Loading...
HomeMy WebLinkAbout2017-10-17 Meeting AgendaCommission Meeting Agenda Commission Chamber 10/17/2017 2:00 PM INVOCATION: PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA. RECOGNITION(S) Employee of the Month A.2017 October Employee of the Month.Attachments Five (5) minute time limit per delegation DELEGATIONS B.Mr. John Milton regarding World AIDS Day/Week- Angelic is a Non- profit organization hosting the Red Gala Annual Event for HIV awareness and education during the week of December 1st. Attachments C.Ms. Bernice Hughes regarding Captain Robert C. Hughes, Sr. Augusta Fire Dept. "Death Benefits" from retirement. Attachments CONSENT AGENDA (Items 1-20) PUBLIC SERVICES 1.Motion to approve McCarthy Improvement Company Change Order #1 to the Airport Taxiway A Reconstruction and Extension Project as approved by the Augusta Aviation Commission at their September 28, 2017 meeting. (Approved by Public Services Committee October 10, 2017) Attachments 2.Motion to approve amendments (Ordinance) to the Augusta, Georgia Code, Title 7, Chapter 2, Article 1 Nuisances, Section 7-2- 2 Nuisances Prohibited so as to clarify the responsibility of property owners with regard to occupied properties. (Approved by Public Services Committee October 10, 2017) Attachments 3.Motion to approve a contract with Reeves Young LLC for the construction of the Transit Bus Operations and Maintenance Facility for a fixed price of $14,375,000.00. (Bid Item 17-250) (Approved by Public Services Committee October 10, 2017) Attachments ADMINISTRATIVE SERVICES 4.Motion to approve award for coating of the metal roof at the Fire Department Fleet Maintenance Facility on Broad Street to Horizon Roofing of Monroe, Georgia in the total amount of $46,800.00. Bid Item 17-237 (Approved by Administrative Services Committee October 10, 2017) Attachments 5.Motion to approve the transfer of $58,340 from 101022110-5224111 (Building Rental) to 101022110-5111110 (Perf. Full-Time S&W-Reg) and other necessary Object Codes for the creation of a new Law Clerk position. (Approved by Administrative Services, Finance and Public Safety Committees October 10, 2017) Attachments PUBLIC SAFETY 6.Motion to approve request for 911 system upgrade. (Approved by Public Safety Committee October 10, 2017) Attachments FINANCE 7.Motion to approve the FY 2018 Metropolitan Transportation Planning Services contract between Augusta, Georgia and the Georgia Department of Transportation. (Approved by Finance Committee October 10, 2017) Attachments 8.Motion to approve a Memorandum of Understanding between Augusta Attachments and the Downtown Development Authority of Augusta, Georgia (“DDA”) regarding the use of SPLOST funds for the renovation and rehabilitation of the Miller Theater. (Approved by Finance Committee October 10, 2017) ENGINEERING SERVICES 9.Motion to approve and adopt proposed Ordinance changes to the Augusta, Georgia code section 3-5-95.11 to create a Residential Parking Permit Program. (Approved by Engineering Services Committee October 10, 2017) Attachments 10.Motion to approve entering into an agreement with Georgia Power stating that the City of Augusta, GA will pay for the GP Transmission (GPT) Facility Relocation Costs on the Berckmans Road Widening & Realignment Phase II Project in accordance with the estimate totaling $318,673.00. Also, approve the Utility Relocation Agreement to be executed by the Augusta, GA Legal Counsel and the Mayor and approve payment upon completion of the work as requested by Augusta Engineering Department. (Approved by Engineering Services Committee October 10, 2017) Attachments 11.Motion to approve and authorize supplemental reimbursement to Georgia Power Transmission (GPT) in amount of $186,300 for cost to relocate their transmission facilities for improving Druid Park Improvements Project. Also approve modifying the Utility Relocation Agreement between GPT and the City from $849,328.00 to $1,035,628.00 as requested by Augusta Engineering Department. (Approved by Engineering Services Committee October 10, 2017) Attachments 12.Motion to approve and award the Engineering Design Services Consultant Services Agreement (CSA), to Hussey Gay Bell in the amount of $1,136,478.00 for the Enhance Operational Efficiency of Various Intersections for Augusta, Georgia Project as requested by AED/TE. Award is contingent upon receipt of signed Agreement. RFQ 17-127 (Approved by Engineering Services Committee October 10, 2017) Attachments 13.Motion to authorize condemnation to acquire property in Fee Simple Attachments Interests (Parcel 087-4-106-00-0) - 2046 Golden Rod Street. (Approved by Engineering Services Committee October 10, 2017) 14.Motion to authorize condemnation to acquire property in Fee Simple Interests (Parcel 087-4-107-00-0) - 2048 Golden Rod Street. (Approved by Engineering Services Committee October 10, 2017) Attachments 15.Motion to approve budget increase for on-call asphalt and concrete repairs for Bid 16-224. (Approved by Engineering Services Committee December 13, 2016 and October 10, 2017) Attachments 16.Motion to approve the Award of RFP Item #17-167 for The Revenue Enhancement and Recovery Project to Utility Revenue Management. (Approved by Engineering Services Committee October 10, 2017) Attachments 17.Motion to approve the installation of Twenty Streetlights on Covington Court, Burlington Drive, and Marble Court at a cost of $124.80 per year. This is also to approve a new lighting tax district for the 51 lots associated with the above roads. Funding is available in the Street Lighting budget account #2760416105312310. (Approved by Engineering Services Committee October 10, 2017) Attachments PETITIONS AND COMMUNICATIONS 18.Motion to approve the minutes of the regular meeting held October 3, 2017, and Special Called meeting held October 10, 2017. Attachments APPOINTMENT(S) 19.Motion to approve the appointment of Mr.Kelvin Rhodes to the General Aviation Commission (Daniel Field Airport) to fill the unexpired term of Frank Scharite representing District 3. Attachments 20.Motion to approve the appointment of Mr. Gaylon Tootle to the Augusta Public Transit Citizens Advisory Board representing District 6. Attachments Upcoming Meetings www.augustaga.gov ****END CONSENT AGENDA**** AUGUSTA COMMISSION 10/17/2017 AUGUSTA COMMISSION REGULAR AGENDA 10/17/2017 (Items 21-23) FINANCE 21.Approve Water and Sewer Revenue Bonds, Series 2017 supplemental bond resolution and authorize the Mayor and Clerk to sign all necessary documents to refund the Augusta Georgia Water and Sewer Revenue Bonds, Series 2007, currently outstanding in the aggregate principal amount of $123,775,000. Attachments ADMINISTRATOR 22.Presentation of the 2018 FY Proposed Budget. Attachments LEGAL MEETING A. Pending and Potential Litigation. B. Real Estate. C. Personnel. 23.Motion to approve execution by the Mayor of the affidavit of compliance with Georgia's Open Meeting Act. Commission Meeting Agenda 10/17/2017 2:00 PM Employee of the Month Department: Department: Caption:2017 October Employee of the Month. Background: Analysis: Financial Impact: Alternatives: Recommendation: Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: Cover Memo Commission Meeting Agenda 10/17/2017 2:00 PM John Milton Department: Department: Caption:Mr. John Milton regarding World AIDS Day/Week- Angelic is a Non-profit organization hosting the Red Gala Annual Event for HIV awareness and education during the week of December 1st. Background: Analysis: Financial Impact: Alternatives: Recommendation: Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: Cover Memo AGENDA ITEM REQUEST FORM commission meetings: First and third ruesdays of each month _ 2:00 p.m.committee meetings: second and last Mondays of each month _ r2z4sto r:05 p.m. contact Information for Individuaupresenter Making the Request: commission/committee: (prease check one and insert meeting date),/Commission Dateof Meetins fr,+nbar. 11 ,2011t public Safety Committee Date of Meeting --------.-public Services Committee Date of Meetin! .---.- Engineering Services Committee Date of Meetirri ----.- Finance Commiuee Date of Me"tirE _-_- Name: Address: Telephone Nuinber: Fax Number: E-Mail Address: l<:. Captioe/Topic of ussion to be this request form to the following address: NIs. Lena J. Bonner Clerk of Commission l9o* 806 Municipal Buitding 530 Greene Street Augusta, GA 30901 Telephone Number: 706-g2l-1g20 Fax Number: 706-g2l-tg3g E-Mail Address: lbonner@augustaga.gov KI??qt o€ fua. 1', Requests may be faxed, e-mailed or delivered in person and must be received in the clerk,soffice no later than 5:00 p.m. on the wednesday preceding the commission meeting and5:00 p'm' on the t1-":9", preceding the Commitiee meeting of the following week. A five-minute time timit will be allowed foi presentations. Please send Commission Meeting Agenda 10/17/2017 2:00 PM Bernice Hughes Department: Department: Caption:Ms. Bernice Hughes regarding Captain Robert C. Hughes, Sr. Augusta Fire Dept. "Death Benefits" from retirement. Background: Analysis: Financial Impact: Alternatives: Recommendation: Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: Cover Memo AGENDA ITEM REQUEST FORM Commission meetings: First and third Tuesdays of each month - 2:00 p.m. Commiffee meetings: Second and last Tuesdays of each month - 1:00 p.m. Commission/Committee: (Please check one and Commission insert meeting date) Public Safety Committee Public Services Committee Administrative Services Committee Engineering Services Committee Finance Committee Contact Information for IndividuaUPresenter Making the Request: Telephone Number: Fax Number: E-Mail Address: Date of Meeting Date of Meeting Date of Meeting Date of Meeting Date of Meeting Date of Meeting 3oqDq sEi' 2017 Clerk o{ Commission ,t,,\IJ\(J"^\ I>' s) 00,<fi/ Please send this request form Ms. Lena J. Bonner Clerk of Commission Suite 220 Municipal Building 535 Telfair Street Augusta, GA 30901 to the following address: Telephone Number: 706-821-1820 Fax Number: 706-821-1838 E-MaiIAddress: nmorawski@augustaga.gov Requests may be faxed, e.mailed or delivered in person and must be received in the Clerk's Office no later than 9:00 a.m. on the Thursday preceding the Commission or Committee meeting of the following week. A five-minute time limit will be allowed for presentations. Commission Meeting Agenda 10/17/2017 2:00 PM McCarthy Improvement Company Change Order #1 - Txy A Project Department:Augusta Regional Airport Department:Augusta Regional Airport Caption:Motion to approve McCarthy Improvement Company Change Order #1 to the Airport Taxiway A Reconstruction and Extension Project as approved by the Augusta Aviation Commission at their September 28, 2017 meeting. (Approved by Public Services Committee October 10, 2017) Background:The original scope of work provides for the reconstruction and extension of the Taxiway A at the Augusta Regional Airport which is currently being performed by McCarthy Improvement Company for a contracted amount of $16,772,436.70. This change order modifies the original construction costs due to modifications to the following: 1. Quantity Adjustments: · Removal of Pavement Markings · Crushed Aggregate Base Course · Underdrain Clean-out · 5KV Power Cable PVC, Direct Bury Electric Duct Bank · PVC, Concrete Encased Electrical Duct Bank · Replace Airfield Guidance Sign Panel Additional Work: · Asphalt Base Course · Catch Basin along Storm Line C · Junction Box Changes to Construction Plans: · Revisions to the construction plans New Construction Specifications: · Asphalt base course added under Taxiway A2 concrete pavement · Prime Coat added under the base course Cover Memo Analysis:During the project, several items included in the original bid needs to be adjusted in order to cover the true quantities shown on the construction plans to complete the approved project scope to the quality and standard that enhances safety on the airfield. This change order cost will be added to the overall contract cost and will be subject to the FAA 90% payment program. These changes have been reviewed and approved by the FAA. Financial Impact:An increase to the original cost of the contract by $349,641.00. Alternatives:Deny request. Recommendation:Approve request. Funds are Available in the Following Accounts: 551081201-5412110 REVIEWED AND APPROVED BY: Finance. Procurement. Law. Administrator. Clerk of Commission Cover Memo Page 2 of 5 AIP NO. 3-13-0011-038-039 CHANGE ORDER NO.1 AIRPORT Augusta Regional Airport LOCATION Augusta, GA JUSTIFICATION FOR CHANGE 1. Brief description of the proposed contract change(s) and location(s). Quantity Adjustments: There are several items included in the orginal bid that need to be adjusted in order to cover the true quantities shown on the construction plans to complete the approved project scope. These items include:  X-105.12 Remove Pavement Markings o Enhanced hold markings removal at TW A1  X-209.2 Crushed Aggragate Base Course (12” Depth) o Taxiway A2  D-705.3 Underdrain Clean-out Type I o Scattered throughout project  L-108.1 #8 AWG, 5kV Power Cable o Scattered throughout project  L-110.1 1-way, 2-inch PVC, Direct Bury Type II Elecric Duct Bank o Scattered throughout project  L-110.3 4-way, 4-inch PVC, Concrete Encased Type I Electrical Duct Bank o Scattered throughout project  L-125.4 Replace (E ) Airfield Guidance Sign Panel o Scattered throughout project There is one item that is being removed from the project in its entirety. This item includes:  P-401.1 Asphalt Surface Course o Taxiway A2 Extra Work/New Bid Item: There are several items that were erroneously not included in the original bid that will be necessary to complete the approved project scope. These items include:  P-403.1 Asphalt Base Course (30% RAP under PCC Pavement) o Taxiway A2  D-751.6 Catch Basin, Type C o Located at various locations along Storm Line C  D-751.7 Junction Box o Located approximately 160 ft from the end of Storm Line C Changes to Construction Plans: Sheets G-021 and Sheets G-041 – Survey Control. Revisions to the survey control table are required to provided updated control point information for the construction of the project. Sheets C-301 and C-302 – Typical Sections. Typical sections revised to clarify limits of P-306 Lean Concrete Base Course, P-209 Crushed Aggregate Base Course. This resolves a discrepancy between FAA Advisory Circular 150/5320-6F – Airport Pavement Design and Evaluation and the requirements of FAA Advisory Circular 150/5370- 10G Standards for Specifying Construction of Airports. Sheets C-321 – Concrete Jointing Plans. Concrete joint reinforcement patterns updated to meet the current FAA Advisory Circular 150/5320-6F – Airport Pavement Design and Evaluation that was published on 11/10/2016 after bidding of the project. Page 3 of 5 Sheets C-322 and C-324 Concrete Jointing Plans. Revised concrete joint patterns to provide a better end product based on the construction methods proposed by the contractor. Sheets C-081 and C-324 – Project Geometrics. Revised limits of concrete along Taxway A2 to streamline construction of the asphalt shoulders and taxiway lighting during limited working hours associated withnighttime closures of Runway 17/35. New Construction Specifications: Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling or Surface Course). This item is added to provide an asphalt base course under the Taxiway A2 concrete pavement. Item P-602 Bituminous Prime Coat. This item is added to provide a prime coat under the base course under the Taxiway A2 concrete pavement. Revised Construction Specifications Item P-306 Lean Concrete Base Course. The Aggregate Gradation for Lean Concrete table has been revised to allow the use of Gradation B. 2. Reason(s) for the change(s) (Continue on reverse if necessary) X-105.12 Remove Pavement Marking: The additional quantity is needed to remove the enhanced centerline and hold position signs that were not included in the original bid tabulation. Leaving the markings in place would cause them to be out of compliance once the new alignment of the centerline for Taxiway A1 implemented. This item is AIP eligible due to the reconfiguration of Taxiway A1. The unit price for this item is reasonable since it is based on the existing unit price for this item within Bid Alternate 2. The quantity of the item did not change substantially to justify renegotiation of the original unit price. P-209.2 Crushed Aggregate Base Course (12” Depth): The additional quantity is needed to correct an error in the original bid quantity. The original bid quantity was based on calculations of a 6” depth as opposed to the approved 12” depth required for the Taxiway A2 pavement section. The special pavement section for Taxiway A2 was necessary in order to construct Taxiway A2 within the runway safety area of Runway 17/35 during night closures. This item is AIP eligible as it is part of the Taxiway A2 pavement section. The unit price for this item is reasonable since it is based on the existing unit price for this item within Bid Alternate 3. The work associated with construction of this material does not substantially change so the unit price has not been renegotiated. D-705.3 Underdrain Clean-out Type I: The additional quantity is needed to correct an error in the original bid quantity. Constructing the underdrain system without these clean-outs could lead to problems with keeping the underdrain clear of debris which could cause water to be trapped under the pavement section and compromise its strength. This item is AIP eligible as part of the pavement system associated with Taxiway A. The unit price for this item is reasonable since it is based on the existing unit prices for this item. The quantity of the item did not change substantially to justify renegotiation of the original unit price. L-108.1 #8 AWG, 5 kV Power Cable; L-110.1 1-way, 2-inch PVC, Direct Bury Type II Elecric Duct Bank; L- 110.3 4-way, 4-inch PVC, Concrete Encased Type I Electrical Duct Bank and L-125.4 Replace (E ) Airfield Guidance Sign Panel: The additional quantities are needed to correct an error in the original bid quantity. New power cable and its protection is essential to the longevity of the new lighting system being installed with this project. This item is AIP eligible as part of taxiway lighting system associated with Taxiway A. The unit price for this item is reasonable since it is based on the existing unit prices for this item. The major cost component of these items are the materials themselves, therefore the increase in quantity does not have a signicant impact on the unit price. Page 4 of 5 P-403.1 Asphalt Base Course (30% RAP under PCC) and P-401.1 Asphalt Surface Course: These item is needed to complete the approved pavement section for Taxiway A2 (see attached 5100-1 form that was submitted with the Engineer’s Design Report). This pavement section will allow for Taxiway A2 to be constructed within the Runway 17/35 safety area during night closures allowing this runway, which is necessary for commercial service operations, to remain open during the hours of 06:30 to 22:30. This pavement layer was erroneously left out of the contract bid documents and is needed to provided for a stabilized base under the P-501. Eleminating this layer would require a modification to standards for the pavement section. This mix will also be used to replace the P-401.1 Asphalt Surface Course that was planned to be used on the shoulders of Taxiway A2. This allows for reduced risks of delays of reopening Runway 17/35 on a nightly bases. New specifications meeting the requirements of Advisor Circular 150/5370-10G – Standard for Specifying Construction of Airports were developed for Item P-602 Bituminus Prime Coat and Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling or Surface Course) have been developed and are attached to the Contract Change Order No. 1. These items are AIP eligible as part of the pavement system associated with Taxiway A. The unit price for this item has been evaluated against the original bid cost for P-401.1 for Bid Alternate 3 and is provides over a 25% reduction in unit cost. Given that the proposed cost includes the cost to develop a new pavement mix design and the construction of an additional test strip this cost is reasonable given the nature of the work being completed in small areas during night closures. New Bid Items associated with this change include:  Item P-403.1 Asphalt Base Course (30% RAP under PCC) – per Ton Items eliminated from the project with this change include:  Item P-401.1 Asphalt Surface Course – Bid Alternate 3 D-751.6 Catch Basin, Type C and D-751.7 Junction Box: These items are needed to complete the storm sewer system that is being reconstructed as a part of this project. These items were erroneously omitted from the contract bid documents and are needed for the completion of the new concrete box culvert that drains the infield areas between the Taxiway A extension and the existing ramp. These items provide for junctions and bends in the storm sewer and for collection of surface drainage into the system. These items were included in the project technical specfications with the original contract bid documents. These items are AIP eligible as part of the drainage system associated with Taxiway A. The unit price for this item has been evaluated against other projects in the area using similar material and has been determined to be reasonable given the nature of the work being completed in small areas during night closures. New Bid Items associated with this change includes:  Item D-751.6 Catch Basin, Type C – per Each  Item D-751.7 Junction Box – Per Each Sheets G-021 and Sheets G-041 – Survey Control. During design of this project the project coordinate system was revised to accommodate AGIS survey that was performed to determine runway end coordinates. The coordinates on the survey control sheet did not get updated when the project was moved to the new coordinate system. This error was discovered during the intial stages of project layout and corrected information was provided to the Contractor. Correcting this information on the plan sheets will safeguard against the errant control coordinates from being used during the remainder of the project. There is no cost to the project for this revision. Sheets C-301 and C-302 – Typical Sections. FAA Advisory Circular 150/5320-6F – Airport Pavement Design and Evaluation requires that a minimum of a one foot overbuild be constructed under P-501 Portland Cement Concrete pavement. However, FAA Advisory Circular 150/5370-10G Standards for Specifying Construction of Airports requires that the underlying surface layer under P-501 pavement be widened by three feet to support the paver without any noticeable displacement. Due to the thickness of the P-306 Lean Concrete Base Course it is necessary to widen the P-306 Lean Concrete Base Course from one foot as shown in the orginal construction plans to three feet to meet this objective. Not widening the P-306 layer would destabilize the paver during placement of the P-501 pavement and could jeapordize the smoothness of the final surface. Widening of the P-306 also requires that the P-209 Aggregate Base Course that lies beneath the P-306 material also be widened to support the P-306 base. Page 5 of 5 The anticipated increase in materials needed for this correction will fall within the 10% overrun of quantities as allowed by the contract documents. Therefore, no changes to the quantities for these items has been proposed as a part of this change order. The unit prices for increased quantities of P-306 and P-209 will be based on the existing unit prices. Sheets C-321 – Concrete Jointing Plans. FAA Advisory Circular 150/5320-6F – Airport Pavement Design and Evaluation that was published on 11/10/2016 after bidding of the project. One of the changes made with this publication was reinforcements of concrete joints where taxiways tie into runways. Additional reinforcement is now required in these areas. There is no cost to the project for this revision. Sheets C-322 and C-324 Concrete Jointing Plans. The Contractor has submitted their pavement layout plans for the project. In that submittal is was propsed to move the construction thickened edge joints (A joints) that separate Taxiway A from Taxiway A2 and Taxiway B by one panel to minimize the dowelled construction joints (E joints) for the project. This method will allow for fewer passes by the concrete paver which will result in a smoother top surface for the taxiways. The revised locations will not hinder the function of the joints. There is no cost to the project associated with these revisions. Sheets C-081 and C-324 – Project Geometrics. The limits of concrete along Taxway A2 have been revised to allow for the shoulders to maintain a constant width. By maintaining a constrant width for the shoulders the amount of hand work in this area will be minimized which will increase productivity and quality of asphalt construction in this area. This revision meets the requirements of FAA Advisory Circular 150/5320-6F – Airport Pavement Design and Evaluation. This change reduces the risks of not having night work completed during the eight hour windows provided to the Contractor for work within the Runway 17/35 safety area. This revision will reduce the cost of the project by reducing the concrete pavement section that was originally designed to extend out into the shoulders. New Construction Specifications: Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling or Surface Course). This item is added to provide an asphalt base course under the Taxiway A2 concrete pavement. The specification meets the requirements of FAA Advisory Circular 150/5370-10G Standards for Specifying Construction of Airports with the exception that the use of a material transfer vehicle is not required. This change was made due to the engineering judgement that the use of a material transfer vehicle within the confined work areas that will be required to construct the asphalt base course will be detrimental to the pavement structure. This base material will be placed in small runs that have been necessitated by the eight hour construction windows allotted the Contractor for construction withinthe Runway 17/35 safety area. Item P-602 Bituminous Prime Coat. This item is added to provide a prime coat under the base course under the Taxiway A2 concrete pavement as a requirement of Item P-403 above. The specification meets the requirements of FAA Advisory Circular 150/5370-10G Standards for Specifying Construction of Airports with the exception that the no specific payment will be made for this material. It will be incidental to the construction of Item P-403.1 Asphalt Base Course (30% RAP under PCC) Revised Construction Specifications Item P-306 Lean Concrete Base Course. The Aggregate Gradation for Lean Concrete table has been revised to allow the use of Gradation B. This will allow the use of high quality aggragate from a local quarry for this project. The specification meets the requirements of FAA Advisory Circular 150/5370-10G Standards for Specifying Construction of Airports. There is no cost to the project associated with this revision. Attachments:  Item P-306 Lean Concrete Base Course  Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling or Surface Course)  Item P-602 Bituminous Prime Coat  Sheets G-021, G-041, C-081, C-301, C-302, C-321, C-322, and C-324  FAA Form 5100-1 for Taxiway A2 from Engineer’s Design Report FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification #1 Augusta Regional Airport, Augusta, Georgia Item P-306 Lean Concrete Base Course AIP No. 3-13-0011-038-2015 & 3-13-0011-039-2016 August 31, 2017 P-306-1 ITEM P-306 LEAN CONCRETE BASE COURSE DESCRIPTION 306-1.1 This item shall consist of a subbase material, herein termed lean concrete, that is composed of aggregate and cement uniformly blended together and mixed with water. The mixture may also include approved cementitious additives, in the form of fly ash or slag, and chemical admixtures. The mixed material shall be spread, shaped, and consolidated using concrete paving equipment in accordance with these specifications and in conformity to the lines, grades, dimensions, and typical cross-sections shown on the plans. MATERIALS 306-2.1 Aggregate. The coarse aggregate fraction shall be crushed stone, crushed or uncrushed gravel, crushed and adequately seasoned, air-cooled, iron blast furnace slag, crushed recycled concrete, or a combination thereof. The fine aggregate fraction may be part of the natural aggregate blend as obtained from the borrow source or it may be natural sand that is added at the time of mixing. The aggregate shall consist of hard, durable particles, free from an excess of flat, elongated, soft, or disintegrated pieces, or objectionable matter such as roots, sod, weeds, organic impurities, etc. A flat particle is one having a ratio of width to thickness greater than five; an elongated particle is one having a ratio of length to width greater than five. The design aggregate blend shall conform to the gradation(s) shown in the table below, when tested in accordance with ASTM C136. The aggregates shall be within the limits for deleterious material contained in ASTM C33 Table 3 type 4S. Aggregates shall not contain any substance which may be deleteriously reactive with the alkalies in the cement, except as permitted in ASTM C33. Aggregate Gradation for Lean Concrete Sieve Size (square openings) Percentage by Weight Passing Sieves Gradation A Gradation B 2 inch (50 mm) 1-1/2 inch (38 mm) 1 inch (25 mm) 3/4 inch (19 mm) No. 4 (4.75 mm) No. 40 (425 µm) No. 200 (75 µm) -- 100 70 - 95 55 - 85 30 - 60 10 - 30 0 - 15 -- -- 100 70 - 100 35 - 65 15 - 30 0 - 15 306-2.2 Cement. Cement shall conform to the requirements of ASTM C150, Type I. 306-2.3 Cementitious additives. Pozzolanic and slag cement may be added to the lean concrete mix. If used, each material must meet the following requirements: a. Pozzolan. Pozzolanic materials must meet the requirements of ASTM C618, Class N, F, or C Fly Ash, except the loss on ignition shall be 6% for Class N and F. b. Ground granulated blast furnace slag (slag cement). Slag shall conform to ASTM C989, Grade 120. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification #1 Augusta Regional Airport, Augusta, Georgia Item P-306 Lean Concrete Base Course AIP No. 3-13-0011-038-2015 & 3-13-0011-039-2016 August 31, 2017 P-306-2 306-2.4 Chemical admixtures. The Contractor shall submit certificates indicating that the material to be furnished meets all the requirements listed below. In addition, the Engineer may require the Contractor to submit complete test data showing that the material to be furnished meets all the requirements of the cited specification. a. Air-entraining admixtures. Air-entraining admixtures shall meet the requirements of ASTM C260. b. Water-reducing admixtures. Water-reducing, set-controlling admixtures shall meet the requirements of ASTM C494, Type A, D, E, F, or G. Water-reducing admixtures shall be added at the mixer separately from air-entraining admixtures in accordance with the manufacturer’s printed instructions. The air entrainment agent and the water-reducing admixture shall be compatible. c. Retarding admixtures. Retarding admixtures shall meet the requirements of ASTM C494, Type B or D. d. Accelerating admixtures. Accelerating admixtures shall meet the requirements of ASTM C494, Type C. 306-2.5 Water. Water used in mixing or curing shall be potable, clean and free of oil, salt, acid, alkali, sugar, vegetable, or other deleterious substances injurious to the finished product. 306-2.6 Curing materials. For curing lean concrete, use white-pigmented, liquid membrane-forming compound conforming to ASTM C309, Type 2, Class B, or clear or translucent Type 1-D, Class B with white fugitive dye. COMPOSITION OF MIXTURE 306-3.1 Mix design. The lean concrete mix design shall be based on trial batch results conducted in the laboratory. The lean concrete shall be designed to meet the criteria in this section. 306-3.1.1 Compressive strength. Compressive strength shall not be less than 500 pounds per square inch (3,445 kPa) nor greater than 800 pounds per square inch (5,516 kPa) at seven (7) days. Three-day and seven-day strengths shall be taken as the average of two compressive strength test results. All compressive strength specimens shall be prepared and tested in accordance with ASTM C192 and ASTM C39, respectively. If the 3-day strength is greater than 500 pounds per square inch (3,447 kPa), the Contractor shall construct transverse joints in the lean concrete layer in accordance with paragraph 306-5.10.2. If there is a change in aggregate sources, type of cement used, or pozzolanic materials, a new mix design must be submitted. 306-3.1.2 Air content. The percentage of air entrainment shall be 6%, ±1/2%. Air content shall be determined by testing in accordance with ASTM C231 for gravel and stone coarse aggregate and ASTM C173 for slag and other highly porous coarse aggregate. 306-3.2 Submittals. At least 30 days prior to the placement of the lean concrete, the Contractor shall submit certified test reports to the Engineer for those materials proposed for use during construction, as well as the mix design information for the lean concrete material. Tests older than six (6) months shall not be used. The certification shall show the appropriate ASTM or AASHTO specifications or tests for the material, the name of the company performing the tests, the date of the tests, the test results, and a statement that the material did or did not comply with the applicable specifications. The submittal package shall include the following: a. Sources of materials, including aggregate, cement, admixtures, and curing and bond breaking materials. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification #1 Augusta Regional Airport, Augusta, Georgia Item P-306 Lean Concrete Base Course AIP No. 3-13-0011-038-2015 & 3-13-0011-039-2016 August 31, 2017 P-306-3 b. Physical properties of the aggregates, cement, admixtures, curing and bond breaking materials. c. Mix design:  Mix identification number  Weight of saturated surface-dry aggregates (fine and coarse)  Combined aggregate gradation  Cement factor  Water content  Water-cementitious material ratio (by weight)  Volume of admixtures and yield for one cubic yard (cubic meter) of lean concrete d. Laboratory test results:  Slump  Air content  Compressive strength at 3, 7, and 28 days (average values)  Freeze-thaw weight loss (when applicable) In addition, where applicable, the Contractor shall submit for approval by the Engineer a jointing plan for transverse joints in the lean concrete layer. During production, the Contractor shall submit batch tickets for each delivered load. EQUIPMENT 306-4.1 All equipment necessary to mix, transport, place, compact, and finish the lean concrete material shall be furnished by the Contractor. The equipment shall be subject to inspection and approval by the Engineer. 306-4.2 Mixing. Lean concrete may be mixed in a stationary mixer (central batch plant or at the site), or in a truck mixer. The mixer type and capacity shall be inspected and approved by the Engineer before production begins. Each mixer shall have attached in a prominent place a manufacturer’s nameplate showing the capacity of the drum in terms of volume of mixed concrete and the speed of rotation of the mixing drum or blades. 306-4.2.1 Stationary plant mixer. The batch plant and equipment shall conform to the requirements of ASTM C94. The Engineer shall have unrestricted access to the plant at all times for inspection of the plant’s equipment and operation and for sampling the lean concrete mixture and its components. The mixers shall be examined daily for changes in condition due to accumulation of hard concrete or mortar or wear of blades. 306-4.2.2 Truck mixers. Truck mixers used for mixing lean concrete shall conform to the requirements of ASTM C94. Lean concrete may be entirely mixed in a truck mixer or partially mixed in a stationary mixer with mixing completed in a truck mixer. Truck mixers shall be equipped with an accurate continuous registering electronically or mechanically activated revolution counter, to verify the number of drum revolutions. 306-4.3 Hauling. Mixed lean concrete shall be hauled from the stationary plant to the job site in a truck agitator, a truck mixer operating at agitating speed, or a non-agitating truck. All equipment shall conform to the requirements of ASTM C94. When truck mixers are used to mix lean concrete, they may be transported to the job site in the same truck operating at agitating speeds, truck agitators, or a non-agitating FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification #1 Augusta Regional Airport, Augusta, Georgia Item P-306 Lean Concrete Base Course AIP No. 3-13-0011-038-2015 & 3-13-0011-039-2016 August 31, 2017 P-306-4 truck. The bodies of non-agitating trucks shall be smooth, metal containers and shall be capable of discharging the concrete at a controlled rate without segregation. 306-4.4 Placing and finishing. 306-4.4.1 Forms. Straight side forms shall be made of steel and shall be furnished in sections not less than 10 feet (3 m) in length. Forms shall have a depth equal to the pavement thickness at the edge. Flexible or curved forms of proper radius shall be used for curves of 100 feet (30 m) radius or less. Forms shall be provided with adequate devices for secure settings so that when in place they will withstand, without visible spring or settlement, the impact and vibration of the consolidating and finishing equipment. Forms with battered top surfaces and bent, twisted or broken forms shall not be used. Built-up forms shall not be used, except as approved by the Engineer. The top face of the form shall not vary from a true plane more than 1/8 inch (3 mm) in 10 feet (3 m), and the upstanding leg shall not vary more than 1/4 inch (6 mm). The forms shall contain provisions for locking the ends of abutting sections together tightly for secure setting. Wood forms may be used under special conditions, when accepted by the Engineer. 306-4.4.2 Fixed form or slip-form pavers. Lean concrete can be placed using fixed form or slip-form pavers. The paver shall be fully energized, self-propelled and capable of spreading, consolidating, and finishing the lean concrete material, true to grade, tolerances, and cross-sections. The paver shall be capable of finishing the surface so that hand finishing is not required. The paver shall be of sufficient weight and power to construct the maximum specified concrete paving lane width, at adequate forward speed, without transverse, longitudinal or vertical instability or without displacement. The slip-form paver shall be equipped with electronic or hydraulic horizontal and vertical control devises using guide wires or stringlines on both sides of the machine. Slope control will not be allowed. a. Concrete pavers. Concrete pavers are approved as paver-finishing machines for lean concrete, providing they are capable of handling the amount of lean concrete required for the full-lane width specified, and consolidating the lean concrete full depth. A concrete paver is a power-driven machine with augers, strike-off and tamper bars ahead of a pan screed, with at least one trailing oscillating screed or belt finisher. b. Bridge deck pavers. Bridge deck pavers are approved as paver-finishing machines for lean concrete, providing they are capable of handling the amount of lean concrete required for the full-lane width specified, and consolidating the lean concrete full depth. A bridge deck paver is an automatic truss paving machine, with paving carriage that strikes off, vibrates, paves, and textures the lean concrete with augers, internal vibration, paving rollers, and drag pan. 306-4.5 Consolidation. For side-form construction, vibrators may be either the surface pan type for pavements less than 8 inches (200 mm) thick or the internal type with either immersed tube or multiple spuds for the full width of the slab. They may be attached to the spreader or the finishing machine, or they may be mounted on a separate carriage. They shall not come in contact with the joint, subgrade, or side forms. For slip-form construction, the paver shall vibrate the lean concrete for the full width and depth of the strip of pavement being placed. Vibration shall be accomplished by internal vibrators. The number, spacing, frequency, and eccentric weights of vibrators shall be provided to achieve acceptable consolidation without segregation and finishing quality. Adequate power to operate all vibrators at the weight and frequency required for a satisfactory finish shall be available on the paver. The internal vibrators may be supplemented by vibrating screeds operating on the surface of the lean concrete. The Contractor shall constantly monitor the frequency of each of the individual vibrators and shall provide constant monitoring of the consolidation process to avoid honeycombing or segregation. Areas that are visually determined to be honeycombed or segregated shall be corrected at the Contractor’s expense. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification #1 Augusta Regional Airport, Augusta, Georgia Item P-306 Lean Concrete Base Course AIP No. 3-13-0011-038-2015 & 3-13-0011-039-2016 August 31, 2017 P-306-5 The vibrators and tamping elements shall be automatically controlled so that they stop operation as forward motion ceases. Any override switch shall be of the spring-loaded, momentary-contact type. Hand held vibrators may be used in irregular areas. 306-4.6 Jointing. The Contractor shall provide sawing equipment adequate in number of units and power to produce contraction or construction joints of the required dimensions as shown on the plans. The Contractor shall provide at least one standby saw in good working order and a supply of saw blades at the site of the work at all times during sawing operations. CONSTRUCTION METHODS 306-5.1 Weather limitations. 306-5.1.1 Cold weather. Unless authorized by the Engineer, the temperature of the mixed lean concrete shall not be less than 50°F (10°C) at the time of placement. In addition, the lean concrete shall not be placed when the ambient temperature is below 40°F (4°C) or when conditions indicate that the temperature may fall below 35°F (2°C) within 24 hours. Under no circumstances shall the lean concrete be placed on frozen underlying courses or mixed when the aggregate is frozen. When mixing and placing is authorized during cold weather, the Engineer may require the water and/or the aggregates to be heated to not less than 70°F (21°C) nor more than 150°F (66°C). The aggregates may be heated by either steam or dry heat prior to being placed in the mixer. The apparatus used shall heat the mass uniformly and shall be arranged to preclude the possible occurrence of overheated areas which might be detrimental to the materials. The Contractor shall adhere to the practices recommended in American Concrete Institute (ACI) 306R, Guide to Cold Weather Concreting. 306-5.1.2 Hot weather. To prevent rapid drying of newly constructed lean concrete, the lean concrete temperature from initial mixing through final cure shall not exceed 90°F (32°C). The aggregates and/or mixing water shall be cooled as necessary to maintain the lean concrete temperature at or not more than the specified maximum. Ice or ice water may be substituted for the mixing water for this purpose. The Contractor shall adhere to the practices recommended in ACI 305R. In addition, during periods of warm weather when the maximum daily air temperature exceeds 85°F (30°C), the forms and/or the underlying material shall be sprinkled with water immediately before placing the lean concrete. 306-5.1.3 Rain. All mixing and batching operations should be halted during rain showers and any plastic lean concrete placed should be covered immediately. The lean concrete shall be kept covered with plastic sheeting or other waterproof material until such time that the rain does not make any surface indentation on the lean concrete layer. Areas damaged by rain shall be refinished or replaced. 306-5.2 Form setting. Forms shall be set sufficiently in advance of the lean concrete placement to ensure continuous paving operation. After the forms have been set to correct grade, the grade shall be thoroughly tamped, either mechanically or by hand, at both the inside and outside edges of the base of the forms. Forms shall be staked into place with not less than three (3) pins for each 10 feet (3 m) section. A pin shall be placed at each side of every joint. Form sections shall be tightly locked and shall be free from play or movement in any direction. The forms shall not deviate from true line by more than 1/4 inch (6 mm) at any joint. Forms shall be so set that they will withstand, without visible spring or settlement, the impact and vibration of the consolidating and finishing equipment. Forms shall be cleaned and oiled prior to the placing of lean concrete. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification #1 Augusta Regional Airport, Augusta, Georgia Item P-306 Lean Concrete Base Course AIP No. 3-13-0011-038-2015 & 3-13-0011-039-2016 August 31, 2017 P-306-6 The alignment and grade elevations of the forms shall be checked and corrections made by the Contractor immediately before placing the lean concrete. When any form has been disturbed or any grade has become unstable, the form shall be reset and rechecked. 306-5.3 Preparation of underlying course. The underlying course shall be checked by the Engineer before placing and spreading operations are started, to ensure it is free of any ruts, depressions, or bumps and is finished to the correct grade. Any ruts or soft yielding places in the underlying course shall be corrected at the Contractor’s expense before the lean concrete mixture is placed. The underlying course should be wetted down in advance of placing the lean concrete to ensure a firm, moist condition at the time of lean concrete placement. The underlying course shall be protected from frost. Usage of chemicals to eliminate frost is not permissible. 306-5.4 Grade control. Grade control between the edges of the pavement shall be accomplished at intervals of 50 feet (15 m) or less on the longitudinal grade and at 25 feet (7.5 m) or less on the transverse grade. To protect the underlying course and ensure proper drainage, the lean concrete paving shall begin along the centerline of the pavement on a crowned section or on the greatest contour elevation of a pavement with variable cross slope. 306-5.5 Handling, measuring, and batching material. The batch plant site, layout, equipment, and provisions for transporting material shall assure a continuous supply of material to the work. Stockpiles shall be constructed in a manner that prevents segregation and intermixing of deleterious materials. Aggregates that have become segregated or mixed with earth or foreign material shall not be used. All aggregates produced or handled by hydraulic methods, and washed aggregates, shall be stockpiled or binned for draining at least 12 hours before being batched. Rail shipments requiring more than 12 hours transit will be accepted as adequate binning if the car bodies permit free drainage. Batching plants shall be equipped to proportion aggregates and bulk cement, by weight, automatically using approved interlocked proportioning devises. When bulk cement is used, the Contractor shall use a suitable method such as a chute, boot or other device approved by the Engineer to handle the cement between the weighing hopper and the transporting container or into the batch itself for transportation to the mixer, to prevent loss of cement. The device shall provide positive assurance that each batch has the specified cement content. 306-5.6 Mixing. All lean concrete shall be mixed and delivered to the site per the requirements of ASTM C94. The mixing time should be adequate to produce lean concrete that is uniform in appearance, with all ingredients evenly distributed. Mixing time shall be measured from the time all materials are emptied into the drum (provided all the water is added before one-fourth the preset mixing time has elapsed) and continues until the time the discharge chute is opened to deliver the lean concrete. If mixing in a plant, the mixing time shall not be less than 50 or greater than 90 seconds. If mixing in a truck, the mixing time shall not be less than 70 or more than 125 truck-drum revolutions at a mixing speed of not less than six (6) or more than 18 truck-drum revolutions per minute. Re-tempering lean concrete by adding water or by other means will not be permitted, except when lean concrete is delivered in truck mixers. With truck mixers, additional water may be added to the batch materials and additional mixing performed to allow proper placement of the material, provided (a) the addition of water is performed within 45 minutes after the initial mixing operations and (b) the slump and water/cementitious ratio specified in the mix design is not exceeded. 306-5.7 Hauling. The elapsed time from the addition of cementitious material to the mix until the lean concrete is deposited in place at the work site shall not exceed 45 minutes when the concrete is hauled in nonagitating trucks, or 90 minutes when it is hauled in truck mixers or truck agitators. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification #1 Augusta Regional Airport, Augusta, Georgia Item P-306 Lean Concrete Base Course AIP No. 3-13-0011-038-2015 & 3-13-0011-039-2016 August 31, 2017 P-306-7 306-5.8 Placing, consolidating, and finishing. Prior to placement of the lean concrete layer, the prepared underlying course shall be moistened with water, without saturating, to prevent rapid loss of moisture from the lean concrete. In cold weather, the underlying course shall be protected so that it will be entirely free of frost when lean concrete is placed. The Contractor has the option of side- form or slip-form paving. Either option shall require the hauled lean concrete material to be discharged onto the prepared underlying course such that segregation of the mix is minimized and minimum handling of the mix is needed. The lean concrete shall be placed continuously at a uniform rate without unscheduled stops except for equipment failure or other emergencies. Avoid contamination of plastic lean concrete with foreign material on construction equipment, workman’s footwear, or any other sources. Lean concrete shall not be mixed, placed, or finished when the natural light is insufficient, unless an adequate artificial lighting system is provided. 306-5.8.1 Side-form construction. For side-form placement, the Contractor shall verify the elevations of the fixed forms so the thickness and finished grade of the lean concrete layer will be in accordance with the requirements of the project plans and specifications. The lean concrete shall be spread uniformly between the forms immediately after it is placed using a spreading machine. Necessary hand spreading shall be done with shovels. Rakes shall not be allowed for spreading lean concrete. The spreading shall be followed immediately by thorough consolidation using vibrating screeds or spud vibrators. Vibrators may be external or internal type, depending on the thickness of the lean concrete layer. The surface vibrators may be attached to the spreader or they may be mounted on a separate carriage. They shall not come in contact with the joint, subgrade, or side forms. When spud vibrators are used, the lean concrete shall be thoroughly consolidated against and along the faces of all forms and previously placed lean concrete. Vibrators shall not be permitted to come in contact with a joint assembly, the grade, or a side form. In no case shall the vibrator be operated longer than 20 seconds in any one location, nor shall the vibrators be used to move the lean concrete. Hand finishing will not be permitted except in areas where the mechanical finisher cannot operate. 306-5.8.2 Slip-form construction. For slip-form construction, the Contractor shall verify the elevations of the guide wires controlling slip-form pavers such that the thickness and finished grade of the lean concrete will be in accordance with the requirements of the project plans and specifications. The slip-form paver should spread, consolidate, and shape the freshly placed lean concrete in one complete pass of the machine. The machine shall vibrate and finish the lean concrete for the full width and depth of the layer. 306-5.9 Final finishing. Final finishing shall be accomplished while the lean concrete is still in the plastic state. Limited surface refinishing by hand is acceptable to meet the grade and surface tolerance established in paragraphs 306-6.2.3 and 306-6.2.4, after strike off and consolidation. If the overlying layer is to be PCC pavement, the surface of the lean concrete shall not be textured. If the overlying layer is to be HMA pavement, and if the bond between the HMA layer and the lean concrete is considered important for pavement performance, tining or scarifying the surface to provide a coarse texture may be permitted. 306-5.10 Joints. Joints shall be constructed as shown on the plans. 306-5.10.1 Construction joints. Locate all longitudinal and transverse construction joints as shown on the plans. If longitudinal joints are not shown, locate longitudinal joints within 6 inches (150 mm) from planned joints in the PCC to be placed over the lean concrete. 306-5.10.2 Contraction joints. If required by paragraph 306-3.1.1 or if shown on the plans, transverse contraction joints shall be constructed by sawing the hardened lean concrete to a depth of at least one-third the thickness of the lean concrete base. These joints shall match within 3 inches (75 mm) the planned joints of the overlying concrete surface. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification #1 Augusta Regional Airport, Augusta, Georgia Item P-306 Lean Concrete Base Course AIP No. 3-13-0011-038-2015 & 3-13-0011-039-2016 August 31, 2017 P-306-8 306-5.10.3 Concrete saws. When sawing of joints are specified, the Contractor shall provide sawing equipment adequate in number of units and power to complete the sawing to the required dimensions and at the required rate. The Contractor shall provide at least one standby saw in good working order. An ample supply of saw blades shall be maintained at the site of the work at all times during sawing operations. The Contractor shall provide adequate artificial lighting facilities for night sawing. All equipment shall be on the job at all times during lean concrete placement. 306-5.11 Curing. Immediately after the finishing operations are complete and within two (2) hours of placement of the lean concrete, the entire surface and edges of the newly placed lean concrete shall be sprayed uniformly with white pigmented, liquid membrane forming curing compound. The layer should be kept moist using a moisture-retaining cover or a light application of water until the curing material is applied. The curing compound shall not be applied during rainfall. The curing material shall be applied at a maximum rate of 200 square feet per gallon (5.0 m2/l) using pressurized mechanical sprayers. The spraying equipment shall be a fully atomizing type equipped with a tank agitator. At the time of use, the curing compound in the tank shall be thoroughly and uniformly mixed with the pigment. During application the curing compound shall be continuously stirred by mechanical means. Hand spraying of odd widths or shapes and lean concrete surfaces exposed by the removal of forms is permitted. If the film of curing material becomes damaged from any cause, including sawing operations, within the required 7-day curing period or until the overlying course is constructed, the damaged portions shall be repaired immediately with additional compound or other approved means as quickly as practical. Edges of the lean concrete layer shall be sprayed with curing compound immediately following placement with slip-form pavers or when side-forms are removed. 