025): A Consultant Annual Audit Fee of $55,000.00 shall be paid to the consultant designated by Client within thirty (30) days of receipt of invoice. Contract Year 3 (January 1, 2026 through December 31, 2026): A Consultant Annual Audit Fee of $55,000.00 shall be paid to the consultant designated by Client within thirty (30) days of receipt of invoice. 92 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 35 ATTACHMENT 1 to EXHIBIT C ANCILLARY FEE SCHEDULE Table 1: Fees for Services Item Rate / Charge per Unit General Administration Account management Included at no cost Banking Included at no cost FSA feeds Included at no cost Implementation services Included at no cost Plan design strategy and consultation Included at no cost Pharmacy ID cards Included at no cost Standard communication materials to assist members with enrollment decisions and welcome them to their new plan when they enroll Included at no cost Plan benefit coding, testing and updates Included at no cost Eligibility updates (batch files, 834s, and/or client self-service tools)Included at no cost Access to Client self-service tool for real time eligibility updates, viewing of prior authorization status and viewing or reporting of utilization or other data Included at no cost Paper claims/member submitted claims processing $2.50 per Claim occurrence Standard coordination of benefits – Secondary Claim Processing $2.50 per Claim occurrence Customized communication materials $2.00 per letter Post Termination File Transfer Fee In the event of termination of the pharmacy contract, CarelonRx shall charge a fee of $5,000 per file for requested files including but not limited to open refill, prior authorization, claims history, and accumulators. Refill transfers, prior authorizations, claims history, and account balances files are each allowed a one-time transfer included at no cost. $5,000.00 per file fee applies for each subsequent file. Network Pharmacy Services Pharmacy help desk with toll-free number 24/7 support Included at no cost Pharmacy network management Included at no cost Pharmacy reimbursement Included at no cost 93 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 36 Item Rate / Charge per Unit Standard daily Paid Claims file via Secure File Transfer Protocol Included at no cost Our Fraud, Waste and Abuse (FWA) Services includes two types of Pharmacy Network monitoring and audit capabilities: Daily claims review and reprocessing Included at no cost Pharmacy Network Audit/Investigative & onsite audits 100% of recoveries received are shared less a 0.00% recovery fee to cover associated expenses On-site pharmacy claim processing services No onsite pharmacies included in offer. If identified, $2.50 per on-site Claim. Custom/onsite pharmacy network development and administration Subject to initial set up and ongoing maintenance fees to be determined based on scope Mail Order Services Mail Order Claims processing Included at no cost Mail Order regular mailing or shipping and handling Included at no cost Mail Order call center with toll-free number Included at no cost Benefit education (includes mail order promotion)Included at no cost Retail-to-Mail Order member outreach programs Included at no cost Account Management Services Annual strategic planning with quarterly reviews Included at no cost Centralized administration for payment of claim and administration fees Included at no cost Designated pharmacy account team support, including Pharmacy Account Manager, Pharmacy Program Manager (clinical), Pharmacy Services Coordinator Included at no cost Dedicated account team support Pricing available upon request Remote training for access to online system(s)Included at no cost Member Services Customer service for members with toll-free number, to include language translation services Included at no cost 94 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 37 Item Rate / Charge per Unit Pharmacy customer service call center with toll-free number Included at no cost Member Website Portal (with Single Sign On)Included at no cost Explanation of Benefits (paper)$1.50 per paper EOB Internet Services e-Services for Prescriptions: Intuitive and easy to navigate Included at no cost Language translation services (EOBs)Included at no cost Online explanation of benefits Included at no cost Online health improvement tools and programs Included at no cost Pharmacy look-up Included at no cost Refill a prescription Included at no cost Savings center – compare costs to switch from retail to mail order Included at no cost Search and price a medicine – search drugs by name, therapeutic class or subclass; compare costs and drug details, including price by pharmacy Included at no cost Secure member message center Included at no cost Additional miscellaneous Internet services – view coverage and copayments, obtain an ID card, access drug and health guide Included at no cost Patient, Trend, Quality and Cost-of-Care Management Clinical Prior Authorization program This review focuses mainly on drugs that may have risk of serious side effects or dangerous drug interactions, high potential for incorrect use or abuse, better alternatives that may cost less, or restrictions for use with very specific conditions. $55.00 per occurrence Clinical Pharmacy Review – physician review Certain medications need a higher level of review than a Clinical Prior Authorization and additional information from the prescriber. $800.00 per occurrence Step Therapy Step therapy requires the member to use one medication before benefits for the use of another medication can be authorized. Step therapy ensures members have previously used first-line therapies or have risk factors making the prescribed products inappropriate $0.30 per prescription 95 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 38 Item Rate / Charge per Unit Quantity Limits and Dose Optimization Quantity limits guard against high doses and excessive utilization based on either doses exceeding the FDA or manufacturer recommended maximum daily doses or limiting short-term medications to a certain number of fills over a defined period of time. $0.55 per prescription Concurrent Drug Utilization Review (DUR) Concurrent DUR program utilizes point-of-service safety edits (for Specialty and non-Specialty Products) to monitor: -Clinical appropriateness -Medication safety -Duplicate claims -Duplicate prescriptions -Refill frequency (refill-to-soon) -Maximum dispensing limitations -Cost and quantity inconsistency Included at no cost Retrospective Drug Utilization Review programs Retrospective safety review within 72 hours of adjudication Included at no cost Cost-of-Care programs Formulary management – outcomes-based formulary Included at no cost Generic Drug Management Preferred Generics – members pay brand copay plus the cost difference when a generic is available but a brand is selected Included at no cost Vaccine Program Fee $2.50 per occurrence Prescription Drug Discount Card Program for Non-Covered Drugs Allows members to purchase certain medications not covered under their plan at a discount Included at no cost Specialty Drug Accumulator Rules The specialty drug accumulator rules help prevent non-needs-based manufacturer copay assistance program funds from counting toward member deductibles and out-of-pocket maximums, ensuring that only the member’s true out of pocket is reflected against their plan and keeping the integrity of the plan design intact. Included at no cost ZipDrug: ZipDrug delivers a personalized pharmacy care experience by providing a platform for matching members to best local preferred pharmacies with the highest adherence scores, free home delivery and other optional services. $0.70 per prescription 96 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 39 Item Rate / Charge per Unit Combines a proactive member outreach program with targeted benefit changes for maintenance medications to ensure that members and ASO clients receive the lowest possible cost for maintenance medications on the Pharmacy Benefit. Members pay $0 out of pocket for their medication, and clients can achieve up to 25% savings off of their total pharmacy benefit spend. Savings are highly dependent upon existing benefit design and how much copay assistance is currently being captured by a given client and its members. Clinical publications (i.e. pipeline reports, emerging trends, drug monographs, etc.)Included at no cost Clinical program member letters (production and shipping to members/Client) Standard communications for PBM clinical programs are included when the communication is required. Cost Share Reduction Plans Included at no cost Opioid Overutilization Intervention Data Files Data analytics, reporting, and system edit capabilities (including POS edits and messaging) in identifying members receiving outlier quantities of opioid medications, based on cumulative morphine equivalent doses over time Included at no cost Medication Savings Note: Using evidenced based guidelines coupled with clinical pharmacist review, this solution identifies opportunities to help improve medication use or a more cost effective therapy without compromising clinical outcomes. This daily retrospective DUR permits earlier interventions, often before the prescription is actually obtained by the Member, resulting in less Member disruption and optimal medication appropriateness while reducing medication spend. These interventions are recommendations and will not prevent the Member from obtaining their originally prescribed medication. $0.25 PMPM CarelonRx Cost Relief Program: The CarelonRx Cost Relief Program combines a proactive Member outreach program with targeted benefit changes for specialty medications to ensure that Members and Client receive the lowest possible cost for specialty medications on the pharmacy benefit. Members pay $0 out of pocket for their medication, and Client can achieve up to 25% savings off of their total pharmacy benefit specialty spend. In order for Client to be eligible for the Cost Relief Program, Client must have the Exclusive Specialty network with no grace fills and the elected formulary. CarelonRx Cost Relief Program is not 25.00% of the Shared Savings. Shared Savings means the amount PBM collects from pharmaceutical manufacturers through the CarelonRx Cost Relief Program multiplied by a discount factor of 12.50%. The discount factor reflects the average amount of copay assistance dollars that would have been achieved without the CarelonRx Cost Relief Program in place. 97 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 40 Item Rate / Charge per Unit compatible with the point of sale Rebates product. Client must allow for coordination of benefits processing. Reporting Services Clinical savings reports Included at no cost Standard reporting Included at no cost Web-based client reporting Included at no cost Custom reporting $150 per hour of time needed to generate a custom or ad-hoc report. Client Reporting: PMPM Fee by Packages Base Package Access to RxGuide (unlimited) Included at no charge. All custom reporting requests will be charged $150.00 per hour of time needed to generate a customized ad hoc report. Enhanced Package Access to RxGuide (unlimited) Up to 10 licenses to online adhoc report library Quarterly PBR available through account manager Unlimited monthly Claims extracts Unlimited access to vendor drug data (Medispan AWP) Unlimited ad hoc reporting hours Medispan license via CarelonRx available for $15,000 annual flat fee $0.12 per prescription Medispan license available through PBM for $15,000 flat fee; not included in $0.12 per prescription base price Customized reporting beyond allotted hours in above packages $150.00 per hour Specialty Pharmacy Services Comprehensive specialty pharmacy and individualized member support services Included at no cost Specialty pharmacy call center with toll-free number Included at no cost Specialty pharmacy claims processing Included at no cost Specialty pharmacy regular shipping and handling Included at no cost Therapy-specific counseling Included at no cost Additional Services and Programs 98 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 41 Item Rate / Charge per Unit Subrogation Included at no cost Cost Share Reduction (CSR) True Up Included at no cost Custom/Ad-hoc requests $150 per hour of time needed to generate a custom or ad-hoc report. Advanced Premium Tax Credit (APTC) POS coding that allows claims to pay at a discount if the member is behind in their payment of premium Charges vary based on complexity and scope Utilization of Custom drug lists (Specialty, MAC etc.)Pricing is based on the use of PBM’s specialty drug and MAC drug price lists Underwriting Support Underwriting strategy and analytics to support Client’s current and prospective clients, including repricing reports, geo-access reports and RFP support. Fees to be mutually agreed upon once scope of support is fully defined. Healthcare Reform Exchange Fees Fees will be determined based on scope and customization Other Exchange Fees Fees will be determined based on scope and customization Claims data transmission to third party vendors Included at no cost for standard data file layouts. Additional fees may apply depending upon level of customization or frequency required Custom/Ad hoc letters $2.00 per letter Member Communications for the following programs: Non-FDA approved drug block Re-labeler program Safety Communications /Drug Recalls and Withdrawals New Implementation Formulary Disruption Letters Commercial Formulary Member Notifications (includes Newly Available Generic Notification when required by law) $1.30 per letter Controlled Substance Utilization Management (CSUM) Retrospective—Monitors overuse of controlled substances Included at no cost Member Medication Review and Provider Highlights - Message Members and Prescribers to close care gaps, improve adherence, and communicate cost saving opportunities. Targets the most prevalent chronic conditions including Diabetes, Cardiovascular, Respiratory, Depression, and ADHD. $0.25 per prescription Diabetes Polypharmacy Pricing available upon request 99 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 42 Item Rate / Charge per Unit CarelonRX pharmacists outreach to diabetic members prescribed 11 or more medications to counsel and identify gaps in care. Members identified for inclusion in the program will benefit from: o Comprehensive medication review by a pharmacist o Regular monitoring for adherence, gaps in care and appointment reminders o Provider and/or member outreach as needed. Improved Outcomes: o Change in drug regimens as appropriate o Reduce gaps in care and improve medication adherence o Drive savings with a decrease in adverse heath events, ER visits and hospital admissions Behavioral health medications bundle (2 versions of program--with or without adherence rules) CarelonRX offers a suite of evidenced based clinical rules developed to support the monitoring and management of safe and appropriate use of psychotropic medications. • Antipsychotics • Antidepressants • Anxiolytics • Sedative Hypnotics • ADHD meds Polypharmacy/Overutilization, Gap in Care/Monitoring, Drug Interaction, Therapy Appropriateness, Dose Optimization (low dose, high dose), High Risk Medication use in elderly, Continuity of Care risk, Prolong/Overuse, New start medication education and Medication Adherence. Medication Adherence programs include live and automated phone call reminders for overdue care, in addition to direct outreach to both members and providers Pricing available upon request Pharmacy Home Identifies members who may be over-utilizing controlled substances, prescription cascading, or doctor/pharmacy shopping. Members that meet defined criteria are restricted to the designated home pharmacy. Included at no cost 100 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 43 EXHIBIT D RETAIL PHARMACY NETWORK, MAIL ORDER PHARMACY NETWORK AND SPECIALTY PHARMACY NETWORK PRESCRIPTION DRUG CLAIMS PRICING The pricing terms and conditions set forth in this Exhibit D (Retail Pharmacy Network, Mail Order Pharmacy Network and Specialty Pharmacy Network Prescription Drug Claims Pricing) will be effective on a Contract Year basis for the following Contract Years: Contract Year 1: 1/1/2024 through 12/31/2024 Contract Year 2: 1/1/2025 through 12/31/2025 Contract Year 3: 1/1/2026 through 12/31/2026 1.Pricing Guarantees Contract Year 1 Contract Year 2 Contract Year 3 Base Retail Network Non-Specialty Drugs Filled at Retail Pharmacies Brand AWP Discount (Per Paid Claim)AWP – 19.65%AWP – 19.75%AWP – 19.85% Brand Dispensing Fee (Per Paid Claim)$0.40 $0.40 $0.40 Generic Effective Discount AWP – 86.50%AWP – 86.60%AWP – 86.70% Generic Dispensing Fee (Per Paid Claim)$0.40 $0.40 $0.40 Base Retail 90 Extended Days’ Supply Retail Network* Brand AWP Discount (Per Paid Claim)AWP – 22.50%AWP – 22.60%AWP – 22.70% Brand Dispensing Fee (Per Paid Claim)$0.00 $0.00 $0.00 *applies to non-specialty brand drugs; extended days’ supply generics are included in the non-specialty network guarantees listed above. Mail Order Pharmacy (Optional) Brand AWP Discount (Per Paid Claim)AWP – 24.65%AWP – 24.65%AWP – 24.65% Generic Effective Discount AWP – 88.25%AWP – 88.35%AWP – 88.45% Dispensing Fee (Per Paid Claim)$0.00 $0.00 $0.00 Specialty Pharmacy –(Exclusive Network)* Overall Effective Brand Specialty Discount Fee AWP – 20.00%AWP – 20.10%AWP – 20.20% 101 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 44 Overall Brand Specialty Dispensing Fee per Rx $0.00 $0.00 $0.00 Overall Effective Generic Specialty Discount Fee 68.00%68.10%68.20% Overall Generic Specialty Dispensing Fee per Rx $0.00 $0.00 $0.00 * Members required to use PBM’s Specialty Pharmacy as preferred provider. Aggregate discount guarantee based on PBM’s Specialty Drug List and excludes limited or exclusive specialty drugs to which PBM’s Specialty Pharmacy does not have access. PBM’s exclusive specialty guarantee requires Members fill specialty products at PBM's specialty pharmacy, other than Limited Distribution Drugs that are not available at the PBM Specialty Pharmacy. The exclusive pricing offer for Client is applicable if the specialty mail penetration based on aggregate spend is greater than 80.00%. PBM reserves the right to modify the pricing terms in the event that less than 80% of Client’s aggregate Specialty Drug spend is dispensed through PBM’s Specialty Pharmacy. PBM Specialty mail pharmacies will be the exclusive provider of Specialty pharmacy services. Claims for Specialty Drugs will not be processed through the retail network, except for those Specialty drugs that PBM Specialty mail pharmacies are unable to dispense. The Exclusive Specialty pricing requires PBM Specialty mail pharmacies fill 80% of specialty Claims. 2.Pricing Guarantee Measurement, Reconciliation and Payment. (a) Reconciliation and Payment. PBM shall reconcile the pricing guarantees described this Exhibit D (Retail Pharmacy Network, Mail Order Pharmacy Network and Specialty Pharmacy Network Prescription Drug Claims Pricing) on an annual basis. Within ninety (90) days after the Measurement Period, the reconciliation for each year of the Measurement Period (which shall mean the period of time PBM’s performance is measured, that may be the same as or differ from the period of time equal to the Term) will be submitted to Client and any resulting value shortfall shall be paid by PBM to Client following submission of the reconciliation report. (b) Measurement. To determine any payment due to Client under the pricing guarantees set forth in the Exhibit D (Retail Pharmacy Network, Mail Order Pharmacy Network and Specialty Pharmacy Network Prescription Drug Claims Pricing), each pricing guarantee will be calculated based claims for Covered Drugs paid during the Measurement Period for Retail Pharmacy, Mail Order Pharmacy, and Specialty Pharmacy. Each such Paid Claims subset is referred to as a “Pricing Guarantee Category.” Each guarantee within a Pricing Guarantee Category is compared to the sum of appropriate portion of the Paid Claims for Covered Drugs plus any Member Cost Shares associated with each pricing guarantee within that Pricing Guarantee Category. Paid Claims include Ingredient Costs plus Dispensing Fees. Therefore, Paid Claims for Covered Drugs dispensed by a Retail Pharmacy are separated into Brand and Generic Ingredient Costs and Brand and Generic Dispensing Fees. These Ingredient Costs and Dispensing Fees are compared to each identified pricing guarantee set forth in this Exhibit D (Retail Pharmacy Network, Mail Order Pharmacy Network and Specialty Pharmacy Network Prescription Drug Claims Pricing) to determine if the pricing guarantee is met. Eligible Member Cost Share or ancillary fees will not be included in any discount calculation (billing, guarantee or otherwise). Guarantees ill be dollar for dollar and there is no limit to dollars at risk. 102 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 45 PBM shall charge Client cost for all Paid Claims based upon the lesser of: a) the applicable Claim adjudication rate (if any), b) MAC (if any), or c) U&C charge (if any) ("Lesser of Logic"). U&C is not applicable to Mail Order Pharmacy and Specialty Pharmacy Claims. PBM shall charge Client cost for all Paid Claims based upon the lesser of: a) the applicable Claim adjudication rate (if any), b) MAC (if any), or c) U&C charge (if any) ("Lesser of Logic"). U&C is not applicable to Mail Order Pharmacy and Specialty Pharmacy Claims. There is no minimum charge at retail for any transaction at any Retail Pharmacy and no minimum charge at mail for any transaction. Mail pricing will not be dependent on the days’ supply of a Claim. (c) Offsetting PBM may offset any payment due to Client under any pricing guarantee within a Pricing Guarantee Category by favorable results within the same Pricing Guarantee Category. PBM will not offset payments and favorable results between Pricing Guarantee Categories, or between a Pricing Guarantee Category and any Rebate guarantee. 3.Pricing Guarantee Conditions. a. Pricing guarantees apply to Paid Claims submitted by Participating Pharmacies applicable to the Plan. b. References in this Exhibit D (Retail Pharmacy Network, Mail Order Pharmacy Network and Specialty Pharmacy Network Prescription Drug Claims Pricing) to “Discount” and “Dispensing Fee” shall refer to and mean the retail Brand and 90-day retail Brand discounts will be minimum fixed discounts for all Claims if the U&C or MAC price is less aggressive. Generic discounts will be effective rates. Dispensing fees are guaranteed maximum fees per Claim. Retail specialty is included in the overall effective specialty rates. c.The following Claims are excluded from pricing guarantees: 1.Medicare Part D Claims; 2.Vaccines; 3.Prescriptions filled through Client’s on-site pharmacy; 4.Compound Drugs; 5.Member Submitted Claims; 6.LTC Claims; 7.Secondary Claims; 8.Subrogation Claims; 9.Claims originating from Military VA centers; 10. Claims originating from Indian Health Centers; 11. Out-of-Network Claims; 12. 340B Claims; 13. Home Infusion Claims. 103 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 46 d. COVID test kits, COVID anti-viral medication and COVID vaccines are excluded from the pricing guarantees under this Agreement. e.Drugs identified at the time the prescription is filled as Single Source Generics, will be included in the Generic Discount and Generic Dispensing Fee Performance Guarantees. f.Drugs identified at the time the prescription is filled as Brand MAC, will be included in the Generic Discount and Generic Dispensing Fee Performance Guarantees. g.Drugs identified at the time the prescription is filled as Dispense As Written Claims with code 5 will be included in the Generic Discount and Generic Dispensing Fee Performance Guarantees. h. Guarantees apply only as long as there are at least 20,498 Annualized Adjusted Prescription Drug Claims. i.Pricing Guarantee Changes. 1. Client Directed Changes. PBM reserves the right to modify the financial provisions of this Agreement if any of the following occur and to the extent of any adverse financial impact to the overall economic value of the Agreement: (a) a change in the scope of services (retail network management, mail, specialty and Rebate services) to be performed under this Agreement upon which the financial provisions included in this Agreement are based; (b) a material change in plan design or (c) any substantive deviation from Client’s formulary, which may impact Rebates “Directed Changes”). Client agrees to provide PBM with written notice of its desired Directed Changes. Upon receipt of the notice, PBM will have thirty (30) days to determine and inform Client in writing of any such change to the financial provisions. PBM agrees to discuss its rationale and calculations with Client’s consultant. Client will inform PBM of its decision of whether or not it will move forward with the Directed Changes. In the event Client moves forward with the Directed Changes, the parties agree to execute a Change Order documenting their agreement of the changes to the financial provisions which Direct Changes and pricing shall be implemented sixty days after the execution of the Change Order. PBM shall have the right to revise Pricing Guarantees in the event there is a greater than 20% change in total membership or claims volume . 2. Market Event Conditions. PBM reserves the right to modify or amend the financial provisions of this Agreement upon at least sixty days prior written notice, if possible, to Client in the event of a government imposed change in federal, state or local laws or industry wide change that materially impacts the financial economics of the Agreement. For modifications or amendments made pursuant to the above, PBM agrees to modify the pricing in an equitable manner to preserve the financial interest of both parties. PBM shall provide documentation demonstrating that the revised pricing terms are equitable based on the new industry standard. In the event Client demonstrates the revised pricing terms are not equitable and the Parties are unable to reach agreement on 104 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 47 revised pricing terms, Client may terminate this Agreement upon ninety (90) days prior written notice. j.The Parties acknowledge and agree that Pricing Guarantees may be revised in the event of product offering decisions by drug manufacturers that result in: (a) a reduction of Rebates, including the introduction of a lower cost alternative product which may replace an existing rebatable Brand Drug; (b) an unexpected launch of a Brand Drug and/or Generic Drug; (c) unforeseen delays in expected Brand Drug and/or Generic Drug launches; or (d) a Brand Drug converted to over-the-counter (“OTC”) status, recalled or withdrawn from the market. 105 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 48 EXHIBIT E REBATE GUARANTEES The Rebate terms and conditions set forth in this Exhibit E (Rebate Guarantees) will be effective on a Contract Year basis for the following Contract Years: Contract Year 1: 1/1/2024 through 12/31/2024 Contract Year 2: 1/1/2025 through 12/31/2025 Contract Year 3: 1/1/2026 through 12/31/2026 1.Rebate Guarantees. a. Table 1 below sets forth the Rebate guarantees applicable on a Contract Year-basis to qualifying Paid Claims for Covered Drugs dispensed to members by Retail Network Pharmacies. PBM will pay an amount equal to the greater of 100.00% of Rebates paid to PBM, or the following: Table 1: Rebate Guarantees Client will receive 100.00% of Rebates, subject to the per Brand Claim minimum guarantees listed in the table below: COMPLETE FORMULARY Contract Year 1 Contract Year 2 Contract Year 3 Non-Specialty Drugs Retail Non- Specialty (1-83 days’ supply) $334.78 $360.12 $390.18 Retail Non- Specialty (84+ days’ supply) $797.05 $915.24 $1,015.16 Mail Order Non- Specialty (all days’ supply)$368.82 $450.50 $500.04 Specialty Drugs Overall Specialty $4,309.87 $5,575.81 $6,575.57 2.Rebate Program Conditions. a. Client must select and adhere to the chosen Formulary, including any additions of deletions to the Formulary provided by PBM. Rebate guarantees are contingent upon Client adhering 106 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 49 to such chosen Formulary and all applicable prior authorization and utilization management criteria related to the same. b. Rebate guarantees do not apply to Claims processed through institutional, hospital or staff model/hospital pharmacies where the pharmacy, most likely, has its own manufacturer contracts (rebate or purchase discounts), or through pharmacies that participate in the Federal government pharmaceutical purchasing program. c.Rebate eligibility is dependent on confirmation of Client’s ERISA status. d. Rebate Guarantee Changes. 1. Client Directed Changes. PBM reserves the right to modify the financial provisions of this Agreement if any of the following occur and to the extent of any adverse financial impact to the overall economic value of the Agreement: (a) a change in the scope of services (retail network management, mail, specialty and Rebate services) to be performed under this Agreement upon which the financial provisions included in this Agreement are based; (b) a material change in plan design or (c) any substantive deviation from Client’s formulary, which may impact Rebates “Directed Changes”). Client agrees to provide PBM with written notice of its desired Directed Changes. Upon receipt of the notice, PBM will have thirty (30) days to determine and inform Client in writing of any such change to the financial provisions. PBM agrees to discuss its rationale and calculations with Client’s consultant. Client will inform PBM of its decision of whether or not it will move forward with the Directed Changes. In the event Client moves forward with the Directed Changes, the parties agree to execute a Change Order documenting their agreement of the changes to the financial provisions which Direct Changes and pricing shall be implemented sixty days after the execution of the Change Order. PBM shall have the right to revise Rebate Guarantees in the event there is a greater than 20% change in total membership or claims volume . 2. Market Event Conditions. PBM reserves the right to modify or amend the financial provisions of this Agreement upon at least sixty days prior written notice, if possible, to Client in the event of a government imposed change in federal, state or local laws or industry wide change that materially impacts the financial economics of the Agreement. For modifications or amendments made pursuant to the above, PBM agrees to modify the pricing in an equitable manner to preserve the financial interest of both parties. PBM shall provide documentation demonstrating that the revised pricing terms are equitable based on the new industry standard. In the event Client demonstrates the revised pricing terms are not equitable and the Parties are unable to reach agreement on revised pricing terms, Client may terminate this Agreement upon 90 days prior written notice. e.The Parties acknowledge and agree that Rebate Guarantees may be revised in the event of product offering decisions by drug manufacturers that result in: (a) a reduction of Rebates, including the introduction of a lower cost alternative product which may replace an existing rebatable Brand Drug; (b) an unexpected launch of a Brand Drug and/or Generic Drug; (c) unforeseen delays in expected Brand Drug and/or Generic Drug 107 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 50 launches; or (d) a Brand Drug converted to over-the-counter (“OTC”) status, recalled or withdrawn from the market. f.In the event of market changes that impact drug price or the event that clinically comparable lower rebate drugs impact the level of rebates expected, a Rebate Credit towards the Rebate guarantee amount will be applied. This credit will be calculated as the difference between the originator Brand product rebates and the new product rebates or the drug cost savings from a lower drug cost due to a pricing change from Pharma, resulting in neutrality for Client.PBM will provide illustrative documentation of the equitable rebate credit calculation to Client and consultant. Client will provide PBM written approval of calculation prior to application of the rebate credit. If Client does not approve of credit value, then PBM and Client will enter good faith negotiations to reach an agreed upon amount. 3.Rebate Guarantee Payment and Reconciliation. PBM shall pay collected Rebates on a quarterly basis. Client will receive 100.00% of Rebates collected within 90 days following the end of the applicable contract quarter for the prior quarter(s). Payment shall be in the form of a credit on Client’s invoice. On an annual basis, Rebates collected and paid to Client will be reconciled to the minimum Rebate guarantee. If the amounts paid to Client are less than the Rebate minimum guarantee the difference will be paid annually no later than 6 months following the end of the applicable contract year. Rebates applicable to a contract year received by PBM later than 6 months following the applicable quarter will be retained by PBM. The Parties acknowledge and agree that PBM retains all right title and interest to manufacturer Rebates received by PBM, that Rebate payments will be made from PBM’s general assets, and that neither Client nor its Members: (i) retain any interest in such assets; (ii) are entitled to any interest on any Rebate payments due. PBM will provide quarterly rebate reporting showing billing, invoiced, collected and paid amounts. Prescription drug Rebate guarantees are for actual Rebates received from PBM and do not include other amounts including, but not limited to, therapeutic interchange savings. 4.Rebate Guarantee Exclusions. a. The following Claims are excluded from Rebate guarantees: 1. Medicare Part D Claims; 2. Vaccines; 3. Prescriptions filled through Client’s on-site pharmacy; 4. Compound Drugs; 5. Authorized Generics; 6. Brand MAC Drugs; 7. Member Submitted Claims; 8. Secondary Claims; 9. 340B Claims; 10. Out-of-Network Claims; 11. Multi-Source Brands; 12. Single Source Generic Claims; 13. Specialty Starter Fills; 108 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 51 14. Non-Formulary Claims approved through exception process; 15. Subrogation Claims; 16. Claims originating from Indian Health Centers; 17. Claims originating from Military VA centers; 18. LTC Claims; 19. Home Infusion Claims. b. COVID test kits, COVID anti-viral medication and COVID vaccines are excluded from the Rebate guarantees under this Agreement. 5.Offsetting. During annual reconciliation, PBM may offset any payment due to Client under any Rebate guarantee within a Rebate Guarantee Category by favorable results in any other Rebate Guarantee Category. 109 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 52 EXHIBIT F OPERATIONAL PERFORMANCE GUARANTEES This Exhibit F (Operational Performance Guarantees) and any attachment hereto provide certain guarantees pertaining to PBM’s performance under this Agreement (“Operational Performance Guarantees”). Descriptions of the terms of each Operational Performance Guarantee applicable to the Parties are set forth in the attachments (“Attachments”) to this Exhibit F (Operational Performance Guarantees) and are made a part of this Exhibit F (Operational Performance Guarantees). Section 1.General Conditions 1.1 The Operational Performance Guarantees described in this Exhibit F (Operational Performance Guarantees) shall be in effect only for the Term, unless specifically indicated otherwise. Each Operational Performance Guarantee shall specify a/an: 1.1.1 Allocation, which shall mean the percent of total Amount at Risk that PBM assigns to each Operational Performance Guarantee. Any surplus on any financial guarantee is retained 100% by Client. The amount at risk will be the full value of the missed performance, not a calculation of Client's net plan cost impact 1.1.2 Amount at Risk, which shall mean the amount PBM may pay if it fails to meet the target(s) specified under the Operational Performance Guarantee. The risk on guarantees is dollar for dollar on any short fall with no limit to the amount at risk up to the guaranteed amount. 1.1.3 Measurement Period, which shall mean the period of time PBM’s performance is measured, that may be the same as or differ from the period of time equal to the Term. 1.1.4 Reporting Period, which shall mean how often PBM will report on its performance under an Operational Performance Guarantee. 1.1.5 Service Feature, which shall mean a service standard stipulated and defined to be guaranteed. 1.2 The parties agree that the amounts specified in this Exhibit F (Operational Performance Guarantees) shall be Client’s exclusive remedy for PBM’s failure to meet such Performance Guarantees. 1.3 PBM shall conduct an analysis of the data necessary to calculate any one of the Operational Performance Guarantees within the timeframes provided. In addition, any calculation of Operational Performance Guarantees, reports provided, or analysis performed by PBM shall be based on PBM’s then current measurement and calculation methodology, that shall be available to Client upon request. 1.4 If the Agreement is not executed, PBM shall have no obligation to make payment under these Operational Performance Guarantees. 1.5 Unless otherwise specified, the measurement of the Operational Performance Guarantee shall be based on data that is maintained and stored by PBM or its Vendors. 1.6 If Client terminates the Agreement prior to the end of the Term, or if the Agreement is terminated for non-payment, then Client shall forfeit any right to collect any further payments under any outstanding 110 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 53 Operational Performance Guarantees, whether such Operational Performance Guarantees are for a prior or current Measurement Period. 1.7 For the purpose of calculating compliance with the Operational Performance Guarantees, if a delay in performance of, or inability to perform, a service underlying any of the Operational Performance Guarantees is due to a Force Majeure event, such delayed or non-performed service will not count towards the measurement of the applicable Operational Performance Guarantee. 1.8 As determined by PBM, Operational Performance Guarantees may be measured using either aggregated data or Client-specific Data. The term “Client-specific Data” means the data associated with Client’s Plan that has not been aggregated with other client data. 1.8 If any Operational Performance Guarantees are tied to a particular program and its components, such Operational Performance Guarantees are only valid if Client participates in the program and its components for the entirety of the Measurement Period associated with the Operational Performance Guarantee. 1.9 Client acknowledges and agrees that each Operational Performance Guarantee will be measured based on the Measurement Period as described and prorated to account for Implementation Date when measured using aggregated data. The Operational Performance Guarantee will begin on the Implementation Date. However, if Client terminates the Agreement before the end of a Measurement Period, the Operational Performance Guarantee measured will be based on the entire Measurement Period during which the termination occurred. 