306-5.11.1 Curing in cold weather. The lean concrete shall be maintained at a temperature of at least 50°F (10°C) during curing. Cover lean concrete and provide with a source of heat sufficient to maintain 50°F (10°C) minimum while curing. The Contractor shall adhere to the practices recommended in ACI 306R. The Contractor shall be responsible for the quality and strength of the lean concrete placed during cold weather, and any lean concrete injured by frost action shall be removed and replaced at the Contractor’s expense. 306-5.11.2 Curing in hot weather. Lean concrete temperature from initial mixing through final cure shall not exceed 90°F (32C). Shade the fresh lean concrete and start curing as soon as the surface is sufficiently hard to permit curing without damage. The Contractor shall adhere to the practices recommended in ACI 305R. 306-5.12 Protection. The Contractor shall protect the lean concrete from injurious action by sun, rain, flowing water, frost, or mechanical injury. Protect lean concrete surfaces from foot and vehicular traffic and other sources of abrasion for a minimum of 72 hours. The Engineer shall decide when the pavement shall be opened to traffic. Traffic shall not be allowed on the pavement until test specimens made per ASTM C31 have attained a compressive strength of 350 psi (2,413 kPa) when tested per ASTM C39. The Contractor shall maintain continuity of applied curing method for the entire curing period. 306-5.13 Bond-breaker. When the lean concrete is placed directly beneath PCC pavement, a bond-breaker shall be used. The entire surface of the lean concrete shall be coated with a de-bonding compound applied in a sufficient quantity to prevent bonding between the PCC pavement and the lean concrete. The Contractor shall be responsible for selecting the de-bonding compound and determining the appropriate application rate. This application shall be made at least eight (8) hours and not more than 24 hours before placement of the PCC pavement. If an impervious membrane is used as a bond breaker, a second application of curing materials is required and shall be placed no more than 24 hours prior to placement of the PCC pavement. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification #1 Augusta Regional Airport, Augusta, Georgia Item P-306 Lean Concrete Base Course AIP No. 3-13-0011-038-2015 & 3-13-0011-039-2016 August 31, 2017 P-306-9 After application of the bond-breaker coat, traffic will be limited to that required for placement of the PCC pavement. MATERIAL ACCEPTANCE 306-6.1 Acceptance sampling and testing. All acceptance sampling and testing, with the exception of coring for thickness determination, necessary to determine conformance with the requirements specified in this section will be performed by the Engineer. The Contractor shall provide the required lean concrete samples during construction for acceptance testing purposes. The samples shall be taken in the presence of the Engineer. The lean concrete layer shall be tested for air content, strength, thickness, grade, and surface tolerance. Sampling and testing for air shall be as specified in paragraph 306-6.1.1. Sampling and testing for strength, thickness, grade, and surface tolerance shall be on a lot basis, with a lot consisting of either: (1) one day’s production not to exceed 2,000 square yards (1700 sq m), or (2) a half day’s production, where a day’s production is expected to consist of between 2,000 and 4,000 square yards (1675 and 3350 m2). Each lot will be divided into four equal sublots. In the event that only three sublots are produced, the three sublots shall constitute a complete lot. If only one or two sublots are produced, they shall be incorporated into the next lot, and the total number of sublots shall be used in the acceptance plan calculation. End-of-production sublots (sublots associated with the final placement of lean concrete for the project which are less than a complete lot) shall be handled as (1) three sublots shall constitute a lot, or (2) one or sublots shall be incorporated into the previous lot. 306-6.1.1 Air content testing. Air content tests shall be performed on the first three truckloads of lean concrete produced at the start of operations each day and the first three truckloads produced after any scheduled or non-scheduled shutdown. Additional tests shall be performed each time a sample is taken for a strength test and when requested by the Engineer. Air content tests shall be made in accordance with ASTM C231. Air content test results shall be between 4% and 8%. If the first test on a truckload of lean concrete is not within the specification limits, a second test on the same truckload shall be made. If the second test is within the specification limits, the lean concrete will be accepted with respect to entrained air content. If the second test is not within the specification limits, the truckload shall be rejected. 306-6.1.2 Compressive strength testing. One sample of freshly delivered lean concrete shall be taken from each sublot for compressive strength testing. The lean concrete shall be sampled in accordance with ASTM C172. Sampling locations shall be determined per ASTM D3665. At least two test cylinders shall be made from each sample per ASTM C31. The 7-day compressive strength of each cylinder shall be determined per ASTM C39. The Contractor shall provide adequate facilities for the initial curing of cylinders. During the 24 hours after molding, the temperature immediately adjacent to the specimens must be maintained in the range of 60 to 80°F (16 to 27°C), and loss of moisture from the specimens must be prevented. The specimens may be stored in tightly constructed wooden boxes, damp sand pits, temporary buildings at construction sites, under wet burlap in favorable weather or in heavyweight closed plastic bags, or use other suitable methods, provided the temperature and moisture loss requirements are met. The compressive strength for each sublot shall be computed by averaging the 7-day compressive strengths of the two test cylinders representing that sublot. The compressive strength of the lot shall be the average compressive strength of the individual sublots comprising the lot. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification #1 Augusta Regional Airport, Augusta, Georgia Item P-306 Lean Concrete Base Course AIP No. 3-13-0011-038-2015 & 3-13-0011-039-2016 August 31, 2017 P-306-10 Specimens that are noticeably defective shall not be considered in the determination of the strength. If the test specimens fail to conform to the requirements for strength, the Engineer shall request changes in the lean concrete mixture to increase the strength to meet the requirements. If the maximum 7-day compressive strength values exceed the maximum strength requirements when evaluated in accordance with paragraph 306-6-2.1, the Contractor shall propose a jointing plan for approval by the Engineer. 306-6.1.3 Thickness testing. After the lean concrete base has cured for three (3) days, one 4-inch (100 mm) diameter core per sublot shall be obtained per ASTM D3665. The thickness of each sampled core shall be determined using the caliper measurement procedures per ASTM C174. The average thickness for the lot shall be determined using the individual sublot core thicknesses. Acceptance criteria for lean concrete thickness are provided in paragraph 306-6.2.2. When such measurement is deficient more than 1/2 inch (12 mm) and not more than 1 inch (25 mm) from the plan thickness, two additional cores shall be taken at random and used in determining the average thickness for that lot. The thickness of the cores shall be determined by average caliper measurement of cores tested in accordance with ASTM C174. At all locations where cores have been drilled, the resulting holes shall be filled with lean concrete or non- shrink grout material, as approved by the Engineer. 306-6.1.4 Grade testing. The elevations of the finished lean concrete shall be surveyed on both sides of the lean concrete lane, every 25 feet (7.5 m). 306-6.1.5 Surface tolerance testing. After the lean concrete has hardened sufficiently, it shall be tested for surface tolerance with a 12 feet (3.7 m) straightedge provided by the Contractor. 306-6.2 Acceptance criteria. Acceptance of lean concrete will be based on compressive strength, thickness, grade, and surface tolerance, as described in the paragraphs below. 306-6.2.1 Compressive strength requirements. The lean concrete shall meet all of the following compressive strength requirements on a lot basis: The compressive strength of the lot, tested at seven (7) days, shall be greater than 500 pounds per square inch (3,445 kPa). When a given lot of lean concrete fails to meet the minimum compressive strength requirements, the entire lot shall be replaced at the Contractor’s expense. Not more than 20% of the individual cylinders in a given lot, tested at seven (7) days, shall have a compressive strength greater than 800 pounds per square inch (5,512 kPa). When greater than 20% of the individual cylinders in a given lot have 7-day compressive strengths in excess of 800 pounds per square inch (5,512 kPa), and transverse joints have not been constructed, a bond-breaker shall be used. 306-6.2.2 Thickness requirements. The completed thickness shall be as shown on the plans. When the average lot thickness is not deficient by more than 1/2 inch (12 mm) from the plan thickness, full payment shall be made. If the lot average thickness is deficient by more than one inch (25 mm), it shall be removed and replaced at the Contractor’s expense. When such measurement is deficient more than 1/2 inch (12 mm) and not more than one inch (25 mm) from the plan thickness, one additional core shall be taken at random from each sublot within the lot. The thickness of these additional cores shall be determined as indicated in paragraph 304-6.1.2. A new lot average thickness shall be recomputed based on these additional cores and the original cores taken from each sublot. When the recomputed average lot thickness is not deficient by more than 1/2 inch (12 mm) from the plan thickness, full payment shall be made. If the average lot thickness is deficient by more than 1/2 inch (12 mm) from the plan thickness, the entire lot shall be removed and replaced at the Contractor’s expense or shall be permitted to remain in place at an adjusted payment of 75% of the contract unit price. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification #1 Augusta Regional Airport, Augusta, Georgia Item P-306 Lean Concrete Base Course AIP No. 3-13-0011-038-2015 & 3-13-0011-039-2016 August 31, 2017 P-306-11 When the measured thickness is more than that indicated on the plans, it will be considered as conforming to the requirements, provided the surface of the completed lean concrete layer is within the established grade and surface tolerance requirements. 306-6.2.3 Grade requirements. When the completed surface is more than 1/2 inch (12 mm) above the grade shown in the plans, the surface shall be trimmed at the Contractor’s expense using an approved grinding machine to an elevation that falls within a tolerance of 1/4 inch (6 mm). 306-6.2.4 Surface tolerance requirements. Surface deviations shall not exceed 3/8 inch (9 mm) from a 12-foot (3.7-m) straightedge laid in any location parallel with or at right angles to the longitudinal axis of the centerline (includes along all edges of the paving lane). Any high spots of more than 3/8 inch (9 mm) in 12-foot (3.7-m) shall be marked and immediately trimmed with an approved grinding machine. If the overlying layer is PCC pavement, the ground surface shall be sprayed with a double application of the curing compound at the specified rate prior to paving. METHOD OF MEASUREMENT 306-7.1 The quantity of lean concrete will be determined by the number of square yard (m2) of lean concrete actually constructed and accepted by the Engineer as complying with the plans and specifications. BASIS OF PAYMENT 306-8.1 The accepted quantities of lean concrete will be paid for at the contract unit price per square yard (m2) for lean concrete base. The price and payment shall be full compensation for furnishing and placing all materials, provided; however, for any pavement found deficient in thickness as specified in paragraph 306-6.2.2, the reduced unit price shall be paid. Item P-306-8.1 Payment will be made for lean concrete base course - per square yard TESTING REQUIREMENTS ASTM C31 Standard Practice for Making and Curing Concrete Test Specimens in the Field ASTM C39 Standard Test Method for Compressive Strength of Cylindrical Concrete Specimens ASTM C136 Standard Test Method for Sieve or Screen Analysis of Fine and Coarse Aggregates ASTM C172 Standard Practice for Sampling Freshly Mixed Concrete ASTM C173 Standard Test Method for Air Content of Freshly Mixed Concrete by the Volumetric Method ASTM C174 Standard Test Method for Measuring Thickness of Concrete Elements Using Drilled Concrete Cores ASTM C192 Standard Practice for Making and Curing Concrete Test Specimens in the Laboratory ASTM C231 Standard Test Method for Air Content of Freshly Mixed Concrete by the Pressure Method ASTM C1260 Standard Test Method for Potential Alkali Reactivity of Aggregates (Mortar-Bar Method) FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification #1 Augusta Regional Airport, Augusta, Georgia Item P-306 Lean Concrete Base Course AIP No. 3-13-0011-038-2015 & 3-13-0011-039-2016 August 31, 2017 P-306-12 ASTM C1567 Standard Test Method for Determining the Potential Alkali-Silica Reactivity of Combinations of Cementitious Materials and Aggregates (Accelerated Mortar-Bar Method) AASHTO T136 Standard Method of Test for Freezing-and-Thawing Tests of Compacted Soil- Cement Mixtures ASTM D3665 Standard Practice for Random Sampling of Construction Materials MATERIAL REQUIREMENTS ACI 305R Guide to Hot Weather Concreting ACI 306R Guide to Cold Weather Concreting ASTM C33 Standard Specification for Concrete Aggregates ASTM C94 Standard Specification for Ready-Mixed Concrete ASTM C150 Standard Specification for Portland Cement ASTM C260 Standard Specification for Air-Entraining Admixtures for Concrete ASTM C309 Standard Specification for Liquid Membrane-Forming Compounds for Curing Concrete ASTM C494 Standard Specification for Chemical Admixtures for Concrete ASTM C595 Standard Specification for Blended Hydraulic Cements ASTM C618 Specification for Coal Fly Ash and Raw and Calcined Natural Pozzolans for Use in Concrete ASTM C989 Standard Specification for Slag Cement for Use in Concrete and Mortars END OF ITEM P-306 FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-1 ITEM P-403 HOT MIX ASPHALT (HMA) PAVEMENTS (BASE, LEVELING OR SURFACE COURSE) DESCRIPTION 403-1.1 This item shall consist of a base course composed of mineral aggregate and asphalt cement binder (asphalt binder) mixed in a central mixing plant and placed on a prepared course in accordance with these specifications and shall conform to the lines, grades, thicknesses, and typical cross-sections shown on the plans. Each course shall be constructed to the depth, typical section, and elevation required by the plans and shall be rolled, finished, and approved before the placement of the next course. MATERIALS 403-2.1 Aggregate. Aggregates shall consist of crushed stone, crushed gravel crushed slag, screenings, natural sand and mineral filler, as required. The aggregates should be free of ferrous sulfides, such as pyrite, that would cause “rust” staining that can bleed through pavement markings. The portion retained on the No. 4 (4.75 mm) sieve is coarse aggregate. The portion passing the No. 4 (4.75 mm) sieve and retained on the No. 200 (0.075 mm) sieve is fine aggregate, and the portion passing the No. 200 (0.075 mm) sieve is mineral filler. a. Coarse aggregate. Coarse aggregate shall consist of sound, tough, durable particles, free from films of matter that would prevent thorough coating and bonding with the bituminous material and free from organic matter and other deleterious substances. The percentage of wear shall not be greater than 50% percent when tested in accordance with ASTM C131. The sodium sulfate soundness loss shall not exceed 12%, or the magnesium sulfate soundness loss shall not exceed 18%, after five cycles, when tested in accordance with ASTM C88. Clay Lumps and friable particles shall not exceed 1.0% when tested in accordance with ASTM C142. Aggregate shall contain at least 75% percent by weight of individual pieces having two or more fractured faces and 85% percent by weight having at least one fractured face. The area of each face shall be equal to at least 75% of the smallest midsectional area of the piece. When two fractured faces are contiguous, the angle between the planes of fractures shall be at least 30 degrees to count as two fractured faces. Fractured faces shall be achieved by crushing. The aggregate shall not contain more than a total of 8%, by weight, of flat particles, elongated particles, and flat and elongated particles, when tested in accordance with ASTM D4791 with a value of 5:1. Slag shall be air-cooled, blast furnace slag, and shall have a compacted weight of not less than 70 pounds per cubic foot (1.12 mg/cubic meter) when tested in accordance with ASTM C29. b. Fine aggregate. Fine aggregate shall consist of clean, sound, tough, durable, angular shaped particles produced by crushing stone, slag, or gravel that meets the requirements for wear and soundness specified for coarse aggregate. The aggregate particles shall be free from coatings of clay, silt, or other objectionable matter. The fine aggregate, including any blended material for the fine aggregate, shall have a plasticity index of not more than six (6) and a liquid limit of not more than 25 when tested in accordance with ASTM D4318. The soundness loss shall not exceed 10% when sodium sulfate is used or 15% when magnesium sulfate is used, after five cycles, when tested per ASTM C88. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-2 Clay lumps and friable particles shall not exceed 1.0 percent, by weight, when tested in accordance with ASTM C142. Natural (non-manufactured) sand may be used to obtain the gradation of the aggregate blend or to improve the workability of the mix. The amount of sand to be added will be adjusted to produce mixtures conforming to requirements of this specification. The fine aggregate shall not contain more than 15% natural sand by weight of total aggregates. If used, the natural sand shall meet the requirements of ASTM D1073 and shall have a plasticity index of not more than six (6) and a liquid limit of not more than 25 when tested in accordance with ASTM D4318. The aggregate shall have sand equivalent values of 45 or greater when tested in accordance with ASTM D2419. c. Sampling. ASTM D75 shall be used in sampling coarse and fine aggregate, and ASTM C183 shall be used in sampling mineral filler. 403-2.2 Mineral filler. If filler, in addition to that naturally present in the aggregate, is necessary, it shall meet the requirements of ASTM D242. 403-2.3 Asphalt cement binder. Asphalt cement binder shall conform to ASTM D6373 Performance Grade (PG) 64-22. A certificate of compliance from the manufacturer shall be included with the mix design submittal. The supplier’s certified test report with test data indicating grade certification for the asphalt binder shall be provided to the Engineer for each load at the time of delivery to the mix plant. A certified test report with test data indicating grade certification for the asphalt binder shall also be provided to the Engineer for any modification of the asphalt binder after delivery to the mix plant and before use in the HMA. 403-2.4 Preliminary material acceptance. Prior to delivery of materials to the job site, the Contractor shall submit certified test reports to the Engineer for the following materials: a. Coarse aggregate: (1) Percent of wear (2) Soundness (3) Clay lumps and friable particles (4) Percent fractured faces (5) Flat and elongated particles (6) Lightweight pieces b. Fine aggregate: (1) Liquid limit and Plasticity index (2) Soundness (3) Clay lumps and friable particles (4) Percent natural sand (5) Sand equivalent (6) Fine aggregate angularity c. Mineral filler. d. Asphalt binder. Test results for asphalt binder shall include temperature/viscosity charts for mixing and compaction temperatures. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-3 The certifications shall show the appropriate ASTM tests for each material, the test results, and a statement that the material meets the specification requirement. The Engineer may request samples for testing, prior to and during production, to verify the quality of the materials and to ensure conformance with the applicable specifications. 403-2.5 Anti-stripping agent. Any anti-stripping agent or additive if required shall be heat stable, shall not change the asphalt cement viscosity beyond specifications, shall contain no harmful ingredients, shall be added in recommended proportion by approved method, and shall be a material approved by the Department of Transportation of the State in which the project is located. COMPOSITION 403-3.1 Composition of mixture. The HMA plant mix shall be composed of a mixture of well-graded aggregate, filler and anti-strip agent if required, and asphalt binder. The several aggregate fractions shall be sized, handled in separate size groups, and combined in such proportions that the resulting mixture meets the grading requirements of the job mix formula (JMF). 403-3.2 Job mix formula. No hot-mixed asphalt (HMA) for payment shall be produced until a JMF has been approved in writing by the Engineer. The asphalt mix design and JMF shall be prepared by an accredited laboratory that meets the requirements of paragraph 403-3.4. The HMA shall be designed using procedures contained in Asphalt Institute MS-2 Mix Design Manual, 7th Edition. ASTM D6926 shall be used for preparation of specimens using the manually held and operated hammer for the mix design procedure. ASTM D6927 shall be used for testing for Marshall stability and flow. If material variability exceeds the standard deviations indicated, the JMF and subsequent production targets shall be based on a stability greater than shown in Table 1 and the flow shall be targeted close to the mid- range of the criteria in order to meet the acceptance requirements. Tensile Strength Ratio (TSR) of the composite mixture, as determined by ASTM D4867, shall not be less than 75 when tested at a saturation of 70-80% or an anti-stripping agent shall be added to the HMA, as necessary, to produce a TSR of not less than 75 when tested at a saturation of 70-80%. If an anti-strip agent is required, it shall be provided by the Contractor at no additional cost to the Owner. The JMF shall be submitted in writing by the Contractor at least 5 days prior to the start of paving operations. The JMF shall be developed within the same construction season using aggregates currently being produced. The submitted JMF shall be stamped or sealed by the responsible professional Engineer of the laboratory and shall include the following items as a minimum: a. Percent passing each sieve size for total combined gradation, individual gradation of all aggregate stockpiles and percent by weight of each stockpile used in the JMF. b. Percent of asphalt cement. c. Asphalt performance, grade, and type of modifier if used. d. Number of blows per side of molded specimen. e. Laboratory mixing temperature. f. Laboratory compaction temperature. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-4 g. Temperature-viscosity relationship of the PG asphalt cement binder showing acceptable range of mixing and compaction temperatures and for modified binders include supplier recommended mixing and compaction temperatures. h. Plot of the combined gradation on the 0.45 power gradation curve. i. Graphical plots of stability, flow, air voids, voids in the mineral aggregate, and unit weight versus asphalt content. j. Specific gravity and absorption of each aggregate. k. Percent natural sand. l. Percent fractured faces. m. Percent by weight of flat particles, elongated particles, and flat and elongated particles (and criteria). n. Tensile Strength Ratio (TSR). o. Anti-strip agent (if required). p. Date the JMF was developed. Mix designs that are not dated or which are from a prior construction season shall not be accepted. q. Percentage and properties (asphalt content, binder properties, and aggregate properties) of reclaimed asphalt pavement (RAP) in accordance with paragraph Reclaimed Hot-Mix Asphalt, if RAP is used. The Contractor shall submit to the Engineer the results of verification testing of three (3) asphalt samples prepared at the optimum asphalt content. The average of the results of this testing shall indicate conformance with the JMF requirements specified in Tables 1 and 3. When the project requires asphalt mixtures of differing aggregate gradations, a separate JMF and the results of JMF verification testing shall be submitted for each mix. The JMF for each mixture shall be in effect until a modification is approved in writing by the Engineer. Should a change in sources of materials be made, a new JMF must be submitted within 15 days and approved by the Engineer in writing before the new material is used. After the initial production JMF has been approved by the Engineer and a new or modified JMF is required for whatever reason, the subsequent cost of the Engineer’s approval of the new or modified JMF will be borne by the Contractor. There will be no time extension given or considerations for extra costs associated with the stoppage of production paving or restart of production paving due to the time needed for the Engineer to approve the initial, new or modified JMF. The Marshall Design Criteria applicable to the project shall be as specified in Table 1. Table 1. Marshall Design Criteria Test Property Value Number of blows 75 Stability, pounds (Newtons) minimum 1800 (8006) Flow, 0.01 inch (0.25 mm) 8-16 Air voids (percent) 3.5 Percent voids in mineral aggregate, minimum See Table 2. 1The flow requirement is not applicable for Polymer Modified Asphalts. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-5 Table 2. Minimum Percent Voids In Mineral Aggregate (VMA) Aggregate (See Table 3) Minimum VMA Gradation 1 14 The mineral aggregate shall be of such size that the percentage composition by weight, as determined by laboratory sieves, will conform to the gradation or gradations specified in Table 3 when tested in accordance with ASTM C136 and ASTM C117. The gradations in Table 3 represent the limits that shall determine the suitability of aggregate for use from the sources of supply, be well graded from coarse to fine and shall not vary from the low limit on one sieve to the high limit on the adjacent sieve, or vice versa. Table 3. Aggregate - HMA Pavements – Gradation 1 Sieve Size Percentage by Weight Passing Sieve 1 inch (25 mm) 100 3/4 inch (19 mm) 76-98 1/2 inch (12 mm) 66-86 3/8 inch (9 mm) 57-77 No. 4 (4.75 mm) 40-60 No. 8 (2.36 mm) 26-46 No. 16 (1.18 mm) 17-37 No. 30 (0.60 mm) 11-27 No. 50 (0.30 mm) 7-19 No. 100 (0.15 mm) 6-16 No. 200 (0.075 mm) 3-6 Asphalt Percent: Stone or gravel 4.5-7.0 Slag 5.0-7.5 The aggregate gradations shown are based on aggregates of uniform specific gravity. The percentages passing the various sieves shall be corrected when aggregates of varying specific gravities are used, as indicated in the Asphalt Institute MS-2 Mix Design Manual, 7th Edition. 403-3.3 Reclaimed asphalt concrete (RAP). Reclaimed HMA shall consist of reclaimed asphalt pavement (RAP), coarse aggregate, fine aggregate, mineral filler, and asphalt cement. Recycled asphalt shingles (RAS) shall not be allowed. The RAP shall be of a consistent gradation and asphalt content and properties. When RAP is fed into the plant, the maximum RAP chunk size shall not exceed 1-1/2 inches (38 mm). The reclaimed asphalt concrete mix shall be designed using procedures contained in the Asphalt FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-6 Institute MS-2 Mix Design Manual, 7th Edition. The percentage of asphalt in the RAP shall be established for the mixture design according to ASTM D2172 using the appropriate dust correction procedure. The JMF shall meet the requirements of Paragraph 403-3.2 RAP should only be used for shoulder surface course mixes and for any intermediate courses. The use of RAP containing Coal Tar shall not be allowed. Coal Tar surface treatments must be removed prior to recycling underlying asphalt material. The amount of RAP shall be limited to 30 percent. In addition to the requirements of paragraph 403-3.2, the JMF shall indicate the percent of reclaimed asphalt pavement and the percent and grade of new asphalt binder. For the PG graded asphalt binder selected in 403-2.3, adjust as follows: a. For 0-20% RAP, there is no change in virgin binder content. b. For >20 to 30% RAP, select binder one grade softer, i.e., PG 64-22 would soften to PG 58-28. 403-3.4 Job mix formula (JMF) laboratory. The Contractor’s laboratory used to develop the JMF shall be accredited in accordance with ASTM D3666. The laboratory accreditation must be current and listed on the accrediting authority’s website. All test methods required for developing the JMF must be listed on the lab accreditation. A copy of the laboratory’s current accreditation and accredited test methods shall be submitted to the Engineer prior to start of construction. 403-3.5 Test section. Prior to full production, the Contractor shall prepare and place a quantity of HMA according to the JMF. The amount of HMA shall be sufficient to construct a test section 100’ long and 20’ wide, placed in two lanes, with a longitudinal cold joint, and shall be of the same depth specified for the construction of the course which it represents. A cold joint for this test section is an exposed construction joint at least four (4) hours old or whose mat has cooled to less than 160°F (71ºC). The cold joint must be cut back using the same procedure that will be used during production in accordance with 403-4.12. The underlying grade or pavement structure upon which the test section is to be constructed shall be the same as the remainder of the course represented by the test section. The equipment used in construction of the test section shall be the same type and weight to be used on the remainder of the course represented by the test section. The test section shall be evaluated for acceptance as a single lot in accordance with the acceptance criteria in paragraph 403-5.1 and 403-5.2. The test section shall be divided into equal sublots. As a minimum the test section shall consist of three (3) sublots. The test section shall be considered acceptable if the average mat density of the test section cores is greater than or equal to 96% and the average joint density of the test section cores is greater than or equal to 94%. If the initial test section should prove to be unacceptable, the necessary adjustments to the JMF, plant operation, placing procedures, and/or rolling procedures shall be made. A second test section shall then be placed. If the second test section also does not meet specification requirements, both sections shall be removed at the Contractor’s expense. Additional test sections, as required, shall be constructed and evaluated for conformance to the specifications. Any additional sections that are not acceptable shall be removed at the Contractor’s expense. Full production shall not begin until an acceptable test section has been constructed and accepted in writing by the Engineer. Once an acceptable test section has been placed, payment for the initial test section and the section that meets specification requirements shall be made in accordance with paragraph 403-8.1. Job mix control testing shall be performed by the Contractor at the start of plant production and in conjunction with the calibration of the plant for the JMF. If the aggregates produced by the plant do not satisfy the gradation requirements or produce a mix that meets the JMF, it will be necessary to reevaluate FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-7 and redesign the mix using plant-produced aggregates. Specimens shall be prepared and the optimum asphalt content determined in the same manner as for the original JMF tests. Contractor will not be allowed to place the test section until the Contractor Quality Control Program, showing conformance with the requirements of paragraph 403-6.1, has been approved, in writing, by the Engineer. CONSTRUCTION METHODS 403-4.1 Weather limitations. The HMA shall not be placed upon a wet surface or when the surface temperature of the underlying course is less than specified in Table 4. The temperature requirements may be waived by the Engineer, if requested; however, all other requirements including compaction shall be met. Table 4. Surface Temperature Limitations of Underlying Course Mat Thickness Base Temperature (Minimum) Degrees F Degrees C 3 inches (7.5 cm) or greater 40 4 Greater than 2 inches (50 mm) but less than 3 inches (7.5 cm) 45 7 403-4.2 HMA plant. Plants used for the preparation of HMA shall conform to the requirements of American Association of State Highway and Transportation Officials (AASHTO) M156 with the following changes: a. Requirements for all plants include: (1) Truck scales. The HMA shall be weighed on approved scales furnished by the Contractor, or on certified public scales at the Contractor’s expense. Scales shall be inspected and sealed as often as the Engineer deems necessary to assure their accuracy. Scales shall conform to the requirements of the General Provisions, subsection 90-01. In lieu of scales, and as approved by the Engineer, HMA weights may be determined by the use of an electronic weighing system equipped with an automatic printer that weighs the total HMA production and as often thereafter as requested by the Engineer. (2) Testing facilities. The Contractor shall ensure laboratory facilities are provided at the plant for the use of the Engineer. The lab shall have sufficient space and equipment so that both testing representatives (Engineer’s and Contractor’s) can operate efficiently. The lab shall meet the requirements of ASTM D3666 including all necessary equipment, materials, and current reference standards to comply with the specifications and masonry saw with diamond blade for trimming pavement cores and samples. The plant testing laboratory shall have a floor space area of not less than 200 square feet (18.5 sq m), with a ceiling height of not less than 7-1/2 feet (2 m). The laboratory shall be weather tight, sufficiently heated in cold weather, air-conditioned in hot weather to maintain temperatures for testing purposes of 70°F ±5°F (21°C ±2.3°C). The plant testing laboratory shall be located on the plant site to provide an unobstructed view, from one of its windows, of the trucks being loaded with the plant mix materials. In addition, the facility shall include the minimum: (a) Adequate artificial lighting. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-8 (b) Electrical outlets sufficient in number and capacity for operating the required testing equipment and drying samples. (c) A minimum of two (2) Underwriter’s Laboratories approved fire extinguishers of the appropriate types and class. (d) Work benches for testing. (e) Desk with chairs and file cabinet. (f) Sanitary facilities convenient to testing laboratory. (g) Exhaust fan to outside air. (h) Sink with running water. Failure to provide the specified facilities shall be sufficient cause for disapproving HMA plant operations. Laboratory facilities shall be kept clean, and all equipment shall be maintained in proper working condition. The Engineer shall be permitted unrestricted access to inspect the Contractor’s laboratory facility and witness quality control activities. The Engineer will advise the Contractor in writing of any noted deficiencies concerning the laboratory facility, equipment, supplies, or testing personnel and procedures. When the deficiencies are serious enough to be adversely affecting the test results, the incorporation of the materials into the work shall be suspended immediately and will not be permitted to resume until the deficiencies are satisfactorily corrected. (3) Inspection of plant. The Engineer, or Engineer’s authorized representative, shall have access, at all times, to all areas of the plant for checking adequacy of equipment; inspecting operation of the plant: verifying weights, proportions, and material properties; and checking the temperatures maintained in the preparation of the mixtures. (4) Storage bins and surge bins. The HMA stored in storage and surge bins shall meet the same requirements as HMA loaded directly into trucks and may be permitted under the following conditions: (a) Stored in non-insulated bins for a period of time not to exceed three (3) hours. (b) Stored in insulated storage bins for a period of time not to exceed eight (8) hours. If the Engineer determines that there is an excessive amount of heat loss, segregation or oxidation of the HMA due to temporary storage, no temporary storage will be allowed. 403-4.3 Hauling equipment. Trucks used for hauling HMA shall have tight, clean, and smooth metal beds. To prevent the HMA from sticking to the truck beds, the truck beds shall be lightly coated with a minimum amount of paraffin oil, lime solution, or other material approved by the Engineer. Petroleum products shall not be used for coating truck beds. Each truck shall have a suitable cover to protect the mixture from adverse weather. When necessary, to ensure that the mixture will be delivered to the site at the specified temperature, truck beds shall be insulated or heated and covers shall be securely fastened. 403-4.3.1 Material transfer vehicle (MTV). A material transfer vehicle is not required. 403-4.4 HMA pavers. HMA pavers shall be self-propelled with an activated heated screed, capable of spreading and finishing courses of HMA that will meet the specified thickness, smoothness, and grade. The paver shall have sufficient power to propel itself and the hauling equipment without adversely affecting the finished surface. The paver shall have a receiving hopper of sufficient capacity to permit a uniform spreading operation. The hopper shall be equipped with a distribution system to place the HMA uniformly in front of the screed without segregation. The screed shall effectively produce a finished surface of the required evenness and texture without tearing, shoving, or gouging the mixture. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-9 If, during construction, it is found that the spreading and finishing equipment in use leaves tracks or indented areas, or produces other blemishes in the pavement that are not satisfactorily corrected by the scheduled operations, the use of such equipment shall be discontinued and satisfactory equipment shall be provided by the Contractor. 403-4.4.1 Automatic grade control. The HMA paver shall be equipped with a control system capable of automatically maintaining the specified screed elevation. The control system shall be automatically actuated from either a reference line and/or through a system of mechanical sensors or sensor-directed mechanisms or devices that will maintain the paver screed at a predetermined transverse slope and at the proper elevation to obtain the required surface. The transverse slope controller shall be capable of maintaining the screed at the desired slope within ±0.1%. The controls shall be capable of working in conjunction with any of the following attachments: a. Ski-type device of not less than 30 feet (9 m) in length b. Taut stringline (wire) set to grade c. Short ski or shoe d. Laser control 403-4.5 Rollers. Rollers of the vibratory, steel wheel, and pneumatic-tired type shall be used. They shall be in good condition, capable of operating at slow speeds to avoid displacement of the HMA. The number, type, and weight of rollers shall be sufficient to compact the HMA to the required density while it is still in a workable condition. All rollers shall be specifically designed and suitable for compacting hot mix bituminous concrete and shall be properly used. Rollers that impair the stability of any layer of a pavement structure or underlying soils shall not be used. Depressions in pavement surfaces caused by rollers shall be repaired by the Contractor at their own expense. The use of equipment that causes crushing of the aggregate will not be permitted. 403-4.5.1 Density device. The Contractor shall have on site a density gauge during all paving operations in order to assist in the determination of the optimum rolling pattern, type of roller and frequencies, as well as to monitor the effect of the rolling operations during production paving. The Contractor shall also supply a qualified technician during all paving operations to calibrate the density gauge and obtain accurate density readings for all new HMA. These densities shall be supplied to the Engineer upon request at any time during construction. No separate payment will be made for supplying the density gauge and technician. 403-4.6 Preparation of asphalt binder. The asphalt binder shall be heated in a manner that will avoid local overheating and provide a continuous supply of the bituminous material to the mixer at a uniform temperature. The temperature of the unmodified asphalt binder delivered to the mixer shall be sufficient to provide a suitable viscosity for adequate coating of the aggregate particles, but shall not exceed 325°F (160°C) when added to the aggregate. The temperature of modified asphalt binder shall be no more than 350°F (175°C) when added to the aggregate. 403-4.7 Preparation of mineral aggregate. The aggregate for the HMA shall be heated and dried. The maximum temperature and rate of heating shall be such that no damage occurs to the aggregates. The temperature of the aggregate and mineral filler shall not exceed 350°F (175°C) when the asphalt binder is added. Particular care shall be taken that aggregates high in calcium or magnesium content are not damaged by overheating. The temperature shall not be lower than is required to obtain complete coating and uniform distribution on the aggregate particles and to provide a mixture of satisfactory workability. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-10 403-4.8 Preparation of HMA. The aggregates and the asphalt binder shall be weighed or metered and introduced into the mixer in the amount specified by the JMF. The combined materials shall be mixed until the aggregate obtains a uniform coating of asphalt binder and is thoroughly distributed throughout the mixture. Wet mixing time shall be the shortest time that will produce a satisfactory mixture, but not less than 25 seconds for batch plants. The wet mixing time for all plants shall be established by the Contractor, based on the procedure for determining the percentage of coated particles described in ASTM D2489, for each individual plant and for each type of aggregate used. The wet mixing time will be set to achieve 95% of coated particles. For continuous mix plants, the minimum mixing time shall be determined by dividing the weight of its contents at operating level by the weight of the mixture delivered per second by the mixer. The moisture content of all HMA upon discharge shall not exceed 0.5%. 403-4.9 Preparation of the underlying surface. Immediately before placing the HMA, the underlying course shall be cleaned of all dust and debris. A prime coat shall be applied in accordance with Item P-602 if shown on the plans. 403-4.10 Laydown plan, transporting, placing, and finishing. Prior to the placement of the HMA, the Contractor shall prepare a laydown plan for approval by the Engineer. This is to minimize the number of cold joints in the pavement. The laydown plan shall include the sequence of paving laydown by stations, width of lanes, temporary ramp locations, and laydown temperature. The laydown plan shall also include estimated time of completion for each portion of the work (that is, milling, paving, rolling, cooling, etc.). Modifications to the laydown plan shall be approved by the Engineer. The HMA shall be transported from the mixing plant to the site in vehicles conforming to the requirements of paragraph 403-4.3. Deliveries shall be scheduled so that placing and compacting of HMA is uniform with minimum stopping and starting of the paver. Hauling over freshly placed material shall not be permitted until the material has been compacted, as specified, and allowed to cool to atmospheric temperature. The alignment and elevation of the paver shall be regulated from outside reference lines established for this purpose for the first lift of all runway and taxiway pavements. Successive lifts of HMA surface course may be placed using a ski, or laser control per paragraph 403-4.4.1, provided grades of the first lift of bituminous surface course meet the tolerances of paragraphs 403-5.2b(5) as verified by a survey. Contractor shall survey each lift of HMA surface course and certify to Engineer that every lot of each lift meets the grade tolerances of paragraph 403-5.2b(5) before the next lift can be placed. The initial placement and compaction of the HMA shall occur at a temperature suitable for obtaining density, surface smoothness, and other specified requirements but not less than 250°F (121°C). Edges of existing HMA pavement abutting the new work shall be saw cut and carefully removed as shown on the drawings and coated with asphalt tack coat before new material is placed against it. Upon arrival, the mixture shall be placed to the full width by a bituminous paver. It shall be struck off in a uniform layer of such depth that, when the work is completed, it shall have the required thickness and conform to the grade and contour indicated. The speed of the paver shall be regulated to eliminate pulling and tearing of the HMA mat. Unless otherwise permitted, placement of the HMA shall begin along the centerline of a crowned section or on the high side of areas with a one-way slope. The HMA shall be placed in consecutive adjacent strips having a minimum width of 10 feet (m) except where edge lanes require less width to complete the area. Additional screed sections shall not be attached to widen paver to meet the minimum lane width requirements specified above unless additional auger sections are added to match. The longitudinal joint in one course shall offset the longitudinal joint in the course immediately below by at least one foot (30 cm); however, the joint in the surface top course shall be at the centerline of crowned FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-11 pavements. Transverse joints in one course shall be offset by at least 10 feet (3 m) from transverse joints in the previous course. Transverse joints in adjacent lanes shall be offset a minimum of 10 feet (3 m). On areas where irregularities or unavoidable obstacles make the use of mechanical spreading and finishing equipment impractical, the HMA may be spread and luted by hand tools. Areas of segregation in the course, as determined by the Engineer, shall be removed and replaced at the Contractor’s expense. The area shall be removed by saw cutting and milling a minimum of 2 inches (50 mm) deep. The area to be removed and replaced shall be a minimum width of the paver and a minimum of 10 feet (3 m) long. 403-4.11 Compaction of HMA. After placing, the HMA shall be thoroughly and uniformly compacted by power rollers. The surface shall be compacted as soon as possible when the mixture has attained sufficient stability so that the rolling does not cause undue displacement, cracking or shoving. The sequence of rolling operations and the type of rollers used shall be at the discretion of the Contractor. The speed of the roller shall, at all times, be sufficiently slow to avoid displacement of the hot mixture and be effective in compaction. Any displacement occurring as a result of reversing the direction of the roller, or from any other cause, shall be corrected at once. Sufficient rollers shall be furnished to handle the output of the plant. Rolling shall continue until the surface is of uniform texture, true to grade and cross-section, and the required field density is obtained. To prevent adhesion of the mixture to the roller, the wheels shall be equipped with a scraper and kept properly moistened using a water soluble asphalt release agent approved by the Engineer. In areas not accessible to the roller, the mixture shall be thoroughly compacted with approved power driven tampers. Tampers shall weigh not less than 275 pounds (125 kg), have a tamping plate width not less than 15 inches (38 cm), be rated at not less than 4,200 vibrations per minute, and be suitably equipped with a standard tamping plate wetting device. Any HMA that becomes loose and broken, mixed with dirt, contains check-cracking, or in any way defective shall be removed and replaced with fresh hot mixture and immediately compacted to conform to the surrounding area. This work shall be done at the Contractor’s expense. Skin patching shall not be allowed. 403-4.12 Joints. The formation of all joints shall be made in such a manner as to ensure a continuous bond between the courses and obtain the required density. All joints shall have the same texture as other sections of the course and meet the requirements for smoothness and grade. The roller shall not pass over the unprotected end of the freshly laid HMA except when necessary to form a transverse joint. When necessary to form a transverse joint, it shall be made by means of placing a bulkhead or by tapering the course. The tapered edge shall be cut back to its full depth and width on a straight line to expose a vertical face prior to placing the adjacent lane. In both methods, all contact surfaces shall be coated with an asphalt tack coat before placing any fresh HMA against the joint. Longitudinal joints which are have been left exposed for more than four (4) hours; the surface temperature has cooled to less than 175°F (80°C); or are irregular, damaged, uncompacted or otherwise defective shall be cut back 3 inches (75 mm) to 6 inches (150 mm) to expose a clean, sound, uniform vertical surface for the full depth of the course. All cutback material shall be removed from the project. A asphalt tack coat or other product approved by the Engineer shall be applied to the clean, dry joint prior to placing any additional fresh HMA against the joint. Any laitance produced from cutting joints shall be removed by vacuuming and washing. The cost of this work shall be considered incidental to the cost of the HMA. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-12 403-4.13 Diamond grinding. When required, diamond grinding shall be accomplished by sawing with saw blades impregnated with industrial diamond abrasive. The saw blades shall be assembled in a cutting head mounted on a machine designed specifically for diamond grinding that will produce the required texture and smoothness level without damage to the pavement. The saw blades shall be 1/8-inch (3-mm) wide and there shall be a minimum of 55 to 60 blades per 12 inches (300 mm) of cutting head width; the actual number of blades will be determined by the Contractor and depend on the hardness of the aggregate. Each machine shall be capable of cutting a path at least 3 feet (0.9 m) wide. Equipment that causes ravels, aggregate fractures, spalls or disturbance to the pavement will not be permitted. The depth of grinding shall not exceed 1/2 inch (13mm) and all areas in which diamond grinding has been performed will be subject to the final pavement thickness tolerances specified. Grinding will be tapered in all directions to provide smooth transitions to areas not requiring grinding. Areas that have been ground will be sealed with a P-608 surface treatment as directed by the Engineer. It may be necessary to seal a larger area to avoid surface treatment creating any conflict with runway or taxiway markings. 