1.10 Any surplus on any financial guarantee is retained 100% by the Client. The amount at risk will be the full value of the missed performance, not a calculation of Client’s net plan cost impact. Section 2.Payment 2.1 If PBM fails to meet any of the obligations specifically described in an Operational Performance Guarantee, PBM shall pay Client the applicable amount set forth in the applicable section of the Operational Performance Guarantee. Payment shall be in the form of a credit on Client’s invoice for Administrative Services Fees that will occur annually unless otherwise stated in the Operational Performance Guarantee. 2.2 Notwithstanding the foregoing, PBM has the right to offset any amounts owed to Client under any of the Operational Performance Guarantees against any amounts owed by Client to PBM under any Operational Performance Guarantees and/or the Agreement. 2.3 Notwithstanding the foregoing, PBM’s obligation to make payment under the Operational Performance Guarantees is conditioned upon Client’s timely performance of its obligations provided in the Agreement, including providing PBM with the information or data required by PBM in the Agreement. PBM shall not be obligated to make payment under an Operational Performance Guarantee if action or inaction by Client, a Client Affiliate, or a vendor of Client adversely impacts PBM’s ability to meet any of its obligations related to such Operational Performance Guarantee, including a failure of Client, a Client Affiliate, and/or a vendor of Client to timely provide PBM with accurate and complete data or information in the form and format requested by PBM. 2.4 Where the Amount at Risk for an Operational Performance Guarantee is on a percentage of a PMPM fee basis, the Operational Performance Guarantee will be calculated by multiplying the PMPM amount by the actual annual enrollment during the Measurement Period. 111 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 54 112 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 55 The Measurement Period for the Implementation - Operational Performance Guarantees in Table 1 will be a one-time measurement completed within thirty (30) days after implementation. Payment by PBM to Client shall be made within ninety (90) days following implementation in the event PBM fails to meet an Implementation - Operational Performance Guarantee. The total amount at risk for the Implementation – Operational Performance Guarantees set forth in Table 1 below shall be $8.00 per Member. Client may allocate the total amount as risk at its discretion across the Implementation – Operational Performance Guarantees in Table 1 below; provided; however, that the maximum allocation for any one Implementation – Operational Performance Guarantees in Table 1 shall be 20% and the total allocation across all Implementation – Operational Performance Guarantees in Table 1 shall not exceed one hundred percent (100%). Client will provide PBM with Client’s written allocation of the amount at risk for each of the Implementation – Operational Performance Guarantees in Table 1 no later than thirty (30) days prior to the Effective Date. In the event Client does not provide written allocation to PBM, PBM will allocate total amount at risk equally among Implementation – Operational Performance Guarantees in Table 1. Table 1: Implementation – Operational Performance Guarantees PG#Service Feature Guarantee Reporting Period Allocation Amount at Risk Implementation -Operational Performance Guarantees – Total Amount at Risk $8.00 per Member Implementation Survey A minimum average score of 3.0 will be attained on the Implementation Survey. PBM will prepare and provide the Implementation Survey to the Plan Sponsor. PBM will consider survey results received within 30 calendar days from the delivery of the survey to the Client. PBM will work with the Client to determine the number of implementation surveys that will be distributed and will require a minimum of 70.00% of the surveys distributed returned, within 30 calendar days from the delivery of the survey, for the results to be valid. This will be measured with Client- specific Data. 90 calendar days following PBM’s receipt of the survey 100.00%$8.00 per Member The Measurement Period for these Operational Performance Guarantees in Table 2 will be annual, unless otherwise specified herein. Reporting periods are based on Calendar Years and Calendar Quarters. The reconciliation for each year will be submitted to Client within ninety (90) days after the end of the Measurement Period and any resulting value shortfall shall by paid by PBM to Client within thirty (30) days following submission of the reconciliation report. The total amount at risk for the Ongoing – Operational Performance Guarantees set forth in Table 2 below shall be $4.00 PMPY. Client may allocate the total amount at risk at its discretion across the Ongoing – Operational Performance Guarantees in Table 2 below; provided; however, that the maximum allocation for any one Ongoing – Operational Performance Guarantees in Table 2 shall be 20% and the total allocation across all Ongoing – Operational Performance Guarantees in Table 2 shall not exceed one hundred percent (100%). 113 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 56 Client will provide PBM with Client’s written allocation of the amount at risk for each of the Ongoing – Operational Performance Guarantees in Table 2 no later than thirty (30) days prior to the start of each contract year. In the event Client does not provide written allocation to PBM, PBM will allocate total amount at risk equally among Ongoing – Operational Performance Guarantees in Table 2 for that contract year. Table 2: Ongoing - Operational Performance Guarantees PG#Service Feature Guarantee Reporting Period Allocation Amount at Risk Ongoing -Operational Performance Guarantees – Total Amount at Risk $4.00 PMPY Claims Processing: Turnaround Time for Member- Submitted Claims ‒ Intervention Required Member Submitted Claims with issues or requiring intervention shall be processed within (10) Business Days. Quarterly 5.88%$_________ Claims Processing: Turnaround Time for Member- Submitted Claims ‒ No Intervention Required Member Submitted Claims not requiring intervention shall be processed within five (5) Business Days. Quarterly 5.88%$_________ Member Services: Satisfaction Survey PBM shall conduct Member Services satisfaction surveys of Members following completion of calls to assess Member satisfaction and resolution of individual call. Survey respondents shall be selected at random from Members who have called into Member Services toll-free number. Overall satisfaction ratings of at least 90% shall be guaranteed. For the purposes of this guarantee, satisfaction shall be defined as Very Satisfied or better on the following 5-point scale; Completely Satisfied, Very Satisfied, Satisfied, Dissatisfied, Very Dissatisfied. PBM shall be responsible for all costs associated with conducting the surveys. Any survey to be utilized and the third-party Vendor must be approved by Client prior to its use. Annually 5.88%$_________ 114 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 57 PG#Service Feature Guarantee Reporting Period Allocation Amount at Risk Member Services: First-Call Resolution PBM will resolve at least 95% of issues at the first point of contact. Quarterly 5.88%$_________ Member Services: Phone Abandonment Rate PBM guarantees calls to Member Services toll-free phone lines shall have an abandonment rate of 2% or less. Quarterly 5.88%$_________ Member Services: Phone Speed of Answer PBM will answer 100% of inbound calls to the toll-free Customer Care line within an average of 25 seconds (excluding calls routed to an IVR). Quarterly 5.88%$_________ Member Services: Turnaround Time ‒ Email Inquiries PBM guarantees 97% of email inquiries received by PBM Member Services department from all Members will be responded to within forty-eight (48) hours following the Business Day on that such inquiry was received. An automated response to received inquiries does not constitute a response for purposes of this guarantee and will not be included in measuring whether this guarantee has been met. Quarterly 5.88%$_________ Member Services - Phone Pharmacist/Supervi sor Speed of Answer PBM agrees that 100.00% of Member calls that are transferred to a pharmacist or supervisor will be answered within 5 minutes. Quarterly 5.88%$_________ Mail Order Pharmacy: Turnaround Time ‒ Intervention Required PBM’s Mail Order Pharmacies will dispense and ship all nonclean prescriptions (those requiring intervention or clarification) for covered drugs to members as follows: at least 99% of these prescriptions within five (5) Business Days and 100% within seven (7) Business days from (and including) the date PBM receives the prescription. Quarterly 5.88%$_________ 115 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 58 PG#Service Feature Guarantee Reporting Period Allocation Amount at Risk Mail Order Pharmacy: Turnaround Time ‒ No Intervention Required PBM’s Mail Order Pharmacies will dispense and ship all clean prescriptions (those not requiring intervention or clarification) as follows: at least 99% of these prescriptions within two (2) Business Days and 100% within five (5) Business Days from (and including) the date of PBM’s receipt of the prescription. Quarterly 5.88%$_________ Account Management: In- person Meetings with Client PBM agrees to 4 in-person meetings with Client annually, and up to weekly calls via phone (at Client's discretion). Additionally, meeting materials delivered electronically to the Client at least three (3) business days in advance of the meeting, and will follow-up on all open issues within three (3) business days after the meeting. Annually 5.88%$_________ 116 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 59 PG#Service Feature Guarantee Reporting Period Allocation Amount at Risk Account Management: Client - Satisfaction Guarantee A minimum average score of 3 will be attained on the Account Management Satisfaction Survey (AMSS). A minimum of 3 responses per Client to the AMSS is required to base the score on Client-specific responses only. If 3 responses are received from the Client, an average score is calculated by adding the scores from each respondent divided by the total number of Client respondents. If fewer than 3 responses are received, the score will be calculated as follows: 2 Client responses: 2/3 of the score will be based on Client-specific AMSS results and 1/3 of the score will be based on the aggregate score of all AMSS results received by the Account Management Team. 1 Client response: 1/3 of the score will be based on Client- specific AMSS results and 2/3 of the score will be based on the aggregate score of all AMSS results received by the Account Management Team. 0 Client responses: The score will be based on the aggregate score of all AMSS results received by the Account Management Team. Annually 5.88%$_________ Account Management: Inquiries TAT PBM will guarantee that all inquiries and issues sent the Account Management team will be responded to within one (1) business day. For inquires and issues that cannot be resolved within one (1) business day, the Account Team will add them to an issue tracking log and provide an update on weekly call (or more frequently via email is at Client's request). Updates will be made at least every seven (7) calendar days. Annually 5.88%$_________ 117 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 60 PG#Service Feature Guarantee Reporting Period Allocation Amount at Risk Account Management: Annual Benefit Plan Review PBM will conduct an annual benefit plan review forty-five (45) days prior to effective date of any plan benefit chances, i.e. copayments, co- insurance, clinical rules, etc. Annually 5.88%$_________ Account Management: Standard Reporting Delivery TAT PBM will guarantee delivery of standard financial and clinical reports within thirty (30) days from the close of each reporting period. Annually 5.88%$_________ Account Management: Quarterly Reporting Delivery PBM will guarantee that each quarterly report will be provided to the client five (5) business days prior to the meeting. Annually 5.88%$_________ Account Management: Formulary Change Notification PBM will guarantee written notification will be provided to prescribing physicians(s) of members impacted by a negative formulary change at least forty-five (45) days in advance. Annually 5.88%$_________ 118 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 61 EXHIBIT G BUSINESS ASSOCIATE AGREEMENT This Business Associate Agreement (“Agreement”) is effective as of January 1, 2024 and is made among CarelonRx, Inc. (“Business Associate”), and the Client named on the signature page of this Agreement. If during the term of any agreement between Business Associate and Client, and/or any of its affiliates (collectively, “Client”), PBM requires the use or disclosure of Protected Health Information, including creating, receiving, maintaining, or transmitting Protected Health Information, then PBM shall be deemed a Business Associate of Client and the following provisions shall apply. WITNESSETH AS FOLLOWS: WHEREAS, Client has, if applicable, established and maintains a plan of health care benefits which is administered by the Client or its designee as an employee welfare benefit plan under the Employee Retirement Income Security Act of 1974 (“ERISA”); WHEREAS, Client has retained Business Associate to provide certain claims administrative services with respect to the Plan which are described and set forth in a separate Pharmacy Benefit Management Agreement (“PBM Agreement”), as amended from time to time; WHEREAS, the parties to this Agreement desire to establish the terms under which Business Associate may use or disclose Protected Health Information (or “PHI”) such that Client may comply with applicable requirements of the Health Insurance Portability and Accountability Act of 1996 and the Privacy, Security, Breach Notification and Standard Transactions regulations found at 45 C.F.R. Parts 160-164 (collectively, the “HIPAA Regulations”) along with any guidance and/or regulations issued by the U.S. Department of Health and Human Services. NOW, THEREFORE, in consideration of these premises and the mutual promises and agreements hereinafter set forth, Client and Business Associate hereby agree as follows: I.DEFINITIONS Unless otherwise defined in this Agreement, capitalized terms shall have the same meaning as used in the HIPAA Regulations. Such terms shall only have such meaning with respect to the information created or maintained in support of this Agreement and the parties’ PBM Agreement. A reference in this Agreement to any section of the HIPAA Regulations shall mean the section as in effect or as amended. II.BUSINESS ASSOCIATE’S RESPONSIBILITIES A. Privacy of Protected Health Information 1.Confidentiality of Protected Health Information. Except as permitted or required by this Agreement, Business Associate will not use or disclose Protected Health Information without the authorization of the Individual who is the subject of such information or as required by Law. 2.Prohibition on Non-Permitted Use or Disclosure. Business Associate will neither use nor disclose PHI except (1) as permitted or required by this Agreement, or any other agreement between the parties, (2) as permitted in writing by the Plan or its Plan administrator, (3) as authorized by Individuals, or (4) as Required by Law. 119 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 62 3.Permitted Uses and Disclosures. Business Associate is permitted to use or disclose PHI as follows: a.Functions and Activities on Plan’s Behalf. Business Associate will be permitted to use and disclose PHI: (a) for the management, operation and administration of the Plan, (b) for the services set forth in the PBM Agreement, which include (but are not limited to) Treatment, Payment activities, and/or Health Care Operations as these terms are defined in this Agreement and 45 C.F.R. § 164.501, and (c) as otherwise required to perform its obligations under this Agreement and the PBM Agreement, or any other agreement between the parties provided that such use or disclosure would not violate the HIPAA Regulations. b.Business Associate’s Own Management and Administration i.Protected Health Information Use. Business Associate may use PHI as necessary for Business Associate’s proper management and administration or to carry out Business Associate’s legal responsibilities. ii.Protected Health Information Disclosure. Business Associate may disclose PHI as necessary for Business Associate’s proper management and administration or to carry out Business Associate’s legal responsibilities only (i) if the disclosure is Required by Law, or (ii) if before the disclosure, Business Associate obtains from the entity to which the disclosure is to be made reasonable assurance, evidenced by written contract, that the entity will: (x) hold PHI in confidence, (y) use or further disclose PHI only for the purposes for which Business Associate disclosed it to the entity or as Required by Law; and (z) notify Business Associate of any instance of which the entity becomes aware in which the confidentiality of any PHI was breached. c.Miscellaneous Functions and Activities i.Protected Health Information Use. Business Associate may use PHI as necessary for Business Associate to perform Data Aggregation services, and to create De-identified PHI, Summary Health Information and/or Limited Data Sets. ii.Protected Health Information Disclosure. Business Associate may disclose, in conformance with the HIPAA Regulations, PHI to make Incidental disclosures and to make disclosures of De-identified PHI, Limited Data Sets, and Summary Health Information. Business Associate may also disclose, in conformance with the HIPAA Regulations, PHI to Health Care Providers for permitted purposes including health care operations. d.Minimum Necessary and Limited Data Set. Business Associate’s use, disclosure or request of PHI shall utilize a Limited Data Set if practicable. Otherwise, Business Associate will make reasonable efforts to use, disclose, or request only the minimum necessary amount of PHI to accomplish the intended purpose. 120 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 63 B. Disclosure to Plan and Client (and their Subcontractors). Other than disclosures permitted by Section II.A.3 above, Business Associate will not disclose PHI to the Plan, its Plan administrator or Client, or any business associate or subcontractor of such parties except as set forth in Section IX. C. Business Associate’s Subcontractors and Agents. Business Associate will require its subcontractors and agents to provide reasonable assurance, evidenced by a written contract that includes obligations consistent with this Agreement with respect to PHI. D. Reporting Non-Permitted Use or Disclosure, Breaches and Security Incidents 1. Non-permitted Use or Disclosure. Business Associate will promptly, and without unreasonable delay, report to the Plan any use or disclosure of PHI not permitted by this Agreement or in writing by the Plan or its Plan administrator, of which Business Associate becomes aware. Such report shall not include instances where Business Associate inadvertently misroutes PHI to a provider, as long as the disclosure is not a Breach as defined under 45 CFR §164.402. 2.Security Incidents. In addition to reporting to Plan any use or disclosure of Protected Health Information not permitted by the Agreement, Business Associate will also report any Breach or security incidents of which Business Associate becomes aware. A security incident is an attempted or successful unauthorized access, use, disclosure, modification or destruction of information or interference with system operations in an information system, and involves only Electronic PHI that is created, received maintained or transmitted by or on behalf of Business Associate. The parties acknowledge and agree that this Section constitutes notice by Business Associate to Plan of the ongoing existence and occurrence of attempted but Unsuccessful Security Incidents (as defined below) for which no additional notice to Plan shall be required. “Unsuccessful Security Incidents” shall include, but not be limited to, pings and other broadcast attacks on Business Associate’s firewall, port scans, unsuccessful log-on attempts, denials of service and any combination of the above, so long as no such incident results in unauthorized access, use or disclosure of PHI. 3.Breach. Business Associate will promptly, and without unreasonable delay, report to Plan any Breach of Unsecured PHI. Business Associate will cooperate with Plan in investigating the Breach and in meeting the Plan’s obligations under applicable breach notification laws. In addition to providing notice to Plan of a Breach, Business Associate will provide any required notice to individuals and applicable regulators on behalf of Plan. E. Termination for Breach of Privacy Obligations. Without limiting the rights of the parties set forth in the PBM agreement, each party will have the right to terminate this Agreement and the PBM Agreement if the other has engaged in a pattern of activity or practice that constitutes a material breach or violation of their obligations regarding PHI under this Agreement. Prior to terminating this Agreement as set forth above, the terminating party shall provide the other with an opportunity to cure the material breach. If these efforts to cure the material breach are unsuccessful, as determined by the terminating party in its reasonable discretion, the parties shall terminate the PBM Agreement and this Agreement, as soon as administratively feasible. If for any reason a party has determined the other has breached the terms of this Agreement and such breach has not been cured, but the non-breaching party determines that termination of the Agreement is not feasible, the party may report such breach to the U.S. Department of Health and Human Services. 121 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 64 F. Disposition of PHI 1.Return or Destruction Upon PBM Agreement End. The parties agree that upon cancellation, termination, expiration or other conclusion of the PBM Agreement, destruction or return of all PHI, in whatever form or medium (including in any electronic medium under Business Associate’s custody or control) is not feasible given the regulatory requirements to maintain and produce such information for extended periods of time after such termination. In addition, Business Associate is required to maintain such records to support its contractual obligations with its vendors and network providers. Business Associate shall extend the protections of this Agreement to such PHI and limit further uses and disclosures of such PHI to those consistent with applicable business and legal obligations for so long as Business Associate, or its subcontractors or agents, maintains such PHI. Business Associate may destroy such PHI in accordance with applicable law and its record retention policy that it applies to similar records. 2.Survival of Termination. The provisions of this Section II.F shall survive cancellation, termination, expiration, or other conclusion of this Agreement and the PBM Agreement. III.ACCESS, AMENDMENT AND DISCLOSURE ACCOUNTING A. Access 1. Business Associate will respond to an Individual’s request for access to his or her PHI as part of Business Associate’s normal customer service function, if the request is communicated to Business Associate directly by the Individual. Despite the fact that the request is not made to the Plan, Business Associate will respond to the request with respect to the PHI Business Associate and its subcontractors maintain in a manner and time frame consistent with 45 C.F.R. § 164.524. 2. In addition, Business Associate will assist the Plan in responding to requests by Individuals that are made to the Plan to invoke a right of access under the HIPAA Regulations. Upon receipt of written notice (includes faxed and emailed notice) from the Plan, Business Associate will make available for inspection and obtaining copies by the Plan, or at the Plan’s direction by the Individual (or the Individual’s personal representative), any PHI about the Individual created or received for or from the Plan in Business Associate’s custody or control, so that the Plan may meet its access obligations under 45 C.F.R. § 164.524. B. Amendment i.Business Associate will respond to an Individual’s request to amend his or her PHI as part of Business Associate’s normal customer service functions, if the request is communicated to Business Associate directly by the Individual. Despite the fact that the request is not made to the Plan, Business Associate will respond to the request with respect to the PHI Business Associate and its subcontractors maintain in a manner and time frame consistent with requirements specified in 45 C.F.R. § 164.526. ii. In addition, Business Associate will assist the Plan in responding to requests by Individuals that are made to the Plan to invoke a right to 122 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 65 amend under the HIPAA Regulations. Upon receipt of written notice (includes faxed and emailed notice) from the Plan, Business Associate will amend any portion of the PHI created or received for or from the Plan in Business Associate’s custody or control, so that the Plan may meet its amendment obligations under 45 C.F.R. § 164.526. C. Disclosure Accounting 1. Business Associate will respond to an Individual’s request for an accounting of disclosures of his or her PHI as part of Business Associate’s normal customer service function, if the request is communicated to the Business Associate directly by the Individual. Despite the fact that the request is not made to the Plan, Business Associate will respond to the request with respect to the PHI Business Associate and its subcontractors maintain in a manner and time frame consistent with requirements specified in 45 C.F.R. § 164.528. 2. In addition, Business Associate will assist the Plan in responding to requests by Individuals that are made to the Plan to invoke a right to an accounting of disclosures under the HIPAA Regulations by performing the following functions so that the Plan may meet its disclosure accounting obligation under 45 C.F.R. § 164.528: a.Disclosure Tracking. Business Associate will record each disclosure that Business Associate makes of PHI, which is not excepted from disclosure accounting under Section III.C.2.b. i.The information about each disclosure that Business Associate must record (“Disclosure Information”) is (a) the disclosure date, (b) the name and (if known) address of the person or entity to whom Business Associate made the disclosure, (c) a brief description of the PHI disclosed, and (d) a brief statement of the purpose of the disclosure or a copy of any written request for disclosure under 45 C.F.R. § 164.502(a)(2)(ii) or §164.512. ii.For repetitive disclosures of PHI that Business Associate makes for a single purpose to the same person or entity (including to the Plan or Client), Business Associate may record (a) the Disclosure information for the first of these repetitive disclosures, (b) the frequency, periodicity or number of these repetitive disclosures, and (c) the date of the last of these repetitive disclosures. b.Exceptions from Disclosure Tracking. Business Associate will not be required to record Disclosure information or otherwise account for disclosures of PHI (a) for Treatment, Payment or Health Care Operations, (b) to the Individual who is the subject of the PHI, to that Individual’s personal representative, or to another person or entity authorized by the Individual (c) to persons involved in that Individual’s health care or payment for health care as provided by 45 C.F.R. § 164.510, (d) for notification for disaster relief purposes as provided by 45 C.F.R. § 164.510, (e) for national security or intelligence purposes, (f) to law enforcement officials or correctional institutions regarding inmates, (g) that are incident to a use or disclosure that is permitted by this Agreement or the PBM Agreement, or (h) as part of a limited data set in accordance with 45 C.F.R. § 164.514(e). 123 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 66 c.Disclosure Tracking Time Periods. Business Associate will have available for the Plan the Disclosure information required by this Section III.C.2 for the six (6) years immediately preceding the date of the Plan’s request for the Disclosure information. d.Provision of Disclosure Accounting. Upon receipt of written notice (includes faxed and emailed notice) from the Plan, Business Associate will make available to the Plan, or at the Plan’s direction to the Individual, the Disclosure information regarding the Individual, so the Plan may meet its disclosure accounting obligations under 45 C.F.R. § 164.528. D. Confidential Communications 1. Business Associate will respond to an Individual’s request for a confidential communication as part of Business Associate’s normal customer service function, if the request is communicated to Business Associate directly by the Individual. Despite the fact that the request is not made to the Plan, Business Associate will respond to the request with respect to the PHI Business Associate and its subcontractors maintain in a manner and time frame consistent with requirements specified in the HIPAA Regulations. If an Individual’s request, made to Business Associate, extends beyond information held by Business Associate or Business Associate’s subcontractors, Business Associate will inform the Individual to direct the request to the Plan, so that Plan may coordinate the request. Business Associate assumes no obligation to coordinate any request for a confidential communication of PHI maintained by other business associates of Plan. 2. In addition, Business Associate will assist the Plan in responding to requests by Individuals that are made to the Plan to invoke a right of confidential communication under the HIPAA Regulations. Upon receipt of written notice (includes faxed and emailed notice) from the Plan, Business Associate will begin to send all communications of PHI directed to the Individual to the identified alternate address so that the Plan may meet its access obligations under 45 C.F.R. § 164.522(b). E. Restrictions 1. Business Associate will respond to an Individual’s request for a restriction as part of Business Associate’s normal customer service function, if the request is communicated to Business Associate directly by the Individual. Despite the fact that the request is not made to the Plan, Business Associate will respond to the request with respect to the PHI Business Associate and its subcontractors maintain in a manner and time frame consistent with requirements specified in the HIPAA Regulations. 2. In addition, Business Associate will promptly, upon receipt of notice from Plan, restrict the use or disclosure of PHI, provided the Business Associate has agreed to such a restriction. Plan and Client understand that Business Associate administers a variety of different complex health benefit arrangements, both insured and self-insured, and that Business Associate has limited capacity to agree to special privacy restrictions requested by Individuals. Accordingly, Plan and Client agree that it will not commit Business Associate to any restriction on the use or disclosure of PHI for Treatment, Payment or Health Care Operations without Business Associate’s prior written approval. IV.SAFEGUARD OF PHI 124 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 67 A.Business Associate will develop and maintain reasonable and appropriate administrative, technical and physical safeguards, as required by Social Security Act § 1173(d) and 45 C.F.R. § 164.530(a) and (c) and as required by the HIPAA Regulations, to ensure and to protect against reasonably anticipated threats or hazards to the security or integrity of health information, to protect against reasonably anticipated unauthorized use or disclosure of health information, and to reasonably safeguard PHI from any intentional or unintentional use or disclosure in violation of this Agreement. B.Business Associate will also develop and use appropriate administrative, physical and technical safeguards to preserve the Availability of electronic PHI, in addition to preserving the integrity and confidentiality of such PHI. The “appropriate safeguards” Business Associate uses in furtherance of 45 C.F.R. § 164.530(c), will also meet the requirements contemplated by 45 C.F.R. Parts 160, 162 and 164, as amended from time to time. V.COMPLIANCE WITH STANDARD TRANSACTIONS Business Associate will comply with each applicable requirement for Standard Transactions established in 45 C.F.R. Part 162 when conducting all or any part of a Standard Transaction electronically for, on behalf of, or with the Plan. VI.INSPECTION OF BOOKS AND RECORDS Business Associate will make its internal practices, books, and records relating to its use and disclosure of PHI created or received for or from the Plan available to the U.S. Department of Health and Human Services to determine Plan’s compliance with the HIPAA Regulations or this Agreement. VII.MITIGATION FOR NON-PERMITTED USE OR DISCLOSURE Business Associate agrees to mitigate, to the extent practicable, any harmful effect that is known to Business Associate of a use or disclosure of PHI by Business Associate in violation of the requirements of this Agreement. VIII.PLAN’S RESPONSIBILITIES A. Preparation of Plan’s Notice of Privacy Practices. Plan shall be responsible for the preparation of its Notice of Privacy Practices (“NPP”). To facilitate this preparation, upon Plan’s or Client’s request, Business Associate will provide Plan with its NPP that Plan may use as the basis for its own NPP. Plan will be solely responsible for the review and approval of the content of its NPP, including whether its content accurately reflects Plan’s privacy policies and practices, as well as its compliance with the requirements of 45 C.F.R. § 164.520. Unless advance written approval is obtained from Business Associate, the Plan shall not create any NPP that imposes obligations on Business Associate that are in addition to or that are inconsistent with the NPP prepared by Business Associate or with the obligations assumed by Business Associate hereunder. B. Distribution of Notice of Privacy Practice. Plan shall bear full responsibility for distributing its own NPP as required by the HIPAA Regulations. C. Changes to PHI. Plan shall notify Business Associate of any change(s) in, or revocation of, permission by an Individual to use or disclose PHI, to the extent that such change(s) may affect Business Associate’s use or disclosure of such PHI. IX.DISCLOSURE OF PHI TO THE PLAN, Client AND OTHER BUSINESS ASSOCIATES A.The following provisions apply to disclosures of PHI to the Plan, Client and other business associates of the Plan. 125 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 68 1.Disclosure to Plan. Unless otherwise provided by this Section IX, all communications of PHI by Business Associate shall be directed to the Plan. 2.Disclosure to Client. Business Associate may provide Summary Health Information regarding the Individuals in the Plan to Client upon Client’s written request for the purpose either: (a) to obtain premium bids for providing health insurance coverage for the Plan, or (b) to modify, amend or terminate the Plan. Business Associate may provide information to Client on whether an Individual is participating in the Plan or is enrolled in or has disenrolled from any insurance coverage offered by the Plan. 3.Disclosure to Other Business Associates and Subcontractors. Business Associate may disclose PHI to other entities or business associates of the Plan if the Plan authorizes Business Associate in writing to disclose PHI to such entity or business associate. The Plan shall be solely responsible for ensuring that any contractual relationships with these entities or business associates and subcontractors comply with the requirements of 45 C.F.R. § 164.504(e) and § 164.504(f). X.MISCELLANEOUS A. Agreement Term. This Agreement will continue in full force and effect for as long as the PBM Agreement remains in full force and effect. This Agreement will terminate upon the cancellation, termination, expiration or other conclusion of the PBM Agreement. B. Automatic Amendment to Conform to Applicable Law. Upon the effective date of any final regulation or amendment to final regulations with respect to PHI, Standard Transactions, the security of health information or other aspects of the Health Insurance Portability and Accountability Act of 1996 applicable to this Agreement or to the PBM Agreement, this Agreement will automatically amend such that the obligations imposed on the Plan, Client, and Business Associate remain in compliance with such regulations, unless Business Associate elects to terminate the PBM Agreement by providing Client notice of termination in accordance with the PBM Agreement at least thirty (30) days before the effective date of such final regulation or amendment to final regulations. C. Conflicts. The provisions of this Agreement will override and control any conflicting provision of the PBM Agreement. All other provisions of the PBM Agreement remain unchanged by this Agreement and in full force and effect. This Agreement shall replace and supersede any prior business associate agreements executed between the parties relating to the PBM Agreement. D. No Third Party Beneficiaries. The parties agree that there are no intended third party beneficiaries under this Agreement. This provision shall survive cancellation, termination, expiration, or other conclusion of this Agreement and the PBM Agreement. E. Interpretation. Any ambiguity in this Agreement or the PBM Agreement or in operation of the Plan shall be resolved to maintain compliance with the HIPAA Regulations. F. References. References herein to statutes and regulations shall be deemed to be references to those statutes and regulations as amended or recodified. CarelonRx, Inc.City of Ames By:By:_______ 126 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 69 Name:Name: Title: Title: Date: ____________________________Date: 127 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 70 EXHIBIT H REGULATORY REQUIREMENTS (To be included if applicable) 128 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 71 EXHIBIT I DELEGATION REQUIREMENTS This Exhibit I (Delegation Requirements) and any attachment(s) hereto set forth certain requirements pertaining to PBM’s performance of certain activities under the Agreement in accordance with applicable accreditation standards when Client delegates the activities to PBM. 1. Definitions. Capitalized terms used, but not defined, in this Exhibit I (Delegation Requirements) have the meaning ascribed to them by other provisions of the Agreement. The following terms have the meanings specified in this Section 1: (a) “Accreditation Standards”means standardized set of quality standards produced by external organizations. (b)“Delegated Activity” means each activity specified in this Exhibit I (Delegation Requirements), with respect to which Client has delegated the performance to PBM as a Service under the Agreement. (c) “NCQA” means the accrediting body, National Committee for Quality Assurance. (d) “URAC” means an accrediting body of pharmacy benefit management organizations. 2. Delegation and Performance of Activities. Subject to and in accordance with the NCQA Utilization Management (UM) and, where applicable, URAC Pharmacy Benefit Management (PBM) Accreditation Standards and Exhibit B (Services) of the Agreement, Client delegates to PBM responsibility for performing Delegated Activities specified in Attachment 1 to this Exhibit I (Delegation Requirements). PBM will perform the Delegated Activities in accordance with the Agreement, NCQA Utilization Management Standards, and where applicable, URAC PBM Accreditation Standards applicable to performance of Delegated Activities. Client retains all other Utilization Management (UM) functions not specified in this agreement as the Client’s responsibility. 3. Party Responsibilities with respect to Delegated Activities. The responsibilities of each of Client and PBM for satisfying Accreditation Standards applicable to the performance of Delegated Activities are set forth in Attachment 1 to this Exhibit I (Delegation Requirements). 4. Performance in Accordance with Applicable Accreditation Standards. PBM must furnish or make available to Client, upon Client’s request, documentation evidencing PBM’s performance of Delegated Activities in accordance with Attachment 1 to this Exhibit I (Delegation Requirements). 5. PBM Reporting on Delegated Activity Performance. PBM will make available or furnish to Client periodic reporting no less than semi-annually related to the performance of Delegated Activities with the content and format as set forth in Attachment I to this Exhibit I. PBM shall provide applicable reports electronically to Client via the account management team, and include at a minimum: (a)Semi-annual phone stat report including availability for both member services and UM call center, as applicable. (b)Semiannual utilization management turnaround time reporting. (c)Semiannual appeal turnaround time reporting. (d)Semiannual drug recall impact report for Class I and Class II Recalls and voluntary drug withdrawals from the market for safety reasons. 129 CarelonRx sent draft 5/12/2023 CarelonRx sent draft 10/26/2023 CarelonRx sent draft 11/21/2023 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. 72 6. Oversight and Evaluation of Delegated Activity Performance. Client may exercise reasonable ongoing oversight of PBM’s performance of Delegated Activities under the Agreement, including but not limited to the following: (a)Annually reviewing performance of the Delegated Activities set forth in Attachment 1 to this Exhibit I; and (b)Review of documentation provided by PBM following agreed-upon scheduled delivery in Attachment 1 to this Exhibit I. (c)Annually or upon request, provide a UM Program Description for review. 7. PBM Non-Performance of Delegated Activity. Should Client reasonably determine that PBM has materially failed to perform any Delegated Activity, Client shall notify PBM in writing and PBM will provide corrective action plans and evidence of remediation/resolution. In the event PBM fails to remediate or resolve any such material non-performance, Client may revoke its delegation and terminate this Exhibit I (Delegation Requirements). 8.Cooperation with Client’s Quality Improvement Efforts. PBM will cooperate with Client’s efforts to implement quality improvement activities related to the applicable Accreditation Standards set forth in Attachment 1 to this Exhibit I. 130 73 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. ATTACHMENT 1 TO DELEGATION ADDENDUM TO PHARMACY BENEFIT MANAGEMENT AGREEMENT Delegated Accreditation Responsibilities Matrix Accreditation Standard Accreditation Requirement Client CarelonRx Delegated Organization Responsibility (PBM) UM 1 Program Structure Element A - Written Program Description √The organization's UM program description includes the following: 1. A written description of the program structure. 2. The behavioral healthcare aspects of the program. 3. Involvement of a designated senior-level physician in UM program implementation. 4. Involvement of a designated behavioral healthcare practitioner in the implementation of the behavioral healthcare aspects of the UM program. 5. The program scope and process used to determine benefit coverage and medical necessity. 6. Information sources used to determine benefit coverage and medical necessity. UM 1 Program Structure Element B - Annual Evaluation √PBM will annually evaluate and update the UM program, as necessary. UM 2 Clinical Criteria for UM Decision Element A: UM Criteria √The organization: 1) Has written UM decision-making criteria that are objective and based on medical evidence. 2) Has written policies for applying the criteria based on individual needs. 3) Has written policies for applying the criteria based on an assessment of the local delivery system. 4) Involves appropriate practitioners in developing, adopting and reviewing criteria. 5) Annually reviews the UM criteria and the procedures for applying them, and updates the criteria when appropriate. UM 2 Clinical Criteria for UM Decision Element B: Availability Criteria √The organization: 1) States in writing how practitioners can obtain UM criteria. 2) Makes the criteria available to its practitioners upon request. CarelonRx does not maintain a practitioner network. The clinical criteria is posted on CarelonRx’s website and is available to practitioners upon request. UM 2 Clinical Criteria for UM Decisions Element C: Consistency in Applying Criteria √At least annually: 131 74 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. Accreditation Standard Accreditation Requirement Client CarelonRx Delegated Organization Responsibility (PBM) Evaluates the consistency with which health care professionals involved in UM apply criteria in decision- making. Acts on opportunities to improve consistency, if applicable. UM 3 Communicatio n Services Element A - Access to Staff √The organization provides the following communication services for members and practitioners: 1) Staff are available at least eight hours a day during normal business hours for inbound collect or toll-free calls regarding UM issues. 2) Staff can receive inbound communication regarding UM issues after normal business hours. 3) Staff are identified by name, title and organization name when initiating or returning calls regarding UM issues. 4) TDD/TTY services for members who need them. 5) Language assistance for members to discuss UM issues. UM 4 Appropriate Professionals Element A: Licensed Health Professionals √Maintains written procedures: 1)Requiring appropriately licensed professionals to supervise all medical necessity decisions. 2)Specifying the type of personnel responsible for each level of UM decision-making. UM 4 Appropriate Professionals Element B: Use of Practitioners for UM Decision- making √Maintains a written job description with qualifications for practitioners who review denials of care based on medical necessity. Practitioners are required to have: 1)Education, training or professional experience in medical or clinical practice. 2)A current clinical license to practice or an administrative license to review UM cases. UM 4 Appropriate Professionals Element E - Practitioner Review of Pharmacy Denials √The organization uses a physician or a pharmacist to review pharmacy denials based on medical necessity. UM 4 Appropriate Professionals Element F: Use of Board- Certified Consultants √1)Maintains written procedures for using board- certified consultants to assist in making medical necessity determinations. 2)Provides evidence that the organization uses board- certified consultants for medical necessity determinations. 132 75 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. Accreditation Standard Accreditation Requirement Client CarelonRx Delegated Organization Responsibility (PBM) UM 5 Timeliness of UM Decisions Element C: Notification of Pharmacy Decisions √Adheres to the following time frames for notifying Members and practitioners of pharmacy UM decisions: 1)For commercial and Exchange urgent concurrent decisions, the organization gives electronic or written notification of the decision to members and practitioners within 24 hours of the request. 2)For commercial and Exchange urgent preservice decisions, the organization gives electronic or written notification of the decision to members and practitioners within 72 hours of the request. 3)For commercial and Exchange nonurgent preservice decisions, the organization gives electronic or written notification of the decision to Members and practitioners within 15 calendar days of receiving the request. 4)For Post-service decisions, the organization gives electronic or written notification of the decision to Members and practitioners within 30 calendar days of receiving the request. 5)NOT APPLICABLE 6)NOT APPLICABLE 7)NOT APPLICABLE UM 5 Timeliness of UM Decisions Element D: UM Timeliness Report √Monitors and submits a report for timeliness of: 1)NOT APPLICABLE- Notification of nonbehavioral UM decisions. 2)NOT APPLICABLE- Notification of behavioral UM decisions. 3)Notification of pharmacy UM decisions. UM 6 Clinical Information Element C: Relevant Information for Pharmacy Decisions √Documents that it consistently gathers relevant information to support pharmacy UM decision making. UM 7 Denial Notice Element G: Discussing a Pharmacy Denial With a Reviewer √Gives practitioners the opportunity to discuss pharmacy UM denial decisions with a physician or pharmacist. UM 7 Denial Notice Element H: Written Notification of Pharmacy Denials √Written notification of pharmacy denials to Members and their treating practitioners contains the following information: 1)The specific reasons for the denial, in language that is easy to understand. 133 76 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. Accreditation Standard Accreditation Requirement Client CarelonRx Delegated Organization Responsibility (PBM) 2)A reference to the benefit provision, guideline, protocol or similar criterion on which the denial decision is based. 3)A statement that Members can obtain a copy of the actual benefit provision, guideline, protocol or similar criterion on which the denial decision was based, upon request. UM 7 Denial Notices Element I: Pharmacy Notice of Appeal Rights/Process √Written notification of pharmacy denials to Members and their treating practitioners contains the following information: 1)A description of appeal rights, including the Member’s right to submit written comments, documents or other information relevant to the appeal. 2)An explanation of the appeal process, including the Member’s right to representation and the appeal time frames. 3)A description of the expedited appeal process for urgent preservice or urgent concurrent denials. 4)Notification that expedited external review can occur concurrently with the internal appeal process for urgent care. UM 8 Policies for Appeals Element A: Internal Appeals √Maintains written procedures for registering and responding to written internal appeals including: 1) For commercial and exchange, allowing at least 180 calendar days after notification of the denial for the member to file an appeal. 2) Documenting the substance of the appeal and any actions taken. 3) Full investigation of the substance of the appeal, including any aspects of clinical are involved. 4) The opportunity for the member to submit written comments, documents or other information relating to the appeal. 5) Appointment of a new person to review an appeal who was not involved in the initial determination and who is not the subordinate of any person involved in the initial determination. 6) Appointment of at least one person to review an appeal who is a practitioner in the same or similar specialty. 7) The decision for a preservice appeal and notification of the member within 30 calendar days of receipt of the request. 8) The commercial and exchange decision for a postservice appeal and notification to the member within 60 calendar days of receipt of the request. 134 77 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. Accreditation Standard Accreditation Requirement Client CarelonRx Delegated Organization Responsibility (PBM) 9) The decision for an expedited appeal and notification to the member within 72 hours of receipt of the request. 10) Notification to the member about further appeals rights. 11) Referencing the benefit provision, guideline, protocol or other similar criterion on which the appeal decision is based. 12) Giving members reasonable access to and copies of all documents relevant to the appeal, free of charge, upon request. 13) Including a list of titles and qualifications, including specialties, of individuals participating in the appeal review. 14) Allowing an authorized representative to act on behalf of the member. 15) Providing notices of the appeals process to members in a culturally and linguistically appropriate manner. 16) Continued coverage pending the outcome of an appeal. UM 9 Appropriate Handling of Appeals Element B: Timeliness of the Appeal Process √Adheres to the following time frames for appeal process: 1) For preservice appeals, provide electronic or written notification within 30 calendar days of receipt of the request. 2) For Commercial and Exchange postservice appeals, provides electronic or written notification within 60 calendar days of receipt of the request. 3) For expedited appeals, provides electronic or written notification within 72 hours of receipt of the request. UM 9 Appropriate Handling of Appeals Element C: Appeal Reviewers √The organization provides nonsubordinate reviewers who were not involved in the previous determination and same-or-similar-specialist review, as appropriate. UM 9 Appropriate Handling of Appeals Element D: Notification of Appeal Decision/Rights √1) Specific reasons for the appeal decision, in easily understandable language. 2)A reference to the benefit provision, guideline, protocol or other similar criterion on which the appeal decision was based. 3) Notification that the member can obtain a copy of the actual benefit provision, guideline, protocol or other similar criterion on which the appeal decision was based, upon request. 135 78 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. Accreditation Standard Accreditation Requirement Client CarelonRx Delegated Organization Responsibility (PBM) 4) Notification that the member is entitled to receive reasonable access to and copies of all documents, free of charge, upon request. 5) A list of titles and qualifications, including specialties, of individuals participating in the appeal review. 6) A description of the next level of appeal, either within the organization or to an independent external organization, as applicable, along with any relevant written procedures. UM 10 Evaluation of New Technology Element A: Written Process √For drugs and/or devices covered under the pharmacy benefit, written process for evaluating new technology and the new application of existing technology for inclusion in benefits plan includes an evaluation of the following: 1)NOT APPLICABLE– Medical procedures 2)NOT APPLICABLE–Behavioral healthcare procedures 3) Pharmaceuticals. 4)Devices UM 10 Evaluation of New Technology Element B: Description of the Evaluation Process √For drugs and/or devices covered under the pharmacy benefit, written evaluation process includes the following: 1)The process and decision variables used to make determinations. 2)A review of information from appropriate government regulatory bodies. 3)A review of information from published scientific evidence. 4)A process for seeking input from relevant specialists and professionals who have expertise in the technology. UM 11 Procedures for Pharmaceutic al Management Element A: Pharmaceutical Management Procedures √Policies and procedures for pharmaceutical management for drugs covered under the pharmacy benefit include the following: 1)The criteria used to adopt pharmaceutical management procedures. 2)A process to use clinical evidence from appropriate external organizations. 3)A process to include pharmacist and appropriate practitioners in the development of procedures. 4)A process to provide procedures to practitioners annually and when it makes changes. 136 79 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. Accreditation Standard Accreditation Requirement Client CarelonRx Delegated Organization Responsibility (PBM) CarelonRx will not distribute annual notifications of pharmaceutical management procedures to practitioners. CarelonRx will partner with client to develop materials at client’s request. UM 11 Procedures for Pharmaceutic al Management Element B: Pharmaceutical Restrictions Preference √√For drugs covered under the pharmacy benefit, annually and after updates, communicates to Members and prescribing practitioners: 1)A list of pharmaceuticals, including restrictions and preferences. 2)How to use the pharmaceutical management procedures. 3)An explanation of limits or quotas. 4)How prescribing practitioners must provide information to support an exception request. 5)Process for generic substitution, therapeutic interchange and step-therapy protocols. CarelonRx will not distribute annual updates of pharmaceutical management procedures or drug lists to practitioners or members. CarelonRx will partner with client to develop materials at client’s request. CarelonRx will communicate negative formulary changes to affected members and their practitioners for drugs covered under the pharmacy benefit. UM 11 Procedures for Pharmaceutic al Management Element C: Pharmaceutical Patient Safety Issues √For drugs covered under the pharmacy benefit, pharmaceutical procedures include: 1)Identifying and notifying Members and prescribing practitioners affected by a Class II Recall or voluntary drug withdrawals from the market for safety reasons within 30 calendar days of the FDA notification. 2)An expedited process for prompt identification and notification of Members and prescribing practitioners affected by a Class I Recall. UM 11 Procedures for Pharmaceutic al Management Element D: Review and Update Procedures √With the participation of physicians and pharmacists for drugs covered under the pharmacy benefit, annually: 1)Reviews the procedures. 2)Reviews the list of pharmaceuticals. 3)Updates the procedures as appropriate. 4)Updates the list of pharmaceuticals as appropriate. UM 12 UM System Controls Element A: UM Denial System Controls √Maintains policies and procedures describing system controls specific to UM denial notification dates that: 1)Define the date of receipt consistent with NCQA requirements. 137 80 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. Accreditation Standard Accreditation Requirement Client CarelonRx Delegated Organization Responsibility (PBM) 2)Define the date of written notification consistent with NCQA requirements. 3)Describe the process for recording dates in systems. 4)Specify titles or roles of staff who are authorized to modify dates once initially recorded and circumstances when modification is appropriate. 5)Specify how the system tracks modified dates. 6)Describe system security controls in place to protect data from unauthorized modification. 7)Describe how the organization monitors its compliance with the policies and procedures in factors 1-6 at least annually and takes appropriate action, when applicable. When the Delegate is granted access to UM systems, the Delegate will not have access to modify CarelonRx UM systems or CarelonRx UM system data. UM 12 UM System Controls Element B: UM System Controls Oversight √At least annually, the organization demonstrates that it monitors compliance with its UM denial controls, as described in Element A, factor 7, by: 1) Identifying all modifications to receipt and decision notification dates that did not meet the organization’s policies and procedures for date modifications. 2) Analyzing all instances of date modifications that did not meet the organization’s policies and procedures for date modifications. Acting on all findings and implementing a quarterly monitoring process until it demonstrates improvement for one finding over three consecutive quarters. UM 12 UM System Controls Element C: UM Appeal System Controls √Maintains policies and procedures describing system controls specific to UM appeal dates that: 1)Define the date of receipt consistent with NCQA requirements. 2)Define the date of written notification consistent with NCQA requirements. 3)Describe the process for recording dates in systems. 4)Specify title or roles of staff who are authorized to modify dates once initially recorded and circumstances when modification is appropriate. 5)Specify how the system tracks modified dates. 6)Describe system security controls in place to protect data from unauthorized modification. 7)Describe how the organization monitors its compliance with the policies and procedures in factors 138 81 This document contains confidential and proprietary information, including trade secrets, and commercial and financial information, any and all of which are protected from disclosure under the Freedom of Information Act (FOIA), pursuant to 5 U.S.C. § 552(b)(4) and 45 C.F.R. Part 5, and any and all state equivalents. Accreditation Standard Accreditation Requirement Client CarelonRx Delegated Organization Responsibility (PBM) 1–6 at least annually and takes appropriate action, when applicable. When the Delegate is granted access, the Delegate will not have access to modify CarelonRx Appeal systems or CarelonRx appeal system data. UM 12 UM System Controls Element D - UM Appeal System Controls Oversight √At least annually, the organization demonstrates that it monitors compliance with its UM appeal controls, as described in Element C, factor 7, by: 1) Identifying all modifications to receipt and decision notification dates that did not meet the organization’s policies and procedures for date modifications. 2) Analyzing all instances of date modifications that did not meet the organization’s policies and procedures for date modifications. 3) Acting on all findings and implementing a quarterly monitoring process until it demonstrates 4) improvement for one finding over three consecutive quarters. 139 ITEM #:13 DATE:12-12-23 DEPT:Fleet SUBJECT:FLEET REPLACEMENT PROGRAM - WHEEL LOADER FOR PUBLIC WORKS STREETS DIVISION COUNCIL ACTION FORM BACKGROUND: There are four rubber-tired wheel loaders in the City’s fleet. The loader used by Public Works Street Maintenance division is scheduled for replacement in July 2024. Bids for a new loader, with bucket, were solicited with a request for a guaranteed buyback offer. The bidders offering a buyback require the City to purchase an extended powertrain and hydraulic warranty as a condition of the buyback. The bidders offering to buy back the machine 5 years from the date of purchase will receive a bid credit in the evaluation process. The credit amount is equal to the vendor's buyback offer, less 35% of the base bid amount. This 35% threshold is what staff believes it can receive if the equipment was sold at auction rather than bought back by the vendor; therefore, buyback offers that exceed 35% of the bid price represent a better value to the City. Bids for this machine were received and evaluated as follows: Bidder Machine Base Bid Warranty 5-Yr. 5-yr. Buyback Credit Fuel Cost Over 5 years Net Evaluated Cost Titan Machinery of Des Moines Case 621G- 2-XR $213,000 $6,463 ($12,780)$35,000 $241,683 Housby Heavy Equipment of Ankeny Iowa Volvo L70H - LB $229,900 $9,750 ($4,535)$35,000 $270,115 Murphy Tractor of Des Moines John Deere 544P $241,176 $7,685 ($9,226)$38,500 $278,135 Murphy Tractor - Alternate Bid John Deere 544L $203,868 $5,951 $0 $38,500 $248,319 RTL Equipment of Des Moines also provided pricing for machines. RTL Equipment's bids were non- responsive/incomplete, and not acceptable as presented. City staff evaluated all bids received to determine the wheel loader with the net low cost. This net low cost included the base bid, warranty, buy back credit, and estimated fuel cost over the life of the unit. Based on this evaluation Titan Machinery of Des Moines provided the net low cost of $241,683. Titan Machinery's low bid of $213,000 is acceptable and meets the minimum specification required by the City for this equipment. The price for Titan Machinery's Case 621G-2 -XR Wheel Loader with purchase of the Comprehensive 5-year Warranty for $6,463 is a total purchase price of $219,463. Titan 140 Machinery's buyback offer of $87,330 for the machine in 5 years is acceptable. City staff recommends approving the option for the City to exercise the the buyback guarantee in 5 years. Available funding for this acquisition is as follows: Accumulated fleet replacement funds available July 1, 2024 $93,413 Operating department undesignated equipment funds 43,000 Funds from Murphy Tractor for buyback of the City's existing loader 90,000 Total $226,413 ALTERNATIVES: 1. a. Award this contract, as the net evaluated low bid, to Titan Machinery of Des Moines, IA, for one 2024 Case 621G-2-XR Wheel Loader for $213,000 b. Purchase the Comprehensive 5-year Warranty for $6,463 for a total cost of $219,463 c. Approve the City’s option to exercise Titan Machinery's buy back guarantee for the loader of $87,330 after five years. 2. Approve one of the other bids. 3. Direct staff to analyze bids for other options. 4. Reject bids at this time. CITY MANAGER'S RECOMMENDED ACTION: The purchase of this piece of equipment is crucial to the operations of the Street Maintenance division of the Public Works Department, and the unit provides the best net evaluated cost for the department. All four bids were in excess of of the budgeted replacement funds for this piece of equipment. Fortunately, there are sufficient funds in the undesignated balance in the department's fleet replacement account to allow for this transaction to proceed. Therefore, it is the recommendation of the City Manager that the City Council adopt Alternative #1 as described above. 141 ITEM #:14 DATE:12-12-23 DEPT:W&PC SUBJECT:CATERPILLAR G379 METHANE/NATURAL GAS ENGINE GENERATOR OVERHAUL PROJECT COUNCIL ACTION FORM BACKGROUND: The process of treating wastewater at the Water Pollution Control Facility produces methane gas as a byproduct. The methane is burned in large engines to generate electric power, which offsets the facility's electric power demand from the utility provider. The engines require routine maintenance and periodic overhauls. On October 23, 2023, the City issued a notice to bidders for the overhaul of the Caterpillar G379 methane/natural gas engine generator set (referred to as MG #2). On 11/14/2023, the City received a single bid. Bidder Bid Price Altofer Power Systems, Cedar Rapids Base Bid $155,905.05 Alternate - individual parts vs. cylinder packs $18,987.42 Alternate - rebuild gas regulators $11,750.00 Altorfer Power Systems quoted $155,905.05 for the engine overhaul, conditioned upon the ability to utilize "cylinder pack" kits. At the time of the bid, cylinder packs were not available, and Altorfer quoted an additional cost of $18,987.42 should they need to purchase parts individually instead of as cylinder pack kits. Altorfer has since confirmed that they are now able to source the cylinder pack kits, making this additional cost unnecessary. Rebuilding of the gas regulators was included as an optional additional item at $11,750. Staff recommends accepting this alternate, due to the number of run time hours since the last rebuild. Accepting this alternate brings the contract cost to $167,655.05. The contract includes the use of parts from the City’s inventory. Altorfer Power Systems took exception to the City’s normal two-year warranty due to the City-owned parts being more than a year old. Altorfer agreed to provide a one-year warranty on parts and labor with the option to purchase additional time at the end of the overhaul. Staff is agreeable to this change in terms. This project was budgeted in the FY 2022/23 Capital Improvements Plan as part of the MG2/MG3 Maintenance project. Carryover funds of $153,169 are available. The single bid came in higher than the authorized funding, but includes additional work that was not previously planned. Altorfer Power Systems' bid includes recommended work to be done to the generator portion of the engine generator set that includes testing, cleaning, bearing replacement and bearing sleeve machine work. Savings from the MG #1 Engine Replacement project of $39,521 can be transferred to the MG2/MG3 Maintenance project to cover the cost difference and to provide a contingency should additional repairs be required once the engine is disassembled. 142 ALTERNATIVES: 1. a. Accept the base bid plus the add alternate to rebuild the gas regulators by Altorfer Power Systems of Cedar Rapids, Iowa in a combined total cost of $167,655.05 for the Caterpillar G379 Methane/Natural Gas Engine Generator Overhaul Project. b. Authorize the transfer of $39,521 from the WPC MG #1 Replacement project to the MG2/MG3 Overhaul project. 2. Do not accept the bid at this time. CITY MANAGER'S RECOMMENDED ACTION: The methane generator is an integral and vital component of the Water Pollution Control Facility, utilizing biogas from the process to produce electricity and reduce electrical costs. It is in the City’s best interest to maintain this unit in a high degree of reliability. Altorfer Power Systems has the expertise to perform the work and has submitted a competitively solicited bid. Funds are available to cover this project. Therefore, it is the recommendation of the City Manager that the City Council adopt Alternative No. 1 as described above. 143 ITEM #:15 DATE:12-12-23 DEPT:ELEC SUBJECT:UNIT 7 BOILER FEEDWATER PUMP NO. 2 INSPECTION AND REPAIR PROJECT - CHANGE ORDER NO. 1 COUNCIL ACTION FORM BACKGROUND: Feedwater pumps are required for operation of the Power Plant, as they are the primary pumps used to pump water through the boiler for conversion to steam to drive the turbine. To keep the pumps operating and providing required pressure, these pumps require routine inspection and repair. This project includes disassembling the Unit #7 feedwater pump, documenting as-found conditions, addressing components that need to be replaced or repaired, reassembly, documenting as-repaired conditions, and returning the pump to the City. On August 8, 2023, City Council awarded a contract to Flowserve Corporation, Chicago, IL, for the inspection and repair of the 72 Boiler Feedwater Pump in the amount of $115,876.95 (inclusive of sales tax). When the pump was disassembled, it was found with several components out of tolerance from the original equipment manufacturer's specifications. The impellers which provide the flow and pressure, were found with too large an opening in the middle for the shaft. The only way to repair this opening is to weld additional material on the inside of the impeller and then machine the new material to the appropriate dimension. Another major item found is the need to replace the existing studs. These studs are large, threaded bolts that hold the case together. Because of the high operating pressure, the torque applied to the studs is very high, ranging between 2,000 and 5500 ft-lb. This high torque causes the bolts to stretch and after one or two uses, they need to be replaced. The manufacturer recommends replacing the studs due to the stretch already incurred on the studs. Failure of one or more studs could be catastrophic to the pump. City staff visited the factory to review the repairs and the proposed change order costs. Staff anticipates these repairs will allow the pump to operate for another 5-10 years. THIS ACTION: The actual conditions of the pump were unknown until it was opened up and examined. The base bid covered anticipated typical wear, however, there are extensive repairs needed to restore the pump to its necessary operating condition. Change Order No. 1 covers the additional repair and restoration needed. The cost of the change order is $178,185.97 (inclusive of sales tax). Funds will come out of equipment repair portion of the operating budget which contains in excess of $200,000 in this fiscal year. 144 ALTERNATIVES: 1. Approve Change Order No. 1 in the amount of $178,185.97 to Flowserve Corporation, Chicago, IL, for the 72 Boiler Feedwater Pump Inspection and Repair. 2. Do not approve the change order and direct staff to seek other options available to complete this work. CITY MANAGER'S RECOMMENDED ACTION: Approving this change order will restore the Unit 7 Boiler Feedwater Pump No. 2 to good operating condition providing reliable performance for the future. Therefore, it is the recommendation of the City Manager that the City Council adopt Alternative No. 1, as described above. 145 To:Mayor and City Council From:City Clerk's Office Date:December 12, 2023 Subject:Contract and Bond approval Item No. 16 MEMO There is no Council Action Form for this item. City Council approval of the contract and bond for the project is simply fulfilling a State Code requirement. /cmw City Clerk's Office 515.239.5105 main 515.239.5142 fax 515 Clark Ave. P.O. Box 811 Ames, IA 50010 www.CityofAmes.org 146 ITEM #:17 DATE:12-12-23 DEPT:ELEC SUBJECT:RESOLUTION ACCEPTING COMBUSTION TURBINE1 RETURN TO SERVICE PROJECT AS COMPLETED BY MMC CONTRACTORS NATIONAL INC, OF KANSAS CITY, MO AND APPROVING REDUCTION IN RETAINAGE COUNCIL ACTION FORM BACKGROUND: Combustion Turbine 1 (CT1) is a 19 megawatt electric generating unit necessary to meet the City’s reserve capacity requirement. It is used primarily to alleviate local and regional transmission system stability and reliability problems. The unit entered service in 1972. In July 2013, the first stage compressor of the engine catastrophically failed while operating, which wrecked the engine and caused significant collateral damage. A significant amount of work was performed to return the generating unit to service. It should be noted that the work to return CT1 to service was divided into three work categories and the bid document was subdivided into the following three separate bids based on these categories. This approach allowed the City flexibility as to how to evaluate and award a contract for these categories. On August 25, 2015, two contracts were awarded to MMC Contractors National Inc, of Kansas City, MO -- Bid No. 2 Inlet Air System in the amount of $915,590 and Bid No. 3 Exhaust System in the amount of $612,900 (both inclusive of Iowa Sales Tax). There were three change orders to the Inlet Air System contract totaling $12,821.94. Change Order No. 1 was for additional work to repair parts of the evaporative cooler flanges in the amount of $4,798.76. Change Order No. 2 was for additional material in the amount of $601.70. Change Order No. 3 was to cover the cost of equipment storage and a union wage increase in the amount of $7,421.48. There were three change orders to the Exhaust System contract totaling $18,920.74. Change Order No. 1 was for additional work to clean rust off the power turbine and pit removal from the exhaust in the amount of $4,027.19. Change Order No. 2 was for additional labor and materials to install the additional stack flashing in the amount of $11,239.35. Change Order No. 3 was to cover the cost of equipment storage and a union wage increase in the amount of $3,654.20. 147 RETAINAGE ISSUES: There were two issues related to the retainage owed MMC for the work on CT1. The first issue involves the performance of the evaporative cooler after the work was completed. The evaporative cooler performed just outside the requested inlet air cooling measurement per the bid specifications. The second issue involves the exhaust stack support structure built by MMC which did not allow the engine compartment to be ventilated properly when the unit was operating. This caused the heat emitted from the engine to build up in the compartment to temperatures that were detrimental to the equipment inside the compartment. After several conversations with MMC, staff was able to reach resolution for both issues. In the case of the evaporative cooling, staff determined that there was a margin of error in the testing procedures used by the City. With the results of the test falling within this margin of error, staff accepted the performance of the cooler as meeting specifications. Regarding ventilation issue, it was determined it would be best for Electric staff to hire a structural engineer and a mechanical contractor to perform the modifications on the evaporative cooler and properly support the exhaust stack while providing adequate ventilation to the engine compartment. Once the work was completed, the funds used to perform this additional work were to be deducted from the retainage held on the two projects with MMC. MMC agreed to this process. The attached spreadsheet labeled 'GT-1 MMC Closeout' shows the detailed expenditures for both projects. The total retainage withheld between both projects is $78,011.63. The total expenditures for solving the two remaining issues is $61,990.23. This leaves a remaining retainage amount of $16,021.40 which will be returned to MMC. ALTERNATIVES: 1. A. Accept completion of the CT1 Return to Service Project with MMC Contractors National Inc, of Kansas City, MO, in the amount of $1,560,232.68. B. Reduce and release the retainage to MMC Contractors National Inc, of Kansas City, MO, in the amount of $16,021.40. 2. A. Do not accept the project as complete. B. Do not reduce or release the retainage. CITY MANAGER'S RECOMMENDED ACTION: CT1 combustion turbine is a generating unit necessary for the City’s reserve capacity requirements and to alleviate local and regional transmission system stability and reliability problems. The generating unit continues to serve as a vital part of the City of Ames electric system. Staff has developed a plan to resolve a remaining ventilation issue with another contractor. The project engineer has certified that the project is complete and the reduced retainage of $16,021.40 can be released. Therefore, it is the recommendation of the City Manager that the City Council adopt Alternative No. 1 as stated above. 