403-4.14 Nighttime Paving Requirements. Paving during nighttime construction shall require the following: a. All paving machines, rollers, distribution trucks and other vehicles required by the Contractor for his operations shall be equipped with artificial illumination sufficient to safely complete the work. b. Minimum illumination level shall be 20 horizontal foot-candles and maintained in the following areas: (1) An area of 30 feet (9 m) wide by 30 feet (9 m) long immediately behind the paving machines during the operations of the machines. (2) An area 15 feet (4.5 m) wide by 30 feet (9 m) long immediately in front and back of all rolling equipment, during operation of the equipment. (3) An area 15 feet (4.5 m) wide by 15 feet (4.5 m) long at any point where an area is being tack coated prior to the placement of pavement. c. As partial fulfillment of the above requirements, the Contractor shall furnish and use, complete artificial lighting units with a minimum capacity of 3,000 watt electric beam lights, affixed to all equipment in such a way to direct illumination on the area under construction. d. A lighting plan must be submitted by the Contractor and approved by the Engineer prior to the start of any nighttime work. e. If the Contractor places any out of specification mix in the project work area, the Contractor is required to remove it at its own expense, to the satisfaction of the Engineer. If the Contractor has to continue placing non-payment HMA, as directed by the Engineer, to make the surfaces safe for aircraft operations, the Contractor shall do so to the satisfaction of the Engineer. It is the Contractor’s responsibility to leave the facilities to be paved in a safe condition ready for aircraft operations. No consideration for extended closure time of the area being paved will be given. As a first order of work for the next paving shift, the Contractor shall remove all out of specification material and replace with approved material to the satisfaction of the Engineer. When the above situations occur, there will be no consideration given for additional construction time or payment for extra costs. MATERIAL ACCEPTANCE 403-5.1 Acceptance sampling and testing. Unless otherwise specified, all acceptance sampling and testing necessary to determine conformance with the requirements specified in this section will be performed by FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-13 the Engineer at no cost to the Contractor except that coring as required in this section shall be completed and paid for by the Contractor. Testing organizations performing these tests shall be accredited in accordance with ASTM D3666. The laboratory accreditation must be current and listed on the accrediting authority’s website. All test methods required for acceptance sampling and testing must be listed on the lab accreditation. A copy of the laboratory’s current accreditation and accredited test methods shall be submitted to the Engineer prior to start of construction. All equipment in Contractor furnished laboratories shall be calibrated by an independent testing organization prior to the start of operations. a. Hot mixed asphalt. Plant-produced HMA shall be tested for air voids and stability and flow on a lot basis. Sampling shall be from material deposited into trucks at the plant or from trucks at the job site. Samples shall be taken in accordance with ASTM D979. A standard lot shall be equal to one day’s production or 2000 tons (1814 metric tons) whichever is smaller. If the day’s production is expected to exceed 2000 tons (1814 metric tons), but less than 4000 tons (3628 metric tons), the lot size shall be 1/2 day’s production. If the day’s production exceeds 4000 tons (3628 metric tons), the lot size shall be an equal sized fraction of the day’s production, but shall not exceed 2000 tons (1814 metric tons). Where more than one plant is simultaneously producing HMA for the job, the lot sizes shall apply separately for each plant. (1) Sampling. Each lot will consist of four equal sublots. Sufficient HMA for preparation of test specimens for all testing will be sampled by the Engineer on a random basis, in accordance with the procedures contained in ASTM D3665. Samples will be taken in accordance with ASTM D979. The sample of HMA may be put in a covered metal tin and placed in an oven for not less than 30 minutes nor more than 60 minutes to stabilize to compaction temperature. The compaction temperature of the specimens shall be as specified in the JMF. (2) Testing. Sample specimens shall be tested for stability and flow in accordance with ASTM D6927. Air voids will be determined by the Engineer in accordance with ASTM D3203. One set of laboratory compacted specimens will be prepared for each sublot in accordance with ASTM D6926 at the number of blows required by paragraph 403-3.2, Table 1. Each set of laboratory compacted specimens will consist of three test specimens prepared from the same sample. The manual hammer in ASTM D6926 shall be used. Prior to testing, the bulk specific gravity of each test specimen shall be measured by the Engineer in accordance with ASTM D2726 using the procedure for laboratory-prepared thoroughly dry specimens for use in computing air voids and pavement density. For air voids determination, the theoretical maximum specific gravity of the mixture shall be measured one time for each sublot in accordance with ASTM D2041. The value used in the air voids computation for each sublot shall be based on theoretical maximum specific gravity measurement for the sublot. The stability and flow for each sublot shall be computed by averaging the results of all test specimens representing that sublot. (3) Acceptance. Acceptance of plant produced HMA for stability, flow, and air voids shall be determined by the Engineer in accordance with the requirements of paragraph 403-5.1. b. In-place HMA. HMA placed in the field shall be tested for mat and joint density on a lot basis. A standard lot shall be equal to one day’s production or 2000 tons (1814 metric tons) whichever is smaller. If the day’s production is expected to exceed 2000 tons (1814 metric tons), but less than 4000 tons (3628 FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-14 metric tons), the lot size shall be 1/2 day’s production. If the day’s production exceeds 4000 tons (3628 metric tons), the lot size shall be an equal sized fraction of the day’s production, but shall not exceed 2000 tons (1814 metric tons). (1) Mat density. The lot size shall be the same as that indicated in paragraph 403-5.1a The lot shall be divided into four equal sublots. One core of finished, compacted HMA shall be taken by the Contractor from each sublot. Core locations will be determined by the Engineer on a random basis in accordance with procedures contained in ASTM D3665. Cores for mat density shall not be taken closer than one foot (30 cm) from a transverse or longitudinal joint. (2) Joint density. The lot size shall be the total length of longitudinal joints constructed by a lot of HMA as defined in paragraph 403-5.1a. The lot shall be divided into four equal sublots. One core of finished, compacted HMA shall be taken by the Contractor from each sublot. Core locations will be determined by the Engineer on a random basis in accordance with procedures contained in ASTM D3665. All cores for joint density shall be taken centered on the joint. The minimum core diameter for joint density determination shall be 5 inches (125 mm). (3) Sampling. Samples shall be neatly cut with a diamond core drill bit. Samples will be taken in accordance with ASTM D979. The minimum diameter of the sample shall be 5 inches (125 mm). Samples that are defective, as a result of sampling, shall be discarded and another sample taken. The Contractor shall furnish all tools, labor, and materials for cutting samples, cleaning, and filling the cored pavement. Cored pavement shall be cleaned and core holes shall be filled in a manner acceptable to the Engineer and within one day after sampling. Laitance produced by the coring operation shall be removed immediately. The top most lift of bituminous material shall be completely bonded to the underlying layers of bituminous material. If any of the cores reveal that the surface is not bonded to the bituminous layer immediately below the surface then additional cores shall be taken as directed by the Engineer in accordance with paragraph 403- 5.1b to determine the extent of any delamination. All delaminated areas shall be completely removed by milling to the limits and depth and replaced as directed by the Engineer at no additional cost. (4) Testing. The bulk specific gravity of each cored sample will be measured by the Engineer in accordance with ASTM D2726. Samples will be taken in accordance with ASTM D979. The percent compaction (density) of each sample will be determined by dividing the bulk specific gravity of each sublot sample by the average bulk specific gravity of all laboratory prepared specimens for the lot, as determined in paragraph 403-5.1a(2). The bulk specific gravity used to determine the joint density at joints formed between different lots shall be the lowest of the bulk specific gravity values from the two different lots. (5) Acceptance. Acceptance of field placed HMA for mat density will be determined by the Engineer in accordance with the requirements of paragraph 403-5.2b(1). Acceptance for joint density will be determined by the Engineer in accordance with the requirements of paragraph 403-5.2b(2). c. Partial lots HMA. When operational conditions cause a lot to be terminated before the specified number of tests have been made for the lot, or when the Contractor and Engineer agree in writing to allow overages or other minor tonnage placements to be considered as partial lots, the following procedure will be used to adjust the lot size and the number of tests for the lot. The last batch produced where production is halted will be sampled, and its properties shall be considered as representative of the particular sublot from which it was taken. In addition, an agreed to minor placement will be sampled, and its properties shall be considered as representative of the particular sublot from which it was taken. Where three sublots are produced, they shall constitute a lot. Where one or two sublots are produced, they shall be incorporated into the next lot, and the total number of sublots shall be used in the acceptance plan calculation, that is, n = 5 or n = 6, for example. Partial lots at the end of asphalt production on the project shall be included with the previous lot. The lot size for field placed material shall correspond to that of the plant material, except that, in no cases, shall less than three (3) cored samples be obtained, that is, n = 3. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-15 403-5.2 Acceptance criteria. a. General. Acceptance will be based on the following characteristics of the HMA and completed pavement and test results: (1) Air Voids (2) Mat density (3) Joint density (4) Thickness (5) Smoothness (6) Grade (7) Stability (8) Flow Mat density will be evaluated for acceptance in accordance with paragraph 403-5.2b(1). Stability and flow will be evaluated for acceptance in accordance with paragraph 403-5.1. Joint density will be evaluated for acceptance in accordance with paragraph 403-5.2b(2). Thickness will be evaluated by the Engineer for compliance in accordance with paragraph 403-5.2b(3). Acceptance for smoothness will be based on the criteria contained in paragraph 403-5.2b(4). Acceptance for grade will be based on the criteria contained in paragraph 403-5.2b(5). The Engineer may at any time reject and require the Contractor to dispose of any batch of HMA which is rendered unfit for use due to contamination, segregation, incomplete coating of aggregate, or improper mix temperature. Such rejection may be based on only visual inspection or temperature measurements. In the event of such rejection, the Contractor may take a representative sample of the rejected material in the presence of the Engineer, and if it can be demonstrated in the laboratory, in the presence of the Engineer, that such material was erroneously rejected, payment will be made for the material at the contract unit price. b. Acceptance criteria. (1) Mat density. Acceptance of each lot of plant produced material for mat density shall be based on the average of all of the densities taken from the sublots. If the average mat density of the lot so established equals or exceeds 96%, the lot shall be acceptable. If the average mat density of the lot is below 96%, the lot shall be removed and replaced at the Contractor’s expense. (2) Joint density. Acceptance of each lot of plant produced HMA for joint density shall be based on the average of all of the joint densities taken from the sublots. If the average joint density of the lot so established equals or exceeds 94%, the lot shall be acceptable. If the average joint density of the lot is less than 94%, the Contractor shall stop production and evaluate the method of compacting joints. Production may resume once the reason for poor compaction has been determined and appropriate measures have been taken to ensure proper compaction. (3) Thickness. Thickness of each course shall be evaluated by the Engineer for compliance to the requirements shown on the plans. Measurements of thickness shall be made by the Engineer using the cores extracted for each sublot for density measurement. The maximum allowable deficiency at any point shall not be more than 1/4 inch (6 mm) less than the thickness indicated for the lift. Average thickness of lift, or combined lifts, shall not be less than the indicated thickness. Where thickness deficiency exceeds the specified tolerances, the lot or sublot shall be corrected by the Contractor at his expense by removing the deficient area and replacing with new pavement. The Contractor, at his expense, may take additional cores as approved by the Engineer to circumscribe the deficient area. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-16 (5) Grade. Grade shall be evaluated on the first day of placement and then every 5 days to allow adjustments to paving operations if measurements do not meet specification requirements. The Contractor must submit the survey data to the Engineer by the following day after measurements have been taken. The finished surface of the pavement shall not vary from the gradeline elevations and cross-sections shown on the plans by more than 1/2 inch (12 mm). The finished grade of each lot will be determined by running levels at intervals of 50 feet (15 m) or less longitudinally and all breaks in grade transversely (not to exceed 50 feet (15 m)) to determine the elevation of the completed pavement. The Contractor shall pay the cost of surveying of the level runs that shall be performed by a licensed surveyor. The documentation, stamped and signed by a licensed surveyor, shall be provided by the Contractor to the Engineer. The lot size shall be 2,000 square yards (square meters). When more than 15% of all the measurements within a lot are outside the specified tolerance, or if any one shot within the lot deviates 3/4 inch (19 mm) or more from planned grade, the Contractor shall remove the deficient area to the depth of the final course of pavement and replace with new material. Skin patching shall not be permitted. Isolated high points may be ground off providing the course thickness complies with the thickness specified on the plans. High point grinding will be limited to 15 square yard (12.5 sq m). The surface of the ground pavement shall have a texture consisting of grooves between 0.090 and 0.130 inches (2 and 3.5 mm) wide. The peaks and ridges shall be approximately 1/32 inch (1 mm) higher than the bottom of the grooves. The pavement shall be left in a clean condition. The removal of all of the slurry resulting from the grinding operation shall be continuous. The grinding operation should be controlled so the residue from the operation does not flow across other lanes of pavement. Areas in excess of 15 square yard (12.5 sq m) will require removal and replacement of the pavement in accordance with the limitations noted above. Contractor shall apply a surface treatment per P-608 to all areas that have been subject to grinding. c. Density outliers. If the tests within a lot include a very large or a very small value that appears to be outside the normal limits of variation, check for an outlier in accordance with ASTM E178, at a significance level of 5%, to determine if this value should be discarded. 403-5.3 Resampling Pavement for Mat Density. a. General. Resampling of a lot of pavement will only be allowed for mat density and then, only if the Contractor requests same in writing, within 48 hours after receiving the written test results from the Engineer. A retest will consist of all the sampling and testing procedures contained in paragraphs 403-5.1. Only one resampling per lot will be permitted. (1) A redefined mat density shall be calculated for the resampled lot. The number of tests used to calculate the redefined mat density shall include the initial tests made for that lot plus the retests. (2) The cost for resampling and retesting shall be borne by the Contractor. b. Payment for resampled lots. The redefined mat density for a resampled lot shall be used to evaluate the acceptance of that lot in accordance with paragraph 403-5.2. c. Outliers. Check for outliers in accordance with ASTM E178, at a significance level of 5%. CONTRACTOR QUALITY CONTROL 403-6.1 General. The Contractor shall perform quality control sampling, testing, and inspection during all phases of the work and shall perform them at a rate sufficient to ensure that the work conforms to the contract requirements, and at minimum test frequencies required by paragraph 403-6.3, including but not limited to: a. Mix Design b. Aggregate Grading FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-17 c. Quality of Materials d. Stockpile Management e. Proportioning f. Mixing and Transportation g. Placing and Finishing h. Joints i. Compaction j. Surface smoothness k. Personnel l. Laydown plan The Contractor shall perform quality control sampling, testing, and inspection during all phases of the work and shall perform them at a rate sufficient to ensure that the work conforms to the contract requirements, and at minimum test frequencies required by paragraph 403-6.3 and Section 100 of the General Provisions. As a part of the process for approving the Contractor’s plan, the Engineer may require the Contractor’s technician to perform testing of samples to demonstrate an acceptable level of performance. No partial payment will be made for materials that are subject to specific quality control requirements without an approved plan. 403-6.2 Contractor testing laboratory. The lab shall meet the requirements of ASTM D3666 including all necessary equipment, materials, and current reference standards to comply with the specifications. 403-6.3 Quality control testing. The Contractor shall perform all quality control tests necessary to control the production and construction processes applicable to these specifications and as set forth in the approved Quality Control Program. The testing program shall include, but not necessarily be limited to, tests for the control of asphalt content, aggregate gradation, temperatures, aggregate moisture, field compaction, and surface smoothness. A Quality Control Testing Plan shall be developed as part of the Quality Control Program. a. Asphalt content. A minimum of two asphalt content tests shall be performed per lot in accordance with ASTM D6307 or ASTM D2172 if the correction factor in ASTM D6307 is greater than 1.0. The asphalt content for the lot will be determined by averaging the test results. b. Gradation. Aggregate gradations shall be determined a minimum of twice per lot from mechanical analysis of extracted aggregate in accordance with ASTM D5444 and ASTM C136, and ASTM C117. c. Moisture content of aggregate. The moisture content of aggregate used for production shall be determined a minimum of once per lot in accordance with ASTM C566. d. Moisture content of HMA. The moisture content of the HMA shall be determined once per lot in accordance with ASTM D1461 e. Temperatures. Temperatures shall be checked, at least four times per lot, at necessary locations to determine the temperatures of the dryer, the asphalt binder in the storage tank, the HMA at the plant, and the HMA at the job site. f. In-place density monitoring. The Contractor shall conduct any necessary testing to ensure that the specified density is being achieved. A nuclear gauge may be used to monitor the pavement density in accordance with ASTM D2950. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-18 g. Additional testing. Any additional testing that the Contractor deems necessary to control the process may be performed at the Contractor’s option. h. Monitoring. The Engineer reserves the right to monitor any or all of the above testing. 403-6.4 Sampling. When directed by the Engineer, the Contractor shall sample and test any material that appears inconsistent with similar material being sampled, unless such material is voluntarily removed and replaced or deficiencies corrected by the Contractor. All sampling shall be in accordance with standard procedures specified. 403-6.5 Control charts. The Contractor shall maintain linear control charts both for individual measurements and range (i.e., difference between highest and lowest measurements) for aggregate gradation, asphalt content, and VMA. The VMA for each sublot will be calculated and monitored by the Quality Control laboratory. Control charts shall be posted in a location satisfactory to the Engineer and shall be kept current. As a minimum, the control charts shall identify the project number, the contract item number, the test number, each test parameter, the Action and Suspension Limits applicable to each test parameter, and the Contractor’s test results. The Contractor shall use the control charts as part of a process control system for identifying potential problems and assignable causes before they occur. If the Contractor’s projected data during production indicates a problem and the Contractor is not taking satisfactory corrective action, the Engineer may suspend production or acceptance of the material. a. Individual measurements. Control charts for individual measurements shall be established to maintain process control within tolerance for aggregate gradation, asphalt content, and VMA. The control charts shall use the JMF target values as indicators of central tendency for the following test parameters with associated Action and Suspension Limits: Control Chart Limits For Individual Measurements Sieve Action Limit Suspension Limit 3/4 inch (19 mm) ±6% ±9% 1/2 inch (12 mm) ±6% ±9% 3/8 inch (9 mm) ±6% ±9% No. 4 (4.75 mm) ±6% ±9% No. 16 (1.18 mm) ±5% ±7.5% No. 50 (0.30 mm) ±3% ±4.5% No. 200 (0.075 mm) ±2% ±3% Asphalt Content ±0.45% ±0.70% VMA -1.00% -1.5% b. Range. Control charts for range shall be established to control process variability for the test parameters and Suspension Limits listed below. The range shall be computed for each lot as the difference between the two test results for each control parameter. The Suspension Limits specified below are based on a sample size of n = 2. Should the Contractor elect to perform more than two tests per lot, the Suspension Limits shall be adjusted by multiplying the Suspension Limit by 1.18 for n = 3 and by 1.27 for n = 4. FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-19 Control Chart Limits Based On Range (Based On n = 2) Sieve Suspension Limit 1/2 inch (12 mm) 11% 3/8 inch (9 mm) 11% No. 4 (4.75 mm) 11% No. 16 (1.18 mm) 9% No. 50 (0.30 mm) 6% No. 200 (0.075 mm) 3.5% Asphalt Content 0.8% c. Corrective action. The Contractor Quality Control Program shall indicate that appropriate action shall be taken when the process is believed to be out of tolerance. The Plan shall contain sets of rules to gauge when a process is out of control and detail what action will be taken to bring the process into control. As a minimum, a process shall be deemed out of control and production stopped and corrective action taken, if: (1) One point falls outside the Suspension Limit line for individual measurements or range; or (2) Two points in a row fall outside the Action Limit line for individual measurements. 403-6.6 Quality control reports. The Contractor shall maintain records and shall submit reports of quality control activities daily, in accordance with the Contractor Quality Control Program described in General Provisions, Section 100. METHOD OF MEASUREMENT 403-7.1 Measurement. Plant mix bituminous concrete pavement shall be measured by the number of tons (kg) of HMA used in the accepted work. Recorded batch weights or truck scale weights will be used to determine the basis for the tonnage. BASIS OF PAYMENT 403-8.1 Payment. Payment for a lot of HMA meeting all acceptance criteria as specified in paragraph 403- 5.2 shall be made at the contract unit price per ton (kg) for HMA. The price shall be compensation for furnishing all materials, for all preparation, mixing, and placing of these materials, and for all labor, equipment, tools, and incidentals necessary to complete the item. Payment will be made under: Item P-403.1 HMA Base Course - per ton (kg) TESTING REQUIREMENTS AASHTO M156 Standard Specification for Requirements for Mixing Plants for Hot-Mixed, Hot- Laid Bituminous Paving Mixtures ASTM C29 Standard Test Method for Bulk Density (“Unit Weight”) and Voids in Aggregate FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-20 ASTM C88 Standard Test Method for Soundness of Aggregates by Use of Sodium Sulfate or Magnesium Sulfate ASTM C117 Standard Test Method for Materials Finer than 75-μm (No. 200) Sieve in Mineral Aggregates by Washing ASTM C127 Standard Test Method for Density, Relative Density (Specific Gravity), and Absorption of Coarse Aggregate ASTM C131 Standard Test Method for Resistance to Degradation of Small-Size Coarse Aggregate by Abrasion and Impact in the Los Angeles Machine ASTM C136 Standard Test Method for Sieve or Screen Analysis of Fine and Coarse Aggregates ASTM C183 Standard Practice for Sampling and the Amount of Testing of Hydraulic Cement ASTM C566 Standard Test Method for Total Evaporable Moisture Content of Aggregate by Drying ASTM D75 Standard Practice for Sampling Aggregates ASTM D979 Standard Practice for Sampling Bituminous Paving Mixtures ASTM D1073 Standard Specification for Fine Aggregate for Bituminous Paving Mixtures ASTM D1074 Standard Test Method for Compressive Strength of Bituminous Mixtures ASTM D1461 Standard Test Method for Moisture or Volatile Distillates in Bituminous Paving Mixtures ASTM D2041 Standard Test Method for Theoretical Maximum Specific Gravity and Density of Bituminous Paving Mixtures ASTM D2172 Standard Test Method for Quantitative Extraction of Bitumen from Bituminous Paving Mixtures ASTM D2419 Standard Test Method for Sand Equivalent Value of Soils and Fine Aggregate ASTM D2489 Standard Practice for Estimating Degree of Particle Coating of Bituminous- Aggregate Mixtures ASTM D2726 Standard Test Method for Bulk Specific Gravity and Density of Non-Absorptive Compacted Bituminous Mixtures ASTM D2950 Standard Test Method for Density of Bituminous Concrete in Place by Nuclear Methods ASTM D3203 Standard Test Method for Percent Air Voids in Compacted Dense and Open Bituminous Paving Mixtures ASTM D3665 Standard Practice for Random Sampling of Construction Materials ASTM D3666 Standard Specification for Minimum Requirements for Agencies Testing and Inspecting Road and Paving Materials ASTM D4125 Standard Test Methods for Asphalt Content of Bituminous mixtures by the Nuclear Method ASTM D4318 Standard Test Methods for Liquid Limit, Plastic Limit, and Plasticity Index of Soils FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-403 Hot Mix Asphalt (HMA) Pavements (Base, Leveling, Course) AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-403-21 ASTM D4791 Standard Test Method for Flat Particles, Elongated Particles, or Flat and Elongated Particles in Coarse Aggregate ASTM D4867 Standard Test Method for Effect of Moisture on Asphalt Concrete Paving Mixtures ASTM D5444 Standard Test Method for Mechanical Size Analysis of Extracted Aggregate ASTM D5581 Standard Test Method for Resistance to Plastic Flow of Bituminous Mixtures Using Marshall Apparatus (6 inch-Diameter Specimen) ASTM D6307 Standard Test Method for Asphalt Content of Hot-Mix Asphalt by Ignition Method ASTM D6926 Standard Practice for Preparation of Bituminous Specimens Using Marshall Apparatus ASTM D6927 Standard Test Method for Marshall Stability and Flow of Bituminous Mixtures ASTM D6752 Standard Test Method for Bulk Specific Gravity and Density of Compacted Bituminous Mixtures Using Automatic Vacuum Sealing Method ASTM E11 Standard Specification for Woven Wire Test Sieve Cloth and Test Sieves ASTM E178 Standard Practice for Dealing with Outlying Observations AASHTO T030 Standard Method of Test for Mechanical Analysis of Extracted Aggregate AASHTO T110 Standard Method of Test for Moisture or Volatile Distillates in Hot Mix Asphalt (HMA) AASHTO T275 Standard Method of Test for Bulk Specific Gravity (Gmb) of Compacted Hot Mix Asphalt (HMA) Using Paraffin-Coated Specimens). Asphalt Institute Handbook MS-26 Asphalt Binder Asphalt Institute MS-2 Mix Design Manual, 7th Edition MATERIAL REQUIREMENTS ASTM D242 Standard Specification for Mineral Filler for Bituminous Paving Mixtures ASTM D946 Standard Specification for Penetration-Graded Asphalt Cement for Use in Pavement Construction ASTM D3381 Standard Specification for Viscosity-Graded Asphalt Cement for Use in Pavement Construction ASTM D4552 Standard Practice for Classifying Hot-Mix Recycling Agents ASTM D6373 Standard Specification for Performance Graded Asphalt Binder END OF ITEM P-403 FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-602 Bituminous Prime Coat AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-602-1 ITEM P-602 BITUMINOUS PRIME COAT DESCRIPTION 602-1.1 This item shall consist of an application of bituminous material on the prepared base course in accordance with these specifications and in reasonably close conformity to the lines shown on the plans. MATERIALS 602-2.1 Bituminous material. The bituminous material shall be an emulsified asphalt indicated in ASTM D3628 as a bituminous application for prime coat appropriate to local conditions or as designated by the Engineer. CONSTRUCTION METHODS 602-3.1 Weather limitations. The prime coat shall be applied only when the existing surface is dry; the atmospheric temperature is 50°F (10°C) or above, and the temperature has not been below 35°F (2°C) for the 12 hours prior to application; and when the weather is not foggy or rainy. The temperature requirements may be waived when directed by the Engineer. 602-3.2 Equipment. The equipment shall include a self-powered pressure bituminous material distributor and equipment for heating bituminous material. Provide a distributor with pneumatic tires of such size and number that the load produced on the base surface does not exceed 65.0 psi (4.5 kg/sq cm) of tire width to prevent rutting, shoving or otherwise damaging the base, surface or other layers in the pavement structure. Design and equip the distributor to spray the bituminous material in a uniform coverage at the specified temperature, at readily determined and controlled rates from 0.05 to 2.0 gallons per square yard (0.23 to 9.05 L/square meter), with a pressure range of 25 to 75 psi (172.4 to 517.1 kPa) and with an allowable variation from the specified rate of not more than ±5%, and at variable widths. Include with the distributor equipment a separate power unit for the bitumen pump, full-circulation spray bars, tachometer, pressure gauges, volume-measuring devices, adequate heaters for heating of materials to the proper application temperature, a thermometer for reading the temperature of tank contents, and a hand hose attachment suitable for applying bituminous material manually to areas inaccessible to the distributor. Equip the distributor to circulate and agitate the bituminous material during the heating process. If the distributor is not equipped with an operable quick shutoff valve, the prime operations shall be started and stopped on building paper. The Contractor shall remove blotting sand prior to asphalt concrete lay down operations at no additional expense to the Owner. A power broom and power blower suitable for cleaning the surfaces to which the bituminous coat is to be applied shall be provided. 