148 ATTACHMENT(S): GT-1 MMC Closeout.xlsx MMC Contract # 2015-132 Engineer's Statement of Completion.pdf 149 GT-1 MMC Reparation Expenses Firm PO Number Funds Held Olsson 057705 $46,420.60 Nuemann Bros 061569 $31,591.03 $78,011.63 Date Description Stack Mod Evap Cooler Grand Total Inlet (PO 51988)Exhaust (PO51989) $46,420.60 $31,591.03 2020 Apr 29 Olsson: GT-1 Exhaust Stack Support Modification Design Phase 101 $4,115.00 $4,115.00 $27,476.03 2020 May 26 Olsson: GT-1 Exhaust Stack Support modification Design L4x3 Removal $277.50 $4,392.50 $27,198.53 2023 Jun 30 Olsson: GT-1 Exhaust Stack Support modification Design Phase 101 $4,187.50 $8,580.00 $23,011.03 2020 Sep 23 Olsson: GT-1 Exhaust Stack Support modification Design Phase 101 $370.00 $8,950.00 $22,641.03 2022 Aug 9 Evap Cooler Filter & Sump Assembly Removal $104.15 $9,054.15 $46,316.45 2022 Aug 12 Evap Cooler Filter & Sump Assembly Removal & Installation $644.24 $9,698.39 $45,672.21 2022 Aug 15 Modern: Evap Cooler Sump Drain Installation and Fill Line adjustment $4,048.88 $13,747.27 $41,623.33 2022 Aug 17 Evap Cooler Filter & Sump Assembly Replacement $166.64 $13,913.91 $41,456.69 2022 Aug 26 Evap Cooler Plenum base nut slag removal $83.32 $13,997.23 $41,373.37 2022 Aug 26 Modern: Evap Cooler GG LO Tank Vent Line installation $7,719.00 $21,716.23 $33,654.37 2023 Mar 17 Neumann Bros.: GT-1 Exhaust Stack Support Modification $39,869.00 $61,585.23 -$17,227.97 2023 Jul 31 Olsson: GT-1 Exhaust Stack Support Modi Design & As-Built Dwgs $405.00 $61,990.23 -$17,632.97 $33,654.37 -$17,632.97 $16,021.40 $0.00New PO Balances PO 51988 Inlet PO 51989 Exhaust Total leftover 150 151 ITEM #:18 DATE:12-12-23 DEPT:Public Works SUBJECT:2020/21 SHARED USE PATH SYSTEM EXPANSION - VET MED TRAIL (S. 16 TH STREET TO S. GRAND AVENUE) COUNCIL ACTION FORM BACKGROUND: This program provides for the construction of shared-use paths on street rights-of-way, adjacent to streets, and through greenbelts. The Long-Range Transportation Plan (LRTP) identifies those paths that separate bicycle traffic from higher-speed automobile traffic. This project was identified as "OFF 14" in the 2040 LRTP. On June 28, 2022, City Council awarded the project to Jasper Construction Services, Inc. of Newton, Iowa in the amount of $333,928.60. The final balancing change order was approved in the deduct amount of ($2,555.75) to reflect finished measured quantities, bringing the final construction cost to $331,372.85. The revenues and expenses for this project are as follows: Revenue Expenses Local Option Sales Tax $461,000 AAMPO TAP Funds (80% of construction, up to $159,000)$159,000 Permanent Easement $3,100.00 Construction $331,372.85 Engineering and Administration $142,500.00 $620,000 $476,972.85 ALTERNATIVES: 1. Accept the 2020/21 Shared Use Path System Expansion - Vet Med Trail (S.16th Street to S. Grand Avenue) project as completed by Jasper Construction Services, Inc. of Newton, Iowa in the amount of $331,372.85. 2. Direct staff to pursue modifications to the project. CITY MANAGER'S RECOMMENDED ACTION: The project has now been completed in accordance with the approved plans and specifications. Therefore, it is the recommendation of the City Manager that the City Council adopt Alternative No. 1, as noted above. ATTACHMENT(S): Final Acceptance Map.pdf 152 S 16TH ST S GRAND AVE S 5TH ST S MAPLE AVE N 1 inch = 375 feet Date: 12/6/2023 2020/21 Shared Use Path - Vet Med Trail Pro je ct Limits Attachment B 153 To:Mayor & City Council From:John Joiner Date:12/12/2023 Subject:LOC Reduction Item No. 19 MEMO Partial completion and reduction of financial security to $423,758.25. North Dayton Industrial LOC Reduction 1.pdf City Clerk's Office 515.239.5105 main 515.239.5142 fax 515 Clark Ave. P.O. Box 811 Ames, IA 50010 www.CityofAmes.org 154 Smart Choice Public Works Department 515.239.5160 main 515 Clark Ave. P.O. Box 811 Engineering 515.239.5404 fax Ames, IA 50010 www.CityofAmes.org Public Works Department 515 Clark Avenue, Ames, Iowa 50010 Phone 515-239-5160 Fax 515-239-5404 November 30, 2023 Honorable Mayor and Council Members City of Ames Ames, Iowa 50010 RE: North Dayton Subdivision Letter of Credit Reduction No. 1 Mayor and Council Members: I hereby certify that public improvements including water system, sanitary sewer, storm sewer, subbase and concrete pavement for Bailey Avenue, Dayton Avenue Widening required as a condition for approval of the final plat of North Dayton Subdivision, have been completed in an acceptable manner by various contractors. The above-mentioned improvements have been inspected by the Engineering Division of the Public Works Department of the City of Ames, Iowa and found to meet City specifications and standards. Improvements outstanding to be completed at this time include stormwater management as-builts, COSESCO, street lights and conduit, electrical primary conduit, mailboxes and concrete pads, sidewalk, pavement markings and symbols for Dayton Avenue widening, and as-builts for pedestrian ramps. As a result of this certification, it is recommended that the financial security for public improvements on file with the City for this subdivision be reduced to $423,758.25. Sincerely, John C. Joiner, P.E. Director JJ/tp cc: Finance, Developer, Planning & Housing, Subdivision file 155 North Dayton Subdivision November 30, 2023 Page 3 Items completed as part of this reduction of financial security for North Dayton Subdivision. ITEM UNIT Qty Sub Grade Preparation Bailey Ave SY 9994 Subbase 6" Bailey Ave. SY 9994 Pavement PCC 8" SY 8863 Sanitary Sewer Gravity Main, Trenched, 12" LF 3266 Sanitary Sewer Sercvice Stub EA 10 Sanitary Mahole SW 301 48" EA 12 Connection to Existing Manhole EA 1 Water Main, Trenched, 8" LF 2454 Water Main Fittings LB 950 Water Service Stub 6" EA 6 Valve 8" EA 1 Valve 6", Service EA 10 Tapping Valve Assembly EA 2 Fire Hyrant Assembly EA 9 Storm Sewer, Trenched, RCP, 15" LF 1386 Storm Sewer, Trenched, RCP, 18" LF 581 Storm Sewer, Trenched, RCP, 24" LF 137 Storm Sewer, Trenched, RCP, 30" LF 68 Storm Sewer, Trenched, RCP, 36" LF 466 Storm Sewer, Trenched, RCP, 48" LF 1101 Pipe Apron 15" EA 1 Pipe Apron 24" EA 1 Pipe Apron 30" EA 1 Pipe Apron 48" EA 2 Subdrain 6" Perforated LF 292 Subdrain CleanOut 6" EA 1 Subdrain Outlet 6" EA 1 Storm Manhole SW 401 72" EA 2 Storm Manhole SW 401 48" EA 1 Intake SW 501 EA 12 Intake SW 503 EA 1 Intake SW 505 EA 3 Intake SW 506 EA 2 Intake SW 512,24" EA 1 Intake SE 506 Modified EA 4 156 North Dayton Subdivision November 30, 2023 Page 3 Items completed as part of this reduction of financial security for Dayton Avenue Widening. ITEM UNIT Qty Sub Grade Preparation SY 6620 Manhole Adjustment Major EA 2 Storm Sewer, Trenched, RCP, 15" LF 79 Storm Sewer, Trenched, RCP, 18" LF 79 Removal of Drain Tile LF 688 Pipe Apron 15" EA 2 Pipe Apron 18"" EA 2 Granular Shoulder SY 2180 Pavement HMA 12" TON 2930 Removal of Pavement SY 417 Shared Use Path Pavement, PCC, 5" SY 2370 157 ITEM #:20 DATE:12-12-23 DEPT:Police SUBJECT:12-MONTH LIQUOR LICENSE RENEWAL APPLICATION - NEIGHBORHOOD LIQUOR AND SMOKES, 3505 LINCOLN WAY, SUITE 105 COUNCIL ACTION FORM BACKGROUND: Neighborhood Liquor and Smokes, located at 3505 Lincoln Way, Suite 105, has applied for renewal of its Class E Liquor License with Class B Wine Permit, Class C Beer Permit (Carryout Beer), and Sunday Sales Privilege. These state licenses and permits must receive approval by the local authority (City Council), before they can be issued by the State. PREVIOUS COUNCIL ACTION: On November 8, 2022, the City Council denied an application from Neighborhood Liquor and Smokes for a renewed 12-month license. The applicant subsequently appealed that decision to the Alcoholic Beverages Division (ABD). It is important to note that until a denied applicant has exhausted its appeals, it may continue to operate and sell alcoholic beverages under the privileges of its prior license. At the time of the denial the Ames Police Department submitted the following information as the basis for the recommendation that Council deny the application: "The Police Department conducts compliance checks on establishments that hold liquor licenses in the City of Ames. The compliance checks are completed by taking an underage person to liquor licenses establishments who then attempts to purchase alcohol. A business passes the check if the employee asks for identification and correctly refuses the purchase. An establishment fails the compliance check if the employee sells to the underage person. The Police Department conducted one such compliance check at Neighborhood Liquor and Smokes on March 26, 2021. The employee of Neighborhood Liquor and Smokes sold alcohol to an underage person during the check and was cited. The Police Department conducted another compliance check on February 11, 2022, and an employee sold alcohol to the underage minor. On May 15, the Iowa Alcoholic Beverages Division (ABD), suspended the establishment’s license for 30 days for a second violation in less than two years and fined the business $1,500 as prescribed in Iowa Code 123.50(3)(b). The Police Department conducted a follow-up compliance check on October 20th, 2022, when an employee again sold alcohol to a minor. This is the third violation within three years and Iowa Code 123.50(3)(c) prescribes a 60-day suspension and $1,500 fine. This suspension and fine will be imposed on the establishment by ABD regardless of whether the City Council chooses to approve or deny the requested renewal. In addition to the three compliance check failures, the Police Department has received complaints from citizens, mostly parents, complaining that the business has sold alcohol and tobacco/vaping products to their underage children. While the Police Department has not been able to substantiate each complaint, the complaints tend to corroborate the staff’s observations made during compliance checks. 158 In the event that the City Council denies the requested license renewal, the denial can be appealed, first to the ABD, then to an Administrative Law Judge, then the Director of ABD, and then District Court. Filing an appeal with ABD places a stay on the denial, and the establishment is allowed to continue to operate until the appeal process is complete. If the appeal(s) are not successful, alcohol may not be sold on the premises for one year, or until a new licensee applies for and is granted a new liquor license." RECENT EVENTS: Following the Council's denial of the renewal application, the applicant appealed the Council's decision and an Administrative Law Judge (ALJ) held a hearing regarding the denial where testimony was heard from the applicant and Geoff Huff, Ames Chief of Police. (See attached documents: Closing Argument by Ames Assistant City Attorney, Jane Chang and the ALJ's Proposed Decision). On November 9, 2023, the ALJ affirmed the denial. Specifically, the ALJ ruled, "I conclude based on the evidence presented in this case, the Ames City Council acted appropriately and within the range of its authority, finding that the applicant was not a person of good moral character when it denied the 12-month liquor license renewal request from Neighborhood, and that decision should be affirmed." The decision of the ALJ may be appealed to the Director of ABD. In addition, on September 29, 2023, Neighborhood Liquor Mart failed another compliance check. The Police Department conducted 52+ compliance checks over that weekend and Neighborhood Liquor Mart was one of seven (and one of two retail establishments) that sold to an 18-year-old and/or a 19-year-old. On this date, the minor entered the store to make a purchase. Video from the store shows the employee asked for an ID, briefly (less than one second) looked at the ID, and then scanned the ID. A large red box pops up on the readout to indicate the person is not 21 or older; however, the employee makes the sale anyway. This is the fourth compliance check failure in three years (March 26, 2021, February 11, 2022, October 20, 2022, and this newest failure on September 29, 2023). Iowa Code section 123.50(3)(d) prescribes revocation as the penalty for a fourth compliance check violation within three years. Revocation proceedings would not take place until after the most recent violation is adjudicated. The September 2023 violation is scheduled for a bench trial on December 27, 2023. If the employee is found guilty, ABD will take action on the revocation as prescribed by Iowa Code 123.50(3)(d). Given the overwhelming evidence demonstrating a lack of care by the applicant, a ruling from the ALJ that the applicant is "not a person of good moral character," and the continued pattern of compliance check failures, the Chief of Police is recommending denial of the renewal application. ALTERNATIVES: 1. Deny the renewal application for a 12-month liquor license. 2. Approve the renewal application for a 12-month liquor license. 159 CITY MANAGER'S RECOMMENDED ACTION: Compliance checks are conducted by the Ames Police Department and ABD to ensure liquor license holders are complying with their obligation to ensure underage individuals are not being sold alcohol. These compliance checks require the establishment to exercise a minimal level of due diligence in order to pass. In order to comply, the establishment must simply ask the customer for identification, confirm the age of the customer as being less than 21, and deny the sale. The applicant, Neighborhood Liquor and Smokes, has failed four such compliance checks in less than three years. Repeated fines and suspensions from ABD along with citations from the Ames Police Department have not resulted in a change in practices. An Administrative Law Judge affirmed the Council's previous denial, finding the applicant is not a person of good moral character. Staff does not have confidence that the employees of this establishment will comply with the requirements for holding an alcoholic beverage control license. Therefore, it is the recommendation of the City Manager that the City Council support the advice of the Chief of Police to deny the renewal application. ATTACHMENT(S): 23ABD0009 - Dec.pdf City of Ames Closing Argument (1).pdf 160 IN THE IOWA ADMINISTRATIVE HEARINGS DIVISION CENTRAL PANEL BUREAU ) In the Matter of: ) ) Case No. 23ABD0009 NEIGHBORHOOD LIQUOR ) ABD Docket No: D-2022-00319 MART INC., d/b/a NEIGHBORHOOD ) LIQUOR MART ) 3505 Lincoln Way, Suite 105 ) Ames, IA 50014 ) ) PROPOSED DECISION License No.: LE0003597 ) ) STATEMENT OF THE CASE On September 20, 2023, this matter came before the undersigned for a telephone hearing. Humza Firoz (“Firoz”), an owner of Neighborhood Liquor Mart, Inc. d/b/a Neighborhood Liquor Mart (“Neighborhood”), appeared with his attorney, Alfredo Parrish, and provided testimony. The City of Ames was represented by attorney Jane Chang. The city called Renee Hall (“Hall”), City Clerk and Jeff Huff, Chief of Police, Ames Police Department (“Chief Huff”), to testify. Neighborhood submitted exhibits A – J which were admitted into the record over the City’s objection. The City submitted exhibits A – G, which were admitted without objection. Following the hearing, the record was held open until October 4, 2023 for the submission of specific additional exhibits. On October 4, 2023, the City of Ames submitted Exhibit H. As stated in the October 19, 2023 Order Excluding Neighborhood’s Additional Exhibits, the only portion of Exhibit H considered by the undersigned in this proposed decision is the portion of City’s Exhibit H from November 9, 2021 through November 8, 2022. This is consistent with the September 21, 2023 Order Holding the Record Open. The parties were initially given until October 13, 2023, to file post-hearing briefs. The brief deadline was extended at the request of Appellant to October 18, 2023. Both parties filed post-hearing briefs and the matter was considered fully submitted on October 18, 2023. ISSUE Whether Neighborhood’s liquor license was properly denied by the City of Ames. FINDINGS OF FACT On November 8, 2022, the Ames City Council considered Neighborhood’s “renewal of its Class E Liquor License with Class B Wine Permit, Class C Beer Permit ELECTRONICALLY FILED 2023 NOV 09 7:29 AM ADMIN HEARING E-FILING SYSTEM 161 Case No. 23ABD0009 Page 2 (Carryout Beer) and Sunday Sales Privilege,” which “must receive approval by the local authority (City Council), before they can be issued by the state.” (City Ex. A, p. 1). On that date, Chief Huff of the Ames Police Department provided information to the City Council. Chief Huff testified at the hearing, that while the Council listens to and considers his report and recommendations, the Council does not always follow his recommendation. (Chief Huff Testimony). Chief Huff told the Council how law enforcement conducts compliance checks on liquor establishments. He described these checks as routine, and involving Law enforcement’s use of an underage person entering an establishment at the direction of Ames Police Department. The underage person then attempts to buy alcohol. If the underage person is asked by store employees for their i.d., the person presents their actual i.d., showing their true date of birth. (City Ex. C, video #2 @ 0:40). Chief Huff advised the Council of failed compliance checks at Neighborhood on March 26, 2021, and February 11, 2022. He further stated that after the second incident, the State of Iowa Alcoholic Beverages Division (“ABD”) suspended the license of Neighborhood for a period of thirty (30) days and assessed a statutory penalty of $1,500.00. (City Ex. G)(City Ex. C, video #2 @ 1:37). As a result of the March 26, 2021 failed compliance check, Neighborhood employee, M. Baker (“Baker”), was cited for violating Iowa Code § 123.49(2)(h), Selling Alcohol to Under Legal Age Person. (Ex. D, p. 1). Baker pled guilty as charged in case no. STA0143311. (Ex. D, p. 3). As a result of the February 11, 2022 failed compliance check, Neighborhood employee, A. Oluwatoyin, was cited for violating Iowa Code § 123.49(2)(h), Selling Alcohol to Under Legal Age Person. (Ex. E, p. 1). Oluwatoyin pled guilty as charged in case no. STA0149679 . (Ex. E, p. 3). It is noted by the undersigned, that despite being cited for selling alcohol to an underage person on February 11, 2022, this same employee then sold tobacco to a minor less than two weeks later on February 24, 2022. (Ex. H, pp. 16-23). This was not a compliance check being conducted by law enforcement. Rather, police made contact with the purchaser and inquired about the purchase of tobacco. At that time, the minor said she did not have an I.D. and the employee only asked “are you working for the cops.” (Ex. H, p. 23). This tobacco violation was not included in Chief Huff’s address to the City Council. Chief Huff told the City Council that the Ames Police Department conducted another alcohol compliance check on October 20, 2022, and again Neighborhood failed the check when an employee sold alcohol to an underage person. As a result of this incident, Neighborhood employee, J. Poe (“Poe”), was cited for violating Iowa Code § 123.49(2)(h), Selling Alcohol to Under Legal Age Person. (Ex. F, p. 1). On or about December 6, 2022, about one month after the Council meeting, Poe pled guilty to an amended charge of “Knowingly permit or engage in any criminal activity on the premises covered by the license,” in violation of Iowa Code § 123.49(2)(j), in case no. STA0155408. (Ex. F, p. 3). Chief Huff advised the Council on November 8, 2022, that ABD had not yet assessed the statutory 60-day suspension for a third violation of Iowa 162 Case No. 23ABD0009 Page 3 Code § 123.49(2)(h), but that “we are waiting on that.” (City Ex. C, video #2 @ 1:55). He indicated this would occur after the citation went through the “court process.” (Id.). It is unclear from the evidence presented whether this 60-day suspension was imposed by ABD or if it was avoided due to the plea to the amended code section. Firoz testified at the administrative evidentiary hearing that Poe the violator on October 20, 2022, was a retired person in his 60’s, with a phone that was not working properly when the incident occurred. Firoz stated that Poe’s non-working phone is what caused him to be unable to use the ABD App to scan the I.D. in question. Also, Poe had only been working a few days at that time and was apparently still becoming familiar with the procedures. The day after this incident occurred, Firoz purchased an I.D. scanner to be used at the store so that employees did not need to rely on using their phones or the ABD App. (Neighborhood Ex. C). The evidence presented in this case did not show that Poe would have been unable to simply look at the underage person’s I.D. and see that the individual was underage, regardless of whether or not his phone and the ABD App were working. As Chief Huff stated at the Council meeting, the underage people used in the compliance checks use their own, accurate, I.D.’s and do not present fake I.D.’s. Chief Huff also advised the Council that the Ames Police Department received “a number of complaints, especially from parents, complaining that their underage children have been purchasing alcohol, tobacco and vaping products from this business.” (City Ex. C, video #2 @ 2:27). He did not state the number of complaints received, and advised that law enforcement was not able to substantiate each and every complaint. (Id.). Chief Huff outlined for the Council their options and recommended a denial of the twelve (12) month renewal based upon the history of 3 failed compliance checks, and the number of citizen complaints received. (City Ex. C, video #2 @ 4:10). Chief Huff was asked by Council members about whether Neighborhood has communicated to Law Enforcement any remedial measures they have taken to address the ongoing problem. He responded that none were communicated directly to him. (City Ex. C, video #2 @ 4:44). However, he advised that it was his understanding Neighborhood has obtained an electronic machine that can read driver’s licenses which would be a “pretty simple fix” but he wasn’t sure if they were using it or not. Chief Huff was asked by Council members about the difference between this case and prior cases that came before the Council in which the Council granted a 6-month renewal rather than simply not renewing the 12-month liquor license. (City Ex. C, video #2 @ 6:45). Chief Huff stated the difference in this case, was that he could not recall a time where there were 3 failed compliance checks within a few years, and so many complaints from concerned parents about their underage children being able to buy alcohol, tobacco and vaping products. Chief Huff did not tell the Council about the May 21, 2022 compliance check that Neighborhood passed. (Ex. H, p. 24). Chief Huff also did not report to Council the additional training provided to Neighborhood employees and the recent placement of signs and video surveillance in the store. 163 Case No. 23ABD0009 Page 4 Following the comments at the Council meeting, the board was addressed by members of the public. (City Ex. C, video #2 @ 8:00 am). A current employee of Neighborhood spoke to the Council. This employee told the Council about the increased efforts of the store to stop underage sales, including I-PACT training through the ABD. (Neighborhood Ex. A, B, & E). She also described signs placed in the store to alert customers to have their I.D.’s ready to display at the time of purchase. (Neighborhood Ex. I & J). The employee further alerted the Council to the implementation of an I.D. scanner, so employees could scan an ID to assist with spotting underage individuals trying to by alcohol. (Neighborhood Ex. C). I find the Council was reasonably advised of the stores mitigation efforts and had the opportunity to consider those factors prior to its decision. Also speaking to the Council was a concerned parent, who described her personal experience with her underage son reporting to her that he purchased alcohol, tobacco and vape products from Neighborhood without ever being asked for an I.D. The child apparently told the parent that it was well known that underage individuals could purchase alcohol at Neighborhood. The parent did not indicate personally witnessing any underage sales of alcohol at Neighborhood. In addition, Firoz, who is a 25-year-old man of Pakistani decent, who graduated from Iowa State University with a degree in genetics, and is an owner of Neighborhood, and works full-time in the store, spoke to the Council. He told the Council he was initially unaware of the problem because he did not see it occurring while he was present in the store. Firoz testified at this administrative evidentiary hearing that he worked about 60 to 80 hours per week at the store. (Firoz Testimony). Firoz told the Council about the remedial measures implemented in the store in an effort to eliminate underage sales of alcohol and other products. Firoz indicated that at least one sale to an underage person was done by an employee who had been terminated, but was allowed to work his last shift. Firoz believed this sale may have been done intentionally to get back at Firoz for the termination, but he presented no evidence on this point, only his suspicion. This belief ignores the obvious criminal charge and penalty levied against the former clerk for selling alcohol to minors, a point the employee would have been well aware of if the employee had completed I-PACT training. (Neighborhood Ex. B). It seems unlikely to the undersigned that a person would suffer a criminal conviction and subject themselves to a substantial fine as part of a plan to get back at Firoz. At the conclusion of public comments, a vote was taken and the Ames City Council voted unanimously to adopt alternative one (1) presented by Chief Huff, which was to “Deny the Application for a 12-month liquor license renewal.” (City’s Ex. A, p. 2). Neighborhood appealed. After the administrative hearing in this matter, the City of Ames submitted exhibit H. The undersigned considers only those events between November 9, 2021 through November 8, 2022, consistent with the prior order of this tribunal. The City’s Exhibit H shows that citizen complaints about sale of alcohol and/or tobacco to minors occurred on January 5, 2022, February 1, 2022, July 20, 2022, September 12, 2022, and 164 Case No. 23ABD0009 Page 5 September 16, 2022. (City Ex. H, p. 1). It is also noted that law enforcement had contact with Firoz on January 31, 2022 regarding police cars parking near his establishment and Firoz’s request they not park near the store because it scares away customers. Firoz also talked to law enforcement at that time about difficulty spotting fake I.D.’s and wanting I.D. training. (Ex. H, p. 6). It is noted that none of the failed compliance checks were due to anyone using a fake I.D. Chief Huff testified at the hearing that when Ames Police Department receives complaints about underage sales of alcohol, they would, as a matter of routine, approach people that looked underage leaving the establishment from time to time, to see if they purchased alcohol and if they were in fact underage. This type of law enforcement activity was occurring near the Neighborhood store in the year prior to the City Council meeting on November 8, 2023. (Ex. H, pp. 19-23). No evidence was presented that this activity by law enforcement resulted in any additional citations for selling alcohol to minors. City’s Exhibit H, also shows that law enforcement had contact with Neighborhood on May 28, 2022, about their failure to post the notice of the 30-day suspension of their liquor license on their main door/window, although the notice had been posted on one of their coolers in the store. (Ex. H, p. 26). Firoz testified at the administrative evidentiary hearing that the Neighborhood store provides income for himself, his mother and part-owner, Farhat Firoz, and provides money for his siblings’ tuition to attend college. Losing the liquor license would negatively impact the store’s revenue and consequently his family’s income. Neighborhood does not dispute the underlying criminal charges and convictions regarding selling alcohol to minors. (Neighborhood’s Post-Hearing Brief, p. 2). Neighborhood alleges disparate treatment of Firoz and Neighborhood. The undersigned finds no specific facts presented that support this assertion. Neighborhood does not dispute the prior violations, and the only evidence concerning the additional policing efforts were that they were routine and conducted by law enforcement in response to citizen complaints, which definitely occurred in this case. (City’s Ex. H, Table of Contents, et al.). Chief Huff advised the City Council that he could not recall an establishment with 3 failed compliance checks and the citizen complaints in such a relatively short period of time and that these factors distinguished this case from other cases in which a 6-month renewal was granted. The Appellant argued that other establishments in Ames have had substantially more violations (21 violations) but were allowed a six-month renewal in lieu of denial of their 12-month liquor license renewal. The City of Ames counters that the particular businesses identified by Neighborhood were both bars, not retail establishments, and both were denied a 12-month liquor license. Also, although there were 21 violations, 20 of those violations were issued to patrons for “minor on the premises” a municipal infraction against the patron, not a violation by an employee of the business and not violations of the Iowa Code. Neighborhood did not cite to any similarly situated establishment with similar admitted violations and citizen complaints. I find the facts presented in this case, do not support a conclusion of disparate treatment. 165 Case No. 23ABD0009 Page 6 CONCLUSIONS OF LAW The local authority, in this case, the City of Ames, “shall either approve or disapprove the issuance of a retail alcohol license . . .” Iowa Code § 123.32(2). Iowa Code section 123.49(2)(h) provides, in relevant part: 2. A person or club holding a liquor control license or retail wine or beer permit under this chapter, and the person's or club's agents or employees, shall not do any of the following: . . . h. Sell, give, or otherwise supply any alcoholic beverage, wine or beer to any person, knowing or failing to exercise reasonable care to ascertain whether the person is under legal age, or permit any person, knowing or failing to exercise reasonable care to ascertain whether the person is under legal age, to consume any alcoholic beverage, wine, or beer. The Iowa Code defines legal age as twenty-one years of age or more.1 In this case, Neighborhood does not dispute the underlying violations of Iowa Code § 123.49(2)(h), regarding selling alcohol to underage individuals. Neither is there any dispute from Neighborhood concerning the reality of the citizen complaints received by the Ames Police Department related to concerns of the sale of alcohol to underage persons. Neighborhood’s position in this case, is essentially that the remedial steps taken by the store should counter balance the violations and citizen complaints such that Neighborhood should be afforded an opportunity to continue with a renewed liquor license with the hope that the additional training, I.D. scanner, signage in the store, and improved security equipment will be sufficient to eliminate or satisfactorily ameliorate the repeated instances of Neighborhood employees selling alcohol to underage individuals. Neighborhood cites to no legal authority to support this proposition. It is clear in this case that there have been repeated instances of Neighborhood employees selling alcohol to underage individuals. It is also clear from the exhibits and Chief Huff’s testimony that there have been a significant number of citizen complaints regarding the same conduct of selling alcohol along with tobacco to underage persons. Iowa law provides that a liquor license may only be issued to a person of “good moral character.” Iowa Code § 123.3(40). This requires the person to have a “good reputation” and be in compliance with “this chapter and all laws, ordinances and regulations applicable to the person’s operations under this chapter.” Iowa Code § 123.3(40)(a). 1 Iowa Code § 123.3(24). 166 Case No. 23ABD0009 Page 7 In this case, Neighborhood has not maintained compliance with chapter 123 of the Iowa Code and as shown by the multiple violations of selling alcohol to underage individuals, as confirmed in the exhibits and undisputed by Neighborhood. Also, these violations and the complaints and statements of a concerned citizen and Chief Huff at the City Council meeting on November 8, 2022, leads to the conclusion that Neighborhood does not have a “good reputation” in the community, but in fact has a poor reputation. The remaining argument of Neighborhood is that there was disparate treatment of Firoz and Neighborhood compared to other establishments. However, as found above there is insufficient evidence in the record to reach this conclusion. This allegation is based on argument of counsel and while the briefs discuss other establishments and their history, there was no substantive evidence presented by either party on these matters. However, considering the arguments of counsel and the suggested facts relate thereto, the undersigned found above, that there was a lack of sufficient evidence to support a conclusion of disparate treatment. I conclude based on the evidence presented in this case, the Ames City Council acted appropriately and within the range of its authority, finding that the applicant was not a person of good moral character when it denied the 12-month liquor license renewal request from Neighborhood, and that decision should be affirmed. ORDER IT IS THEREFORE ORDERED, the denial by the Ames City Council of the 12- month liquor license renewal application from Neighborhood, is hereby AFFIRMED. Dated this 9th November, 2023. Toby J. Gordon Administrative Law Judge cc: Neighborhood Liquor Mart Incorporated, c/o Humza Firoz, 1410 Panoramic Ct., Ames, IA 50010; f25humzanaeem@gmail.com (by Email and regular mail) Alfredo Parrish, Attorney for Licensee, 2910 Grand Avenue, Des Moines, IA 50312 (by AEDMS) Jane Chang, Assistant City Attorney, 515 Clark Avenue, PO Box 811, Ames, IA 50010; jane.chang@cityofames.org (by AEDMS) Alana Stamas, IDR (by AEDMS) ABD Staff: Stephen Larson, Stephanie Strauss, Tyler Ackerson, Scherael Thurston-Shell, Madelyn Cutler (By AEDMS) 167 Case No. 23ABD0009 Page 8 NOTICE Pursuant to the administrative rules of the division, any adversely affected party may appeal a proposed decision to the Administrator of the Alcoholic Beverages Division within thirty days after issuance of the proposed decision. In addition, the Administrator may initiate review of a proposed decision on the Administrator's own motion at any time within thirty days following the issuance of a proposed decision. A notice of appeal shall be sent to the Administrator of the Alcoholic Beverages Division, 1918 S.E. Hulsizer, Ankeny, IA 50021. The notice of appeal must be signed by the appealing party or a representative and contain a certificate of service. In addition, the notice must comply with the requirements set forth in 185 Iowa Administrative Code 10.27(3).2 2 185 IAC 10.27(1), (2), (3). 168 Case Title:IN RE THE MATTER OF NEIGHBORHOOD LIQUOR MART INCORPORATED D/B/A NEIGHBORHOOD LIQUOR MART Case Number:23ABD0009 Type:Proposed Decision IT IS SO ORDERED. Toby Gordon, Administrative Law Judge Electronically signed on 2023-11-09 page 9 of 9 169 1 IOWA DEPARTMENT OF INSPECTIONS AND APPEALS ADMINISTRATIVE HEARING DIVISION In the Matter of: Neighborhood Liquor Mart Incorporated d/b/a Neighborhood Liquor Mart 3505 Lincoln Way, Suite 105 Ames, Iowa 50014, License #: LE0003597 Case No. 23ABD009 ABD Docket No: D-2022-00319 CITY’S WRITTEN CLOSING ARGUMENT Denial for Good Cause Ames City Council had good cause to deny renewal of Neighborhood Liquor Mart’s Class E Liquor License with Class B Wine Permit, Class C Beer Permit, and Sunday Sales Privilege after conducting a full public hearing on November 8, 2022. Iowa Code section 123.30(1)(a) states that “[a] liquor control license may be issued to any person who is of good moral character as defined by this chapter.” The information provided to the Ames City Council on November 8th showed that Neighborhood Liquor Mart was not a business of “such . . . good reputation as will satisfy the director that the [business] will comply with [Iowa Code Chapter 123] and all laws, ordinances, and regulations applicable to the [business’] operations under this chapter.” Iowa Code section 123.3(40)(a). The council’s denial of Neighborhood Liquor Mart’s liquor license was based on Chief Geoff Huff’s unbiased report to council, the chief’s statements to council at the hearing, as well as in-person testimony from an employee of the store, a concerned parent whose minor child was able to purchase contraband from the store repeatedly, and Humza Firoz, himself. City’s Exhibits A, B, and C. Chief Huff informed council about a series of failed compliance checks during the prior two years and the complaints the police department received from concerned parents about their minor children being able to purchase alcohol and tobacco products from Neighborhood Liquor. Brietta Voss spoke to council about the purchases her 17-year-old son was able to made at the liquor store. City’s Exhibit C, YouTube time stamp 11:05 to 14:48. She provided details ELECTRONICALLY FILED 2023 OCT 18 4:45 PM ADMIN HEARING E-FILING SYSTEM 170 2 about the manner in which her son was able to purchase large amounts contraband from the store as well as the efforts her husband undertook to stop the store from selling to their son. She let council know that her son was able to make purchases the week after the store’s suspension was lifted in June 2022. Ms. Voss also told council that it is also known to teenagers at other school districts like Ballard and Gilbert that they could purchase items from the store without using fake IDs. Ames City Council had good cause to deny the renewal of Neighborhood Liquor Mart’s liquor license after considering the three failed compliance checks in two years and the statements from Ms. Voss regarding the sale of contraband to minors. The council had more than sufficient reason to believe that Neighborhood Liquor Mart would not comply with Iowa Code Chapter 123 or other laws, ordinances or regulations that applied to the business. Oluwaoyin Adeleke At the public hearing and during the telephonic hearing in this matter, Mr. Firoz said that he had fired the employee who caused his business to fail an alcohol compliance check on February 11, 2022. City’s Exhibit C, YouTube time stamp 17:15 to 18:00. Mr. Firoz told the council that the sale might have been an intentional act to get back at him for the termination. However, Ames Police Department records show that the employee, Oluwaoyin Adeleke, who failed the compliance check on February 11th was still employed by the business on February 24, 2022, when he was cited for selling tobacco to a person under the legal age. City’s Exhibit H, pages 16- 23. On both occasions, Mr. Adeleke did not check the purchaser’s ID. City’s Exhibit H, pages 13, 21, and 23. He did not request to see identification at all on February 11th and allowed a person under the legal age to purchase tobacco on February 24th after being told by the person that she did not have her ID and that she was not working for the police. Id. No Harassment or Bias Mr. Firoz has alleged harassment by an Ames Police Department (Ames PD) officer and bias against his business. Similar accusations are also present in Mr. Firoz’ statement submitted 171 3 as Respondent’s Exhibit H. The city could not find any written complaints to the Ames PD regarding such harassment of the business by Ames police officers. What could be discovered is a series of interactions that are consistent with the community-based policing that the department strives to conduct. Ames Police Department records from January 1, 2022, through September 21, 2023, show that officers from the police department had interactions with either Mr. Firoz or one of his employees on at least six different occasions. All of the interactions were within department guidelines and do not constitute harassment of the business. 1. On January 31, 2022, Mr. Firoz approached Officer Dilok Phanchantraurai at a McDonald’s parking lot and asked the officer why there had been more police cards near his store. City’s Exhibit H, page 6.Officer Phanchantraurai replied that increased police presence was due to the department receiving concerns/reports that the business was selling to underage individuals. Mr. Firoz requested that officers not park patrol cars in the area. Officer Phanchantraurai explained to Mr. Firoz that the business needed to work on fixing the root cause of the issue (selling to minors) and eliminate the negative reputation the business had. 2. On February 11, 2022, the Ames Police Department conducted compliance check at the liquor store. City’s Exhibit H, page 13. Store employee Oluwatoyin Adeleke was cited for the sale of alcohol to a person under the legal age. Officer Phanchantraurai’s report indicates that the co-owner he spoke with on January 31st was also at the store when the citation was issued and that the ABD agent spoke with him about the issue. 3. On May 21, 2022, the Ames Police Department conducted compliance check at the liquor store. City’s Exhibit H, page 24. No sale occurred. This check was conducted during the store’s 30-day suspension period. City’s Exhibit G, page 2. 4. On May 28, 2022, Officer Dilok Phanchantraurai talked to the store about posting the suspension notice on their front door. City’s Exhibit H, page 26. Posting the suspension 172 4 notice in a conspicuous place on the front door is required by Iowa Admin. Code r. 185- 4.15(123). 5. On October 20, 2022, the Ames Police Department conducted compliance check at the liquor store. City’s Exhibit H, page 38. Store employee James Poe was cited for the sale of alcohol to a person under the legal age. Officer Phanchantraurai’s report indicates that he and the ABD agent spoke with the store owner about the issue afterward. 6. On November 20, 2022, Officer Geil observed a young male who appeared to be under the legal age quickly put cases of beer in his vehicle after noticing the officer. City’s Exhibit H, pages 41 and 44. When Officer Geil confronted the young male about his age, the male admitted that he was just 20 years old and had purchased the alcohol using a fake ID. Officer Geil entered the store with the young male to return the beer. While in the store, Officer Geil spoke to the clerk about the fake ID. Officer Geil notes in his report that the clerk and another lade were upset with him. Officer Geil issued a citation to the young male for possession under the legal age but later destroyed the citation as it was written on the wrong from. The video from these interactions was not retained by the APD records system as the citation was not filed. A complaint was made by Kerry Orr, the Neighborhood Liquor Mart employee who spoke to council on November 8, 2022, to the Ames PD. City’s Exhibit H, page 48. Lieutenant Heath Ropp reviewed Officer Geil’s body camera footage and spoke with both Kerry Orr and Officer Geil regarding their interaction on November 20th. As stated in the Lt. Ropp’s email to command staff on November 30, 2022, no department policies were violated during the interaction. The interaction between Officer Geil and Ms. Orr did not occur until November 20, 2022. If Chief Huff was informed of Ms. Orr’s complaint against Officer Geil during Lt. Ropp’s informal investigation, it would have been weeks after Chief Huff submitted his written council action form and appeared at the November 8th council meeting. Chief Huff’s council action form and his 173 5 statements to council on November 8th were based on fact and lacked any bias towards Neighborhood Liquor Mart. No Disparate Treatment The Respondent also alleged that there was disparate treatment between its business and a similar establishment, Sips & Paddy’s Irish Pub. Other than being liquor license holders and both being denied 12-month liquor licenses by the Ames City Council, the two businesses are not similar. Sips & Paddy’s Irish Pub are both bars in the Campustown area of Ames; the businesses are located in the same building and are covered under the same liquor license. Sips & Paddy’s Irish Pub are not liquor stores. Unlike a bar where clientele walk around and order multiple drinks over several hours, Neighborhood Liquor Mart is a liquor store where customers generally pick out merchandise then pay the cashier. Twenty of the twenty-one violations used to deny the 12-month Class C Liquor License renewal were minor-on-premise violations – municipal infractions issued to patrons, not employees of the business, and not violations of the Iowa Code. Further, there was no failed compliance checks at either Sips or Paddy’s Irish Pub during the 12- months prior to their application for renewal. Fourth Failed Compliance Check Despite the Respondent’s changes to the operation of his business and his increased presence at the store, the liquor store failed yet another compliance check on September 29, 2023. City’s Exhibit H, page 57. The store’s fourth failed compliance check in three years. Ames PD’s confidential informant used their real, state-issued driver’s license to make the purchase. The clerk scanned the license using the scanner that Respondent purchased last October, reportedly saw a green light, and proceeded with sale. It does not appear that the employee looked at the driver’s license to determine whether the individual was of age or not. After the employee alleged that a fake ID must have been used by the confidential informant, the officer retrieved the ID that was used to complete the sale. When it was scanned for a second time in front of both the employee and Mr. Firoz, the scanner turned red. Mr. Firoz then reviewed the 174 6 surveillance video from the sale and reported to Officer Escobar that the employee should not have completed the sale. Conclusion For the foregoing reasons, the City asks that the Ames City Council’s decision to deny the renewal of Neighborhood Liquor Mart’s Class E Liquor License with Class B Wine Permit, Class C Beer Permit, and Sunday Sales Privilege be affirmed. Respectfully Submitted, /s/ Jane Chang Jane Chang Assistant City Attorney 515 Clark Avenue, P.O. Box 811 Ames, Iowa 50010 Phone: 515-239-5146 • Fax: 515-239-5142 jane.chang@cityofames.org 175 To:Mayor and City Council From:Steve Schainker, City Manager Date:December 12, 2023 Subject:Short-Term Housing Task Force Recommendations Item No. 21 MEMO Attached is the Staff Report regarding the Short-Term Housing Task Force Recommendations. SLS/gb Staff Report regarding Short-Term Housing Task Force Recommendations.pdf City Clerk's Office 515.239.5105 main 515.239.5142 fax 515 Clark Ave. P.O. Box 811 Ames, IA 50010 www.CityofAmes.org 176 Staff Report SHORT-TERM HOUSING TASK FORCE RECOMMENDATIONS December 12, 2023 BACKGROUND: The Ames Economic Development Commission (AEDC) organized a Taskforce to identify “opportunities and barriers in creating new housing of all types in Ames at prices that are attainable for a wide demographic.” The Taskforce members provided their perceived ranking for the most critical housing needs in Ames. 1) Owner-Occupied housing below $250,000 2) Owner-Occupied housing ranging from $251,000 to $350,000 3) Market rate rental housing 4) Owner-Occupied housing ranging from $351,000 to $500,000 5) Low-income rental housing 6) High-end rental housing 7) Student housing 8) Owner-Occupied housing ranging from $551,000 and above The Taskforce members also identified what they believe are currently the five barriers to creating all types of housing in Ames. 1) Lack of incentives 2) Planning Development Review Committee process 3) Limited housing resources focused on housing development of all types 4) Land cost 5) Limited number of developers in Ames community 1) LACK OF INCENTIVES: a) Create a city-wide tax abatement program which would offer a three year 100% abatement, or a five or ten year sliding scale. This tax incentive would sunset at the end of the 2040 Plan. b.) Include “Pioneer Infrastructure” associated with residential developments into the CIP so that the City, rather than the Developer pays for sanitary sewers, water lines, arterial/collector streets, and intersections outside of the development. c.) Create a program to incentivize the desired size and price of residential units that pays $5,000 to the Home Builder when a foundation is complete and an additional $5,000 to the Home Buyer. 177 d.) The City to pay for “buyout” from Xenia and Central Iowa rural water systems the right for the City to serve a residential development where required in their territory, rather than the Developer. 2. DEVELOPMENT REVIEW COMMITTEE (DRC) PROCESS a) The City Council establish specific housing targets and tract progress. b) The City Council develop aggressive standards to move projects through the DRC and track timeframes for approval. c) Empower staff 1) to be more flexible in its interpretation of codes and 2) the ability to reduce standards by a certain percentage (for example for landscaping, parking, green space). d) Assign a senior member of the City Manager’s staff to facilitate the DRC process. 3. LIMITED HOUSING RESOURCES FOCUSED ON HOUSING OF ALL TYPES a) Encourage and track use of federal, state, and local housing programs. b) Rethink how the City uses HOME funds so that Ames is positively impacting underserved households/housing units. c) Assign a staff person to focus on advocacy and tracking housing objectives, including housing trends in Ames. 4. LAND COSTS No recommendations were offered by the Taskforce to eliminate this barrier. 5. LIMITED NUMBER OF DEVELOPERS INVOLVED IN AMES COMMUNITY No recommendations were offered by the Taskforce to eliminate this barrier. STAFF COMMENTS: The City’s comprehensive plan Ames Plan 2040 was adopted in December 2021 and established a land use plan that could accommodate growth of the city by 15,000 people through the year 2040. Plan 2040 defined land uses, infill opportunities, and growth areas that would support the growth assumption with support for diverse housing types and housing that could meet the needs of households at a variety of income levels. The Plan 178 includes a preference for construction of more ownership housing than rental housing while providing for diverse housing opportunities. If the City were to grow at the assumed 1.5% growth rate, Plan 2040 defined annual housing production averages at approximately 300 housing units each year. Interestingly, the last year that 300 housing units were constructed in the City was 2019, the year the City began preparation of Ames Plan 2040. This was largely driven by the boom in apartment construction between 2011 and 2019. The 300 units is inclusive or all types of dwellings, multi -family and single family. The desired split of new construction identified in the Plan is 55% ownership housing opportunities and 45% rental housing opportunities compared to existing conditions of 60% rental and 40% ownership. The Housing Chapter identifies household income distribution and needs of attainable housing for low and moderate income households as well as moderate and above income households. City staff reviewed affordable housing issues as part of a workshop with City Council in June 2023. It appears from the Task Force letter that the main challenges associated with the Ames housing market are the high cost of new houses, along with a lack of a sufficient number of houses (new and existing) affordable to buyers in various income brackets. The high cost of housing is not unique to Ames as it is an issue of national concern. However, along with the high cost, locally we see very little differentiation of housing types compared to some other larger markets. Housing construction has also slowed within the past year locally and nationally as costs have increased. To substantiate this problem, Developers have indicated to staff that the average cost of a new home which they are building in Ames is now approximately $450,000 which includes a 1,500 to 1,600 square foot house, 2 car garage, 2 bathrooms, 3 bedrooms above grade with an additional bedroom if the basement is partially finished. For comparison, the Census Bureau reported that in 2022 new single-family home median sales price was $457,000 and the average price was $540,000. Within the Midwest region it was $405,000. The national median size of a home was 2,383 square feet of finished space. This is significantly more than the 2018 median of $326,400 nationally and $290,900 in the Midwest. In order to better understand the factors that influence the cost for new housing, staff reviewed survey information published by the National Association of Home Builders (NAHB). Single-family housing costs are divided into seven basic categories to equal the total cost of purchasing a new home. The individual dollars amounts described by NAHB may not correlate specifically to the cost of a home in Ames, but the percentages should roughly track with the NAHB surveys. The single highest cost element is the construction of the home itself at approximately 60% in the 2022 survey. The cost of the lot was second, followed by profit percentage. Staff applied the average of the past three surveys to the example $450,000 home for a general understanding of cost distribution shown in Table 1. 179 Table 1: Breakdown of New Single-Family House Cost- Item % of Total Cost Dollar Cost Lot Cost* 19.2 % $ 86,700 House Construction Cost 59.2 % $ 266,250 Financing Cost 1.8 % $ 8,100 Overhead/General 5 % $ 22,650 Marketing 1 % $ 4,350 Sales Commission 3.8 % $ 17,100 Profit 10 % $ 44,850 Total $450,000 *Included in the Lot Cost are land, grading, on-site infrastructure, off-site pioneer infrastructure, and profit. It appears that this high cost of new housing limits the number of potential qualified buyers, and undoubtedly leads to the higher cost of our existing housing stock. If the City is to attract new residents, a diversity in pricing must be achieved for workforce housing as well as the highest priced housing. STAFF RECOMMENDATIONS: The City Council should consider the fact that even if all of the recommendations suggested in the Task Force report are pursued, circumstances outside of our control; such as rising interest rates, shortage of skilled construction workers, and lack of willing sellers of land within the planned growth areas; might still suppress the demand and ability to produce more housing starts in Ames. Even when taking into account the influences that are outside of our control, staff believes it is worthwhile to consider new strategies to help accomplish the goal of producing a greater variety of housing for all segments of our population. While not all of the Task Force recommendations are being supported at this time, the following is a list of initial action steps that the City staff would support in response to the Task Force recommendations. #1 LACK OF INCENTIVES: Action Step #1-1 – Create A New Tax Abatement Program Create a pilot tax abatement program targeted to single-family detached and single- family attached dwelling units completed within two years of the City Council formally approving this new program. (If the City Council determines the program has been successful increasing the number and variety of housing starts, then the abatement program could be extended.) 180 Under this recommendation, a qualifying home would receive the City’s 5-year tax abatement with a sliding scale of 100% in the first year, 80% in the second year, 60% in the third year, 40% in the fourth year and 20% in the fifth year. Under this staff recommendation, multi-family/apartments would not qualify for the incentive. It is hoped offering this recommended tax incentive to the homebuyer will increase the demand for more new housing and spur additional construction of housing in Ames. While the actual sale price would not be lower, the new buyer of a home with an assessed value of $450,000 could save approximately $12,431 in property taxes over a five- year period based on the current tax rate and rollback percentage. It is believed that with the buyers’ reduced initial costs through tax abatement, the new demand housing should reduce the risk for the builders to construct more spec homes in a development and increase the overall production of housing. Staff hopes that it would also encourage developers to build a greater variety of housing and reduce the perceived risk of constructing more housing types. It could be argued that some limited incentive, such as a partial tax abatement incentive, might be justified for small communities or cities, like Ames, that are outside of a large urban area. For example, of the surrounding communities, the City of Gilbert offers a five- year tax abatement schedule of 50%, 45%, 35%, 25%, 15% (a total abatement of $7,955 for a $450,000 house), while the City of Boone offers a 100% tax abatement on the first $75,000 of taxable value for five years (a total abatement of $3,929 for a $450,000 house). It should be noted that a review of other cities in Iowa indicates that tax abatement and direct payment incentives are offered more often by the smaller communities than the larger growing communities such as Ankeny, Waukee, and West Des Moines. This could signal that other factors such as competition, location, or other amenities present in these larger cities are more impactful than tax abatement incentives in creating a market for new houses. The major policy question before the City Council would be if the City supports a financial incentive, which of the following criteria, if any, must be met to qualify of the proposed tax abatement incentive. a) Should the tax abatement incentive be offered for all new housing units regardless of the sale price, or for some established maximum sales price (e.g. $350,000 for workforce housing)? b) Should the tax abatement incentive be offered to new owner-occupied units as well as rental units? c) Should the tax abatement incentive be offered only to new residential units that accomplish some other goal of the City Council, such as incorporating some level of sustainability elements into the design? 181 d) Should the tax abatement incentive be offered only to a developer who agrees to increase the amount of housing on the market and have a certain number of spec homes completed and available for sale at any one time? e) Should the tax abatement incentive be offered with any combination of the above criteria? f) Are there any other qualifying criteria the City Council might want to include? Action Step #1-2 – Pioneer Infrastructure And Oversizing -Pioneer Infrastructure- Ames Plan 2040 includes the concept of pioneer infrastructure without assigning responsibilities. The staff believes that the City should assume some responsibility to pay for or assist, in the cost of deploying pioneer infrastructure critical to the four approved growth areas of Ames Plan 2040. The definition under this action step recommendation would be restricted to off-site water mains, sanitary sewer mains, trails, and arterial/collector street extensions that eliminate service gaps. It is important to note that the staff’s definition of Pioneer Infrastructure is not as expansive as suggested in the Task Force report which includes off-site intersection, traffic control, and the total cost of arterial and collector streets improvements within a residential subdivision. A good example of the staff’s recommendation is the City’s project to pay for the sanitary sewer line extension from Dayton Road, east under Interstate 35 that opens up commercial and industrial land envisioned in the Comprehensive Plan. In the past, the developer(s) would have to pay some, or all, of these off-site improvements to eliminate any gaps in service for new expansion areas. A review of the current Capital Improvements Plan (CIP) already reflects the City’s new commitment to eliminate these gaps as they relate to the four growth areas with the use of the federal American Rescue Plan Act (ARPA) funding. However, it is likely additional infrastructure will be needed at various times to support the buildout of the designated growth areas. This commitment to the Pioneer Infrastructure will have an impact on the City’s property taxes and utility fees for our residents. Therefore, a case-by-case decision in the future must be made by the City Council whether or not to move ahead with each project based upon the timing, cost, size of area served, and impact on the City’s CIP. Although the City will likely shoulder some of direct financial burden, use of connection districts and assessments that distribute costs among multiple properties may be considered to defray some of these expenses to the City and still facilitate individual development projects. 182 -Oversizing- The City staff also would recommend that the City assume responsibility for paying the cost of oversizing the pipes that are mandated for water and sanitary sewer lines that run through a development to serve projected demand outside of the development. In addition, this oversizing obligation would extend to costs (extra depth & extra width) related to constructing arterial and collector streets through a development. A State law will require the City to calculate these oversizing costs and agree to fund a segment of street and/or utility improvement as a separate project. This oversizing incentive was offered in the previous Land Use Policy Plan for improvements made only within the former Southwest Growth Area. Staff believes this policy should be officially recognized as applying to all four growth areas of the new Comprehensive Plan. Therefore, in accordance with the Staff recommendations related to Pioneer Infrastructure and Oversizing, the Developer would still be responsible for infrastructure sized to serve their development and for a percentage of the cost of any intersection improvements/traffic signals in the same percentage as the projected traffic demand from the development as well as 100% of the acceleration and/or deceleration lanes providing access to the development, all as identified as needed in accordance with a traffic study. #2 PLANNING AND DEVELOPMENT REVIEW PROCESS: Action Step #2-1 - Assistant City Manager To Facilitate DRC Process In keeping with our ETP value of continuous improvement, Brian Phillips will be temporarily assigned to facilitate the Development Review Committee (DRC) meetings. The observations of the Assistant City Manager will offer a new third -party perspective for identifying improvements to the process. Action Step #2-2 - Authorizing Planning Director To Modify Zoning Requirements to provide more flexibility In response to a previous referral focusing on increasing flexibility, the City Council will be considering in February which, if any, zoning requirements/standards (eg. landscaping, parking, green space) that the City staff will be empowered to modify by an agreed upon percentage. In addition, the Planning Staff will be reviewing the Zoning Ordinance and seek feedback from Developers to identify common complaints about City standards that may hinder residential development. 183 Action Step #2-3 – DRC/Inspections Approvals To track the timeliness of the process, the Staff will provide a quarterly report regarding the timing of approvals granted by the DRC and Inspections staff. #3 LIMITED HOUSING RESOURCES FOCUSED ON HOUSING DEVELOPMENT OF ALL TYPES: Action Step #3-1 – Use of HOME Funds To date, the City has committed all of its available HOME funds, $1,800,000, to support the Townhomes at Creekside Apartments, 38 unit LIHTC development, within the Baker Subdivision. The City’s HOME allocation has been reduced significantly over the past four years since the original $750,000 allocation. The City’s most recent HOME allocation for FY2023/24 was $321,000, of which approximately $241,000 is available for assistance after accounting for administration and CHDO set-asides. Use of HOME Funds, as well as CDBG funds, is determined on an annual basis in coordination with the City’s five-year Consolidated Plan housing goals. The City will be updating the Consolidated Plan in the Spring of 2024 based upon public input and data on housing needs for the community. Identifying housing assistance goals for low and moderate income households for the HOME funding would be most appropriate at that time. Action Step # 3-2 – Assignment of Business Coordinator The City’s contribution to the Ames Economic Development Commission goes to pay for a portion of a Business Development Coordinator. An additional assignment will be given to this position to focus on housing trends in Ames and the U.S. as well as identify possible federal and state grant opportunities that could help increase the number of housing starts in the community. #4 LAND COSTS: While the Task Force report does not offer any suggestions for reducing land costs, previous action by the City Council might help mitigate this issue. Action Step #4-1 – Implement The Ames 2040 Plan It can be argued that the high cost of land was influenced as exacerbated by the City Council’s adoption of the previous Land Use Policy Plan. By promoting development in only one direction, to the southwest, a limited number of landowners in this one area were able to suppress the available supply by their unwellness to sell th eir land for residential 184 development or were able to extract higher than market prices in order to be motivated to sell. Recent action by the City Council in adopting the new Ames 2040 Plan is expected to help alleviate this situation. The land use plan within Plan 2040 calls for diverse housing types for each growth area as well. By authorizing growth in four directions and expending federal ARPA funds to extend utilities to these areas, a greater supply of land will potentially be available for development. It is hoped that the increase in the supply of land available for development will help lower the purchase price or at least encourage additional housing production. #5 LIMITED NUMBER OF DEVELOPERS INVOLVED IN THE AMES COMMUNITY: This is an important issue that should not be overlooked. The City of Ankeny, for example, has many more developers than Ames which results in a greater supply of land available for development and, through this competition, home prices are lowered. Increasing competition would likely help overcome one of the critical barriers to housing. The Task Force report, however, does not provide any suggestions to address this significant barrier. NEXT STEPS: Should the City Council support the implementation of the staff recommendations, or identify any modifications to these recommendations, regarding Action Steps 1- 1 & 1-2, then a motion should be made to direct staff to prepare formal policies for pioneer infrastructure/oversizing and an Urban Revitalization Plan along with criteria defined by Council for tax abatement. All of the other Action Steps do not require specific action by Council and can be implemented by the staff. 185 ITEM #:22 DATE:12-12-23 DEPT:Planning and Housing SUBJECT:HEARING ON TEXT AMENDMENTS TO AMES MUNICIPAL CODE CHAPTER 13 (RENTAL HOUSING CODE), CHAPTER 29 (ZONING ORDINANCE), & CHAPTER 31 (HISTORIC PRESERVATION) TO ALLOW ACCESSORY DWELLING UNITS (ADUS) IN RESIDENTIAL DISTRICTS COUNCIL ACTION FORM BACKGROUND: The City Council identified implementing the Ames Plan 2040 initiatives related to infill development options for housing as priority for 2023 and directed staff to prepare draft standards and seek public input for allowing Accessory Dwelling Units (ADU) within residential zoning districts as one of these measures. In response to this direction, Staff conducted public outreach in August and September and provided this input to City Council at its October 10th meeting. The public input was generally supportive of creating an ADU option, but had roughly equal opinions about the draft standards as being too permissive, too restrictive, or fairly balanced. T h e City Council reviewed the public input and comments at the October 10th meeting and directed Staff to proceed with related text amendments to Chapter 31, Historic Preservation and Chapter 29, Zoning Ordinance, to adopt ADU standards consistent with the draft regulations. In addition to the zoning changes, Chapter 13, Rental Code will be updated in relation to ADUs as well. The proposed ordinance for approval on first reading is included as an attachment to this report. CHAPTER 29 ZONING ORDINANCE SUMMARY: One ADU will be allowed on a single-family residential lot that is the primary residence of the property owner. If a property already has two units, it is not eligible to have add an ADU. ADUs will only be permitted in the in the following zoning districts: R-L (Residential Low Density Zone), R- M (Residential Medium Density Zone), UCRM (Urban Core Residential Medium Density Zone), FS- RL (Suburban Residential Low Density Zone), FS-RM (Suburban Residential Medium Density Zone), and F-PRD (Planned Residence District). Notably, F-VR (i.e., Somerset) does not include an allowance for ADUs because of the design requirements related uniquely to that zoning district and the covenants in Somerset prohibit the use. Key elements of the ADU requirements were patterned after the standards of our existing accessory building requirements. The City’s existing accessory building requirements found in Section 29.408 will apply to ADUs. These include maximum size, setbacks, height coverage, and location in the rear yard. An exception of allowing for habitable space within an accessory building was added to this section. Standards unique to ADUs are proposed in Section 29.409. Unique elements of an ADU are the allowance for it to be a dwelling, accessory to a single-family dwelling. Previously, the city prohibited creating habitable space within accessory buildings. As a dwelling, an ADU is limited to a maximum of one bedroom, must have cooking, sanitation, and sleeping areas and be independently functional from the principal residence with its own utility services. The utilities 186 are allowed to be split from existing services or for wholly new metered services to be connected to the ADU. Bedrooms are a defined term within the Zoning Ordinance and will apply to the one-bedroom limitation of the ADU. As mentioned in October, any living area that is separated from kitchen, living room or the bathroom will likely meet the definition of a bedroom and additional rooms, therefore, will not be permitted, including basements and second floors when a bedroom already exists on the main level. One additional parking space is also required for the ADU and a paved sidewalk connecting to the home or paved parking area is also required. An ADU is only permitted through the construction of a new detached building or through the conversion of an existing detached accessory building. Conversion of space within an existing home or the addition of space to an existing home for an ADU is not permitted. The ADU must be a building, it cannot be a RV or trailer, and must be set upon a permanent foundation. All new buildings and conversions are subject to residential building code requirements a residential dwelling occupancy classification. Although an owner must reside on the site, they can live in either dwelling- the other dwelling is permitted to be rented. Only one of the two dwelling units on the lot may be rented. Properties owned by an L.L.C. or other non-natural person entity will not qualify as owner-occupied. To receive a permit for an ADU the owner must already reside on the property and a signed and recorded “Notice of Limitations” will be required confirming their understanding of rental and occupancy requirements. The notice of limitations will restate the ADU requirements about occupancy and rental restrictions. Currently within Chapter 29, no additional building for human habitation may be located anywhere on the same lot as a principal residential building, except within the Agricultural (A) Zone, or for specifically permitted uses such as multifamily residential. The amended text will clarify what is meant by human habitation regarding accessory buildings (defined for this purpose as sleeping, cooking, and sanitation facilities), while continuing to still allowing for pool houses to include a bathroom. The final proposed language does not permit any other accessory buildings to have a bathroom or features of an ADU that enable it to function as a dwelling unless the structure is designed to fully meet the ADU requirements. One of the questions related to this change is whether other accessory buildings that are not ADUs could have a bathroom, other than pool houses. As currently written, it does not allow such an improvement. Staff was concerned that allowing other types of habitable space could be hard to monitor for occupancy limitations and preferred that either a structure fully meet the requirements or meet the recreational building exception. An accessory structure could have a sink. Additionally, the section on “size and appearance of detached dwellings” (formerly Section 29.412, now proposed as Section 29.410) has been expanded to include ADUs, and clarifying language has been added in Section 29.1101 Single-Family Conservation Overlay District, exempting ADUs from the dwelling unit count and compatibility standards. CHAPER 31 HISTORIC PRESERVATION SUMMARY: The draft ordinance addresses the review process for Alterations of contributing garages when they could be converted to an ADU. Section 31.11(1) grants staff administrative authority to grant a Certificate of Appropriateness for Alterations; however, changing a contributing garage to an ADU will require approval by the HPC. Additionally, character-defining features of a contributing garage must not be significantly altered. New Construction of an ADU is included under Section 31.13(10), Garages and Accessory Buildings. 187 The draft ordinance includes clarification of Design Criteria for New Construction of garages and accessory buildings (including ADUs), on requirements for porches, two-stories, raised foundation, and meeting footprint design criteria have been addressed, as they relate to garages and accessory buildings (including ADUs). Additionally, the draft ordinance includes changes to the wording of Section 31.10 Certificate of Appropriateness, without making any substantive changes. This section has been under discussion by the HPC at various times over the past 18 months. CHAPTER 13 RENTAL HOUSING SUMMARY: The allowance for an ADU is predicated upon the owner of the property also residing on the property. Chapter 13 amendments include a definition for ADU, standards that only one of the two dwellings on the property may be rented, that the owner must always occupy one of the two structures to rent any of the dwellings, and that the ADU with the single-family dwelling are considered collectively for the Owner-Occupied exception. The Owner-Occupied definition with the exception would allow for family members and a roomer to live in either the primary residence or the ADU without it being registered as rental. The Near Campus Neighborhood bedroom limitation based upon 2018 records has been updated to make it clear that regardless of modifications to a structure, additions to a structure, or construction of a new did not increase the bedroom count for purpose of calculating maximum occupancy. It should be emphasized that two of the issues highlighted above were not previously discussed in detail. The first issue makes it clear that in no case can both dwellings be licensed as rental units, even if the property owner lives in one of the dwellings. The second issue specifies that once an ADU is constructed, the property must always be owner occupied to allow for either dwelling to be rented. Outside of the regular renewal requirement, n o additional or ongoing confirmation of owner residency is required and no specific time period of transition from one owner to another has been included. HISTORIC PRESERVATION COMMISSION RECOMMENDATION: On November 13, 2023, the Historic Preservation Commission (HPC) discussed at length the proposed amendments to Chapter 31. The Commission voted 5-0 to recommend City Council approval of modifications to the proposed text amendments in Chapter 31, clarifying the application of design criteria and guidelines to accessory structures and ADUs. Conversion of a contributing garage to an ADU will require HPC approval. PLANNING & ZONING COMMISSION RECOMMENDATION: On December 6, 2023, the Planning and Zoning Commission reviewed the text amendments to Chapter 29, Zoning Ordinance and Chapter 31, Historic Preservation. The discussion included questions about ownership requirements and how that affected living trusts that and how parking requirements apply to ownership and rental situations. The Commission voted 5-0 to recommend approval of the draft ordinance for Chapter 29 and 31. ___________________ ALTERNATIVES: 188 ALTERNATIVES: 1. Approve on first reading, implementing an allowance for Accessory Dwelling Units (ADUs) into t h e Ames Municipal Code, as per the attached ordinance amending the following three chapters: Chapter 13, Rental Housing; Chapter 29, Zoning Ordinance; and Chapter 31, Historic Preservation. 2. Approve on first reading a modified version of the attached ordinance implementing an allowance for Accessory Dwelling Units (ADUs) into the Ames Municipal Code. 3. Continue the public hearing to a date certain and direct modifications to the draft ordinances prior to first reading. 