602-3.3 Application of bituminous material. Immediately before applying the prime coat, the full width of the surface to be primed shall be swept with a power broom to remove all loose dirt and other objectionable material. The bituminous material shall be uniformly applied with a bituminous distributor at the rate of 0.15 to 0.30 gallons per square yard (0.68 to 1.36 liters per square meter) depending on the base course surface texture. The type of bituminous material and application rate shall be approved by the Engineer prior to application. Following application of the bituminous material and prior to application of the succeeding layer of pavement, allow the bituminous coat to cure and to obtain evaporation of any volatiles or moisture. Maintain FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-602 Bituminous Prime Coat AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-602-2 the coated surface until the succeeding layer of pavement is placed, by protecting the surface against damage and by repairing and recoating deficient areas. Allow the prime coat to cure without being disturbed for a period of at least 48 hours or longer, as may be necessary to attain penetration into the treated course. Furnish and spread enough sand to effectively blot up and cure excess bituminous material. Keep traffic off surfaces freshly treated with bituminous material. Provide sufficient warning signs and barricades so that traffic will not travel over freshly treated surfaces. 602-3.4 Trial applications. Before providing the complete bituminous coat, the Contractor shall apply three lengths of at least 100 feet (30 m) for the full width of the distributor bar to evaluate the amount of bituminous material that can be satisfactorily applied with the equipment. Apply three different trial application rates of bituminous materials within the application range specified in paragraph 602-3.3. Other trial applications will be made using various amounts of material as deemed necessary by the Engineer. 602-3.5 Bituminous material Contractor’s responsibility. The Contractor shall provide a statement of source and character of the proposed bituminous material which must be submitted to and approved by the Engineer before any shipment of bituminous materials to the project. The Contractor shall furnish vendor’s certified test reports for each carload, or equivalent, of bituminous material shipped to the project. The test reports shall be provided to and approved by the Engineer before the bituminous material is applied. If the bituminous material does not meet the specifications, it shall be replaced at the Contractor’s expense. Furnishing the vendor’s certified test report for the bituminous material shall not be interpreted as basis for final acceptance. 602-3.6 Freight and weigh bills. The Contractor shall submit waybills and delivery tickets during the progress of the work. Before the final estimate is allowed, file with the Engineer certified waybills and certified delivery tickets for all bituminous materials used in the construction of the pavement covered by the contract. Do not remove bituminous material from storage until the initial outage and temperature measurements have been taken. The delivery or storage units will not be released until the final outage has been taken. METHOD OF MEASUREMENT 602-4.1 No direct measurement will be made for any bituminous prime coat. BASIS OF PAYMENT 602-5.1 No direct payment will be made for any bituminous tack coat. The cost of furnishing and installing bituminous prime coat shall be included in the contract unit price for Item P-403 or any other items that require its use. TESTING REQUIREMENTS ASTM D1250 Standard Guide for Use of the Petroleum Measurement Tables MATERIAL REQUIREMENTS ASTM D977 Standard Specification for Emulsified Asphalt ASTM D2028 Standard Specification for Cutback Asphalt (Rapid-Curing Type) ASTM D2397 Standard Specification for Cationic Emulsified Asphalt ASTM D3628 Standard Practice for Selection and Use of Emulsified Asphalts FAA 150/5370-10G (7/21/2014) Reconstruct and Extend Taxiway A Contract Modification No. 1 Augusta Regional Airport, Augusta, Georgia Item P-602 Bituminous Prime Coat AIP No. 3-13-0011-038-205 & 3-13-0011-039-2016 September 12, 2017 P-602-3 END OF ITEM P-602 Commission Meeting Agenda 10/17/2017 2:00 PM Nuisance Ordinance Code Amendment Department:Planning & Development Department:Planning & Development Caption:Motion to approve amendments (Ordinance) to the Augusta, Georgia Code, Title 7, Chapter 2, Article 1 Nuisances, Section 7- 2-2 Nuisances Prohibited so as to clarify the responsibility of property owners with regard to occupied properties. (Approved by Public Services Committee October 10, 2017) Background:The Nuisance Code is not clear in stating that property owners are responsible for maintaining their parcel and the portion of the adjoining public right-of-way between the parcel and the street. Analysis:The proposed code amendment will clarify the responsibility of owner’s of occupied property with regard to maintaining their parcel and the portion of the adjoining public right-of-way between the parcel and the street. Financial Impact:N/A Alternatives:Do not approve. Recommendation:Approve Funds are Available in the Following Accounts: N/A REVIEWED AND APPROVED BY: Cover Memo ORDINANCE NO. ___________ AN ORDINANCE TO AMEND THE AUGUSTA, GEORGIA CODE, TITLE 7, CHAPTER 2, ARTICLE 1, NUISANCES; SECTION 7-2-2, NUISANCES - PROHIBITED, SO AS TO CLARIFY THAT OWNERS OF OCCUPIED PARCELS ARE REQUIRED TO MAINTAIN THE PARCEL AND THE PORTION OF THE ADJOINING PUBLIC RIGHT-OF- WAY BETWEEN THE PARCEL AND THE STREET; TO PROVIDE AN EFFECTIVE DATE; TO REPEAL CONFLICTING ORDINANCES, AND FOR OTHER PURPOSES. NOW, BE IT ORDAINED BY THE AUGUSTA, GEORGIA COMMISSION AND IT IS HEREBY ORDAINED BY THE AUTHORITY OF SAME THAT IT IS A VIOLATION OF AUGUSTA, GEORGIA CODE TO NOT COMPLY WITH THE ADOPTED CODE AS STATED IN THE REGULATIONS HEREWITH, AS FOLLOWS: SECTION 1. TITLE 7, CHAPTER 2, ARTICLE 1, NUISANCES, SECTION 7-2-2 IS HEREBY DELETED BY STRIKING THIS SECTION IN ITS ENTIRETY, AND NEW SECTION 7-2-2 IS HEREBY INSERTED TO REPLACE THE REPEALED SECTION AS SET FORTH IN “EXHIBIT A” HERETO. SECTION 2. This ordinance shall become effective upon adoption. SECTION 3. All ordinances or parts of ordinances in conflict herewith are hereby repealed. Adopted this ___ day of ___________, 2017. __________________________ Attest:______________________________ Hardie Davis, Jr. Lena J. Bonner, Clerk of Commission As its Mayor Seal: CERTIFICATION The undersigned Clerk of Commission, Lena J. Bonner, hereby certifies that the foregoing Ordinance was duly adopted by the Augusta, Georgia Commission on ________________, 2017 and that such Ordinance has not been modified or rescinded as of the date hereof and the undersigned further certifies that attached hereto is a true copy of the Ordinance which was approved and adopted in the foregoing meeting(s). ______________________________ Lena J. Bonner, Clerk of Commission Published in the Augusta Chronicle. Date: _________________________ First Reading ______________________ Second Reading ______________________ “EXHIBIT A” NUISANCES [ARTICLE 1 IN GENERAL] Sec. 7-2-1. Generally. The following conditions, in addition to those conditions recognized as such pursuant to State law, are hereby declared to constitute nuisances: substances emitting noxious odors, carcasses of animals, establishments or structures emitting noxious odors, vapors, or fumes; deposits of waste-water; litter, trash, refuse, rubble, and rubbish of all sorts; overgrown vegetation, weeds, brambles, brush or thickets; malfunctioning private sewage disposal systems; dilapidated buildings open to unauthorized or unlawful entry; hazardous trees; all articles, conditions, acts, or things whatsoever, kept, maintained or permitted by any person to pose a threat of injury, inconvenience, or annoyance to the public; and, all pursuits followed or engaged in, behavior or conduct performed by any person, which pose a threat of injury, annoyance, or inconvenience to the public. Sec. 7-2-2. Nuisances—Prohibited. It shall be unlawful for any owner or occupant of any parcel of land lying within Augusta- Richmond County to cause or permit any nuisance to be created or remain upon such premises; and it shall be the duty of such owner or occupant to abate and remove any such nuisance from such premises. No owner or occupant of any parcel of land lying within Augusta-Richmond County shall permit, cause, keep, maintain, or engage in any activity constituting a nuisance, as defined herein, or as otherwise defined by the law of the State of Georgia, within Augusta- Richmond County. Sec. 7-2-2. Nuisances—Prohibited. (a) It shall be unlawful for any owner or occupant of any parcel of land lying within Augusta- Richmond County to cause or permit any nuisance to be created or remain upon such premises; and it shall be the duty of such owner or occupant to abate and remove any such nuisance from such premises. No owner or occupant of any parcel of land lying within Augusta-Richmond County shall permit, cause, keep, maintain, or engage in any activity constituting a nuisance, as defined herein, or as otherwise defined by the law of the State of Georgia, within Augusta- Richmond County. (b) No owner of any occupied parcel of land within Augusta, Georgia shall permit or allow the existence of excessive accumulation or untended growth of weeds, undergrowth or other plant life to grow to a height exceeding twelve (12) inches upon any parcel of land, or on the area between the parcel of land and the street curb. Sec. 7-2-3. Nuisances—Notice. Whenever an inspector of the Planning & Development Department or any other duly constituted inspecting authority of the Augusta-Richmond County Commission determines that a nuisance exists on any premises within Augusta-Richmond County, he may serve written notice upon the owner or occupant, or his agent having control thereof, to abate such nuisance. The notice shall, at a minimum, set forth the nature of the nuisance and the fact that the same constitutes a nuisance upon said property; describe the premises where the nuisance is alleged to exist or to have been committed; and specify a reasonable period of time for the abatement of said nuisance. Said notice shall be served upon the owner or occupant of the premises by personal delivery, or by mailing said notice, certified mail, return receipt requested, addressed to the owner, occupant or agent. If service cannot be effectuated in such a manner after diligent effort to do so, service may be made by conspicuously posting the notice in or about the premises described in the notice, or by causing such notice to be published once in a newspaper of general circulation in Augusta-Richmond County. If the owner or occupant is a corporation, notice may be served upon an officer, a manager or person in charge of any local business office of such corporation, or the corporation's registered agent for service of process. Sec. 7-2-4. Nuisances—Procedures in the event nuisance not abated when specified. In the event that such nuisance is not abated by the owner or occupant within the time specified, then the owner and/or occupant may be cited for violation of this chapter. Sec. 7-2-5. Nuisances—Penalties. Violations of the provisions of this chapter shall be punished as provided in section 1-6-1 of this Code. Commission Meeting Agenda 10/17/2017 2:00 PM Transit Bus Operations and Maintenance Facility Department:Transit Department Department:Transit Department Caption:Motion to approve a contract with Reeves Young LLC for the construction of the Transit Bus Operations and Maintenance Facility for a fixed price of $14,375,000.00. (Bid Item 17-250) (Approved by Public Services Committee October 10, 2017) Background:The purpose of this contract is to provide construction services for the construction of the Transit Bus Operations and Maintenance Facility to be located at 2844 Regency Boulevard in Augusta, Georgia. The project will entail the construction of an approximate 32,000 square foot facility that will serve the administration and maintenance operations that support Augusta’s Public Transit System. The facility will feature other amenities such as a fueling and bus wash system, a large classroom and meeting place, and a parking area for employees and visitors. Analysis:APT currently houses its operation at 1535 Fenwick Street. The administration portion of the operations and maintenance facility was opened in 1993. The facility is adjacent to an existing structure that contains the maintenance portion of APT. The building was existing when the adjacent addition was constructed and has far reached its useful life. The building has been repaired multiple times, but continues to show its age with roof leaks, and difficulty with upgrading systems. In addition to the longevity or useful life issues of the facility, the current location lacks any real growth opportunities for APT. The site is locked for expansion to adjacent properties and the facility has little to no room on which to build or expand. Due to these conditions a decision was made to locate the facility to a property that would support current operations and future system expansion. The Transit Operations and Maintenance Facility has been designed to achieve a high level of environmental sustainability. While not specifically designed to be certified under USBGC LEED guidelines, the principles and strategies inherent in those guidelines were followed in the design of the facility. For example: • The project Cover Memo site will use vacated properties now paved with asphalt. The proposed facility will remove that dark-color paving; in its place will be a large green area for storm water management and recreation, and new more reflective and durable paving to reduce the existing heat-island effect. • The proposed facility will use water-efficient plumbing fixtures—sinks, toilets and urinals—and the new bus-wash will recycle water used to wash APT vehicles • The project will manage waste generated both by demolition and by removal of the existing building and paving, including the reuse of materials found suitable as components of the new paving. • The new buildings will be constructed using materials with significant recycled content (structural steel, exterior cladding, roofing, window frames). • New finishes will have low emitting (paints, flooring, wall base, carpet tile), and exposed polished concrete will be used in place of some applied finishes to reduce outgassing and facilitate cleaning. • Occupied rooms will benefit from windows located and sized to use daylight and offer exterior views, for employee well-being and safety. The bus maintenance bays in particular will receive a high degree of natural lighting through large transom windows and glazed overhead doors. • Occupied spaces will offer greater control of interior temperature. • Lighting will be more efficient, less costly to maintain and better balanced to match the use of individual spaces. • Both buildings have been designed in accordance with the current energy code, which requires a much higher level of performance than previous codes, and should result in considerable savings compared to earlier designs of this facility type. In addition to thick layers of wall and roof insulation, and insulated glazing and thermally blocked door and window frames, insulation has been designed to be continuous to reduce thermal bridges at transitions between façade cladding materials. Construction will be carefully phased and planned to allow for demolition of the old movie theater and construction of the new facility to allow for move in and commission in late 2018. On September 21, 2017, Augusta received four submittals in response to Bid Item # 17-250 Transit Bus Operations and Maintenance Facility. After reviewing the bids, Reeves Young LLC was found to be the lowest responsive and responsible bidder on the project. The Compliance Department-DBE office established ten 10% goal for this project Reeves Young LLC has confirmed they will meet the minimum of ten 10% goal on this project. Financial Impact:The total cost of this construction contract with Reeves Young LLC is $14,375,000. Alternatives:If not approved, it will delay the project and result in increased costs as indicated below: Rebidding the contract will result in increased costs to redo specifications Further Value Engineering will most likely result in a loss of functionality Additional cost are already being experienced due to the need to extend contract (PM Cover Memo Etc.) Construction market costs in Augusta are higher due to the high volume of construction scheduled to take place not only locally but also nationally Material costs are expected to rise due to the recent hurricanes. Recommendation:Approve construction contract with Reeves Young LLC. Funds are Available in the Following Accounts: This bid award for $14,375.000 will be funded through a combination of Federal Transit Administration Transit Capital Grant 5307 and 5339 Funds and local funds. The allocated funding breakdown is: Funding Source Total Split Federal Local FTA Grants $14,375,000 80/20 $11,500,000 $2,875,000 Local funds provided by TIA discretionary and SPLOST. REVIEWED AND APPROVED BY: Finance. Procurement. Law. Administrator. Clerk of Commission Cover Memo TOTAL PROJECT BUDGET TRANSIT FACILITY Augusta Transit O&M Facility Item Construction $14,375,000 Equipment $965,000 Architect/Engineer $895,010 Construction Contingency $745,000 Loose Furnishings and Equipment $250,000 Other Costs (see below) $769,990 Total $18,000,000 OTHER COSTS: Project Administration Project Management $476,707 Project Controls, Fees, and Advertising Connection Fees $0 Survey $0 Geotech $0 Testing & Inspections $0 Advertising and Miscellaneous Printing/Copying $2,000 Other Consultants A/E Additional Services $281,870 Other Building/Infrastructure Costs Security/card readers/cameras $0 Technology/IT and A/V Systems $0 Utility Relocations $0 TBD $0 Other Project Costs Moving $5,000 Property Easements $0 Legal $0 Other Cost Contingency $4,413 TOTAL OTHER COSTS: $769,990 Invitation to Bid Sealed bids will be received at this office until Thursday, September 21, 2017 @ 3:00 p.m. for furnishing: Bid Item #17-250 Transit Bus Operations and Maintenance Facility for Augusta Public Transit Department Bids will be received by Augusta, GA Commission hereinafter referred to as the OWNER at the offices of: Geri A. Sams, Director Augusta Procurement Department 535 Telfair Street - Room 605 Augusta, Georgia 30901 Bid documents may be examined at the office of the Augusta, GA Procurement Department, 535 Telfair Street – Room 605, Augusta, GA 30901. Plans and specifications for the project shall be obtained by all prime, subcontractors and suppliers exclusively from Augusta Blue Print. The fees for the plans and specifications which are non-refundable is $575.00. It is the wish of the Owner that all businesses are given the opportunity to submit on this project. To facilitate this policy the Owner is providing the opportunity to view plans online (www.augustablue.com) at no charge through Augusta Blue Print (706 722-6488) beginning Thursday, July 27, 2017. Bidders are cautioned that submitting a package without Procurement of a complete set are likely to overlook issues of construction phasing, delivery of goods or services, or coordination with other work that is material to the successful completion of the project. Bidders are cautioned that acquisition of documents through any other source is not advisable. Acquisition of documents from unauthorized sources places the bidder at the risk of receiving incomplete or inaccurate information upon which to base his qualifications. A Pre Bid Conference will be held on Friday, August 25, 2017 @ 10:00 a.m. in the Procurement Department, 535 Telfair Street, Room 605. A site visit will follow. All questions must be submitted in writing by fax to 706 821-2811 or by email to procbidandcontract@augustaga.gov to the office of the Procurement Department by Tuesday, August 29, 2017 @ 5:00 P.M. No bid will be accepted by fax, all must be received by mail or hand delivered. No bids may be withdrawn for a period of ninety (90) days after bids have been opened, pending the execution of contract with the successful bidder. A 5% Bid Bond is required to be submitted along with the bidders’ qualifications; a 100% performance bond and a 100% payment bond will be required for award. Invitation for bids and specifications. An invitation for bids shall be issued by the Procurement Office and shall include specifications prepared in accordance with Article 4 (Product Specifications), and all contractual terms and conditions, applicable to the procurement. All specific requirements contained in the invitation to bid including, but not limited to, the number of copies needed, the timing of the submission, the required financial data, and any other requirements designated by the Procurement Department are considered material conditions of the bid which are not waiveable or modifiable by the Procurement Director. All requests to waive or modify any such material condition shall be submitted through the Procurement Director to the appropriate committee of the Augusta, Georgia Commission for approval by the Augusta, Georgia Commission. Please mark BID number on the outside of the envelope. Bidders are cautioned that acquisition of BID documents through any source other than the office of the Procurement Department is not advisable. Acquisition of BID documents from unauthorized sources placed the bidder at the risk of receiving incomplete or inaccurate information upon which to base his qualifications. Correspondence must be submitted via mail, fax or email as follows: Augusta Procurement Department Attn: Geri A. Sams, Director of Procurement 535 Telfair Street, Room 605 Augusta, GA 30901 Fax: 706-821-2811 or Email: procbidandcontract@augustaga.gov No bid will be accepted by fax, all must be received by mail or hand delivered. GERI A. SAMS, Procurement Director Publish: Augusta Chronicle July 27, August 3, 10, 17, 24, 2017 Metro Courier August 2, 2017 OFFICIAL VENDORS McKnight Con 635 NW Frontage Rd Augusta, GA 30907 Reeves Young 45 Peachtree Ind Sugar Hill, GA 30518 Astra Group 300 Churchill Ct Woodstock, GA 30188 Principle Willams 51 New Hutchinson Mill Lagrange, GA 30240 Attachment "B"YES YES YES NO / NOTARY SEAL Addendum 1 YES YES YES YES E-VERIFY 261725 886774 72922 1200590 BID BOND YES YES YES YES Save Form YES YES YES YES Bid Price $15,640,876.00 $14,240,000.00 $16,400,000.00 $16,049,000 / Non-Compliant Alternate 1 $634,722.00 $512,950.00 $140,000.00 -$220,800.00 Alternate 2 $168,908.00 $135,000.00 $130,000.00 $220,000.00 Alternate 3 $472,667.00 $1,300,000.00 $965,000.00 $410,000.00 Alternate 4 $49,245.00 $109,000.00 $90,000.00 $30,000.00 Alternate 5 $43,200.00 $120,000.00 $86,000.00 $64,000.00 Alternate 6 -$27,000.00 NO BID -$18,000.00 NO BID Total Number Specifications Mailed Out: 53 Total Number Specifications Download (Demandstar): 2 Total Electronic Notifications (Demandstar): 20 Pre-Bid Conference Attendees: 42 Total packages submitted: 4 Total Noncompliant: 1 Bid Item #17-250 Transit Bus Operations and Maintenance Facility for Augusta, GA Public Transit Department Bid Date:Thursday, September 21, 2017 @ 3:00 p.m Page 1 of 2 OFFICIAL VENDORS McKnight Con 635 NW Frontage Rd Augusta, GA 30907 Reeves Young 45 Peachtree Ind Sugar Hill, GA 30518 Astra Group 300 Churchill Ct Woodstock, GA 30188 Principle Willams 51 New Hutchinson Mill Lagrange, GA 30240 Total Number Specifications Mailed Out: 53 Total Number Specifications Download (Demandstar): 2 Total Electronic Notifications (Demandstar): 20 Pre-Bid Conference Attendees: 42 Total packages submitted: 4 Total Noncompliant: 1 Bid Item #17-250 Transit Bus Operations and Maintenance Facility for Augusta, GA Public Transit Department Bid Date:Thursday, September 21, 2017 @ 3:00 p.m The following vendor has been deemed Non-Compliant for an outdated Notary Public Stamp: Principle Willams Page 2 of 2 AUGUSTA PUBLIC TRANSIT PATRICKG STEPHENS Director October 2,2017 Geri Sams, Director Augusta Procurement Department 535 Telfair Street - Room 605 Augusta, GA 30901 Dear Ms. Sams: The Transit team has reviewed the bid submittal for the construction of the Transit Bus Operations & Maintenance by Reeves Young, LLC. The base bid submitted by Reeves Young, LLC for $14,240,000 was the lowest submitted among the four bids received in response to ITB #17-250. Additionally, information received from others involved in the review process show that Reeves Young LLC has successfully submitted documents and met the requirements required for this project. The Transit Department is recommending that Reeves Young LLC be awarded the contract for the construction of the new facility. In addition to the base bid, Reeves Young LLC submitted bids for six Alternates included in the ITB Proposal. The Transit Department desires to incorporate the bid of $135,000 submitted for the Generator and listed as Alternate #2 nthe contract with Reeves Young LLC bringing the total recommended contract amount to $14,375,000. Transit has reviewed all of the listed Alternate bids submitted by Reeves Young LLC and has determined that Bid Alternate #2 is the most important addition that needs to be implemented during the construction process given the current budget.. Alternate #l listed concrete in the bus storage area as alternate to the heavy-duty asphalt included in the specifications. After careful evaluation it has been determined there is not a significant advantage in terms of return on investment to implement concrete at the quoted price at this time. The evaluation report supporting this determination is attached. Augusta Public Transit 1535 Fenwick Street - Augusta, GA 30904 (706) 823-4400 - Fax (706) 821-1752 WWW.AUGUSTAGA,GOV Based on tlte above information, we are requesting the Procurement Departnent conduct their final review and begin the final process for contracting with Reeves Young LLC. lia\rely,WJry-^-. Patrick G Stephens Transit Director Lifecycle Cost Analyais - Continuously Reinforced Concrete Paving and Asphalt Paving This analysis if being provided for your review in considering the best option related to the paving for the new Operations and Maintenance Facility for APT. Current design includes heavy duty asphalt drive lanes. There is an add alternate to replace the heavy duty asphalt drive lanes with concrete paving. ln evaluating the lifecycle cost there are a few considerations to be discussed. Volatility in the cost of oil. The cost of oil has a direct relationship with the cost of asphalt. Below is the Producer Price lndexes for both Portland cement and paving materials (information provided from the Bureau of Labor Statistics). PPI Commodity Data Original Data Value Series ld: WPU132 Not Se8snally Adjusted Group: Nonmetallic mineral prcducts Item: ConcEte ingEdi€nts and Elatod products Base Date: ''l982ooYeart 2@7 to 2017 Aug sep 2007 2008 2009 ml0 2011 2012 20l3 2011 2015 2016 fr'17 2't5.6 226.1 2. .1 233.8 232.7 2U.9 242.4 250.1 261.9 275.7 285.4 2't5.6 227.O 235.5 233.9 232.2 236.1 242.9 250.6 2.7 275.6 285.7 216.8 227.4 235.7 233.2 232.4 237.3 243.7 2fi.4 263.3 276.1 285.8 220.1 228.7 238.5 233.0 233.6 238.4 243.3 254.3 266.3 278.4 288.5 219.9 28.4 247.8 232.4 233.6 238.'l 245.3 255.3 266.6 279.9 2W.5 219.0 228.1 236.8 232.1 2U.1 238.3 244.7 255.7 266.3 279.8 290.0 219.9 2@.3 236..O 232.1 235.0 239.5 244.4 255.7 7.'l 280.9 291.3 22't.4 231.5 235.2 233.8 2U.4 239.6 245.2 255.9 268.2 281.0 2W.4 2..6 231.7 235.4 232.7 2U.8 239.1 247.O 256.3 2ffi.7 279.3 223.6 231.9 233.7 232.3 232.1 239.3 2$.7 256.7 268.5 279.O 224.0 223.4 2g2.g 232.6233.9 233.9 231.8 232.2232.6 233.'