4. Take no action regarding the text amendments, thereby not memorializing changes in state law related to short-term rentals within the Ames Municipal Code. CITY MANAGER'S RECOMMENDED ACTION: Staff has indicated on a number of occasions that the proposed standards are “middle of the road” compared to our review of other cities. Generally, most single-family properties that are not restricted by private covenants should be able to take advantage of the new standards. Properties with one-car garages and small rear yards are the sites most likely to have difficulty in meeting the requirements. As described in April, almost 25% of the City's single family residential lots will not be able to take advantage of the allowance because of current covenants. Staff believes that based upon experiences in other communities there will be slow and gradual approach of homeowners building ADUs. The proposed standards for ADUs are designed for consistency with our existing accessory building requirements. They are a balance between encouraging the use while respecting compatibility with the surroundings. Therefore, it is the recommendation of the City Manager that the City Council adopt Alternative #1, thereby approving first reading of the ordinance amending three chapters of the Ames Municipal Code to allow for ADUs. ATTACHMENT(S): Ordinance for Allowing ADUs in Residential Districts.pdf 189 ORDINANCE NO. ____________ AN ORDINANCE TO AMEND THE MUNICIPAL CODE OF THE CITY OF AMES, IOWA, BY AMENDING CHAPTER 13, RENTAL HOUSING; CHAPTER 29, ZONING; AND CHAPTER 31, HISTORIC PRESERVATION THEREOF, FOR THE PURPOSE OF ALLOWING ACCESSORY DWELLING UNITS IN RESIDENTIAL DISTRICTS; REPEALING ANY AND ALL ORDINANCES OR PARTS OF ORDINANCES IN CONFLICT TO THE EXTENT OF SUCH CONFLICT; PROVIDING A PENALTY; AND ESTABLISHING AN EFFECTIVE DATE. BE IT ENACTED, by the City Council for the City of Ames, Iowa, that: Section One. The Municipal Code of the City of Ames, Iowa shall be and the same is hereby amended by amending Chapter 13, Rental Housing Code; Chapter 29, Zoning, and Chapter 31, Historic Preservation as follows: “CHAPTER 13, RENTAL HOUSING * * * Sec. 13.100. GENERAL * * * (5) Exceptions. The following residential structures are exempt from these rules: (a) owner-occupied single-family dwellings (see definition of “Owner-Occupied Dwelling Unit” in Section 13.201). For purposes of this exception, an Accessory Dwelling Unit (ADU) is considered part of the single-family dwelling so long as both dwelling units are owner-occupied; Sec. 13.201. TERMS DEFINED * * * DWELLING UNIT, ACCESSORY. Accessory Dwelling Unit (ADU) is defined and permitted through standards of the Zoning Ordinance as a detached “dwelling unit” on the same property as a single-family dwelling. * * * Sec. 13.300. GENERAL (1) Registration required. No owner or operator shall rent, or offer for rent, any dwelling unit for use in whole or in part for human habitation, unless: * * * (c) For properties with an ADU, the property must also include the primary residence of the owner. * * * Sec. 13.503. OCCUPANCY LIMITATIONS 190 * * * (4) Limits based on Zoning District - Maximum Occupancy * * * (e) The maximum occupancy for a single-family or a two-family dwelling unit shall be based upon compliance with all standards of the Code, including but not limited to parking spaces, area requirements, habitable space requirements, and the following: * * * (iii) For properties with a single-family dwelling and an approved ADU, the maximum occupancy of the single-family dwelling is calculated based upon its bedroom count, if it is the licensed rental unit on the property. An ADU is limited to a maximum of three adults, if it is the licensed rental unit on the property. In no event can both dwellings be licensed as rental units, regardless of owner residency. (iii) (iv) For dwelling units located within the Near Campus Neighborhoods the number of bedrooms for determining maximum occupancy on a property shall be determined by the number of bedrooms listed in the records of the Ames City Assessor as of January 1, 2018, or by the number of bedrooms reflected in the inspection records of the City of Ames Inspections Division as of January 1, 2018, whichever number is higher. The number of bedrooms for occupancy purposes cannot be increased in excess of these limitations through any changes to or additions to an existing dwelling or through new construction of a dwelling, including an ADU. (iv) (v) Any room that had a legally conforming egress window on January 1, 2018… * * * CHAPTER 29, ZONING * * * Sec. 29.201. DEFINITIONS. * * * (3a) Accessory Dwelling Unit (ADU) means a detached “dwelling unit” on the same property with a single-family dwelling that includes the Primary Residence of the owner. * * * (5) Accessory Structure means a subordinate structure detached from but located on the same lot as a principal building. The use of an accessory structure must be incidental and accessory to the use of the principal building. Accessory Structures include, but are not limited to, accessory dwelling units (ADUs), garages, sheds, and fences. * * * Sec. 29.304. USE REGULATIONS. * * * (3) Prohibited Uses. (a) Uses Prohibited in All Zones… * * * (iv) Any building for human habitation located to the rear of another building on the same lot. Any building for any purpose whatever located in front of any 191 building for human habitation on the same lot. This subsection (d) does not apply to uses located in the Agricultural (A) Zone or to any use of a lot expressly permitted by provisions of this Ordinance, including multifamily residential use and accessory dwelling units (ADUs). * * * Sec. 29.406. OFF-STREET PARKING. * * * Table 29.406(2) Minimum Off-Street Parking Requirements RESIDENTIAL DWELLINGS Accessory Dwelling Units 1 space/RU Not Applicable * * * Sec. 29.408. OTHER GENERAL DEVELOPMENT STANDARDS. * * * (7) Requirements for Private Garages and Other Accessory Buildings (a) The following requirements apply to private garages and accessory buildings in Agricultural, Residential and Hospital/Medical districts: (i) Location Within Setbacks * * * (b) Side Yards. * * * (ii) Corner Lot. A one-story garage or accessory building may be placed within 3 feet of the side lot lines, provided the garage is set back a minimum of 25 feet from the abutting streets. (c) Rear Yards. (i) … For purposes of this section, the rear yard is located between the rear lot line and the primary structure principal building, extending from side lot line to side lot line. … * * * (iv) General Requirements. * * * (c) No detached garage or accessory building shall contain habitable space, unless approved as an Accessory Dwelling Unit (ADU). “Habitable Space” is defined for this purpose as: facilities or improvements for sleeping, cooking, and a bathroom. Other than an approved ADU, only an accessory building used for recreational purposes, such as a pool house, may include a bathroom except for recreational uses requiring plumbing such as a pool house. * * * (d) The following requirements apply to shared common lot line garages … * * * (iv) General Requirements. * * * 192 (c) No detached garage or accessory building shall contain habitable space, unless approved as an Accessory Dwelling Unit (ADU). “Habitable Space” is defined for this purpose as: facilities or improvements for sleeping, cooking, and a bathroom. Other than an approved ADU, only an accessory building used for recreational purposes, such as a pool house, may include a bathroom except for recreational uses requiring plumbing such as a pool house. * * * Sec. 29.409. ACCESSORY DWELLING UNIT (ADU) STANDARDS. An ADU is a specific type of accessory building with requirements additional to those of private garages and accessory buildings provided in 29.408. (1) Where Permitted. (a) Zoning districts. ADUs are permitted in the following zoning districts: R-L, R-M, UCRM, FS- RL, FS-RM, and F-PRD. (i) One ADU is allowed on any lot having one existing single-family dwelling that is the primary residence of the property owner, and no other dwellings are on the lot. If a lot has two or more dwellings, an ADU is not permitted. (b) Overlay zoning districts. If the property is in an overlay zone, such as the Single-Family Conservation (O-SFC) or the Historic (O-H), it may be subject to additional design standards and permitting requirements. In the event of conflict between overlay regulations and the regulations included herein, the more restrictive regulations shall control. (2) Independent Dwelling Unit. (a) Detached from the principal building. The detached ADU may be created through the conversion of an existing detached structure or may be new construction creating a new standalone building. No ADU may be established as an addition to or within an existing s ingle-family dwelling. (b) Functions Independently. The ADU must function independently from the principal residence. It must include its own bathroom and kitchen facilities and be connected to public utilities including water and sanitary sewer. Separate metering is not required but allowed. (c) Foundation. Whether constructed on site or premanufactured, an ADU must be placed upon a permanent foundation. (3) Lot Size There is no minimum lot size for an ADU. (4) Size Limitations and Bedrooms. The ADU is subject to the gross floor area limitations of accessory buildings and is limited to one bedroom. Any additional area or room that meets the definition of a bedroom as defined within the Zoning Ordinance is prohibited. (5) Parking & Driveways. (a) One paved off-street parking space is required for the ADU in addition to the two spaces required for the principal building. Although spaces for the principal building can include two cars parked in tandem, an ADU parking space cannot be in front of or behind another required parking space. All parking spaces must be paved and located in accordance with the requirements of 29.406. (b) Sidewalk. A sidewalk is required to connect the primary exterior entrance of the ADU with the paved parking area or to the principal building. 193 (6) Occupancy. (a) Owner-occupancy. No building permit or rental letter of compliance will be issued by the City for an ADU unless the titleholder resides on the property as their primary residence. The property owner’s primary residence may be either the principal building or the ADU. Prior to issuance of a permit, a “Notice of Limitation on Rental” shall be recorded by the property owner, including an affidavit confirming their understanding of rental and occupancy requirements. The “Notice of Limitation on Rental” shall be on a form prepared by the city. Properties owned by an L.L.C. or other non-natural person entity do not qualify as owner-occupied. (b) The maximum occupancy of an ADU is limited to three adults. Additional occupancy limitations may apply to Near Campus Neighborhoods, as defined within Chapter 13, Rental Code. (c) Rentals. Only one of the two dwelling units on the lot may be a rental. Any ADU or principal building that is intended for use as a rental must be registered with the city and have a valid rental permit. All requirements of Chapter 13, Rental Code apply. Sec. 29.412410. SIZE AND APPEARANCE DETACHED DWELLINGS. All non-attached dwelling structures of any kind located outside the RLP Zone, shall meet the following minimum standards: (1) The principal portion or main body of the principal structure shall have a width and length of not less than 20 feet. (2) The siding of any dwelling unit the structure shall consist of wood, simulated wood siding (to include horizontal lapped steel, vinyl, or aluminum siding), brick, stone, stucco or concrete and, furthermore, shall not have an appearance or condition incompatible with conserving the market value and beneficial use and enjoyment of adjacent buildings, as determined by the person responsible for zoning administration. Any person aggrieved by that determination may appeal to the Zoning Board of Adjustment as by law provided. Sec. 29.410411. SINGLE FAMILY ATTACHED DWELLINGS - PARTY WALL AGREEMENT. * * * Sec. 29.409412. BILLBOARDS. * * * Sec. 29.411413. OUTDOOR LIGHTING CODE. * * * Sec. 29.413414. STORMWATER MANAGEMENT DESIGN STANDARDS. * * * Sec. 29.501. CLASSIFICATIONS OF USES. * * * (3) Accessory Uses. Unless otherwise stated in this Ordinance or otherwise indicated in the Use Tables for each zone: * * * (e) Accessory Uses:; 194 (i)i. Are clearly incidental and customary to and commonly associated with the operation of the Principal Use; (ii)ii. Are operated and maintained under the same ownership or by lessees or concessionaires of the owner, and on the same zone lot as the Principal Use; (iii)iii. Do not include structures or structural features inconsistent with the Principal Use; (iv)iv. May include the use a portion of a dwelling unit that is the primary residence of the property owner as limited Short-Term Rental (Home Share or Hosted Home Share); (v) May include one accessory dwelling unit (ADU) on any single-family residential zoned lot having one existing single-family dwelling. * * * Table 29.501 (4)-1 RESIDENTIAL USE CATEGORIES * * * Household Living * * * Accessory Uses Accessory Dwelling Units (ADUs) subject to the limitations found in the Zone Use Tables and the Use Development Standards * * * Sec. 29.701. "RL" RESIDENTIAL LOW DENSITY. * * * Table 29.701(2) Residential Low Density (RL) Zone Uses USE CATEGORIES STATUS APPROVAL REQUIRED APPROVAL AUTHORITY RESIDENTIAL USES *** Household Living Accessory Uses Accessory Dwelling Unit Y ZP Staff * * * Sec. 29.702. "RM" RESIDENTIAL MEDIUM DENSITY. * * * Table 29.702(2) Residential Medium Density (RM) Zone Uses USE CATEGORIES STATUS APPROVAL REQUIRED APPROVAL AUTHORITY RESIDENTIAL USES *** 195 Household Living Accessory Uses Accessory Dwelling Unit Y ZP Staff * * * Sec. 29.703. "UCRM" URBAN CORE RESIDENTIAL MEDIUM DENSITY ZONE. * * * Table 29.703(2) Urban Core Residential Medium Density (UCRM) Zone Uses USE CATEGORIES STATUS APPROVAL REQUIRED APPROVAL AUTHORITY RESIDENTIAL USES *** Household Living Accessory Uses Accessory Dwelling Unit Y ZP Staff * * * Sec. 29.1101. “O-SFC” SINGLE FAMILY CONSERVATION OVERLAY DISTRICT. * * * (6) Intensification Limited. In the O-SFC the maximum number of dwelling units, of any kind defined in Section 29.201, shall not at any time be permitted to exceed 648. Approved accessory dwelling units (ADUs) after January 1, 2024, are exempt from this limitation. Additionally, in the O-SFC, apartment dwellings shall not be permitted unless the plans for the project meet the following standards: * * * (9) Compatibility Standards. New construction of any principal building or other structure or any change in the use of land shall comply with the following compatibility standards .: Accessory dwelling units (ADUs) are not subject to the compatibility standards. * * * Sec. 29.1202. "F-S" SUBURBAN RESIDENTIAL ZONE. * * * Table 29.1202(4)-1 Suburban Residential Floating Zoning Residential Low Density (FS-RL) Uses USE CATEGORIES STATUS APPROVAL REQUIRED APPROVAL AUTHORITY RESIDENTIAL USES *** Household Living Accessory Uses Accessory Dwelling Unit Y ZP Staff * * * 196 Table 29.1202(4)-2 Suburban Residential Floating Zoning Residential Medium Density (FS-RM) Uses USE CATEGORIES STATUS APPROVAL REQUIRED APPROVAL AUTHORITY RESIDENTIAL USES *** Household Living Accessory Uses Accessory Dwelling Unit Y ZP Staff * * * CHAPTER 31, HISTORIC PRESERVATION * * * SECTION 31.10. CERTIFICATE OF APPROPRIATENESS. (1) Any act of alteration, demolition, new construction, or relocation, as defined herein, shall require a Certificate of Appropriateness as further described below. Furthermore, eEvery application for a building permit or a demolition permit affecting the exterior architectural appearance of a designated landmark or of any contributing structure within a designated historic district shall be accompanied by a complete City of Ames an application for a Certificate of Appropriateness. Applicants shall be required to submit plans, drawings, elevations, specifications, and other information as may be necessary to make decisions. The Building Official shall not issue the building or demolition permit until a Certificate of Appropriateness has been approved. (2) Alteration. of an exterior part of a building or a structure. An alteration is any act or process that changes one or more of the exterior features of a structure, such as windows, porches, siding, and other features identified under the Design Guidelines that do not increase without increasing the amount of gross floor area. Alterations to existing structures that are contributing structures or to structures designated as historic landmarks shall require a A Certificate of Appropriateness for an alteration and shall be permitted in the following instances. (a) An architectural feature has deteriorated to the point that it must be replaced. (b) Architectural features were added which modified the original qualities of the architectural style and the current property owner wishes to restore the structure to the original architectural style. (c) An architectural feature may can be added if as long as the feature is appropriate to the architectural style of the structure. (3) New Construction. A Certificate of Appropriateness shall be required for construction of: (a) A a new principal structure, or (b) An an addition to an existing contributing structure or to a designated landmark, or (c) A a new accessory building or addition to an accessory building on any property with a contributing principal structure or designated landmark. 197 (4) Consideration of an application for a Certificate of Appropriateness shall apply the Design Guidelines, which shall pertain to all historic preservation districts and historic landmarks; and the Design Criteria, which shall apply only to the particular historic district or historic landmark for which they are enacted. A new principal structure shall be representative of one of the architectural styles approved in the district. The design for the new principal structure must meet all the design criteria listed for the architectural style selected. Architectural features not specifically listed in the design criteria may be proposed by the applicant. Those features should be incorporated in a manner appropriate with the architectural style. In each instance, the Commission may grant exemptions to the requirements for an alteration if it determines that the cost of replication is prohibitive. * * * SECTION 31.11. APPLICATION FOR A CERTIFICATE OF APPROPRIATENESS. (1) Administrative Approval Process. (a) A Certificate of Appropriateness for alterations to the principal structure, garages, and other accessory buildings, and the new construction of fences and retaining walls may can be approved by the Planning and Housing Director, provided the alterations or new construction meet the adopted Design Guidelines and Design Criteria, and substitute materials are not proposed, other than those specifically listed in the Design Guidelines. However, changing or converting a contributing garage to an Accessory Dwelling Unit (ADU) requires approval by the Historic Preservation Commission. The Planning and Housing Director may refer an application for an alteration to the Historic Preservation Commission for approval. * * * Sec. 31.13. DESIGN GUIDELINES FOR ALTERATIONS. * * * (8) Garages and Accessory Buildings * * * (k) Changing or converting an existing contributing garage to an ADU is allowed as long as the character defining features of the garage are not significantly altered as determined by the Historic Preservation Commission. * * * SECTION 31.15. DESIGN GUIDELINES FOR NEW CONSTRUCTION. * * * (10) Garages and Accessory Buildings (including Accessory Dwelling Units [ADUs]). * * * (k) Garages and accessory buildings do not typically require a porch; however, a standalone ADU adjacent to street frontage, may require a porch as determined by the HPC. (l) Garages and accessory buildings are exempt from the two-story requirement. 198 (m) Garages and accessory buildings are not required to have a raised foundation and may be constructed slab-on-grade. (n) Garages and accessory buildings are not typically required to conform to footprint design criteria; however, a standalone ADU adjacent to street frontage, may be subject to the footprint design criteria as determined by the HPC.” Section Two. Violation of any provision of this ordinance shall constitute a municipal infraction punishable as set out by law. Section Three. All ordinances, or parts of ordinances, in conflict herewith are hereby repealed to the extent of such conflict, if any. Section Four. This ordinance shall be in full force and effect from and after its passage and publication as required by law. Passed this day of , . ______________________________________ _______________________________________ Renee Hall, City Clerk John A. Haila, Mayor 199 To:Mayor and City Council From:Donald Kom, Director of Electric Services Date:December 8, 2023 Subject:Approval of Tesla Power Walls Item No. 23 MEMO On November 28, 2023, the City Council requested a memo regarding the use of Tesla Power Walls in the Ames Electric Services’ system. The following attachments include a comprehensive response to this request. Tesla Power Wall Approval Memo.pdf Conditional Interconnect Agreement (3511 Oakland Street).pdf City Clerk's Office 515.239.5105 main 515.239.5142 fax 515 Clark Ave. P.O. Box 811 Ames, IA 50010 www.CityofAmes.org 200 Electric Administration main fax To: Mayor and Ames City Council From: Donald Kom, Director of Electric Services Date: December 8, 2023 Subject: APPROVAL OF TESLA POWER WALLS On November 28, 2023, the City Council requested a memo regarding the use of Tesla Power Walls in the Ames Electric Services’ system. The following information is in response to this request. Electric Services has developed rules and requirements for systems that interconnect with the city’s electric system. These rules provide for safe operation of the electrical grid to protect both people and equipment. These requirements are outlined in Electric Services’ Solar Interconnection Agreement which was adopted in 2017. The Tesla Power Wall, specifically the invertors used to convert AC power to DC power and back again, historically have not been able to meet Ames adopted safe utility standards. The deficiencies are: 1) Tesla Power Walls will not pass a fast open/close anti-islanding test which requires that the wall must wait five minutes before it restarts. Tesla originally designed the Power Walls to immediately start back up, which, violates one of Ames’ safety requirements for our employees and equipment. 2) There is no way to locally display/verify setting compliance. It is the staff’s understanding that installers have to rely on Telsa’s remote programming of the setting in the absence of any verification either in writing or visually at the site of installation. For these reasons, 3511 Oakland Street interconnection request was denied and the decision and reasons for the denial were communicated to the customer and to his consultant. Following the Council meeting in November, Electric services staff met with the customer and consultant. They have assured staff that Tesla Power Walls (invertors) can now meet the Ames standards. In an effort move to this issue forward, staff has issued the attached “conditional” interconnection agreement signature page which the customer has signed. This agreement will allow the Power Wall to be installed. Once installed, staff will come out to the site for a commissioning test. If the actual test substantiates that the Tesla Power Wall meets the Electric Services requirements, equipment will be allowed to be placed in service. In addition, with this verification, all future requests to install Tesla Power Walls will be approved. MEMO 201 202 To:Mayor and City Council From:Keith Abraham, Director of Parks and Recreation Date:December 8, 2023 Subject:Staff Report on Fitch Family Indoor Aquatic Center Follow-Up to Council Questions Item No. 24 MEMO The report for this item is being prepared by the project consultants and will be available Monday, December 11th. KA/gb City Clerk's Office 515.239.5105 main 515.239.5142 fax 515 Clark Ave. P.O. Box 811 Ames, IA 50010 www.CityofAmes.org 203 To:Mayor & City Council From:Corey Goodenow Date:December 12, 2023 Subject:Budget Issues/Guidelines Item No. 25 MEMO At the onset of each fiscal year's budget preparation cycle, the City Manager and Finance staff engage the City Council in a comprehensive budget overview. Please see the attached documents for that describe the FY 2024-25 Budget Issues. CG/cmw FY 2024-25 Budget Issues 2024-25 Outside Funding Requests.pdf City Clerk's Office 515.239.5105 main 515.239.5142 fax 515 Clark Ave. P.O. Box 811 Ames, IA 50010 www.CityofAmes.org 204 Fiscal Year 2024/25 City Council Budget Issues At the onset of each fiscal year's budget preparation cycle, the City Manager and Finance staff engage the City Council in a comprehensive budget overview. This presentation serves four primary objectives: 1. Offering a comprehensive perspective of the forthcoming year's budget, including incorporating factors likely to influence the Council's budgetary decisions later in the cycle. 2. Sharing input and requests concerning the budget received from local citizens and organizations. 3. Soliciting Council guidance on specific budget components, such as overall funding allocations for human services and arts. 4. Receiving any broad funding or service level directives the Council wishes to integrate into the budget. Overall Economic Condition Of The City The Ames Metropolitan Statistical Area (MSA) continues its recovery from the pandemic, manifesting in a low unemployment rate of 2%, modest per capita income growth of 2.3%, and a notable increase in the total gross domestic product by 8.9%. Concurrently, housing costs have demonstrated an upward trend, with a November 2023 median listing price per square foot of $209, slightly down from the historical peak of $221 in February 2023. As noted in Moody’s most recent credit opinion, the city's tax base is expected to remain resilient due to several stabilizing institutions and ongoing residential and commercial growth. As widely publicized, FY 2024/25 is expected to realize a substantial increase in assessed valuation, primarily of residential homes. This increase is a result of the Iowa property tax system, which assesses real property every odd-numbered year and values properties to actual or market value. As explained in detail in the following section, while assessed valuations are expected to increase significantly, tax rate limitations imposed by the State will result in reduced revenue-raising flexibility in the future. The City continues to contend with a number of challenges, including supply chain disruptions, elevated commodity/contractual service prices, labor shortages, and inflationary pressures, echoing issues faced by organizations nationwide. Maintaining consistent service levels within the budget presents a challenge. Any desired service level enhancements may necessitate compensatory service level reductions or tax increases when permitted by the State. 205 Changes To The Iowa Property Tax System The legislative session of 2023 resulted in significant alterations to the Iowa Property Tax System. Most notably, through SF 718, the new legislation limited levies via the creation of an adjusted city general fund levy (ACGFL). The new ACGFL consolidates several levies and retains only select categories, such as debt service, pensions, employee benefits, among others. Additionally, the ACGFL is limited and restricted based on the taxable non -TIF growth from year to year. Although the formula is more complicated, the following is generally the impact of the new restrictions: • Taxable non-TIF growth under 3% - no reduction ($8.10 max ACGFL) • Taxable non-TIF growth over 3% and less than 6% - 2% reduction • Taxable non-TIF growth over 6% - 3% reduction Also, as part of the new property tax legislation, the State introduced a new homestead exemption for property owners aged 65 and over, further reducing taxable valuations. This additional exemption begins at $3,250 for FY 2024/25 and increases to $6,500 beginning FY 2025/26 and forward. The current homestead credit will continue to be state-funded. New in FY 2024/25, the military exemption will no longer be funded by the State and will increase from $1,852 to $4,000, expected to reduce the City’s taxable valuation by roughly $4 million. Early estimates indicate the impact on the FY 2024/25 fiscal year of these two new tax exemptions to be between $100,000 and $150,000 in revenue per year, and between $200,000 and $250,000 in all following years. In addition to these changes, the recently issued assessment limitation (rollback) resulted in the most significant change in state history, reducing the percentage of assessed residential value subject to tax to 46.34%, a decrease of 8.31%. Finally, the bill also modified the timing and notice requirements of the budget process. Beginning with the FY 2024/25 budget the County Auditor must mail an annual property taxpayer statement outlining the tax implications of the proposed levy for the three major property tax collecting entities (City, School District, County) by March 20th. The statement must outline the impact of tax rate changes, the cause of any change of the rate change, and the date/time when the taxing entity will hold a public hearing to consider the maximum tax levy. To accommodate these new requirements, the annual budget deadline was amended to April 30th each year. Also impacting the City’s property tax collection is the continued implementation of the backfill elimination associated with rollback of commercial property valuation. Beginning in FY 2024/15 the state revised the valuation process for commercial and industrial 206 property through a rollback, or limitation order, that reduced the taxable valuation for commercial and industrial property to 95% in FY 2014/15 and 90% in FY 2015/16. To minimize the impact on local governments, the state created a standing appropriation to reimburse local governments for the property tax reductions resulting from the new rollback. The “backfill” was funded at 100% by the legislature for fiscal years 2015 -2022, capped at the FY 2016/17 level, and cities similarly received the funds as property tax revenue. In the FY 2020/21, the Iowa Legislature passed legislation phasing out the “backfill” funds over a five- or eight-year period. The phase-out period is determined by the tax valuation growth rate of each city. Cities whose average property tax valuation growth rate increased by more than 34.14% for FY 2020/21 compared to FY 2013/14 are receiving a five-year phase-out. Cities with a lower than 34.14% are receiving an eight-year phase- out. The reduction in the backfill is phased out evenly each year, based on the growth rate. The City of Ames experienced 37.0597% of growth during the noted period, resulting in a five-year phase-out of $976,583. FY 2024/25 is the fourth year of the phase- out, which will result in a decrease in backfill funds of $195,316 when compared to FY 2023/24. General Fund The General Fund ended FY 2022/23 with an approximately $16.3 million balance. This created an ending balance of roughly $2 million higher than anticipated when the budget was originally adopted. Overall, FY 2022/23 revenues were roughly $825,000 higher than budgeted. The largest revenue impact was the increased collection of Local Option Sales Tax and interest revenue. FY 2022/23 expenses were roughly $5.256 million lower than the FY 2022/23 adjusted budget. However, many of the expense savings related to capital projects carried over to FY 2023/24. The most significant operating expense reductions were due to vacant positions in Law Enforcement, Fire Safety, and Library Services. As previously mentioned, the savings from FY 2022/23 primarily stem from capital projects and departmental initiatives that were deferred to FY 2023/24. Of the additional General Fund balance, a significant amount has been allocated to unfinished FY 2022/23 projects that have been carried over to the adjusted FY 2023/24 budget. These projects consist of funding for Downtown Plaza ($1,364,607), City Hall improvements ($650,000), the Auditorium HVAC system ($499,462), City Hall Space Needs funding ($232,150), Splash Pad ($231,172), Parks and Recreation agility course equipment ($195,350), Bike Trail signage ($187,705), Inis Grove Restroom reconstruction ($175,000), ARCH funding ($154,000), a mini-soccer pitch at Lloyd Kurtz Park ($150,000), and the Arts Capital Grant Program ($147,997), as well as several other minor expenses. After considering carryovers, Staff has projected a net available balance of approximately $1.2 million at the conclusion of FY 2022/23. This can be attributed to the increased interest revenue and the higher-than-anticipated local option sales tax, as mentioned 207 above. However, staff anticipates that savings on salaries from open positions and interest revenue will provide supplementary funding for one-time expenses. The Council has the option to leverage the additional balance from FY 2022/23 and FY 2023/24 to subsidize operating costs, thus resulting in a reduction in property tax rates in FY 2024/25. However, it is important to note that this strategy may lead to a great er increase in the following year, as the one-time balance would need to be replaced with a more permanent revenue source. Therefore, after careful consideration, the staff recommends utilizing the one-time available balance created by savings in FY 2022/23 for one-time expenses. This approach will help ensure that the budget remains stable and that there is no undue burden on taxpayers in the long term. During the budget review, the City Manager will present a list of potential projects that can be funded using the balance available. Additionally, the remaining fund balance that exceeds the Council-approved minimum balance will help provide a contingency for unexpected expenses or revenue reductions, including additional modifications to the state's property tax system. Alternative Response For Community Health (ARCH) FY 2023/24 is the first year that the City funded the ARCH program. This service, administered by Mary Greely Medical Center (MGMC), provides a two-person team of a mental health professional and an EMT/Paramedic who respond to assigned 911 calls in Ames to help de-escalate a crisis situation, provide mental health support, mediate simple conflicts, assist with welfare checks, and connect individuals with appropriate resources/services. The goal of the ARCH response team is to reduce the unnecessary use of Police, Fire, EMS, and Emergency Room resources. Initial feedback received during the first year of operation indicates that ARCH has been successful in accomplishing its mission. The budget in FY 2023/24 for this program totals $325,000 for 56 hours of service each week. Funding is being provided by the City of Ames ($154,000), MGMC ($154,000), and Iowa State University ($17,000). These funds are being utilized to pay for the startup costs of the program, such as the acquisition of the necessary equipment and purchase of a vehicle, as well personnel expenses. Because of the newness of this service and lack of evidence of its usefulness, the City’s portion of the program funding was allocated from the available balance in the General Fund (one-time money) rather than incorporating this obligation into the base budget and increasing the property tax levy. At the time the Council committed to this new venture, the City staff urged MGMC to explore the possibility of other funding partners and/or outside funding opportunities to mitigate the financial responsibility of the City and MGMC as the program costs in crease over the years. To date, ASSET is the only additional funding source being explored by MGMC for FY 2024/25. Because the probability of this new program being funded by ASSET is low, the City Council should be prepared to make a decision at the February budget hearings on how to fund this important service. 208 CyRide During FY 2023/24, CyRide experienced significant growth, with ridership levels reaching nearly 80% of their pre-pandemic numbers. This growth is of utmost importance, as it is directly tied to federal funding levels. To support the continued success of the transit system, a concerted effort has been made to improve hiring and retention, leading to a reduction in the number of vacant driver positions. This, in turn, has enabled CyRide to provide additional bus services and reduce crowding on high -traffic routes. Additionally, staff reports that the first two battery electric buses were successfully introduced, fulfilling the goals set by the Transit Board and the City Council as it relates to the Climate Action Plan. In preparation for the upcoming fiscal year, the Transit Board has requested a budget increase of 3.6%, although the funding agencies request is only increasing 2.5% compared to the previous year. This increase reflects inflationary costs , ongoing supply chain issues, early replacement of heavy-duty bus engines, and shortened maintenance intervals for other equipment. Utility Rates Water and Wastewater City staff updates long-term rate planning each year based on operating cost trends and capital improvements. Staff also reviews the timing of other utility rate increases to minimize the impact on affected customers. As projected in last year’s forecast, the rates for the sanitary sewer utility are anticipated to increase by 7% in FY 2024/25. No increase is anticipated in water rates. That said, changes to the recommended rate increases may be required as staff analyzes and models the impact of construct ion costs and rates associated with capital project debt issuances. Electric It is expected that the electric utility rates will remain unchanged for FY 2024/25. That said, a long-term natural gas contract with very advantageous terms ended in December 2023, and the City entered into a new agreement that runs through December 31, 2024. As a result, customers may experience increased rates in the form of Energy Cost Adjustments, resulting from the costs associated with the new natural gas contract as well as market rate power costs. Furthermore, the electric utility staff is currently conducting a rate study, which will likely lead to some changes in the rate structure. The initial assessment by the City's consultant suggests an increase in the service charge (minimum bill) associated with the cost of maintaining the current infrastructure but an offsetting decrease in the cost of power. Staff has expressed the desire to maintain revenue neutrality to the greatest extent possible. Resource Recovery The staff has recommended increasing tipping fees from $62.50 to $75.00 per ton, effective July 1, 2024. The current tipping fee of $62.50 per ton was increased by $3.75 per ton beginning at the start of FY 2022/23. The recommended increase in tipping fees 209 is due to the recent change in the City's gas contract, which increases the cost of gas and reduces the amount of contracted gas necessary to accept refuse-derived fuel (RDF). As a result of this change, the Power Plant cannot continue to accept similar levels of RDF as it has historically, which means that refuse will be diverted to the Boone County landfill, resulting in lost tipping revenue. However, the staff does not recommend increasing the per capita fee charged to participating communities, which was raised from $9.10 to $10.50, effective from January 1, 2018. It should also be noted that an increase in the price of RDF provided the Power Plant is also currently under consideration by staff, given the rise in fuel costs. These two proposed increases will be required to meet the financial needs of the utility in the coming year. Stormwater The stormwater drainage system is currently subject to a 4 -tier structure based on impervious area adopted in FY 2012/13. As of July 1, 2022, the fee has been increased to $5.20 per equivalent residential unit (ERU). The revenue generated from this fee is allocated towards maintaining and expanding the storm sewer infrastructure, preventing overland flooding, performing erosion control, and installing other useful measures for adequate control, management, collection, drainage, and disposition of stormwater . Staff continuously evaluates the stormwater system's long-term needs, including future capital improvement projects, personnel, and equipment. No modifications to the fee structure or rates are anticipated for FY 2024/25. Parking The Parking Revenue Fund continues to struggle to meet its operating revenue requirement year over year and, as such, has made little progress in supporting collections that would sustain significant capital projects/maintenance. To support the fund over the past several years, external transfers have been necessary, including during FY 2022/23 when the City transferred nearly $450,000 of general fund savings. Staff is currently evaluating potential modifications to the parking program to increase revenue or reduce expenses. The current evaluation includes the possibility of rate changes, staffing modifications, and changes to collection and ticketing practices. While the evaluation is still underway, it has become clear that the fund will likely require a modification in more than one of the items mentioned above to sustain financial stability in the future. Hotel/Motel Tax Fund Hotel/Motel tax revenues are collected in the General Fund and transferred to the Hotel/Motel Tax Fund. Of the 7 cents per dollar collected ; 5 cents are passed through to the Discover Ames, 1 cent replaces the Local Option Sales Tax that was not collected and is split 60% for property tax reduction and 40% for community betterment. The remaining 1 cent is placed in the Hotel/Motel Tax Fund to be used for economic development opportunities. 210 From FY 2021/22 to FY 2022/23, collections increased from $2,416,000 to $2,878,000, or roughly 19%. Through conversations with Discover Ames, who indicated that they expect a decrease in the number of events in the area , staff is projecting revenues from Hotel/Motel tax to remain flat at $2,878,000 in the FY 2023/24 adjusted budget. For FY 2024/25, given the information provided by Discover Ames, staff recommends again budgeting for flat revenue through the upcoming fiscal year. The City continues to maintain a strong balance in the Hotel/Motel Tax fund. Interest Rate Revenue While an increase in interest rates will negatively impact the City's borrowing costs, they also provide additional sources of revenue for funds with substantial balances. Staff projects interest revenue for FY 2023/24 to be approximately $8.1 million and roughly $7.0 million in FY 2024/25. Staff uses a conservative approach to estimating interest revenue, including lower rates and the use of existing balances, resulting in decreased invested funds. These projected increases represent a significant increase compared to the adopted FY 2023/24 budget for all funds. Fire and Police Retirement and IPERS MFPRSI The formula for determining the contribution rate for MFPRSI is defined in the Code of Iowa Chapter 411. Presently, the employee rate is constant at 9.4%. The employer rate, on the other hand, is determined annually by the MFPRSI Board of Trustees followin g an actuarial assessment. Currently, the city's contribution rate is 22.99%. There will be a minor reduction to 22.66% in FY 2024/25. IPERS The City contribution rate to the Iowa Public Employee Retirement System (IPERS) will be unchanged at 9.44% for FY 2024/25. The employee contribution will also remain at 6.29%, with a fixed 60/40 pension cost sharing. Health Insurance After a thorough review of claims and a careful consideration of anticipated fixed costs, staff recommends an 8% increase in FY 2024/25 for all insurance plans. The primary drivers of the suggested increase are the significant increases in excess insurance and medical claims. Staff continues to collaborate with the City’s benefits consultant to identify additional cost-saving measures, including the recent change in the pharmacy benefit manager, which has prevented the need for a more significant recommended increase. Staff is confident that the health insurance fund balance will remain well above the required level to maintain a self-insured plan and provide an adequate balance to fund possible claim fluctuations. Staff will continue to monitor the condition of the fund closely and explore additional options for minimizing the potential of future increases. 211 Climate Action Plan As part of the Climate Action Plan, the Council identified six big moves: new net-zero constructions, building retrofits, reducing vehicle emissions, reducing waste emissions, renewable energy, and increasing active and transit transportation use that were further broken down into a seven-step implementation process: ▪ Increasing wind and solar ▪ Waste to energy improvements to help reduce waste emissions ▪ Policies to support net-zero construction ▪ Implementing a pilot program to incentivize retrofits in older homes ▪ Hiring a consultant to help plan retrofits for municipal buildings ▪ Create a Mayor’s CAP Leadership Task Force While the Staff is seeking funding alternatives, including federal grants, implementation of these steps are likely to significantly impact the City’s future financial strategies. Capital Improvements Plan During the presentation of this report last year, Staff noted that the constantly rising inflationary costs would lead to significant increases in project costs in all future years. The Iowa Department of Transportation (DOT) composite index for construction remained stable in 2023, after a 23.4% increase in 2022. While construction costs have stabilized, the interest rate environment continues to rise for the debt required to support many of these major projects. Where possible, staff anticipates using available bond proceeds that were previously issued for public works projects but remain unspent for various reasons. Road Conditions/Road Use Tax Fund The City’s annual Resident Satisfaction Survey's continually ranks the reconstruction of existing streets as one of the top capital improvement priorities. This represents a challenge since the lane-miles of streets continue to expand, existing streets continue to age, and recent winters have been difficult on our roadways. The Road Use Tax Fund (RUTF) is a pool of funds that is collected through various means such as motor vehicle registration fees, motor vehicle fuel taxes, an excise tax on automobile rentals, and a use tax on trailers. The revenue generated from RUTF is st rictly used for the maintenance and operation of street rights-of-way and capital improvements. The City has been cautious in estimating the annual road use tax revenue based on economic conditions in the past budget years. For the adjusted FY 2023/24 budget, staff has forecasted a road use tax revenue of $9,235,174, which is approximately 0.5% higher than the adopted budget. For the FY 2024/25 budget, the staff has forecasted road use tax revenue of $9,300,000, which is a 1.2% increase over the FY 2023/24 adopted budget. This increase in revenue will help the City cover the cost of maintaining the growing street infrastructure. 212 Local Option Sales Tax The FY 2023/24 budget projected $10,303,016 in Local Option Sales Tax (LOST) revenues. However, the latest projection for Ames from the Iowa Department of Revenue for the same period is $10,668,381. The Department of Revenue's estimate appears to assume no growth in sales tax receipts, which seems implausible given the collections received in the first quarter of the fiscal year. Based on this information, the staff believes that a reasonable adjusted budget for FY 2023/24 is $11.5 million. Additionally, st aff estimates a 5% increase over the recommended adjusted budget, bringing the recommended LOST revenue to a total of $12 million for FY 2024/25, based on the available information. Attachment 1 of this document summarizes the Local Option Sales Tax Fund, including an illustrative option of 5% for ASSET, COTA, and outside funding requests for the FY 2024/25 budget. Staff requests the City Council's direction regarding the percentage increase in funding for these programs for inclusion in the FY 2024/25 budget. Asset Human Services Funding The City Council adopted the following priorities for human services funding for FY 2024/25: (NOTE: Categories 1, 2, and 3 are in priority order as are the lettered services in each category. An emphasis is placed on low to moderate income individuals and families in all categories and services). 1. Meet mental health and substance use disorder needs through A. Community-based and outpatient mental health services B. Outpatient emergency access and crisis intervention services C. Awareness and education about suicide prevention and services D. Substance use prevention and treatment availability 2. Meet basic needs through A. Sheltering, including emergency shelter (length of stay in emergency shelter is dependent upon the population group being served) B. Housing cost offset programs including utility assistance C. Food cost offset programs to assist in providing nutritious perishables and staples D. Quality childcare cost offset programs, including daycare and State of Iowa licensed in-home facilities E. Medical and dental services F. Financial literacy and education programs G. Transportation cost offset programs H. Legal assistance I. Disaster response 3. Provide youth development services and activities through A. Skill development and enhancement B. Summer enrichment/prevention of loss of learning 213 The following table summarizes each year’s ASSET allocations by funders. Central Iowa Community Services (CICS) continues to fund mental health and disability services separately from the ASSET process. The prior budget year is not the only way to evaluate the amount to budget for the next fiscal year. The amount budgeted at this time each year can vary if the ASSET volunteers do not recommend funding the entire amount authorized by the City Council. This was the case for the current FY 2023/24. A total of $66,25 9 was left unallocated and Council approved the volunteer’s recommendation to set those funds aside specifically for an RFP for Emergency Shelter services. Additionally, the amount contracted with agencies may not be entirely drawn down each year. In FY 2022/23, $96,429 (5.6%) was not drawn down by agencies. FY 2022/23 City Funds FY 2023/24 City Funds FY 2024/25 Requested 2,056,939 Budgeted 1,729,180 Contracted 1,717,528 Requested 1,933,960 Budgeted 1,832,931 Contracted 1,766,672 Requested 2,280,601 FY 2024/25 Program and Service Requests For FY 2024/25, City ASSET funds requested by agencies total $2,280,601 (Attachment A), up $447,670, or approximately 24.4% over the current fiscal year budgeted amount of $1,832,931. The following requests are noteworthy for the City Council: • American Red Cross (Disaster Services) - City funding for FY 2023/24 was not requested by Red Cross, therefore, funding was not allocated to Disaster Services. Red Cross has submitted a request for FY 2024/25 in the amount of $9,933 which is the same amount that was in their FY 2022/23 contract with the City. • The Bridge Home (Supportive Housing and Service Coordination) – Supportive Housing was a new service in the ASSET process for FY 2023/24 and funding was not allocated to this service by ASSET funders as the higher need was with Emergency Shelter services. For FY 2024/25 The Bridge Home (TBH) is requesting City funds for Supportive Housing in the amount of $40,000. As part of their Rapid Re-housing program, TBH provides Service Coordination to help individuals and families connect to the needed resources to be successful in 214 obtaining and maintaining long-term housing. The City is currently funding Service Coordination in the amount of $5,752 and the request for FY 2024/25 is $19,675 or a 242% increase. • Mary Greeley Medical Center (ARCH) – Mary Greeley Medical Center (MGMC) is a new agency in the ASSET process for FY 2024/25. They are requesting funding for their Alternative Response to Community Health (ARCH) program that was piloted in October 2022 – June 2023. This program responds to calls that would typically be handled by the Ames Police Department or First Responders through the Fire Department. In order to help continue the program during the current fiscal year, the City Council agreed to share in half the cost with MGMC by approving the use of ending fund balance dollars from the General Fund in the amount of $154,000. MGMC’s request through ASSET is for City funding only in the amount of $186,696. • Raising Readers in Story County (Public Education) – This is a new request to the City. The amount requested is $5,000. • The Community Academy (Out of School Program) – The Community Academy (TCA) was a new agency in the ASSET process in FY 2023/24 and requested $105,000. A total of $17,972 was allocated from all four ASSET funders and the City’s share of that was $5,000 (approximately 28%). TCA’s FY 2024/25 request to ASSET is $180,000 and of that $48,260 (865% increase) is requested from the City. • ASSET approved two new services submitted by The Salvation Army. The first is Emergency Shelter for adults and families. The Salvation Army (TSA) has been providing this service in local hotels using limited financial donations. TSA is requesting $13,000 from ASSET and of this amount, $5,000 is requested from the City. The second new service is a Vehicle Repair service that falls within the ASSET category of Emergency Assistance for Basic Material Needs. This service assists individuals with car repairs up to $300 at local automotive repair businesses. If repairs exceed this amount, the individual needs to verify that they can cover the balance. The purpose of this service is to help individuals with maintaining transportation. TSA is requesting $2,000 from the City for this new service. • YSS (The Nest and Employment Assistance for Youth) – YSS is requesting an increase in City funding for The Nest program due to the loss of state grant funding. The request is for $16,626 which is a 362% increase over the current allocation of $3,600. Similar increases are asked of the other ASSET funders. 215 An increase in City funds is also being sought for the Employment Assistance for Youth service. The City is currently funding $20,931 and next year’s request is for $42,559 which is a 103% increase. Service Outcomes Reporting Agencies continue collecting and reporting service outcomes through Clear Impact Scorecard and submit data with their ASSET budget packet. Those outcome reports are shared with the ASSET volunteers as one of the several tools used to prepare allocation recommendations for the Funders. ASSET Administrative Expenses In addition to the amount authorized for human service programs, the City will also budget its share of the ASSET administrative expenses. The expenses include the administrative assistant salary, website hosting, virtual programs, printing, and meal expe nses for the volunteers. The City’s estimated share is $8,800. Funding Options Last year, the City Council authorized a 6% increase in funding. The table below indicates allocation options based on the percentage increases from the FY 2023/24 budgeted amount of $1,832,930. Increase from Current Dollar Increase Total City Funding Authorized 0% 0 1,832,931 3% 54,988 1,887,919 5% 91,647 1,924,578 24.4% (agency requests) 447,671 2,280,601 In addition to the authorized funding, it should be noted that the City’s estimated share of the administrative expenses will be an additional $8,800 on top of the total authorized funding amount. COTA – Performing Arts Funding For FY 2023/24, the City Council approved contracts with COTA agencies totaling $220,950, and an additional $8,508 was reserved to be used for fall and spring special project grants, for a total COTA allocation of $229,458. COTA has received annual grant applications from 21 agencies for FY 2024/25. This is an increase from 19 agencies receiving awards in FY 2023/24. New organizations to the process were the Ames Desi Drama Association, Creative Artists’ Studios of Ames, Friends of Roosevelt Park, and Iowa Youth Ballet. Two organizations that requested funds in FY 2023/24 did not apply for FY 2024/25. Additionally, the Ames Children’s Choirs organization was renamed to the Ames Youth Choir. The requests for FY 2024/25 total $262,350, which is a 14.3% increase ($32,892) above the budgeted amount for FY 2023/24 (before any reserve for special project grants). 216 Hearings were held by COTA with the applicants to review the application materials and answer questions. The City Council is being asked to establish the total funding amount that COTA may use to make its recommendations for FY 2024/25. From that amount, COTA will determine recommended funding amounts for each agency, and will reserve the remainder for the special project “mini-grant” opportunities that are solicited twice each year. This special project grant reserve has varied in past years from $4,000 to $10,000 out of the total funding authorized by the City Council. The table below indicates the City Council’s awards in the current fiscal year compared to the prior fiscal year: FY 2022/23 FY 2023/24 Difference Contract Amounts: $ % Award Amount to Agencies $ 206,470 $ 220,950 $ 14,480 7.0% Special Project Reserve 10,000 8,508 -1,492 -14.9% Total $ 216,470 $ 229,458 $ 12,988 6.0% As always, a range of options is available for establishing an authorized allocation for FY 2024/25. The entire amount authorized by the City Council is used by COTA. COTA sets aside a portion of the funds authorized by the Council for Special Project Gran t funds to distribute later in the year. Increase From Current Dollar Increase Amount Authorized 0% $ 0 $ 229,458 1% 2,295 231,753 2% 4,590 234,047 5% 11,473 240,931 14.3% (request) 32,892 262,350 Funding Requests From Outside Organizations City staff accepts applications from outside organizations wishing to receive funds for their organizations’ operations. The City Council has exempted the Ames Economic Development Commission’s business development partnership, the Ames/ISU Sustainability Coordinator, and the Ames Human Relations Commission from this process since those activities are conducted in an official capacity on behalf of the City government. Funds for these programs come from two sources: The Hotel/Motel Tax Fund supports the workforce development activities undertaken by the Ames Economic Development Commission. Requests from other outside organizations are supported with funds from the Local Option Sales Tax Fund. 217 During the February 2020 Budget Wrap-up, the City Council adopted a new policy regarding reimbursement for parking meters that are closed for special events. The policy indicates that parking fees will not be waived for district -wide events, effective July 1, 2020. Instead, event organizers must reimburse the Parking Fund for lost revenue. The total amount allocated for these requests in FY 2023/24 was $314,808. Purpose Source Allocation General Outside Funding Requests Local Option Sales Tax Fund $294,319 Local Option Sales Tax Fund Total 294,319 Parking Waivers Hotel/Motel Tax Fund 5,489 AEDC Workforce Initiatives Hotel/Motel Tax Fund 15,000 Hotel/Motel Tax Fund Total 20,489 TOTAL $314,808 Last year, funds to reimbursement the Parking Fund for special events were allocated in the Hotel/Motel Tax Fund rather than in the Local Option Sales Tax Fund for the first time. Staff is recommending that the parking waiver funds continue to be drawn from the Hotel/Motel Tax Fund. This year, parking waiver requests total $7,000. Staff would recommend allocating a total of $10,000 for parking waiver requests to cover any unanticipated events or activities that the Council wishes to provide free parking for. The authorization to transfer funds from the Hotel/Motel Fund to the Parking Fund would be made at the time of approval of each request. The total Local Option Sales Tax Fund portion of the FY 2024/25 requests is $332,729, which is a 13.1% increase over the FY 2023/24 Local Option allocation. 218 Organization/Program FY 23/24 Adopted FY 24/25 Request $ Change % Change Ames Historical Society $ 50,752 $ 66,752 $ 16,000 31.5% Ames Int’l Partner City Ass’n 5,800 8,000 2,200 37.9% Campustown Action Ass’n 42,000 43,000 1,000 2.4% Hunziker Youth Sports Complex 84,000 94,000 10,000 11.9% Ames Main Street 53,000 54,000 1,000 1.9% Story County Housing Trust Fund 40,778 52,477 11,699 28.7% Farmers Market 10,000 12,000 2,000 20% American Legion Riders 2,500 2,500 - - Home Allies 5,489* - (5,489) -100.0% Local Option Tax Subtotal $ 294,319 $ 332,729 $ 38,410 13.1% Ames Main Street (Parking Waivers) 5,489 5,500 11 0.2% Campustown Action Ass’n Parking Waivers - 1,500 1,500 100% Staff recommended additional parking waiver reserve - 3,000 3,000 100% AEDC Workforce Development* 15,000 15,000 - - Hotel/Motel Tax Subtotal $ 20,489 $ 25,000 $ 4,511 22.0% TOTAL $ 314,808 $ 357,729 $ 42,921 13.6% *Home Allies received an additional allocation of $4,511 from Council Contingency Highlights from the requests are summarized below: • Hunziker Youth Sports Complex – HYSC is requesting an increase to $94,000 for FY 2024/25. This request represents a $10,000 increase over the $84,000 it received in FY 2023/24, and would address increased expenses for field maintenance, equipment, and building upkeep. • Ames Historical Society – AHS is requesting an increase to $66,752 for FY 2024/25. This represents an increase of $16,000 over the $50,752 it received in FY 2023/24. The requested increase corresponds to the expected growth in attendance with the opening of the expanded facility in mid-2024, and would provide for free or reduced admission to SNAP/EBT, WIC, and Medicaid recipients, students, and active military. • Ames International Partner Cities Association – AIPCA is requesting an increase to $8,000 for FY 2024/25. This represents an increase of $2,200 over the $5,800 it received in FY 2023/24, and is related to exploring new ways to develop a commerce exchange with Koshu City, Japan. 219 • Farmers Market – Farmers Market is requesting an increase to $12,000. This represents an increase of $2,000 over the $10,000 it received in FY 2023/24. The Market indicates that the requested increase is due to the projected increase in logistical costs. • Story County Housing Trust (SCHT) – SCHT is requesting an increase to $52,477 for FY 2024/25, compared with the $40,778 it received in FY 2023/24. Most of the increase would be allocated towards repairs of owner-occupied housing for those with low- and moderate incomes, compared to the approved contract for FY 2023/24. The past practice has been to include the amount approved for the prior fiscal year in the recommended budget. The City Council is not being asked to evaluate or approve the merits of these requests at this time. Instead, City staff is seeking direction from the City Council regarding a total amount of Local Option funds available to be allocated for the coming year, and concurrence with staff’s proposal to fund the parking meter waivers from Hotel/Motel tax revenues rather than Local Option Sales Tax. The applications will be reviewed by staff with that budget authority in mind, and recommendations will be made to the City Council. As with other funding processes, a variety of options are available to the City Council: Increase From Current ($294,319) Dollar Increase Amount Authorized 1% $ 2,943 $ 297,262 2% 5,886 300,205 3% 8,829 303,148 4% 11,773 306,092 5% 14,716 309,035 13.1% (all requests)* 38,410 332,729 *excludes AEDC request and parking waiver requests, which would be funded from Hotel/Motel Tax Fund Town Budget Meeting On November 2, 2023, the annual Town Budget Meeting was held. Notes from the meeting are included as Attachments (2 & 3) to this document. Attachments 1. Local Option Sales Tax Fund Summary 2. Town Budget Meeting Minutes 3. Outside Funding Requests 220 City Council’s Input (Given the information provided, the City Council’s input is requested.) Service Level Increases Service Level Decreases Other Issues 221 Attachment 1 Local Option Sales Tax Summary +5% ASSET/COTA 2023/24 2023/24 2024/25 Adopted Adjusted Estimated Revenues: Local Option Sales Tax 10,303,016$ 11,500,000$ 12,000,000$ Transfer from Hotel/Motel 137,341 164,622 164,622 Total Revenues 10,440,357 11,664,622 12,164,622 Expenses: Operating Expenses: Municipal Band 33,471 34,168 35,084 Human Svcs Administration 30,083 22,523 32,438 Human Svc Agency Funding 1,832,931 1,832,931 1,924,578 "+5% Adopted Public Art 46,000 138,566 46,000 Art Agency Funding 229,458 229,458 240,931 "+5% Adopted City Council Allocations 294,319 294,319 309,035 "+5% Adopted AHRC Special Events 3,000 3,000 3,000 Total Operations 2,469,262 2,554,965 2,591,066 CIP Projects:1,842,628 7,115,241 2,073,628 Transfers: 60% Property Tax Relief 6,181,810 6,900,000 7,200,000 Park Development 100,000 100,000 100,000 Ice Arena Capital Reserve 40,000 40,000 40,000 Total Transfers 6,321,810 7,040,000 7,340,000 Total Expenses 10,633,700 16,710,206 12,004,694 Fund Balance: Net Change in Fund (193,343) (5,045,584) 159,928 Beginning Balance 3,645,308 9,779,014 4,733,430 Ending Balance 3,451,965 4,733,430 4,893,358 Minimum Balance Reserve 1,112,973 2,452,552 1,201,174 (25% of expenses less 60% pass through) Unreserved Fund Balance 2,338,992$ 2,280,878$ 3,692,184$ S:\Finance-Administration\BUDGET DIVISION\Council Budget Issues\FY 24 25 Issues\Local Option Sales Tax Summary FY 24-25 222 Agency Service Index Contracted 23/24 Request 24/25 % Change Contract to Request 24/25 Proposed Units of Service Unit of Service 24/25 Proposed Cost per Unit ACCESS Emergency Shelter 2.08 66,813$ 73,495$ 10.00%565 24 Hr Period Food/Shelter 130.00$ ACCESS Domestic Abuse Crisis and Support 3.07 35,864$ 39,450$ 10.00%326 1 Staff Hour 121.00$ ACCESS Sexual Abuse Crisis and Support 3.08 9,570$ 10,527$ 10.00%80 1 Staff Hour 131.00$ ACCESS Battering Courtwatch 3.10 7,124$ 7,836$ 9.99%65 1 Staff Hour 121.00$ ACCESS Public Education and Awareness 1.12 4,750$ 5,225$ 10.00%43 1 Staff Hour 121.00$ 124,121$ 136,533$ 10.00% Ames Comm. Preschool Center Day Care - Infant 2.02 25,000$ 27,500$ 10.00%331 1 Full Day 82.96$ Ames Comm. Preschool Center Day Care - Children 2.03 84,829$ 93,312$ 10.00%1,529 1 Full Day 61.02$ Ames Comm. Preschool Center Day Care - School Age 2.04 45,670$ 50,237$ 10.00%2,791 1 Partial Day (3 hrs)18.00$ 155,499$ 171,049$ 10.00% All Aboard for Kids Out of School Program 1.09 8,263$ 8,676$ 5.00%63 1 Partial Day (3 hrs)138.73$ All Aboard for Kids Supported Employment Dev. Disab.1.01 2,976$ 3,215$ 8.03%79 1 Staff Hour 40.63$ 11,239$ 11,891$ 5.80% American Red Cross Disaster Services 2.12 -$ 9,933$ 100.00%8 1 Staff Hour 1,180.00$ -$ 9,933$ 100.00% Boys and Girls Club Out of School Program 1.09 123,218$ 126,915$ 3.00%2,532 1 Partial Day (3 hrs)50.13$ 123,218$ 126,915$ 3.00% Campfire Day Care- School Age 2.04 -$ -$ NA -$ Campfire Day Care - School Age - Scholarships 2.04 -$ -$ NA -$ Campfire Youth Development and Social Adjustment 1.07 -$ -$ NA Campfire Out of School Program 1.09 5,500$ 6,000$ 9.09%92 1 Partial Day (3 hrs)65.33$ 5,500$ 6,000$ 9.09% Center for Creative Justice Correctional Services - Probation Supervision 2.09 67,450$ 70,823$ 5.00%659 1 Client Hour 107.39$ 67,450$ 70,823$ 5.00% ChildServe Day Care - Infant 2.02 6,600$ 6,600$ 0.00%114 1 Full Day 57.66$ ChildServe Day Care - Children 2.03 17,600$ 17,600$ 0.00%311 1 Full Day 56.65$ 24,200$ 24,200$ 0.00% The Bridge Home Rapid Re-Housing Emerg. Assistance for Basic Needs 2.01 19,172$ 19,500$ 1.71%42 1 Client Contact 459.53$ The Bridge Home Emergency Shelter 2.08 92,927$ 110,000$ 18.37%1,416 24 Hr Period Food/Shelter 77.70$ The Bridge Home Supportive Housing 2.15 -$ 40,000$ 100.00%1,539 1 Day 25.99$ The Bridge Home Rapid Re-Housing Service Coordination 3.13 5,752$ 19,675$ 242.05%697 1 Client Hour 28.23$ 117,851$ 189,175$ 60.52% Good Neighbor Emergency Assistance for Rent and Utilities 2.01 29,000$ 38,700$ 33.45%70 1 Client Contact 553.40$ Good Neighbor Emergency Assistance for Healthy Food Vouchers 2.01 6,500$ 9,100$ 40.00%44 1 Client Contact 206.72$ Good Neighbor Emergency Assistance - Navigator 2.01 -$ -$ 0.00%- 1 Client Contact 133.23$ 35,500$ 47,800$ 34.65% Heartland of Story County Day Care - Adults , Adult Day Center 3.02 65,620$ 67,600$ 3.02%843 1 Day 80.15$ Heartland of Story County Congregate Meals 3.06 -$ -$ 0.00%- 1 Meal -$ Heartland of Story County Home Delivered Meals 3.05 86,335$ 102,525$ 18.75%12,293 1 Meal 8.34$ Heartland of Story County Home Delivered Meals Under 60 Program 3.05 2,189$ -$ 0.00%NA 1 Meal NA City of Ames 223 Agency Service Index Contracted 23/24 Request 24/25 % Change Contract to Request 24/25 Proposed Units of Service Unit of Service 24/25 Proposed Cost per Unit City of Ames Heartland of Story County Senior Food Program 2.01 4,668$ 4,668$ 0.00%454 1 Client Contact 10.29$ Heartland of Story County Service Coordination - Outreach 3.13 48,613$ 50,100$ 3.06%478 1 Client Hour 104.73$ Heartland of Story County Activity and Resource Center 3.14 -$ -$ 0.00%NA 1 Client Contact -$ 207,425$ 224,893$ 8.42% HIRTA Transportation - City 2.13 47,921$ 51,000$ 6.43%2,589 One-Way Trip 19.70$ 47,921$ 51,000$ 6.43% Legal Aid Legal Aid - Society , Legal Aid - Civil 2.10 138,704$ 149,800$ 8.00%1,051 1 Staff Hour 142.57$ 138,704$ 149,800$ 8.00% Lutheran Services in Iowa Crisis Intervention - Crisis Child Care 3.09 5,389$ 5,389$ 0.00%2 1 Contact $3,114.00 5,389$ 5,389$ 0.00% Mary Greeley Home Health Services (ARCH)**NEW SERVICE** Crisis Intervention (ARCH)3.09 -$ 186,696$ 100.00%741 1 Contact 251.81$ 186,696$ 100.00% Mary Greeley Home Health Services Community Clinics and Health Education 3.01 17,878$ 17,878$ 0.00%114 1 Clinic Hour 156.24$ Mary Greeley Home Health Services In-Home Health Assistance 3.04 16,300$ 16,300$ 0.00%231 1 Client Hour 70.48$ 34,178$ 34,178$ 0.00% MICA Food Pantry 2.01 28,000$ 33,000$ 17.86%1,577 1 Client Contact 20.92$ 28,000$ 33,000$ 17.86% NAMI Public Education and Awareness 1.12 12,900$ 13,400$ 3.88%196 1 Staff Hour 68.42$ NAMI Activity and Resource Center 3.14 7,400$ 12,400$ 67.57%178 1 Staff Hour 69.79$ NAMI Family and Peer Support 1.02 550$ 550$ 0.00%9 1 Staff Hour 59.39$ NAMI Family and Peer Education 1.02 1,200$ 1,200$ 0.00%4 1 Staff Hour 296.95$ 22,050$ 27,550$ 24.94% Primary Health Care Dental Clinic 3.01 80,000$ 100,209$ 25.26%345 1 Clinic Hour 290.46$ 80,000$ 100,209$ 25.26% Raising Readers Family Development/Education 1.10 13,063$ 14,108$ 8.00%84 1 Client Hour 167.42$ Raising Readers Out-of-School Program 1.09 17,712$ 19,129$ 8.00%143 1 Partial Day (3 hours)134.16$ Raising Readers **NEW REQUEST** Public Education/Awareness 1.12 -$ 5,000$ 100.00%285 1 Staff Hour 17.52$ 30,775$ 38,237$ 24.25% RSVP Disaster Services - Volunteer Management for Emergencies 2.12 7,800$ 8,000$ 2.56%172 1 Staff Hour 46.63$ RSVP Transportation 2.13 1,700$ 2,000$ 17.65%94 One-Way Trip 21.27$ RSVP Volunteer Management 1.11 26,000$ 27,150$ 4.42%5,251 1 Volunteer Hour 5.17$ 35,500$ 37,150$ 4.65% The Arc of Story County Special Recreation - Active Lifestyles 3.19 5,500$ 5,700$ 3.64%547 1 Participant Hour 10.42$ The Arc of Story County Respite Care 3.11 4,200$ 4,200$ 0.00%250 1 Client Hour 16.78$ The Arc of Story County Service Coordination 3.13 1,500$ 1,500$ 0.00%71 1 Client Hour 21.15$ 11,200$ 11,400$ 1.79% 224 Agency Service Index Contracted 23/24 Request 24/25 % Change Contract to Request 24/25 Proposed Units of Service Unit of Service 24/25 Proposed Cost per Unit City of Ames The Community Academy Out of School Program 1.09 5,000$ 48,260$ 865.20%704 1 Partial Day (3 hrs)68.57$ 5,000$ 48,260$ 865.20% The Salvation Army Emergency Asst. for Basic Material Needs (Food Pantry)2.01 18,000$ 21,000$ 16.67%141 1 Client Contact 149.42$ The Salvation Army Emergency Asst. for Basic Material Needs (Homeless Prev)2.01 30,000$ 33,000$ 10.00%82 1 Client Contact 402.73$ The Salvation Army Disaster Services 2.12 1,000$ 1,200$ 20.00%3 1 Staff Hour 423.30$ The Salvation Army Representative Payee Services 2.14 18,000$ 18,000$ 0.00%955 1 Client Contact 18.84$ The Salvation Army **NEW SERVICE** Emergency Shelter 2.08 -$ 5,000$ 100.00%66 24 Hr Period Food/Shelter 75.67$ The Salvation Army **NEW SERVICE** Emergency Asst. for Basic Material Needs (Vehicle Repair)2.01 -$ 2,000$ 100.00%7 1 Client Contact 301.85$ 67,000$ 80,200$ 19.70% University Community Childcare Child Care - Infant 2.02 46,200$ 50,820$ 10.00%470 1 Full Day 108.24$ University Community Childcare Child Care - Children 2.03 48,572$ 53,430$ 10.00%833 1 Full Day 64.18$ 94,772$ 104,250$ 10.00% YWCA Youth Development and Social Adjustment (Girl Power)1.07 3,000$ 3,000$ 0.00%2,857 1 Client Contact/day 1.05$ YWCA Parent and Student Support 1.02 1,366$ 1,366$ 0.00%64 1 Staff Hour 21.39$ 4,366$ 4,366$ 0.00% Youth and Shelter Services Substance Abuse Treatment - Outpatient 3.16 13,555$ 13,962$ 3.00%58 1 Client Hour 242.06$ Youth and Shelter Services Primary Treatment /Health Maintenance Family Counseling 3.17 63,037$ 89,928$ 42.66%651 1 Client Hour 138.19$ Youth and Shelter Services Emergency Assistance for Basic Needs - Transitional Living Services 2.07 6,158$ 7,082$ 15.00%97 1 Day 72.70$ Youth and Shelter Services Emergency Shelter - Rosedale 2.08 32,442$ 34,064$ 5.00%177 24 Hr Period Food/Shelter 192.20$ Youth and Shelter Services Rosedale Crisis 3.09 5,250$ 5,250$ 0.00%69 1 Contact 76.09$ Youth and Shelter Services The Nest 2.11 3,600$ 16,626$ 361.83%169 1 Client Contact 98.22$ Youth and Shelter Services Youth Dev and Social Adjustment - Mentoring 1.07 38,057$ 42,662$ 12.10%343 1 Client Contact/Day 124.37$ Youth and Shelter Services Youth Dev and Social Adjustment - Community Youth Dev 1.07 34,671$ 35,711$ 3.00%605 1 Client Contact/Day 58.98$ Youth and Shelter Services Employment Assistance for Youth - Skills 1.08 20,931$ 42,559$ 103.33%454 1 Staff Hour 93.81$ Youth and Shelter Services Out of School Program - Summer Enrichment 1.09 11,984$ 13,583$ 13.34%881 Partial Day (3 hrs)15.41$ Youth and Shelter Services Family Development/Education - Pathways, FADSS 1.10 13,026$ -$ -100.00%1 Client Hour -$ Youth and Shelter Services Public Education/ Awareness 1.12 39,103$ 40,277$ 3.00%222 1 Staff Hour 181.23$ Youth and Shelter Services Public Education/ Awareness - Child Safety 1.12 -$ -$ Youth and Shelter Services Service Coordination 3.13 8,000$ 8,000$ 0.00%133 1 Staff Hour 60.00$ 289,814$ 349,704$ 20.66% TOTAL 1,766,672$ 2,280,601$ 29.09% Funds set-aside for Emergency Shelter RFP 66,258$ Total Amount Budgeted for FY 2023/24 1,832,930$ 225 Town Budget Mee ng November 2, 2023 A endees: Andrea Gronau, The Bridge Home Evelyn Garrison, The Bridge Home Will Determan Stan Rabe, ACTORS More: Publicizing City ac vi es, events, mee ngs Downtown bike infrastructure o Main Street bike lanes Annual input for bike/pedestrian infrastructure (like Bike/Ped Master Plan process) Transit: More frequent buses (yellow, brown, and green routes) o Fare free for residents Rebates for energy efficiency (more things covered) Less: Parking lot expansion in parks o North River Valley Park 226 227 228 229 Outside Funding Request Process Application Application Information Is this request for a program/event sponsored by a student organization? Yes _______ No _______ Organization Name: __________________________________________________ Date: ________________ Contact Person: ____________________________________________________________________________ Contact Mailing Address: _____________________________________________________________________ Phone: _________________ Email Address: _____________________________ Tax ID #: _____________ Program/Event Information What are the goals of this program/event: _______________________________________________________ Date(s) program/event will be held: _________________ to _________________ Check if continuous or ongoing: ____________ Location of program/event: __________________________________________________________________ # of individuals involved in program/event planning: _____________________ # of individuals who will benefit from program/event: ___________________ Funding amount requested: __________________________________________________________________ Has the City of Ames funded this program/event before? __________________ If yes, what year was it last funded? _____________ If yes, what amount of funding was received? ____________ Program/Event Description Please answer each question below using the space provided. Explain how this request helps accomplish the goals of this program/event. If you are requesting an increase in funding from the last funding cycle, include an explanation of the enhanced or expanded services you intend to provide with the additional funding: v.10.10.23 Ames Chamber of Commerce 10/16/23 Nikki Fischer 304 Main St, Ames, IA 50010 5152332310 nikki@ameschamber.com 42-0623975 The overall goal of our workforce solutions program is the attraction and retention of workforce to the Ames MSA. We have plans to continue to refresh and enhance our program of work as we move into FY24/25. Our needs for a robust workforce solutions program have never been greater as we work to fill the more than 1,600 job openings in the area as well as to support job growth within the Ames MSA. Ames $15,000 yes FY23 See yourself in Ames Intern Program - We have grown this program year over year. Our local employers continue to recruit more and more interns including those from other places than ISU. Ames Career Fair and Career Fair Training - There continues to be a need for in person career fair events in which we will work to implement those in the community. There is a need for employers to utilize these the best they can and we have training for this. Iowa State University Alumni marketing- Our unique opportunity to have a university in our community gives us a market most do not get to market their job openings. Youth Career Fair - We co-host an event annually at the Ames Grand Mall for youth to find employment. We will co-host a middle school career for career exploration. 4 4 230 What efforts have you made to obtain funding from other sources? Include fundraising, dues, and any requests to other City- sponsored programs (e.g., ASSET, COTA, Ames Community Grants Program) Who will be responsible for ensuring compliance with the funding contract? What are his/her/their qualifications? Budget Complete the budget for your activity below, including previous fiscal years in columns A, B, and C, and your grant request from the City of Ames in box D10. (A) (B) (C) (D) REVENUE - ALL SOURCES 1 FUNDRAISING 2 MEMBERSHIP DUES 3 FEES CHARGED 4 INVESTMENT INCOME 5 GRANTS (PRIVATE SECTOR) 6 STATE/FEDERAL FUNDS 7 ISU OR ISU STUDENT GOVERNMENT FUNDS 8 OTHER GOV'T OR NON-PROFIT FUNDS 9 MISC. (Describe): 10 FUNDING REQUEST FROM CITY OF AMES 11 TOTAL REVENUES EXPENSES 12 SALARY AND RELATED 13 OCCUPANCY/RENT 14 SUPPLIES/EQUIPMENT 15 CONTRACTUAL SERVICES 16 PROMOTION/ADVERTISING 17 MISC. (Describe): 18 TOTAL EXPENSES v.10.10.23 FY 21-22 ACTUAL FY 22-23 ACTUAL FY 23-24 ADOPTED FY 24-25 PROPOSED FY 21-22 ACTUAL FY 22-23 ACTUAL FY 23-24 ADOPTED FY 24-25 PROPOSED We have begun efforts to secure $65,000 in funding from private sources. We will be requesting $40,000 in funding support for the Story County Supervisors in January. Nikki Fischer will be responsible for ensuring compliance with this funding contract. Nikki tracks and monitors all aspects of the workforce solutions budget and progress towards goals each month. Not only does Nikki serve in a leadership roles within our organization but has managed a non profit and been apart of ASSET for the last 3 years. 