.1 239.1 239.0246.8 247.3 257.1 25.9 267.9 270.1 278.5 278.4 Baseyear is 1982. lndex 100 in 1982. PPI Commodity Data (Producer Price lndex) Original Data Value Serles ld: WPU1394 Not Seasonally Adjusted Group: NonmetallicmineElproducts Item: Pa\,ing mixtures and blocks Bas Date: '198200 YeaB 2@Z to211l May 2007 200E m09 2010 2011 2012 2013 2014 2015 2016 2017 2'15.5 222.8 283.8 270.7 279.4 306.2 317.3 321.8 324.9 312.4 306.3 216.2 225.9 277.4 275.8 282.3 3'13.6 316.8 321.9 321.4 310. 1 301.7 217.3 226.8 271.0 277.2 282.7 314.0 316.7 321.9 319.2 305.7 298.2 218.6 233.7 262.'l 282.6 289.3 320.0 315.0 318.3 295.4 289.8 219.3 239.2 269.5 283.7 299.7 319.3 316.9 321.7 312.2 288.5 28€.1 220.O 258.6 263.3 283.7 302.2 321.O 316. I 311.4 247.4 293 I 219.6 290.3 265.3 281.5 304.3 320.3 316.4 322.6 311.4 289.9 2%.2 220.6 318.1 268.3 280.7 303.5 318.8 320.'t 325.6 312.1 289.7 290.5 220.5 325.9 267.3 279.8 303.9 316.3 320.4 325.5 310.1 288.2 220.1 317.9 266.6 279.'.| &2.7 316.5 320.2 326.4 308.5 289.3 219.9 2'19.2 315.7 294.3 266.4 267.0 278.7 278.5 301.4 302 3 3'16.4 315.8 319.7 319.1 326.9 327.0 307.3 305.6 290.1 288.4 While over time the cost of material for both cement and paving mixtures does increase the PPI for paving mixtures does show more unpredictability. This should be considered in decision making between the two options. il.Life span The second consideration is the number of years each material is considered to provide service until major repairlreplacement is necessary. The Federal HighwayAdministration issued a technical bulletin in 1998 providing an analysis comparing the two materials. Findings in the technical bulletin were included in a separate report prepared by VDOT and are provided below related to life cycle cost analysis for pavement materials. Please note that this analysis by the Federal Highwav Administration was based upon Stone Matrix Asohalt (SMA). The design for the APT Ooerations and Maintenance facility utilizes Suoeroave mix which mav deteriorate earlier than the Stone Matrix Asohalt. Assumptions for each type of material: Perlirrmance l'or SMA surlhce The designer rvill consider this section if the par'ement is to be builr using SMA mixes. As rvith all pavcrncnt options. scvcral critcria rverc cstablished and *ssumptions madc.. Ir is assumcd that the psycmcnt $ystcm rcccivcs appropriate SMA mixcs during all maintcnance trcatnrcnts. l. The initial pavement design life is l0 years. The pavement systenr will undergo a funclional rrrill and replace at Year I5 and major rehabilitation is schcduled at Year 28. ?. F'or thc struclural rehubilitation at Ycar ?tl. thc pavcmcnt surfacc lifc is l5 ycars (a-ssuming SMA mixcs ro bc uscd). l. Functional nrill and rcplacc is a tixcd activity at Ycars l5 and 43 in ordcr ro providc l3 additional ycars of life to the pavement surface and structure. 4. For structural atlcquacy. lhe pavcmcnt overlay tlcsign lirt ar year 2t is ?0 ycani. Pavement activities and required structure$ nlust b€ detennined by the engineer (e.g.. thickncss of AC basc. intcrmcdiatc and surfacc laycrs) at thc tinlc of thc rchab. 5. Patching of AC pavemcnts is hascd $n arca of pavcmcnl surfacc. 6. Preventive maintenance aclivities considered in the analysis include surlace treatments (e.g.. BSTs. thin overlays. slurrys. nticrosurfacing). crack sealing. and patching. Preventative maintcnance is only specified in the analysis for rlrc shoulden if a functional or structural improvcmcnt is pcrl'onncd on thc mainlinc pavcmcnt. No prcvcnlalivc maintcnancc is progranrmcd t'or thc mainlinc pavcmcnt ils part of thc LCCA. *As appropriatc Pavement Actlvitles Teble Yerr 0 - ftiew Construction/Reconrtruction Year 15 - Functionel ltill rnd Rcohce Mainlinc* AC Surlacc Mats.rial AC lntermediate Marerial .{C Base Material Stabi I iz.ed Drainage Layer CTA or DCA Subbase Shoulders* .{C Surfacc Material AC lntcrnrcdiate Matcrial AC Basc lVtatcrial Stabilizcd Drainage Layer CTA or DCA Subbasc Mainline Pre+vcrlay repair - Patch - l% (up ro rhc top of bir.se laycr) Mill- Surface layer Replace rvith AC Wearing Course - one layer Shoulders Surlhcc Trcatnrcnt Yeer 28 - l\hior Rchrbilitetion Yeer {J - Functional mill end reolrce Mainlinc Prc<rverlay Rcpair - Patch - 5'yo (full dcpth) Deep Mill (All Surface and Inrennediare Laycrs) Replace u.ith ;\C Basc Matcrial AC Intermcdiatc Matcriirl AC Wr.aring Coursc Shoulders Ovcrlay witlr AC Wcarins Coursc Mainlinc Prc-ovcrlav rcpair - Parch - l% (up ro th* top ofbasc layer) Mill - Surfhce layer Rcplacc rvith AC Wearing Coursc - onc layer Shouldcns Surlhce Treatnrent For continually reinforced concrete paving: As with all pavement options. several criteria were established and assumptions made: l. Initial prvemcnt dasign lifc is 30 yeilr. 2. For struclural adequacy, the pavemcnt ovcrley dcsign life at Year 30 is 20 ycars. Pavement activitics and strucrures must be detcrmincd by the cnginecr (c.g.. thickncss of AC basc. intcrmediate and surface layeis). 3. The mill and rcplrcc is a fixed activity at Year42 or at Ycar 45 (if SMA mix is utilized) in order to provide I0 or I 3 (for SMA mixes) additional ycars of life to the pavemcnt surface and stmcture. 4. The fulldepth potching pcrccntagc for compositc pavcmcnt is baccd on thc pavcmenl surfacc atEa. 5. The fulldepth patching percentage for jointed concrete pavemcnt is based on the pavement surface area. 6. PCC slab costs includc thc costs of tie bar$, dowcls. cut joints. and ssal joints. Prvemcnt ActiYities Teble Ycrr 0 - New Construcdon/Rcconrtructlon Yelr l0 * Concrcte Prvemcnt Mrlntenrnce Mainline' Pavement Rernoval (Reconstnrction) PCC Slab Stabilizcd Drainage Laycr CTA or DCA Subbase Shouldcrs' Shoulder Removal (Reconstnrction) PCC Slab Stabilized Drainage Layer CTA or DGA Subbase Soil Stabilization Mainline Patching - 1.5% (of surfacc area) Clcan and Scal Joint -- l00o/o As Yerr 20 - Concrete Prvement Rertoretion Ycr 30 - Concretc Prvemrni Rertorrtion end AC Or.erlev Mainlinc (Conercte Pevcmenr Repair) Patching - 5olo (of surhcc area) Clcan and Scal Joints - 100% Crinding - 1007o Mainlinc Prc-overlay Rcpair: Patch - 5?o (ofsurfacc arca) AC Overlay (Mirinrunr rrro lifls) wirh: AC Surlhcc Material AC lntermediate Material AC Basc Matcrial Shouldcn AC Ovcrlay (Minimum rwo lifls) wirh: AC Wearing Course AC lntcrmcdiatc Marcrial AC Basc Matcrial Ycrr{2 or {5* -Mlll ead Reolece Yerr 50 - Selvesr Vrlue Mainlinc Pre-overlay Repair Patching (AC overlay) - 2.5olo (of zurfacc arca) Patching (PCC Base) * 2.5% (of surfacc area) Mill - Surface layer Rcplace with AC Intcrmcdiatc Marcrials . one layer Overlay with AC Wearing Course * onc laycr Shoulders Overlay with AC Wearing Coursc - one layer None f If SMA mixes utilized at year 30 lll. The third consideration is the cost of replacement and major repair. Asohalt Paving Following the logic from point #2. Alyea( L5 asphalt paving will need to be milled and a functional layer of paving placed at year 28 an overlay should be done. Estimated costs and assumptions below: o Tons of asphalt required for functional layer is approximately 2435.o Estimated cost per ton of asphalt is $361o Discount rate (difference between interest and inflation rates) used here is 4%. Milling costs at $.60/sfo Costs will be incurred at years 15 and 28 Mill asphalt Replacement Subtotal With discount rale of 4% applied Overlay in year 28 (from table below) Total $ 78,000 $ 294,937 $ 372,937 $ 387,854 $322,334 $710,188 Continually Reinforced Concrete Paving (CRCP) Again, using the logic discussed in point 2, significant repair and/or replacement would not be necessary until year 30 for concrete paving. At year 30 the recommendation would be to overlay the CRCP with Asphalt paving. lt is worth noting that a 1" overlay could impact drainage structures. Estimated cost and assumptions for a 1" overlay of asphalt paving are as follows: o Tons of asphalt required for functional layer is approximately 2435.o Estimated cost per ton of asphalt is $361o Discount rate (difference between interest and inflation rates) used here is 4% Minor cut and repair of damage area 1" Overlay of asphalt paving Subtotal With discount rate of 4o/o applied$ 15,000.00 $ 294,937.00 $ 309,937.00 $ 322,334.48 Conclusion The above analysis concludes that major repair/replacement for asphalt paving come at a higher cost for APT (when the premium to go with CRCP is not considered). When considering the premium of $530,000 to go with the CRCP upfront the costs over the lifetime of the systems get pretty close with Asphalt paving at $710,188 and CRCP at $852,334 ($530,000 + $322,334 overlay). Other special considerations should be weighed in making the final determination. Special Considerations: o lntermediate repairs to the asphalt paving are to be expected and those costs are undetermined.o The ESAL factor* for bus traffic should be expected to impact the life cycle of the asphalt which could necessitate major repair/replacement to occur prematurely (before year 15).o Adequate preparation of subgrade critical in ensuring these life cycles prove accurate. Poor compaction of aggregate subgrade, infiltration of ground water, and other subsurface impacts could cause both the CRCP and Asphalt Pavement to fail.o Fuel spillage has significant impact on asphalt deterioration and could be cause of prematu re r epair / r eplacement.o The numbers provided are estimates and costs of materials and the means of placement could change (in either direction) and could cause a significant change to this analysis.o Major repair/replacement to the Asphalt Pavement to occur in closer intervals. A cost of inconvenience for this work should be considered as a real cost to time and operations of the facility. Therefore given how close in cost over 30 years the two are the decision point may come down to undetermined factors such as identified in the special considerations. *ESAL Factor - ESAL is the acronym for equivalent single axle load. ESAL is a concept developed from data collected at the American Association of State Highway Officials (AASHO) Road Test to establish a damage relationship for comparing the effects of axles carrying different loads. Document A101TM – 2007 Standard Form of Agreement Between Owner and Contractor where the basis of payment is a Stipulated Sum Init. / AIA Document A101™ – 2007. Copyright © 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1967, 1974, 1977, 1987, 1991, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:41:37 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1481591659) 1 ADDITIONS AND DELETIONS: The author of this document has added information needed for its completion. The author may also have revised the text of the original AIA standard form. An Additions and Deletions Report that notes added information as well as revisions to the standard form text is available from the author and should be reviewed. A vertical line in the left margin of this document indicates where the author has added necessary information and where the author has added to or deleted from the original AIA text. This document has important legal consequences. Consultation with an attorney is encouraged with respect to its completion or modification. AIA Document A201™–2007, General Conditions of the Contract for Construction, is adopted in this document by reference. Do not use with other general conditions unless this document is modified. AGREEMENT made as of the day of in the year (In words, indicate day, month and year.) BETWEEN the Owner: (Name, legal status, address and other information) Augusta, Georgia 535 Telfair Street, Suite 605 Augusta, GA 30901 and the Contractor: (Name, legal status, address and other information) Reeves Young, LLC 45 Peachtree Industrial Boulevard N.W. Suite 200 Sugar Hill, GA 30518 for the following Project: (Name, location and detailed description) Transit Operations and Maintenance Facility 2844 Regency Boulevard Augusta, GA 30901 The Architect: (Name, legal status, address and other information) Wendel Architecture PC 375 Essjay Road, Suite 2000 Williamsville, NY 14221 The Owner and Contractor agree as follows. Init. / AIA Document A101™ – 2007. Copyright © 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1967, 1974, 1977, 1987, 1991, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:41:37 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1481591659) 2 TABLE OF ARTICLES 1 THE CONTRACT DOCUMENTS 2 THE WORK OF THIS CONTRACT 3 DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION 4 CONTRACT SUM 5 PAYMENTS 6 DISPUTE RESOLUTION 7 TERMINATION OR SUSPENSION 8 MISCELLANEOUS PROVISIONS 9 ENUMERATION OF CONTRACT DOCUMENTS 10 INSURANCE AND BONDS ARTICLE 1 THE CONTRACT DOCUMENTS The Contract Documents consist of this Agreement, Conditions of the Contract (General, Supplementary and other Conditions), Drawings, Specifications, Addenda issued prior to execution of this Agreement, other documents listed in this Agreement and Modifications issued after execution of this Agreement, all of which form the Contract, and are as fully a part of the Contract as if attached to this Agreement or repeated herein. The Contract represents the entire and integrated agreement between the parties hereto and supersedes prior negotiations, representations or agreements, either written or oral. An enumeration of the Contract Documents, other than a Modification, appears in Article 9. ARTICLE 2 THE WORK OF THIS CONTRACT The Contractor shall fully execute the Work described in the Contract Documents, except as specifically indicated in the Contract Documents to be the responsibility of others. ARTICLE 3 DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION § 3.1 The date of commencement of the Work shall be the date of this Agreement unless a different date is stated below or provision is made for the date to be fixed in a notice to proceed issued by the Owner. (Insert the date of commencement if it differs from the date of this Agreement or, if applicable, state that the date will be fixed in a notice to proceed.) If, prior to the commencement of the Work, the Owner requires time to file mortgages and other security interests, the Owner’s time requirement shall be as follows: § 3.2 The Contract Time shall be measured from the date of commencement. § 3.3 The Contractor shall achieve Substantial Completion of the entire Work not later than Three Hundred Sixty ( 360 ) days from the date of commencement, or as follows: (Insert number of calendar days. Alternatively, a calendar date may be used when coordinated with the date of commencement. If appropriate, insert requirements for earlier Substantial Completion of certain portions of the Work.) Init. / AIA Document A101™ – 2007. Copyright © 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1967, 1974, 1977, 1987, 1991, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:41:37 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1481591659) 3 Portion of Work Substantial Completion Date , subject to adjustments of this Contract Time as provided in the Contract Documents. (Insert provisions, if any, for liquidated damages relating to failure to achieve Substantial Completion on time or for bonus payments for early completion of the Work.) ARTICLE 4 CONTRACT SUM § 4.1 The Owner shall pay the Contractor the Contract Sum in current funds for the Contractor’s performance of the Contract. The Contract Sum shall be Fourteen Million Three Hundred Seventy Five Thousand and 00/100 Dollars ($ 14,375,000.00), subject to additions and deductions as provided in the Contract Documents. § 4.2 The Contract Sum is based upon the following alternates, if any, which are described in the Contract Documents and are hereby accepted by the Owner: (State the numbers or other identification of accepted alternates. If the bidding or proposal documents permit the Owner to accept other alternates subsequent to the execution of this Agreement, attach a schedule of such other alternates showing the amount for each and the date when that amount expires.) Alternate No. 2, Generator: Furnish and install emergency generator as indicated in the Contract Documents: $135,000.00 § 4.3 Unit prices, if any: (Identify and state the unit price; state quantity limitations, if any, to which the unit price will be applicable.) Item Units and Limitations Price Per Unit ($0.00) See Bid Form submitted by Reeves Young, LLC dated September 21, 2017 § 4.4 Allowances included in the Contract Sum, if any: (Identify allowance and state exclusions, if any, from the allowance price.) Item Price No allowances ARTICLE 5 PAYMENTS § 5.1 PROGRESS PAYMENTS § 5.1.1 Based upon Applications for Payment submitted to the Architect by the Contractor and Certificates for Payment issued by the Architect, the Owner shall make progress payments on account of the Contract Sum to the Contractor as provided below and elsewhere in the Contract Documents. § 5.1.2 The period covered by each Application for Payment shall be one calendar month ending on the last day of the month, or as follows: § 5.1.3 Provided that an Application for Payment is received by the Architect not later than the 30th day of a month, the Owner shall make payment of the certified amount to the Contractor not later than the 30th day of the following month. If an Application for Payment is received by the Architect after the application date fixed above, payment shall be made by the Owner not later than thirty ( 30 ) days after the Architect receives the Application for Payment. (Federal, state or local laws may require payment within a certain period of time.) Init. / AIA Document A101™ – 2007. Copyright © 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1967, 1974, 1977, 1987, 1991, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:41:37 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1481591659) 4 § 5.1.4 Each Application for Payment shall be based on the most recent schedule of values submitted by the Contractor in accordance with the Contract Documents. The schedule of values shall allocate the entire Contract Sum among the various portions of the Work. The schedule of values shall be prepared in such form and supported by such data to substantiate its accuracy as the Architect may require. This schedule, unless objected to by the Architect, shall be used as a basis for reviewing the Contractor’s Applications for Payment. § 5.1.5 Applications for Payment shall show the percentage of completion of each portion of the Work as of the end of the period covered by the Application for Payment. § 5.1.6 Subject to other provisions of the Contract Documents, the amount of each progress payment shall be computed as follows: .1 Take that portion of the Contract Sum properly allocable to completed Work as determined by multiplying the percentage completion of each portion of the Work by the share of the Contract Sum allocated to that portion of the Work in the schedule of values, less retainage of Five percent ( 5 %). Pending final determination of cost to the Owner of changes in the Work, amounts not in dispute shall be included as provided in Section 7.3.9 of AIA Document A201™–2007, General Conditions of the Contract for Construction; .2 Add that portion of the Contract Sum properly allocable to materials and equipment delivered and suitably stored at the site for subsequent incorporation in the completed construction (or, if approved in advance by the Owner, suitably stored off the site at a location agreed upon in writing), less retainage of Five percent ( 5 %); .3 Subtract the aggregate of previous payments made by the Owner; and .4 Subtract amounts, if any, for which the Architect has withheld or nullified a Certificate for Payment as provided in Section 9.5 of AIA Document A201–2007. § 5.1.7 The progress payment amount determined in accordance with Section 5.1.6 shall be further modified under the following circumstances: .1 Add, upon Substantial Completion of the Work, a sum sufficient to increase the total payments to the full amount of the Contract Sum, less such amounts as the Architect shall determine for incomplete Work, retainage applicable to such work and unsettled claims; and (Section 9.8.5 of AIA Document A201–2007 requires release of applicable retainage upon Substantial Completion of Work with consent of surety, if any.) .2 Add, if final completion of the Work is thereafter materially delayed through no fault of the Contractor, any additional amounts payable in accordance with Section 9.10.3 of AIA Document A201–2007. § 5.1.8 Reduction or limitation of retainage, if any, shall be as follows: (If it is intended, prior to Substantial Completion of the entire Work, to reduce or limit the retainage resulting from the percentages inserted in Sections 5.1.6.1 and 5.1.6.2 above, and this is not explained elsewhere in the Contract Documents, insert here provisions for such reduction or limitation.) To be determined by Owner § 5.1.9 Except with the Owner’s prior approval, the Contractor shall not make advance payments to suppliers for materials or equipment which have not been delivered and stored at the site. § 5.2 FINAL PAYMENT § 5.2.1 Final payment, constituting the entire unpaid balance of the Contract Sum, shall be made by the Owner to the Contractor when .1 the Contractor has fully performed the Contract except for the Contractor’s responsibility to correct Work as provided in Section 12.2.2 of AIA Document A201–2007, and to satisfy other requirements, if any, which extend beyond final payment; and .2 a final Certificate for Payment has been issued by the Architect. § 5.2.2 The Owner’s final payment to the Contractor shall be made no later than 30 days after the issuance of the Architect’s final Certificate for Payment, or as follows: Init. / AIA Document A101™ – 2007. Copyright © 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1967, 1974, 1977, 1987, 1991, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:41:37 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1481591659) 5 ARTICLE 6 DISPUTE RESOLUTION § 6.1 INITIAL DECISION MAKER The Architect will serve as Initial Decision Maker pursuant to Section 15.2 of AIA Document A201–2007, unless the parties appoint below another individual, not a party to this Agreement, to serve as Initial Decision Maker. (If the parties mutually agree, insert the name, address and other contact information of the Initial Decision Maker, if other than the Architect.) § 6.2 BINDING DISPUTE RESOLUTION For any Claim subject to, but not resolved by, mediation pursuant to Section 15.3 of AIA Document A201–2007, the method of binding dispute resolution shall be as follows: (Check the appropriate box. If the Owner and Contractor do not select a method of binding dispute resolution below, or do not subsequently agree in writing to a binding dispute resolution method other than litigation, Claims will be resolved by litigation in a court of competent jurisdiction.) [ ] Arbitration pursuant to Section 15.4 of AIA Document A201–2007 [ X ] Litigation in a court of competent jurisdiction [ ] Other (Specify) ARTICLE 7 TERMINATION OR SUSPENSION § 7.1 The Contract may be terminated by the Owner or the Contractor as provided in Article 14 of AIA Document A201–2007. § 7.2 The Work may be suspended by the Owner as provided in Article 14 of AIA Document A201–2007. ARTICLE 8 MISCELLANEOUS PROVISIONS § 8.1 Where reference is made in this Agreement to a provision of AIA Document A201–2007 or another Contract Document, the reference refers to that provision as amended or supplemented by other provisions of the Contract Documents. § 8.2 Payments due and unpaid under the Contract shall bear interest from the date payment is due at the rate stated below, or in the absence thereof, at the legal rate prevailing from time to time at the place where the Project is located. (Insert rate of interest agreed upon, if any.) % § 8.3 The Owner’s representative: (Name, address and other information) Curtiss Elswick Senior Vice President/Regional Executive Skanska USA Building Inc. 4309 Emperor Blvd., Suite 200 Durham, NC 27703 § 8.4 The Contractor’s representative: Init. / AIA Document A101™ – 2007. Copyright © 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1967, 1974, 1977, 1987, 1991, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:41:37 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1481591659) 6 (Name, address and other information) Jeff Buser Vice President, Director of Preconstruction 45 Peachtree Industrial Boulevard N.W. Suite 200 Sugar Hill, GA 30518 770-271-1159 § 8.5 Neither the Owner’s nor the Contractor’s representative shall be changed without ten days written notice to the other party. § 8.6 Other provisions: ARTICLE 9 ENUMERATION OF CONTRACT DOCUMENTS § 9.1 The Contract Documents, except for Modifications issued after execution of this Agreement, are enumerated in the sections below. § 9.1.1 The Agreement is this executed AIA Document A101–2007, Standard Form of Agreement Between Owner and Contractor. § 9.1.2 The General Conditions are AIA Document A201–2007, General Conditions of the Contract for Construction. § 9.1.3 The Supplementary and other Conditions of the Contract: Document Title Date Pages See Supplementary General Conditions included in Bid Documents § 9.1.4 The Specifications: (Either list the Specifications here or refer to an exhibit attached to this Agreement.) All drawing sheets Section Title Date Pages All sections § 9.1.5 The Drawings: (Either list the Drawings here or refer to an exhibit attached to this Agreement.) See Drawings dated July 7, 2017 Number Title Date All drawing sheets § 9.1.6 The Addenda, if any: Number Date Pages Addendum #1 Portions of Addenda relating to bidding requirements are not part of the Contract Documents unless the bidding requirements are also enumerated in this Article 9. § 9.1.7 Additional documents, if any, forming part of the Contract Documents: Init. / AIA Document A101™ – 2007. Copyright © 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1967, 1974, 1977, 1987, 1991, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:41:37 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1481591659) 7 .1 AIA Document E201™–2007, Digital Data Protocol Exhibit, if completed by the parties, or the following: .2 Other documents, if any, listed below: (Paragraph deleted) All documents included in the Invitation to Bid All documents included in the Invitation to Bid ARTICLE 10 INSURANCE AND BONDS The Contractor shall purchase and maintain insurance and provide bonds as set forth in Article 11 of AIA Document A201–2007. (State bonding requirements, if any, and limits of liability for insurance required in Article 11 of AIA Document A201–2007.) Type of insurance or bond Limit of liability or bond amount ($0.00) As required by AIA Document A201-2007 This Agreement entered into as of the day and year first written above. OWNER (Signature) CONTRACTOR (Signature) (Printed name and title) (Printed name and title) Additions and Deletions Report for AIA® Document A101TM – 2007 This Additions and Deletions Report, as defined on page 1 of the associated document, reproduces below all text the author has added to the standard form AIA document in order to complete it, as well as any text the author may have added to or deleted from the original AIA text. Added text is shown underlined. Deleted text is indicated with a horizontal line through the original AIA text. Note: This Additions and Deletions Report is provided for information purposes only and is not incorporated into or constitute any part of the associated AIA document. This Additions and Deletions Report and its associated document were generated