59,000 55,000 55,000 65,000 5,000 60,000 60,000 60,000 60,000 139,000 30,000 30,000 30,000 30,000 1,000 1,000 1,000 1,000 49,000 45,000 50,000 50,000 59,000 54,000 49,000 50,000 139,000 115,000 115,000 125,000 130,000 130,000 131,000 231 Proposed Task/Drawdown Schedule Funds awarded must be used to benefit the general public. On the lines below, describe the tasks you plan to complete using requested funds, the anticipated task completion date, and the amount you will request in reimbursement for that task. The total should add up to your funding request. Tasks below should be services and programs that will be provided to the public (e.g., individual events, educational programs, improvements to public spaces, etc.). Tasks should not include costs that primarily benefit the organization (e.g., administrative expenses, overhead, rent, utilities, etc.). The organization should consider such internal costs in the overall cost of providing the specific service or program. Prioritize the tasks proposed in this list, with the tasks the organization would most like to receive funding for towards the top Priority Task Participants Completion Date Amount 1 2 3 4 5 6 7 8 9 TOTAL: Disclaimer and Submission By typing in my name below, I certify that my answers are true and complete to the best of my knowledge. I am authorized to submit this application on behalf of the organization named herein. Name: ___________________________________________ Title: __________________ Date: ___________ Submit completed applications to the City Manager’s Office, 515 Clark Avenue, Ames, IA 50010. Applications must be received no later than 5:00 p.m. on November 15 to be considered for funding. v.10.10.23 See Yourself In Ames Internship Program 5/15/2025$2,000 Conduct and Promote Career Fair 300 06/30/2025$2,000 Iowa State Alumni Marketing 12/31/2024$3,000 Participation in State of Iowa Workforce Marketing 06/30/2025$5,000 Youth Career Fair 450 12/31/2025$3,000 $15,000 Director, Workforce Development and Diversity 10/16/23Nikki Fischer 232 Outside Funding Request Process Application Application Information Is this request for a program/event sponsored by a student organization? Yes _______ No _______ Organization Name: __________________________________________________ Date: ________________ Contact Person: ____________________________________________________________________________ Contact Mailing Address: _____________________________________________________________________ Phone: _________________ Email Address: _____________________________ Tax ID #: _____________ Program/Event Information What are the goals of this program/event: _______________________________________________________ Date(s) program/event will be held: _________________ to _________________ Check if continuous or ongoing: ____________ Location of program/event: __________________________________________________________________ # of individuals involved in program/event planning: _____________________ # of individuals who will benefit from program/event: ___________________ Funding amount requested: __________________________________________________________________ Has the City of Ames funded this program/event before? __________________ If yes, what year was it last funded? _____________ If yes, what amount of funding was received? ____________ Program/Event Description Please answer each question below using the space provided. Explain how this request helps accomplish the goals of this program/event. If you are requesting an increase in funding from the last funding cycle, include an explanation of the enhanced or expanded services you intend to provide with the additional funding: v.10.10.23 233 What efforts have you made to obtain funding from other sources? Include fundraising, dues, and any requests to other City- sponsored programs (e.g., ASSET, COTA, Ames Community Grants Program) Who will be responsible for ensuring compliance with the funding contract? What are his/her/their qualifications? Budget Complete the budget for your activity below, including previous fiscal years in columns A, B, and C, and your grant request from the City of Ames in box D10. (A) (B) (C) (D) REVENUE - ALL SOURCES 1 FUNDRAISING 2 MEMBERSHIP DUES 3 FEES CHARGED 4 INVESTMENT INCOME 5 GRANTS (PRIVATE SECTOR) 6 STATE/FEDERAL FUNDS 7 ISU OR ISU STUDENT GOVERNMENT FUNDS 8 OTHER GOV'T OR NON-PROFIT FUNDS 9 MISC. (Describe): 10 FUNDING REQUEST FROM CITY OF AMES 11 TOTAL REVENUES EXPENSES 12 SALARY AND RELATED 13 OCCUPANCY/RENT 14 SUPPLIES/EQUIPMENT 15 CONTRACTUAL SERVICES 16 PROMOTION/ADVERTISING 17 MISC. (Describe): 18 TOTAL EXPENSES v.10.10.23 FY 21-22 ACTUAL FY 22-23 ACTUAL FY 23-24 ADOPTED FY 24-25 PROPOSED FY 21-22 ACTUAL FY 22-23 ACTUAL FY 23-24 ADOPTED FY 24-25 PROPOSED 234 Proposed Task/Drawdown Schedule Funds awarded must be used to benefit the general public. On the lines below, describe the tasks you plan to complete using requested funds, the anticipated task completion date, and the amount you will request in reimbursement for that task. The total should add up to your funding request. Tasks below should be services and programs that will be provided to the public (e.g., individual events, educational programs, improvements to public spaces, etc.). Tasks should not include costs that primarily benefit the organization (e.g., administrative expenses, overhead, rent, utilities, etc.). The organization should consider such internal costs in the overall cost of providing the specific service or program. Prioritize the tasks proposed in this list, with the tasks the organization would most like to receive funding for towards the top Priority Task Participants Completion Date Amount 1 2 3 4 5 6 7 8 9 TOTAL: Disclaimer and Submission By typing in my name below, I certify that my answers are true and complete to the best of my knowledge. I am authorized to submit this application on behalf of the organization named herein. Name: ___________________________________________ Title: __________________ Date: ___________ Submit completed applications to the City Manager’s Office, 515 Clark Avenue, Ames, IA 50010. Applications must be received no later than 5:00 p.m. on November 15 to be considered for funding. v.10.10.23 235 Ames History Museum Application, City of Ames FY 2024-25 Notes: PROGRAM/EVENT DESCRIPTION on Page 1 – We provided as much information as possible with the limited number of characters allowed in this section. We are happy to answer questions or provide more information about how services will be expanded with the new museum if n eeded. TASK LIST on Page 3 – Most tasks listed are ongoing throughout the year. We will compile each quarter’s portion of completed tasks and request approximately 1/4 of the funding each quarter. Some tasks are seasonal, but all listed will be completed by 6/30/25. BUDGET SECTION AHM financial reports are kept by calendar year on a cash basis. On our application, Column A is 2021 actual revenue and expenses, Column B is 2022 actual revenue and expenses, Column C is 2023 approved budget, and Column D is proposed budget for 2024. Line 9 – Misc. includes gift shop sales, bank interest, and transfers from cash reserves Line 10 – Funding Request: Because our Jan-Dec fiscal year overlaps with the City’s July-June fiscal year, the figures on this line represent the sum of half the money from two fiscal years. Line 17 – Misc. includes expenses associated with programs, events, exhibitions, collections, and transfers to building maintenance reserve 236 Outside Funding Request Process Application Application Information Is this request for a program/event sponsored by a student organization? Yes _______ No _______ Organization Name: __________________________________________________ Date: ________________ Contact Person: ____________________________________________________________________________ Contact Mailing Address: _____________________________________________________________________ Phone: _________________ Email Address: _____________________________ Tax ID #: _____________ Program/Event Information What are the goals of this program/event: _______________________________________________________ Date(s) program/event will be held: _________________ to _________________ Check if continuous or ongoing: ____________ Location of program/event: __________________________________________________________________ # of individuals involved in program/event planning: _____________________ # of individuals who will benefit from program/event: ___________________ Funding amount requested: __________________________________________________________________ Has the City of Ames funded this program/event before? __________________ If yes, what year was it last funded? _____________ If yes, what amount of funding was received? ____________ Program/Event Description Please answer each question below using the space provided. Explain how this request helps accomplish the goals of this program/event. If you are requesting an increase in funding from the last funding cycle, include an explanation of the enhanced or expanded services you intend to provide with the additional funding: v.10.10.23 237 What efforts have you made to obtain funding from other sources? Include fundraising, dues, and any requests to other City- sponsored programs (e.g., ASSET, COTA, Ames Community Grants Program) Who will be responsible for ensuring compliance with the funding contract? What are his/her/their qualifications? Budget Complete the budget for your activity below, including previous fiscal years in columns A, B, and C, and your grant request from the City of Ames in box D10. (A) (B) (C) (D) REVENUE - ALL SOURCES 1 FUNDRAISING 2 MEMBERSHIP DUES 3 FEES CHARGED 4 INVESTMENT INCOME 5 GRANTS (PRIVATE SECTOR) 6 STATE/FEDERAL FUNDS 7 ISU OR ISU STUDENT GOVERNMENT FUNDS 8 OTHER GOV'T OR NON-PROFIT FUNDS 9 MISC. (Describe): 10 FUNDING REQUEST FROM CITY OF AMES 11 TOTAL REVENUES EXPENSES 12 SALARY AND RELATED 13 OCCUPANCY/RENT 14 SUPPLIES/EQUIPMENT 15 CONTRACTUAL SERVICES 16 PROMOTION/ADVERTISING 17 MISC. (Describe): 18 TOTAL EXPENSES v.10.10.23 FY 21-22 ACTUAL FY 22-23 ACTUAL FY 23-24 ADOPTED FY 24-25 PROPOSED FY 21-22 ACTUAL FY 22-23 ACTUAL FY 23-24 ADOPTED FY 24-25 PROPOSED 238 Proposed Task/Drawdown Schedule Funds awarded must be used to benefit the general public. On the lines below, describe the tasks you plan to complete using requested funds, the anticipated task completion date, and the amount you will request in reimbursement for that task. The total should add up to your funding request. Tasks below should be services and programs that will be provided to the public (e.g., individual events, educational programs, improvements to public spaces, etc.). Tasks should not include costs that primarily benefit the organization (e.g., administrative expenses, overhead, rent, utilities, etc.). The organization should consider such internal costs in the overall cost of providing the specific service or program. Prioritize the tasks proposed in this list, with the tasks the organization would most like to receive funding for towards the top Priority Task Participants Completion Date Amount 1 2 3 4 5 6 7 8 9 TOTAL: Disclaimer and Submission By typing in my name below, I certify that my answers are true and complete to the best of my knowledge. I am authorized to submit this application on behalf of the organization named herein. Name: ___________________________________________ Title: __________________ Date: ___________ Submit completed applications to the City Manager’s Office, 515 Clark Avenue, Ames, IA 50010. Applications must be received no later than 5:00 p.m. on November 15 to be considered for funding. v.10.10.23 239 240 241 242 Outside Funding Request Process Application Application Information Is this request for a program/event sponsored by a student organization? Yes _______ No _______ Organization Name: __________________________________________________ Date: ________________ Contact Person: ____________________________________________________________________________ Contact Mailing Address: _____________________________________________________________________ Phone: _________________ Email Address: _____________________________ Tax ID #: _____________ Program/Event Information What are the goals of this program/event: _______________________________________________________ Date(s) program/event will be held: _________________ to _________________ Check if continuous or ongoing: ____________ Location of program/event: __________________________________________________________________ # of individuals involved in program/event planning: _____________________ # of individuals who will benefit from program/event: ___________________ Funding amount requested: __________________________________________________________________ Has the City of Ames funded this program/event before? __________________ If yes, what year was it last funded? _____________ If yes, what amount of funding was received? ____________ Program/Event Description Please answer each question below using the space provided. Explain how this request helps accomplish the goals of this program/event. If you are requesting an increase in funding from the last funding cycle, include an explanation of the enhanced or expanded services you intend to provide with the additional funding: v.10.10.23 243 What efforts have you made to obtain funding from other sources? Include fundraising, dues, and any requests to other City- sponsored programs (e.g., ASSET, COTA, Ames Community Grants Program) Who will be responsible for ensuring compliance with the funding contract? What are his/her/their qualifications? Budget Complete the budget for your activity below, including previous fiscal years in columns A, B, and C, and your grant request from the City of Ames in box D10. (A) (B) (C) (D) REVENUE - ALL SOURCES 1 FUNDRAISING 2 MEMBERSHIP DUES 3 FEES CHARGED 4 INVESTMENT INCOME 5 GRANTS (PRIVATE SECTOR) 6 STATE/FEDERAL FUNDS 7 ISU OR ISU STUDENT GOVERNMENT FUNDS 8 OTHER GOV'T OR NON-PROFIT FUNDS 9 MISC. (Describe): 10 FUNDING REQUEST FROM CITY OF AMES 11 TOTAL REVENUES EXPENSES 12 SALARY AND RELATED 13 OCCUPANCY/RENT 14 SUPPLIES/EQUIPMENT 15 CONTRACTUAL SERVICES 16 PROMOTION/ADVERTISING 17 MISC. (Describe): 18 TOTAL EXPENSES v.10.10.23 FY 21-22 ACTUAL FY 22-23 ACTUAL FY 23-24 ADOPTED FY 24-25 PROPOSED FY 21-22 ACTUAL FY 22-23 ACTUAL FY 23-24 ADOPTED FY 24-25 PROPOSED 244 Proposed Task/Drawdown Schedule Funds awarded must be used to benefit the general public. On the lines below, describe the tasks you plan to complete using requested funds, the anticipated task completion date, and the amount you will request in reimbursement for that task. The total should add up to your funding request. Tasks below should be services and programs that will be provided to the public (e.g., individual events, educational programs, improvements to public spaces, etc.). Tasks should not include costs that primarily benefit the organization (e.g., administrative expenses, overhead, rent, utilities, etc.). The organization should consider such internal costs in the overall cost of providing the specific service or program. Prioritize the tasks proposed in this list, with the tasks the organization would most like to receive funding for towards the top Priority Task Participants Completion Date Amount 1 2 3 4 5 6 7 8 9 TOTAL: Disclaimer and Submission By typing in my name below, I certify that my answers are true and complete to the best of my knowledge. I am authorized to submit this application on behalf of the organization named herein. Name: ___________________________________________ Title: __________________ Date: ___________ Submit completed applications to the City Manager’s Office, 515 Clark Avenue, Ames, IA 50010. Applications must be received no later than 5:00 p.m. on November 15 to be considered for funding. v.10.10.23 245 Ames Main Street, Outside Funding Request FY 2024/2025 What are the goals of this program/event: The main goals of Ames Main Street is to promote and maintain Downtown Ames as a destination for living, working, playing through shopping, dining, socializing and entertainment; promoting historic preservation and building development through facade work and upper-story housing, and renovation; recruiting and retaining new businesses; organizing events and promotions that increase customer and community engagement with the businesses that should result in higher tax revenue for the City of Ames. In 2023, the AMS Promotions Committee re-evaluated each existing program or event and took into consideration their value, return on investment to business owners in the district, and community participation. For 2024, two events are eliminated, with three events added, as well as expansion of one existing event. One signature event was moved to a new month to connect and correspond with another community art event. Eliminated: Downtown Dollar Days and Shop for a Cause New: Heart of Ames, Luck of the Irish, Downtown After Sundown Expansion: Witches Walk Moved: Music Walk from April to September Explain how this request helps accomplish the goals of this program/event. If you are requesting an increase in funding from the last funding cycle, include an explanation of the enhanced or expanded services you intend to provide with the additional funding: 1. Host 4th of July Parade ($4,000) 2. Fulfill Requirements to maintain Ames as an MSI community, including seeking and managing grants ($13,500) 3. Maintain a current building and business inventory, district statistics, per the requirements of the MSI Program ($2,500) 4. Serve as a point of contact regarding downtown public policy issues and inform property owners and tenants about policy changes, construction projects, and other issues that may affect downtown ($8,500) 5. Host Snow Magic ($3,500) 6. Conduct public right-of-way beautification efforts ($12,000) - Weed Control - Planters + begin process of upgrading landscaping beds 7. Host ArtWalk ($3,000) 8. Serve as a point of contact for special events, whether organized by Ames Main Street or others ($4,000) 9. Host at least four (4) district-wide retail promotions ($3,000) and arrange for free parking in Downtown for (4) Saturdays in one calendar year. ($5,500) We are requesting funding to allow for free parking for the following events, which we have included in item (9). - February, Heart of Ames (two days) - July, Summer Sidewalk Sales (one day) - November, Small Business Saturday (one day) Other retail events (4) that we are hosting, but will not ask for free parking in Downtown District: - March, Luck of the Irish, community cash give aways inside businesses 246 - May, 515 Days, business specials for all days of this event - October, Witches Walk, business specials night of event - December, Snow Magic, business specials night of event We believe a teaser of free parking incentivizes Downtown patrons to come support the businesses for an event, turns them into long-term customers, and gives retailers the opportunity to showcase where additional parking opportunities are located. We are asking for a total of $54,000 to be allocated to the program with $5,500 to be provided to pay for parking in Downtown Ames. 247 Outside Funding Request Process Application Application Information Is this request for a program/event sponsored by a student organization? Yes _______ No _______ Organization Name: __________________________________________________ Date: ________________ Contact Person: ____________________________________________________________________________ Contact Mailing Address: _____________________________________________________________________ Phone: _________________ Email Address: _____________________________ Tax ID #: _____________ Program/Event Information What are the goals of this program/event: _______________________________________________________ Date(s) program/event will be held: _________________ to _________________ Check if continuous or ongoing: ____________ Location of program/event: __________________________________________________________________ # of individuals involved in program/event planning: _____________________ # of individuals who will benefit from program/event: ___________________ Funding amount requested: __________________________________________________________________ Has the City of Ames funded this program/event before? __________________ If yes, what year was it last funded? _____________ If yes, what amount of funding was received? ____________ Program/Event Description Please answer each question below using the space provided. Explain how this request helps accomplish the goals of this program/event. If you are requesting an increase in funding from the last funding cycle, include an explanation of the enhanced or expanded services you intend to provide with the additional funding: v.10.10.23 248 What efforts have you made to obtain funding from other sources? Include fundraising, dues, and any requests to other City- sponsored programs (e.g., ASSET, COTA, Ames Community Grants Program) Who will be responsible for ensuring compliance with the funding contract? What are his/her/their qualifications? Budget Complete the budget for your activity below, including previous fiscal years in columns A, B, and C, and your grant request from the City of Ames in box D10. (A) (B) (C) (D) REVENUE - ALL SOURCES 1 FUNDRAISING 2 MEMBERSHIP DUES 3 FEES CHARGED 4 INVESTMENT INCOME 5 GRANTS (PRIVATE SECTOR) 6 STATE/FEDERAL FUNDS 7 ISU OR ISU STUDENT GOVERNMENT FUNDS 8 OTHER GOV'T OR NON-PROFIT FUNDS 9 MISC. (Describe): 10 FUNDING REQUEST FROM CITY OF AMES 11 TOTAL REVENUES EXPENSES 12 SALARY AND RELATED 13 OCCUPANCY/RENT 14 SUPPLIES/EQUIPMENT 15 CONTRACTUAL SERVICES 16 PROMOTION/ADVERTISING 17 MISC. (Describe): 18 TOTAL EXPENSES v.10.10.23 FY 21-22 ACTUAL FY 22-23 ACTUAL FY 23-24 ADOPTED FY 24-25 PROPOSED FY 21-22 ACTUAL FY 22-23 ACTUAL FY 23-24 ADOPTED FY 24-25 PROPOSED 249 Proposed Task/Drawdown Schedule Funds awarded must be used to benefit the general public. On the lines below, describe the tasks you plan to complete using requested funds, the anticipated task completion date, and the amount you will request in reimbursement for that task. The total should add up to your funding request. Tasks below should be services and programs that will be provided to the public (e.g., individual events, educational programs, improvements to public spaces, etc.). Tasks should not include costs that primarily benefit the organization (e.g., administrative expenses, overhead, rent, utilities, etc.). The organization should consider such internal costs in the overall cost of providing the specific service or program. Prioritize the tasks proposed in this list, with the tasks the organization would most like to receive funding for towards the top Priority Task Participants Completion Date Amount 1 2 3 4 5 6 7 8 9 TOTAL: Disclaimer and Submission By typing in my name below, I certify that my answers are true and complete to the best of my knowledge. I am authorized to submit this application on behalf of the organization named herein. Name: ___________________________________________ Title: __________________ Date: ___________ Submit completed applications to the City Manager’s Office, 515 Clark Avenue, Ames, IA 50010. Applications must be received no later than 5:00 p.m. on November 15 to be considered for funding. v.10.10.23 250 Ames Chamber of Commerce-Campustown Outside Funding Request FY 24/25 What are the goals of this program/event: The Ames Chamber of Commerce will continue our program of work for the Campustown district in 2024 which will include clean up and beautification throughout the year. The Chamber will implement several community and retail events within the district, while also serving as the Point of Contact for the City of Ames inside the district. Finally, the Chamber will be the organization promoting the City of Ames Facade Grant Program, as well as serve as point of contact for public policy issues, construction updates, and events both managed by the Ames Chamber and outside groups. In 2023, meetings were held with key individuals who either reside in the Campustown area, are a property owner or business owner in the Campustown area. From there, a plan of events, both geared towards retail and community have been planned. Continuation/Expansion: Small Business Saturday New: Downtown After Sundown; Farmers’ Market (2); Tasty Tuesdays; Fall Frenzy Explain how this request helps accomplish the goals of this program/event. If you are requesting an increase in funding from the last funding cycle, include an explanation of the enhanced or expanded services you intend to provide with the additional funding: The funding will assist in accomplishing several goals of improving the Campustown district. The City's funding, along with private funding and a financial allocation from Iowa State University, will allow for consistent clean up, fresh banners on light poles, and other plants and flowers that will aesthetically enhance the district. We will also implement several events, some with the community and residents in mind, some with the Iowa State University students in mind. We will also work to maintain the highest level of communication possible with stakeholders in the Campustown area, working closely with building owners, business owners, to keep them apprised of the facade grant program and maintaining a rapid response to street closures and other needs of the City when it impacts the Campustown area. In addition to our event support, we ask for the waiver of parking meters for Small Business Saturday. By removing the parking fees for one day, this incentivizes Campustown patrons to come support the businesses for an event, turns them into long-term customers, and gives retailers the opportunity to showcase where additional parking opportunities are located. This is valued at $1,500. 251 1. District wide clean up and beautification 1 (ongoing through year) ($10,000) 2. District wide clean up and beautification 2 (ongoing through year) ($10,000) 3. Host retail event geared towards restaurants and bars, Tasty Tuesdays, July ($3,00) - music each week 4. Host Fall Event, Fall Frenzy, October ($5,000) 5. Host Two Farmers’ Markets, May and August ($7,500) - May event is called Campustown After Sundown, part of a series in partnership with Downtown Ames; August event is called Campustown Famers’ Market 6. Host Small Business Saturday, November ($2,500) 7. Free Parking Saturday in Campustown Business District ($1,500) 8. Serve as a point of contact for Campustown Business District on policy issues that affect business owners/tenants/residents; city façade grant program; construction updates; events managed by Ames Chamber or outside groups We are asking for a total of $43,000 to be allocated to the program with $1,500 to be provided to pay for parking in the Campustown Business District. 252 253 254 255 256 Outside Funding Request Process Application Application Information Is this request for a program/event sponsored by a student organization? Yes _______ No _______ Organization Name: __________________________________________________ Date: ________________ Contact Person: ____________________________________________________________________________ Contact Mailing Address: _____________________________________________________________________ Phone: _________________ Email Address: _____________________________ Tax ID #: _____________ Program/Event Information What are the goals of this program/event: _______________________________________________________ Date(s) program/event will be held: _________________ to _________________ Check if continuous or ongoing: ____________ Location of program/event: __________________________________________________________________ # of individuals involved in program/event planning: _____________________ # of individuals who will benefit from program/event: ___________________ Funding amount requested: __________________________________________________________________ Has the City of Ames funded this program/event before? __________________ If yes, what year was it last funded? _____________ If yes, what amount of funding was received? ____________ Program/Event Description Please answer each question below using the space provided. Explain how this request helps accomplish the goals of this program/event. If you are requesting an increase in funding from the last funding cycle, include an explanation of the enhanced or expanded services you intend to provide with the additional funding: v.10.10.23 257 What efforts have you made to obtain funding from other sources? Include fundraising, dues, and any requests to other City- sponsored programs (e.g., ASSET, COTA, Ames Community Grants Program) Who will be responsible for ensuring compliance with the funding contract? What are his/her/their qualifications? Budget Complete the budget for your activity below, including previous fiscal years in columns A, B, and C, and your grant request from the City of Ames in box D10. (A)(B) (C) (D) REVENUE - ALL SOURCES 1 FUNDRAISING 2 MEMBERSHIP DUES 3 FEES CHARGED 4 INVESTMENT INCOME 5 GRANTS (PRIVATE SECTOR) 6 STATE/FEDERAL FUNDS 7 ISU OR ISU STUDENT GOVERNMENT FUNDS 8 OTHER GOV'T OR NON-PROFIT FUNDS 9 MISC. (Describe): 10 FUNDING REQUEST FROM CITY OF AMES 11 TOTAL REVENUES EXPENSES 12 SALARY AND RELATED 13 OCCUPANCY/RENT 14 SUPPLIES/EQUIPMENT 15 CONTRACTUAL SERVICES 16 PROMOTION/ADVERTISING 17 MISC. (Describe): 18 TOTAL EXPENSES v.10.10.23 FY 21-22 ACTUAL FY 22-23 ACTUAL FY 23-24 ADOPTED FY 24-25 PROPOSED FY 21-22 ACTUAL FY 22-23 ACTUAL FY 23-24 ADOPTED FY 24-25 PROPOSED Admin contract 258 Proposed Task/Drawdown Schedule Funds awarded must be used to benefit the general public. On the lines below, describe the tasks you plan to complete using requested funds, the anticipated task completion date, and the amount you will request in reimbursement for that task. The total should add up to your funding request. Tasks below should be services and programs that will be provided to the public (e.g., individual events, educational programs, improvements to public spaces, etc.). Tasks should not include costs that primarily benefit the organization (e.g., administrative expenses, overhead, rent, utilities, etc.). The organization should consider such internal costs in the overall cost of providing the specific service or program. Prioritize the tasks proposed in this list, with the tasks the organization would most like to receive funding for towards the top Priority Task Participants Completion Date Amount 1 2 3 4 5 6 7 8 9 TOTAL: Disclaimer and Submission By typing in my name below, I certify that my answers are true and complete to the best of my knowledge. I am authorized to submit this application on behalf of the organization named herein. Name: ___________________________________________ Title: __________________ Date: ___________ Submit completed applications to the City Manager’s Office, 515 Clark Avenue, Ames, IA 50010. Applications must be received no later than 5:00 p.m. on November 15 to be considered for funding. v.10.10.23 259 ORDINANCE NO. _________ AN ORDINANCE TO AMEND THE MUNICIPAL CODE OF THE CITY OF AMES, IOWA, BY AMENDING SECTION 28.108 THEREOF, FOR THE PURPOSE OF RENAMING THE SECTION LARGE CUSTOMER TIME-OF-USE ELECTRIC RATE AND CHARGES AND LOWERING THE RATE FOR CUSTOMER PARTICIPATION, REPEALING ANY AND ALL ORDINANCES OR PARTS OF ORDINANCES IN CONFLICT TO THE EXTENT OF SUCH CONFLICT; AND ESTABLISHING AN EFFECTIVE DATE. BE IT ENACTED, by the City Council for the City of Ames, Iowa, that: Section One. The Municipal Code of the City of Ames, Iowa shall be and the same is hereby amended by amending Section 28.108 as follows: “Sec. 28.108. INDUSTRIAL LARGE CUSTOMER TIME-OF-USE ELECTRIC RATE AND CHARGES. (1) Availability: The Industrial Large Customer Time-of-Use Electric Rate shall be voluntary for any customer whose metered demand at any time exceeds 2,500 kVA. Service under this rate schedule is billed on a Time-of-Use basis as provided under these rules. The Industrial Large Customer Time-of-Use Electric Rate is an alternative to Section 28.105 or Section 28.107 (1) Availability, at the customer’s discretion. Customers opting for inclusion on Industrial Large Customer Time-of-Use Electric Rate are required to remain on the rate for a period no less than twelve (12) consecutive calendar months.” Section Two. All ordinances, or parts of ordinances, in conflict herewith are hereby repealed to the extent of such conflict, if any. Section Three. This ordinance shall be in full force and effect from and after its passage and publication as required by law. Passed this day of , 2023. _____________________________________________________________________________ Renee Hall, City Clerk John A. Haila, Mayor 260 ORDINANCE NO. ________ AN ORDINANCE TO AMEND THE MUNICIPAL CODE OF THE CITY OF AMES, IOWA, BY AMENDING SECTION 29.406 OFF- STREET PARKING THEREOF, FOR THE PURPOSE OF REDUCING THE MINIMUM OFF-STREET PARKING REQUIREMENTS FOR AFFORDABLE HOUSING DEVELOPMENTS; REPEALING ANY AND ALL ORDINANCES OR PARTS OF ORDINANCES IN CONFLICT TO THE EXTENT OF SUCH CONFLICT; PROVIDING A PENALTY; AND ESTABLISHING AN EFFECTIVE DATE. BE IT ENACTED, by the City Council for the City of Ames, Iowa, that: Section One. The Municipal Code of the City of Ames, Iowa shall be and the same is hereby amended by amending Section 29.406 as follows: “Sec. 29.406. OFF-STREET PARKING. (19) Reductions of Minimum Off-Street Parking Requirements for Affordable Housing Developments. (a) The minimum off-street parking requirement may be reduced as set forth in this section for a proposed affordable housing development upon approval of an agreement by the Planning and Housing Director or City Council, as appropriate. (i) The units for which the reduction is approved shall be restricted to households with a median family income less than or equal to 60% of the Area Median Income (AMI) of Ames, as adjusted for family size and determined annually by HUD. (ii) At a minimum to qualify for the reduction, 40% of the units shall be income-restricted to the 60% AMI level or less. (iii) The Planning and Housing Director may approve the reduction when the proposal includes a satisfactory: (1) configuration of units and bedrooms as family housing units; (2) affordable housing compliance agreement with a state or federal agency. If there is no agreement it requires City Council approval; (3) financial and operations plan demonstrating feasibility for the project addressing at a minimum: affordability levels, household income verification, and rent restrictions; and (4) affordability period of 30 years or more. The Director may forward to the City Council for approval any proposed reduction that they do not find satisfactory. (b) The affordable housing agreement shall: (i) Be executed by the property owner or owners and the City prior to issuance of any building permit. (ii) Be recorded and be binding on all successors and assigns of the property or properties involved. (c) Affordable housing developments with an approved agreement may have parking reduced as follows: (i) 1.0 parking space per unit for units with two or fewer bedrooms. (ii) 1.5 parking spaces per unit for units with three to four bedrooms. (iii) If the affordable housing units are located in a development with other units, such as market-rate units, or with other land use components, the reduced parking requirements shall only apply to the affordable housing units. The total required 261 parking shall be determined as the sum of parking requirements of the individual use components. (iv) At the end of the affordability period, the development may be converted to market- rate units without providing additional parking. (d) The City Council may approve additional reductions in parking for affordable housing developments in the following circumstances: (i) Developments that are permanently committed to serving households with incomes below 30% of AMI. Permanently committed includes projects that require City Council approval for a change of use. (ii) When a development is within approximately a quarter-mile walking distance of a public transit stop, Council may approve a reduction to 1.0 parking space per unit, regardless of bedroom count. The measurement shall begin at the intersection of the development’s property line with the sidewalk, access, or other public pedestrian path on the property nearest to the transit stop. The requirements of Section 29.406(19)(a-b) still apply to Council approvals, except for the parking rate.” Section Two. Violation of the provisions of this ordinance shall constitute a municipal infraction punishable as set out by law. Section Three. All ordinances, or parts of ordinances, in conflict herewith are hereby repealed to the extent of such conflict, if any. Section Four. This ordinance shall be in full force and effect from and after its passage and publication as required by law. Passed this day of , 2023. ______________________________________ _______________________________________ Renee Hall, City Clerk John A. Haila, Mayor 262 ORDINANCE NO. 4514 AN ORDINANCE TO AMEND THE LEGAL DESCRIPTION OF THE AMES DOWNTON URBAN REVITALIZATION AREA BE IT ENACTED, by the City Council for the City of Ames, Iowa, that: Section One. Amend the legal description of the Ames Downtown Urban Revitalization Area as follows: “Legal Description of Proposed Ames Downtown Urban Revitalization Area: Beginning at the northeast corner of Lot 5, Block 7, Original Town of Ames, Story County, Iowa; thence south a distance of 508.15 feet along the west ROW of Duff Avenue to the north ROW line of the Union Pacific Railroad; thence westerly along said ROW to the southwest corner of Lot 4, College Park Second Addition; thence northwesterly along the west line of said Lot 4 to the southeast corner of Lot 5, College Park Second Addition; thence north along the east line of said Lot 5 a distance of 158.1 feet to the south ROW line of Fifth Street; thence east along said ROW line to the northwest corner of Lot 1, Triangle Addition, which is also a point on the south ROW line of Fifth Street: thence north across said ROW to the southwest corner of Lot 5, College Park First Addition; thence north along the west line of said Lot 5 a distance of 203 feet more or less to the southwest corner of Lot 4, College Park First Addition; thence north along the west line of said Lot 4 a distance of 100.4 feet to the south ROW line of Sixth Street; thence east along said ROW a distance of 2761 feet, more or less, to the northwest corner of Lot 1, Block 7, Original Town of Ames; thence north across said ROW to the east line of the alley of Block 6, Original Town of Ames; thence north along the east line of said alley a distance of 120 feet more or less to the northwest corner of Lot 4, Block 6, Original Town of Ames; thence east along the north line of said Lot 4 a distance of 180 feet to the west ROW of Duff Avenue; thence east a distance of 80 feet more or less across said ROW to the northwest corner of Lot 7 of Blair's 2nd Addition: thence east along the north line of said Lot 7 a distance of 180 feet to the northeast corner of said Lot 7; then south along the east line of said Lot 7 a distance of 60 feet to the southeast corner of said Lot 7; thence west along the south line of said Lot 7 a distance of 60 feet; thence south a distance of 60 feet to the north ROW of East Sixth Street; thence west along said north ROW a distance of 120 feet more or less to the east ROW of Duff Avenue; thence west across said ROW a distance of 80 feet more or less to the west ROW of Duff Avenue; thence south along said ROW a distance of 306 feet more or less to the Point of Beginning.” Is hereby desginated, pursuant to Chapter 404, Code of Iowa, as the amended Downtown Urban Revitatlization Area. Section Two. Ordinance No. 3978 designating the Amended Downtown Urban Revitalization Area is hereby repealed. Section Three. All ordinances, or parts of ordinances or resolutions in conflict herewith are hereby repealed to the extent of such conflict, if any. Section Four. This ordinance shall be in full force and effect from and after its passage and publication as required by law. Passed this day of , 2023. ______________________________________ _______________________________________ Renee Hall, City Clerk John A. Haila, Mayor 263