simultaneously by AIA software at 16:41:37 on 10/04/2017. Additions and Deletions Report for AIA Document A101™ – 2007. Copyright © 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1967, 1974, 1977, 1987, 1991, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:41:37 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1481591659) 1 PAGE 1 Augusta, Georgia 535 Telfair Street, Suite 605 Augusta, GA 30901 … Reeves Young, LLC 45 Peachtree Industrial Boulevard N.W. Suite 200 Sugar Hill, GA 30518 … Transit Operations and Maintenance Facility 2844 Regency Boulevard Augusta, GA 30901 … Wendel Architecture PC 375 Essjay Road, Suite 2000 Williamsville, NY 14221 PAGE 2 § 3.3 The Contractor shall achieve Substantial Completion of the entire Work not later than Three Hundred Sixty ( 360 ) days from the date of commencement, or as follows: PAGE 3 § 4.1 The Owner shall pay the Contractor the Contract Sum in current funds for the Contractor’s performance of the Contract. The Contract Sum shall be ($ ), Fourteen Million Three Hundred Seventy Five Thousand and 00/100 Dollars ($ 14,375,000.00), subject to additions and deductions as provided in the Contract Documents. … Alternate No. 2, Generator: Furnish and install emergency generator as indicated in the Contract Documents: $135,000.00 … See Bid Form submitted by Reeves Additions and Deletions Report for AIA Document A101™ – 2007. Copyright © 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1967, 1974, 1977, 1987, 1991, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:41:37 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1481591659) 2 Young, LLC dated September 21, 2017 … No allowances … § 5.1.3 Provided that an Application for Payment is received by the Architect not later than the 30th day of a month, the Owner shall make payment of the certified amount to the Contractor not later than the 30th day of the following month. If an Application for Payment is received by the Architect after the application date fixed above, payment shall be made by the Owner not later than thirty ( 30 ) days after the Architect receives the Application for Payment. PAGE 4 .1 Take that portion of the Contract Sum properly allocable to completed Work as determined by multiplying the percentage completion of each portion of the Work by the share of the Contract Sum allocated to that portion of the Work in the schedule of values, less retainage of Five percent ( 5 %). Pending final determination of cost to the Owner of changes in the Work, amounts not in dispute shall be included as provided in Section 7.3.9 of AIA Document A201™–2007, General Conditions of the Contract for Construction; .2 Add that portion of the Contract Sum properly allocable to materials and equipment delivered and suitably stored at the site for subsequent incorporation in the completed construction (or, if approved in advance by the Owner, suitably stored off the site at a location agreed upon in writing), less retainage of Five percent ( 5 %); … To be determined by Owner PAGE 5 [ X ] Litigation in a court of competent jurisdiction … Curtiss Elswick Senior Vice President/Regional Executive Skanska USA Building Inc. 4309 Emperor Blvd., Suite 200 Durham, NC 27703 PAGE 6 Jeff Buser Vice President, Director of Preconstruction 45 Peachtree Industrial Boulevard N.W. Suite 200 Sugar Hill, GA 30518 770-271-1159 … See Supplementary General Conditions included in Bid Additions and Deletions Report for AIA Document A101™ – 2007. Copyright © 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1967, 1974, 1977, 1987, 1991, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:41:37 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1481591659) 3 Documents … All drawing sheets … All sections … See Drawings dated July 7, 2017 … All drawing sheets … Addendum #1 PAGE 7 (List here any additional documents that are intended to form part of the Contract Documents. AIA Document A201–2007 provides that bidding requirements such as advertisement or invitation to bid, Instructions to Bidders, sample forms and the Contractor’s bid are not part of the Contract Documents unless enumerated in this Agreement. They should be listed here only if intended to be part of the Contract Documents.) All documents included in the Invitation to Bid All documents included in the Invitation to Bid … As required by AIA Document A201-2007 AIA Document D401™ – 2003. Copyright © 1992 and 2003 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:41:37 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1481591659) 1 Certification of Document’s Authenticity AIA® Document D401™ – 2003 I, Curtis Elswick, hereby certify, to the best of my knowledge, information and belief, that I created the attached final document simultaneously with its associated Additions and Deletions Report and this certification at 16:41:37 on 10/04/2017 under Order No. 0904861768_1 from AIA Contract Documents software and that in preparing the attached final document I made no changes to the original text of AIA® Document A101™ – 2007, Standard Form of Agreement Between Owner and Contractor where the basis of payment is a Stipulated Sum, as published by the AIA in its software, other than those additions and deletions shown in the associated Additions and Deletions Report. _____________________________________________________________ (Signed) _____________________________________________________________ (Title) _____________________________________________________________ (Dated) Document A201TM – 2007 General Conditions of the Contract for Construction Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 1 ADDITIONS AND DELETIONS: The author of this document has added information needed for its completion. The author may also have revised the text of the original AIA standard form. An Additions and Deletions Report that notes added information as well as revisions to the standard form text is available from the author and should be reviewed. A vertical line in the left margin of this document indicates where the author has added necessary information and where the author has added to or deleted from the original AIA text. This document has important legal consequences. Consultation with an attorney is encouraged with respect to its completion or modification. for the following PROJECT: (Name and location or address) Transit Operations and Maintenance Facility 2844 Regency Boulevard Augusta, GA 30901 THE OWNER: (Name, legal status and address) Augusta, Georgia 535 Telfair Street Augusta, GA 30901 THE ARCHITECT: (Name, legal status and address) Wendel Architecture PC 375 Essjay Road, Suite 200 Williamsville, NY 14221 TABLE OF ARTICLES 1 GENERAL PROVISIONS 2 OWNER 3 CONTRACTOR 4 ARCHITECT 5 SUBCONTRACTORS 6 CONSTRUCTION BY OWNER OR BY SEPARATE CONTRACTORS 7 CHANGES IN THE WORK 8 TIME 9 PAYMENTS AND COMPLETION 10 PROTECTION OF PERSONS AND PROPERTY 11 INSURANCE AND BONDS 12 UNCOVERING AND CORRECTION OF WORK 13 MISCELLANEOUS PROVISIONS 14 TERMINATION OR SUSPENSION OF THE CONTRACT 15 CLAIMS AND DISPUTES Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 2 INDEX (Topics and numbers in bold are section headings.) Acceptance of Nonconforming Work 9.6.6, 9.9.3, 12.3 Acceptance of Work 9.6.6, 9.8.2, 9.9.3, 9.10.1, 9.10.3, 12.3 Access to Work 3.16, 6.2.1, 12.1 Accident Prevention 10 Acts and Omissions 3.2, 3.3.2, 3.12.8, 3.18, 4.2.3, 8.3.1, 9.5.1, 10.2.5, 10.2.8, 13.4.2, 13.7, 14.1, 15.2 Addenda 1.1.1, 3.11 Additional Costs, Claims for 3.7.4, 3.7.5, 6.1.1, 7.3.7.5, 10.3, 15.1.4 Additional Inspections and Testing 9.4.2, 9.8.3, 12.2.1, 13.5 Additional Insured 11.1.4 Additional Time, Claims for 3.2.4, 3.7.4, 3.7.5, 3.10.2, 8.3.2, 15.1.5 Administration of the Contract 3.1.3, 4.2, 9.4, 9.5 Advertisement or Invitation to Bid 1.1.1 Aesthetic Effect 4.2.13 Allowances 3.8, 7.3.8 All-risk Insurance 11.3.1, 11.3.1.1 Applications for Payment 4.2.5, 7.3.9, 9.2, 9.3, 9.4, 9.5.1, 9.6.3, 9.7, 9.10, 11.1.3 Approvals 2.1.1, 2.2.2, 2.4, 3.1.3, 3.10.2, 3.12.8, 3.12.9, 3.12.10, 4.2.7, 9.3.2, 13.5.1 Arbitration 8.3.1, 11.3.10, 13.1, 15.3.2, 15.4 ARCHITECT 4 Architect, Definition of 4.1.1 Architect, Extent of Authority 2.4, 3.12.7, 4.1, 4.2, 5.2, 6.3, 7.1.2, 7.3.7, 7.4, 9.2, 9.3.1, 9.4, 9.5, 9.6.3, 9.8, 9.10.1, 9.10.3, 12.1, 12.2.1, 13.5.1, 13.5.2, 14.2.2, 14.2.4, 15.1.3, 15.2.1 Architect, Limitations of Authority and Responsibility 2.1.1, 3.12.4, 3.12.8, 3.12.10, 4.1.2, 4.2.1, 4.2.2, 4.2.3, 4.2.6, 4.2.7, 4.2.10, 4.2.12, 4.2.13, 5.2.1, 7.4, 9.4.2, 9.5.3, 9.6.4, 15.1.3, 15.2 Architect’s Additional Services and Expenses 2.4, 11.3.1.1, 12.2.1, 13.5.2, 13.5.3, 14.2.4 Architect’s Administration of the Contract 3.1.3, 4.2, 3.7.4, 15.2, 9.4.1, 9.5 Architect’s Approvals 2.4, 3.1.3, 3.5, 3.10.2, 4.2.7 Architect’s Authority to Reject Work 3.5, 4.2.6, 12.1.2, 12.2.1 Architect’s Copyright 1.1.7, 1.5 Architect’s Decisions 3.7.4, 4.2.6, 4.2.7, 4.2.11, 4.2.12, 4.2.13, 4.2.14, 6.3, 7.3.7, 7.3.9, 8.1.3, 8.3.1, 9.2, 9.4.1, 9.5, 9.8.4, 9.9.1, 13.5.2, 15.2, 15.3 Architect’s Inspections 3.7.4, 4.2.2, 4.2.9, 9.4.2, 9.8.3, 9.9.2, 9.10.1, 13.5 Architect’s Instructions 3.2.4, 3.3.1, 4.2.6, 4.2.7, 13.5.2 Architect’s Interpretations 4.2.11, 4.2.12 Architect’s Project Representative 4.2.10 Architect’s Relationship with Contractor 1.1.2, 1.5, 3.1.3, 3.2.2, 3.2.3, 3.2.4, 3.3.1, 3.4.2, 3.5, 3.7.4, 3.7.5, 3.9.2, 3.9.3, 3.10, 3.11, 3.12, 3.16, 3.18, 4.1.2, 4.1.3, 4.2, 5.2, 6.2.2, 7, 8.3.1, 9.2, 9.3, 9.4, 9.5, 9.7, 9.8, 9.9, 10.2.6, 10.3, 11.3.7, 12, 13.4.2, 13.5, 15.2 Architect’s Relationship with Subcontractors 1.1.2, 4.2.3, 4.2.4, 4.2.6, 9.6.3, 9.6.4, 11.3.7 Architect’s Representations 9.4.2, 9.5.1, 9.10.1 Architect’s Site Visits 3.7.4, 4.2.2, 4.2.9, 9.4.2, 9.5.1, 9.9.2, 9.10.1, 13.5 Asbestos 10.3.1 Attorneys’ Fees 3.18.1, 9.10.2, 10.3.3 Award of Separate Contracts 6.1.1, 6.1.2 Award of Subcontracts and Other Contracts for Portions of the Work 5.2 Basic Definitions 1.1 Bidding Requirements 1.1.1, 5.2.1, 11.4.1 Binding Dispute Resolution 9.7, 11.3.9, 11.3.10, 13.1, 15.2.5, 15.2.6.1, 15.3.1, 15.3.2, 15.4.1 Boiler and Machinery Insurance 11.3.2 Bonds, Lien 7.3.7.4, 9.10.2, 9.10.3 Bonds, Performance, and Payment 7.3.7.4, 9.6.7, 9.10.3, 11.3.9, 11.4 Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 3 Building Permit 3.7.1 Capitalization 1.3 Certificate of Substantial Completion 9.8.3, 9.8.4, 9.8.5 Certificates for Payment 4.2.1, 4.2.5, 4.2.9, 9.3.3, 9.4, 9.5, 9.6.1, 9.6.6, 9.7, 9.10.1, 9.10.3, 14.1.1.3, 14.2.4, 15.1.3 Certificates of Inspection, Testing or Approval 13.5.4 Certificates of Insurance 9.10.2, 11.1.3 Change Orders 1.1.1, 2.4, 3.4.2, 3.7.4, 3.8.2.3, 3.11, 3.12.8, 4.2.8, 5.2.3, 7.1.2, 7.1.3, 7.2, 7.3.2, 7.3.6, 7.3.9, 7.3.10, 8.3.1, 9.3.1.1, 9.10.3, 10.3.2, 11.3.1.2, 11.3.4, 11.3.9, 12.1.2, 15.1.3 Change Orders, Definition of 7.2.1 CHANGES IN THE WORK 2.2.1, 3.11, 4.2.8, 7, 7.2.1, 7.3.1, 7.4, 8.3.1, 9.3.1.1, 11.3.9 Claims, Definition of 15.1.1 CLAIMS AND DISPUTES 3.2.4, 6.1.1, 6.3, 7.3.9, 9.3.3, 9.10.4, 10.3.3, 15, 15.4 Claims and Timely Assertion of Claims 15.4.1 Claims for Additional Cost 3.2.4, 3.7.4, 6.1.1, 7.3.9, 10.3.2, 15.1.4 Claims for Additional Time 3.2.4, 3.7.4, 6.1.1, 8.3.2, 10.3.2, 15.1.5 Concealed or Unknown Conditions, Claims for 3.7.4 Claims for Damages 3.2.4, 3.18, 6.1.1, 8.3.3, 9.5.1, 9.6.7, 10.3.3, 11.1.1, 11.3.5, 11.3.7, 14.1.3, 14.2.4, 15.1.6 Claims Subject to Arbitration 15.3.1, 15.4.1 Cleaning Up 3.15, 6.3 Commencement of the Work, Conditions Relating to 2.2.1, 3.2.2, 3.4.1, 3.7.1, 3.10.1, 3.12.6, 5.2.1, 5.2.3, 6.2.2, 8.1.2, 8.2.2, 8.3.1, 11.1, 11.3.1, 11.3.6, 11.4.1, 15.1.4 Commencement of the Work, Definition of 8.1.2 Communications Facilitating Contract Administration 3.9.1, 4.2.4 Completion, Conditions Relating to 3.4.1, 3.11, 3.15, 4.2.2, 4.2.9, 8.2, 9.4.2, 9.8, 9.9.1, 9.10, 12.2, 13.7, 14.1.2 COMPLETION, PAYMENTS AND 9 Completion, Substantial 4.2.9, 8.1.1, 8.1.3, 8.2.3, 9.4.2, 9.8, 9.9.1, 9.10.3, 12.2, 13.7 Compliance with Laws 1.6, 3.2.3, 3.6, 3.7, 3.12.10, 3.13, 4.1.1, 9.6.4, 10.2.2, 11.1, 11.3, 13.1, 13.4, 13.5.1, 13.5.2, 13.6, 14.1.1, 14.2.1.3, 15.2.8, 15.4.2, 15.4.3 Concealed or Unknown Conditions 3.7.4, 4.2.8, 8.3.1, 10.3 Conditions of the Contract 1.1.1, 6.1.1, 6.1.4 Consent, Written 3.4.2, 3.7.4, 3.12.8, 3.14.2, 4.1.2, 9.3.2, 9.8.5, 9.9.1, 9.10.2, 9.10.3, 11.3.1, 13.2, 13.4.2, 15.4.4.2 Consolidation or Joinder 15.4.4 CONSTRUCTION BY OWNER OR BY SEPARATE CONTRACTORS 1.1.4, 6 Construction Change Directive, Definition of 7.3.1 Construction Change Directives 1.1.1, 3.4.2, 3.12.8, 4.2.8, 7.1.1, 7.1.2, 7.1.3, 7.3, 9.3.1.1 Construction Schedules, Contractor’s 3.10, 3.12.1, 3.12.2, 6.1.3, 15.1.5.2 Contingent Assignment of Subcontracts 5.4, 14.2.2.2 Continuing Contract Performance 15.1.3 Contract, Definition of 1.1.2 CONTRACT, TERMINATION OR SUSPENSION OF THE 5.4.1.1, 11.3.9, 14 Contract Administration 3.1.3, 4, 9.4, 9.5 Contract Award and Execution, Conditions Relating to 3.7.1, 3.10, 5.2, 6.1, 11.1.3, 11.3.6, 11.4.1 Contract Documents, Copies Furnished and Use of 1.5.2, 2.2.5, 5.3 Contract Documents, Definition of 1.1.1 Contract Sum 3.7.4, 3.8, 5.2.3, 7.2, 7.3, 7.4, 9.1, 9.4.2, 9.5.1.4, 9.6.7, 9.7, 10.3.2, 11.3.1, 14.2.4, 14.3.2, 15.1.4, 15.2.5 Contract Sum, Definition of 9.1 Contract Time 3.7.4, 3.7.5, 3.10.2, 5.2.3, 7.2.1.3, 7.3.1, 7.3.5, 7.4, 8.1.1, 8.2.1, 8.3.1, 9.5.1, 9.7, 10.3.2, 12.1.1, 14.3.2, 15.1.5.1, 15.2.5 Contract Time, Definition of 8.1.1 Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 4 CONTRACTOR 3 Contractor, Definition of 3.1, 6.1.2 Contractor’s Construction Schedules 3.10, 3.12.1, 3.12.2, 6.1.3, 15.1.5.2 Contractor’s Employees 3.3.2, 3.4.3, 3.8.1, 3.9, 3.18.2, 4.2.3, 4.2.6, 10.2, 10.3, 11.1.1, 11.3.7, 14.1, 14.2.1.1 Contractor’s Liability Insurance 11.1 Contractor’s Relationship with Separate Contractors and Owner’s Forces 3.12.5, 3.14.2, 4.2.4, 6, 11.3.7, 12.1.2, 12.2.4 Contractor’s Relationship with Subcontractors 1.2.2, 3.3.2, 3.18.1, 3.18.2, 5, 9.6.2, 9.6.7, 9.10.2, 11.3.1.2, 11.3.7, 11.3.8 Contractor’s Relationship with the Architect 1.1.2, 1.5, 3.1.3, 3.2.2, 3.2.3, 3.2.4, 3.3.1, 3.4.2, 3.5, 3.7.4, 3.10, 3.11, 3.12, 3.16, 3.18, 4.1.3, 4.2, 5.2, 6.2.2, 7, 8.3.1, 9.2, 9.3, 9.4, 9.5, 9.7, 9.8, 9.9, 10.2.6, 10.3, 11.3.7, 12, 13.5, 15.1.2, 15.2.1 Contractor’s Representations 3.2.1, 3.2.2, 3.5, 3.12.6, 6.2.2, 8.2.1, 9.3.3, 9.8.2 Contractor’s Responsibility for Those Performing the Work 3.3.2, 3.18, 5.3, 6.1.3, 6.2, 9.5.1, 10.2.8 Contractor’s Review of Contract Documents 3.2 Contractor’s Right to Stop the Work 9.7 Contractor’s Right to Terminate the Contract 14.1, 15.1.6 Contractor’s Submittals 3.10, 3.11, 3.12.4, 4.2.7, 5.2.1, 5.2.3, 9.2, 9.3, 9.8.2, 9.8.3, 9.9.1, 9.10.2, 9.10.3, 11.1.3, 11.4.2 Contractor’s Superintendent 3.9, 10.2.6 Contractor’s Supervision and Construction Procedures 1.2.2, 3.3, 3.4, 3.12.10, 4.2.2, 4.2.7, 6.1.3, 6.2.4, 7.1.3, 7.3.5, 7.3.7, 8.2, 10, 12, 14, 15.1.3 Contractual Liability Insurance 11.1.1.8, 11.2 Coordination and Correlation 1.2, 3.2.1, 3.3.1, 3.10, 3.12.6, 6.1.3, 6.2.1 Copies Furnished of Drawings and Specifications 1.5, 2.2.5, 3.11 Copyrights 1.5, 3.17 Correction of Work 2.3, 2.4, 3.7.3, 9.4.2, 9.8.2, 9.8.3, 9.9.1, 12.1.2, 12.2 Correlation and Intent of the Contract Documents 1.2 Cost, Definition of 7.3.7 Costs 2.4, 3.2.4, 3.7.3, 3.8.2, 3.15.2, 5.4.2, 6.1.1, 6.2.3, 7.3.3.3, 7.3.7, 7.3.8, 7.3.9, 9.10.2, 10.3.2, 10.3.6, 11.3, 12.1.2, 12.2.1, 12.2.4, 13.5, 14 Cutting and Patching 3.14, 6.2.5 Damage to Construction of Owner or Separate Contractors 3.14.2, 6.2.4, 10.2.1.2, 10.2.5, 10.4, 11.1.1, 11.3, 12.2.4 Damage to the Work 3.14.2, 9.9.1, 10.2.1.2, 10.2.5, 10.4, 11.3.1, 12.2.4 Damages, Claims for 3.2.4, 3.18, 6.1.1, 8.3.3, 9.5.1, 9.6.7, 10.3.3, 11.1.1, 11.3.5, 11.3.7, 14.1.3, 14.2.4, 15.1.6 Damages for Delay 6.1.1, 8.3.3, 9.5.1.6, 9.7, 10.3.2 Date of Commencement of the Work, Definition of 8.1.2 Date of Substantial Completion, Definition of 8.1.3 Day, Definition of 8.1.4 Decisions of the Architect 3.7.4, 4.2.6, 4.2.7, 4.2.11, 4.2.12, 4.2.13, 15.2, 6.3, 7.3.7, 7.3.9, 8.1.3, 8.3.1, 9.2, 9.4, 9.5.1, 9.8.4, 9.9.1, 13.5.2, 14.2.2, 14.2.4, 15.1, 15.2 Decisions to Withhold Certification 9.4.1, 9.5, 9.7, 14.1.1.3 Defective or Nonconforming Work, Acceptance, Rejection and Correction of 2.3, 2.4, 3.5, 4.2.6, 6.2.5, 9.5.1, 9.5.2, 9.6.6, 9.8.2, 9.9.3, 9.10.4, 12.2.1 Definitions 1.1, 2.1.1, 3.1.1, 3.5, 3.12.1, 3.12.2, 3.12.3, 4.1.1, 15.1.1, 5.1, 6.1.2, 7.2.1, 7.3.1, 8.1, 9.1, 9.8.1 Delays and Extensions of Time 3.2, 3.7.4, 5.2.3, 7.2.1, 7.3.1, 7.4, 8.3, 9.5.1, 9.7, 10.3.2, 10.4, 14.3.2, 15.1.5, 15.2.5 Disputes 6.3, 7.3.9, 15.1, 15.2 Documents and Samples at the Site 3.11 Drawings, Definition of 1.1.5 Drawings and Specifications, Use and Ownership of 3.11 Effective Date of Insurance 8.2.2, 11.1.2 Emergencies 10.4, 14.1.1.2, 15.1.4 Employees, Contractor’s 3.3.2, 3.4.3, 3.8.1, 3.9, 3.18.2, 4.2.3, 4.2.6, 10.2, 10.3.3, 11.1.1, 11.3.7, 14.1, 14.2.1.1 Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 5 Equipment, Labor, Materials or 1.1.3, 1.1.6, 3.4, 3.5, 3.8.2, 3.8.3, 3.12, 3.13, 3.15.1, 4.2.6, 4.2.7, 5.2.1, 6.2.1, 7.3.7, 9.3.2, 9.3.3, 9.5.1.3, 9.10.2, 10.2.1, 10.2.4, 14.2.1.1, 14.2.1.2 Execution and Progress of the Work 1.1.3, 1.2.1, 1.2.2, 2.2.3, 2.2.5, 3.1, 3.3.1, 3.4.1, 3.5, 3.7.1, 3.10.1, 3.12, 3.14, 4.2, 6.2.2, 7.1.3, 7.3.5, 8.2, 9.5.1, 9.9.1, 10.2, 10.3, 12.2, 14.2, 14.3.1, 15.1.3 Extensions of Time 3.2.4, 3.7.4, 5.2.3, 7.2.1, 7.3, 7.4, 9.5.1, 9.7, 10.3.2, 10.4, 14.3, 15.1.5, 15.2.5 Failure of Payment 9.5.1.3, 9.7, 9.10.2, 13.6, 14.1.1.3, 14.2.1.2 Faulty Work (See Defective or Nonconforming Work) Final Completion and Final Payment 4.2.1, 4.2.9, 9.8.2, 9.10, 11.1.2, 11.1.3, 11.3.1, 11.3.5, 12.3, 14.2.4, 14.4.3 Financial Arrangements, Owner’s 2.2.1, 13.2.2, 14.1.1.4 Fire and Extended Coverage Insurance 11.3.1.1 GENERAL PROVISIONS 1 Governing Law 13.1 Guarantees (See Warranty) Hazardous Materials 10.2.4, 10.3 Identification of Subcontractors and Suppliers 5.2.1 Indemnification 3.17, 3.18, 9.10.2, 10.3.3, 10.3.5, 10.3.6, 11.3.1.2, 11.3.7 Information and Services Required of the Owner 2.1.2, 2.2, 3.2.2, 3.12.4, 3.12.10, 6.1.3, 6.1.4, 6.2.5, 9.6.1, 9.6.4, 9.9.2, 9.10.3, 10.3.3, 11.2, 11.4, 13.5.1, 13.5.2, 14.1.1.4, 14.1.4, 15.1.3 Initial Decision 15.2 Initial Decision Maker, Definition of 1.1.8 Initial Decision Maker, Decisions 14.2.2, 14.2.4, 15.2.1, 15.2.2, 15.2.3, 15.2.4, 15.2.5 Initial Decision Maker, Extent of Authority 14.2.2, 14.2.4, 15.1.3, 15.2.1, 15.2.2, 15.2.3, 15.2.4, 15.2.5 Injury or Damage to Person or Property 10.2.8, 10.4 Inspections 3.1.3, 3.3.3, 3.7.1, 4.2.2, 4.2.6, 4.2.9, 9.4.2, 9.8.3, 9.9.2, 9.10.1, 12.2.1, 13.5 Instructions to Bidders 1.1.1 Instructions to the Contractor 3.2.4, 3.3.1, 3.8.1, 5.2.1, 7, 8.2.2, 12, 13.5.2 Instruments of Service, Definition of 1.1.7 Insurance 3.18.1, 6.1.1, 7.3.7, 9.3.2, 9.8.4, 9.9.1, 9.10.2, 11 Insurance, Boiler and Machinery 11.3.2 Insurance, Contractor’s Liability 11.1 Insurance, Effective Date of 8.2.2, 11.1.2 Insurance, Loss of Use 11.3.3 Insurance, Owner’s Liability 11.2 Insurance, Property 10.2.5, 11.3 Insurance, Stored Materials 9.3.2 INSURANCE AND BONDS 11 Insurance Companies, Consent to Partial Occupancy 9.9.1 Intent of the Contract Documents 1.2.1, 4.2.7, 4.2.12, 4.2.13, 7.4 Interest 13.6 Interpretation 1.2.3, 1.4, 4.1.1, 5.1, 6.1.2, 15.1.1 Interpretations, Written 4.2.11, 4.2.12, 15.1.4 Judgment on Final Award 15.4.2 Labor and Materials, Equipment 1.1.3, 1.1.6, 3.4, 3.5, 3.8.2, 3.8.3, 3.12, 3.13, 3.15.1, 4.2.6, 4.2.7, 5.2.1, 6.2.1, 7.3.7, 9.3.2, 9.3.3, 9.5.1.3, 9.10.2, 10.2.1, 10.2.4, 14.2.1.1, 14.2.1.2 Labor Disputes 8.3.1 Laws and Regulations 1.5, 3.2.3, 3.6, 3.7, 3.12.10, 3.13, 4.1.1, 9.6.4, 9.9.1, 10.2.2, 11.1.1, 11.3, 13.1, 13.4, 13.5.1, 13.5.2, 13.6, 14, 15.2.8, 15.4 Liens 2.1.2, 9.3.3, 9.10.2, 9.10.4, 15.2.8 Limitations, Statutes of 12.2.5, 13.7, 15.4.1.1 Limitations of Liability 2.3, 3.2.2, 3.5, 3.12.10, 3.17, 3.18.1, 4.2.6, 4.2.7, 4.2.12, 6.2.2, 9.4.2, 9.6.4, 9.6.7, 10.2.5, 10.3.3, 11.1.2, 11.2, 11.3.7, 12.2.5, 13.4.2 Limitations of Time 2.1.2, 2.2, 2.4, 3.2.2, 3.10, 3.11, 3.12.5, 3.15.1, 4.2.7, 5.2, 5.3, 5.4.1, 6.2.4, 7.3, 7.4, 8.2, 9.2, 9.3.1, 9.3.3, 9.4.1, 9.5, 9.6, 9.7, 9.8, 9.9, 9.10, 11.1.3, 11.3.1.5, 11.3.6, 11.3.10, 12.2, 13.5, 13.7, 14, 15 Loss of Use Insurance 11.3.3 Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 6 Material Suppliers 1.5, 3.12.1, 4.2.4, 4.2.6, 5.2.1, 9.3, 9.4.2, 9.6, 9.10.5 Materials, Hazardous 10.2.4, 10.3 Materials, Labor, Equipment and 1.1.3, 1.1.6, 1.5.1, 3.4.1, 3.5, 3.8.2, 3.8.3, 3.12, 3.13, 3.15.1, 4.2.6, 4.2.7, 5.2.1, 6.2.1, 7.3.7, 9.3.2, 9.3.3, 9.5.1.3, 9.10.2, 10.2.1.2, 10.2.4, 14.2.1.1, 14.2.1.2 Means, Methods, Techniques, Sequences and Procedures of Construction 3.3.1, 3.12.10, 4.2.2, 4.2.7, 9.4.2 Mechanic’s Lien 2.1.2, 15.2.8 Mediation 8.3.1, 10.3.5, 10.3.6, 15.2.1, 15.2.5, 15.2.6, 15.3, 15.4.1 Minor Changes in the Work 1.1.1, 3.12.8, 4.2.8, 7.1, 7.4 MISCELLANEOUS PROVISIONS 13 Modifications, Definition of 1.1.1 Modifications to the Contract 1.1.1, 1.1.2, 3.11, 4.1.2, 4.2.1, 5.2.3, 7, 8.3.1, 9.7, 10.3.2, 11.3.1 Mutual Responsibility 6.2 Nonconforming Work, Acceptance of 9.6.6, 9.9.3, 12.3 Nonconforming Work, Rejection and Correction of 2.3, 2.4, 3.5, 4.2.6, 6.2.4, 9.5.1, 9.8.2, 9.9.3, 9.10.4, 12.2.1 Notice 2.2.1, 2.3, 2.4, 3.2.4, 3.3.1, 3.7.2, 3.12.9, 5.2.1, 9.7, 9.10, 10.2.2, 11.1.3, 12.2.2.1, 13.3, 13.5.1, 13.5.2, 14.1, 14.2, 15.2.8, 15.4.1 Notice, Written 2.3, 2.4, 3.3.1, 3.9.2, 3.12.9, 3.12.10, 5.2.1, 9.7, 9.10, 10.2.2, 10.3, 11.1.3, 11.3.6, 12.2.2.1, 13.3, 14, 15.2.8, 15.4.1 Notice of Claims 3.7.4, 10.2.8, 15.1.2, 15.4 Notice of Testing and Inspections 13.5.1, 13.5.2 Observations, Contractor’s 3.2, 3.7.4 Occupancy 2.2.2, 9.6.6, 9.8, 11.3.1.5 Orders, Written 1.1.1, 2.3, 3.9.2, 7, 8.2.2, 11.3.9, 12.1, 12.2.2.1, 13.5.2, 14.3.1 OWNER 2 Owner, Definition of 2.1.1 Owner, Information and Services Required of the 2.1.2, 2.2, 3.2.2, 3.12.10, 6.1.3, 6.1.4, 6.2.5, 9.3.2, 9.6.1, 9.6.4, 9.9.2, 9.10.3, 10.3.3, 11.2, 11.3, 13.5.1, 13.5.2, 14.1.1.4, 14.1.4, 15.1.3 Owner’s Authority 1.5, 2.1.1, 2.3, 2.4, 3.4.2, 3.8.1, 3.12.10, 3.14.2, 4.1.2, 4.1.3, 4.2.4, 4.2.9, 5.2.1, 5.2.4, 5.4.1, 6.1, 6.3, 7.2.1, 7.3.1, 8.2.2, 8.3.1, 9.3.1, 9.3.2, 9.5.1, 9.6.4, 9.9.1, 9.10.2, 10.3.2, 11.1.3, 11.3.3, 11.3.10, 12.2.2, 12.3, 13.2.2, 14.3, 14.4, 15.2.7 Owner’s Financial Capability 2.2.1, 13.2.2, 14.1.1.4 Owner’s Liability Insurance 11.2 Owner’s Relationship with Subcontractors 1.1.2, 5.2, 5.3, 5.4, 9.6.4, 9.10.2, 14.2.2 Owner’s Right to Carry Out the Work 2.4, 14.2.2 Owner’s Right to Clean Up 6.3 Owner’s Right to Perform Construction and to Award Separate Contracts 6.1 Owner’s Right to Stop the Work 2.3 Owner’s Right to Suspend the Work 14.3 Owner’s Right to Terminate the Contract 14.2 Ownership and Use of Drawings, Specifications and Other Instruments of Service 1.1.1, 1.1.6, 1.1.7, 1.5, 2.2.5, 3.2.2, 3.11, 3.17, 4.2.12, 5.3 Partial Occupancy or Use 9.6.6, 9.9, 11.3.1.5 Patching, Cutting and 3.14, 6.2.5 Patents 3.17 Payment, Applications for 4.2.5, 7.3.9, 9.2, 9.3, 9.4, 9.5, 9.6.3, 9.7, 9.8.5, 9.10.1, 14.2.3, 14.2.4, 14.4.3 Payment, Certificates for 4.2.5, 4.2.9, 9.3.3, 9.4, 9.5, 9.6.1, 9.6.6, 9.7, 9.10.1, 9.10.3, 13.7, 14.1.1.3, 14.2.4 Payment, Failure of 9.5.1.3, 9.7, 9.10.2, 13.6, 14.1.1.3, 14.2.1.2 Payment, Final 4.2.1, 4.2.9, 9.8.2, 9.10, 11.1.2, 11.1.3, 11.4.1, 12.3, 13.7, 14.2.4, 14.4.3 Payment Bond, Performance Bond and 7.3.7.4, 9.6.7, 9.10.3, 11.4 Payments, Progress 9.3, 9.6, 9.8.5, 9.10.3, 13.6, 14.2.3, 15.1.3 PAYMENTS AND COMPLETION 9 Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 7 Payments to Subcontractors 5.4.2, 9.5.1.3, 9.6.2, 9.6.3, 9.6.4, 9.6.7, 14.2.1.2 PCB 10.3.1 Performance Bond and Payment Bond 7.3.7.4, 9.6.7, 9.10.3, 11.4 Permits, Fees, Notices and Compliance with Laws 2.2.2, 3.7, 3.13, 7.3.7.4, 10.2.2 PERSONS AND PROPERTY, PROTECTION OF 10 Polychlorinated Biphenyl 10.3.1 Product Data, Definition of 3.12.2 Product Data and Samples, Shop Drawings 3.11, 3.12, 4.2.7 Progress and Completion 4.2.2, 8.2, 9.8, 9.9.1, 14.1.4, 15.1.3 Progress Payments 9.3, 9.6, 9.8.5, 9.10.3, 13.6, 14.2.3, 15.1.3 Project, Definition of 1.1.4 Project Representatives 4.2.10 Property Insurance 10.2.5, 11.3 PROTECTION OF PERSONS AND PROPERTY 10 Regulations and Laws 1.5, 3.2.3, 3.6, 3.7, 3.12.10, 3.13, 4.1.1, 9.6.4, 9.9.1, 10.2.2, 11.1, 11.4, 13.1, 13.4, 13.5.1, 13.5.2, 13.6, 14, 15.2.8, 15.4 Rejection of Work 3.5, 4.2.6, 12.2.1 Releases and Waivers of Liens 9.10.2 Representations 3.2.1, 3.5, 3.12.6, 6.2.2, 8.2.1, 9.3.3, 9.4.2, 9.5.1, 9.8.2, 9.10.1 Representatives 2.1.1, 3.1.1, 3.9, 4.1.1, 4.2.1, 4.2.2, 4.2.10, 5.1.1, 5.1.2, 13.2.1 Responsibility for Those Performing the Work 3.3.2, 3.18, 4.2.3, 5.3, 6.1.3, 6.2, 6.3, 9.5.1, 10 Retainage 9.3.1, 9.6.2, 9.8.5, 9.9.1, 9.10.2, 9.10.3 Review of Contract Documents and Field Conditions by Contractor 3.2, 3.12.7, 6.1.3 Review of Contractor’s Submittals by Owner and Architect 3.10.1, 3.10.2, 3.11, 3.12, 4.2, 5.2, 6.1.3, 9.2, 9.8.2 Review of Shop Drawings, Product Data and Samples by Contractor 3.12 Rights and Remedies 1.1.2, 2.3, 2.4, 3.5, 3.7.4, 3.15.2, 4.2.6, 5.3, 5.4, 6.1, 6.3, 7.3.1, 8.3, 9.5.1, 9.7, 10.2.5, 10.3, 12.2.2, 12.2.4, 13.4, 14, 15.4 Royalties, Patents and Copyrights 3.17 Rules and Notices for Arbitration 15.4.1 Safety of Persons and Property 10.2, 10.4 Safety Precautions and Programs 3.3.1, 4.2.2, 4.2.7, 5.3, 10.1, 10.2, 10.4 Samples, Definition of 3.12.3 Samples, Shop Drawings, Product Data and 3.11, 3.12, 4.2.7 Samples at the Site, Documents and 3.11 Schedule of Values 9.2, 9.3.1 Schedules, Construction 3.10, 3.12.1, 3.12.2, 6.1.3, 15.1.5.2 Separate Contracts and Contractors 1.1.4, 3.12.5, 3.14.2, 4.2.4, 4.2.7, 6, 8.3.1, 12.1.2 Shop Drawings, Definition of 3.12.1 Shop Drawings, Product Data and Samples 3.11, 3.12, 4.2.7 Site, Use of 3.13, 6.1.1, 6.2.1 Site Inspections 3.2.2, 3.3.3, 3.7.1, 3.7.4, 4.2, 9.4.2, 9.10.1, 13.5 Site Visits, Architect’s 3.7.4, 4.2.2, 4.2.9, 9.4.2, 9.5.1, 9.9.2, 9.10.1, 13.5 Special Inspections and Testing 4.2.6, 12.2.1, 13.5 Specifications, Definition of 1.1.6 Specifications 1.1.1, 1.1.6, 1.2.2, 1.5, 3.11, 3.12.10, 3.17, 4.2.14 Statute of Limitations 13.7, 15.4.1.1 Stopping the Work 2.3, 9.7, 10.3, 14.1 Stored Materials 6.2.1, 9.3.2, 10.2.1.2, 10.2.4 Subcontractor, Definition of 5.1.1 SUBCONTRACTORS 5 Subcontractors, Work by 1.2.2, 3.3.2, 3.12.1, 4.2.3, 5.2.3, 5.3, 5.4, 9.3.1.2, 9.6.7 Subcontractual Relations 5.3, 5.4, 9.3.1.2, 9.6, 9.10, 10.2.1, 14.1, 14.2.1 Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 8 Submittals 3.10, 3.11, 3.12, 4.2.7, 5.2.1, 5.2.3, 7.3.7, 9.2, 9.3, 9.8, 9.9.1, 9.10.2, 9.10.3, 11.1.3 Submittal Schedule 3.10.2, 3.12.5, 4.2.7 Subrogation, Waivers of 6.1.1, 11.3.7 Substantial Completion 4.2.9, 8.1.1, 8.1.3, 8.2.3, 9.4.2, 9.8, 9.9.1, 9.10.3, 12.2, 13.7 Substantial Completion, Definition of 9.8.1 Substitution of Subcontractors 5.2.3, 5.2.4 Substitution of Architect 4.1.3 Substitutions of Materials 3.4.2, 3.5, 7.3.8 Sub-subcontractor, Definition of 5.1.2 Subsurface Conditions 3.7.4 Successors and Assigns 13.2 Superintendent 3.9, 10.2.6 Supervision and Construction Procedures 1.2.2, 3.3, 3.4, 3.12.10, 4.2.2, 4.2.7, 6.1.3, 6.2.4, 7.1.3, 7.3.7, 8.2, 8.3.1, 9.4.2, 10, 12, 14, 15.1.3 Surety 5.4.1.2, 9.8.5, 9.10.2, 9.10.3, 14.2.2, 15.2.7 Surety, Consent of 9.10.2, 9.10.3 Surveys 2.2.3 Suspension by the Owner for Convenience 14.3 Suspension of the Work 5.4.2, 14.3 Suspension or Termination of the Contract 5.4.1.1, 14 Taxes 3.6, 3.8.2.1, 7.3.7.4 Termination by the Contractor 14.1, 15.1.6 Termination by the Owner for Cause 5.4.1.1, 14.2, 15.1.6 Termination by the Owner for Convenience 14.4 Termination of the Architect 4.1.3 Termination of the Contractor 14.2.2 TERMINATION OR SUSPENSION OF THE CONTRACT 14 Tests and Inspections 3.1.3, 3.3.3, 4.2.2, 4.2.6, 4.2.9, 9.4.2, 9.8.3, 9.9.2, 9.10.1, 10.3.2, 11.4.1, 12.2.1, 13.5 TIME 8 Time, Delays and Extensions of 3.2.4, 3.7.4, 5.2.3, 7.2.1, 7.3.1, 7.4, 8.3, 9.5.1, 9.7, 10.3.2, 10.4, 14.3.2, 15.1.5, 15.2.5 Time Limits 2.1.2, 2.2, 2.4, 3.2.2, 3.10, 3.11, 3.12.5, 3.15.1, 4.2, 5.2, 5.3, 5.4, 6.2.4, 7.3, 7.4, 8.2, 9.2, 9.3.1, 9.3.3, 9.4.1, 9.5, 9.6, 9.7, 9.8, 9.9, 9.10, 11.1.3, 12.2, 13.5, 13.7, 14, 15.1.2, 15.4 Time Limits on Claims 3.7.4, 10.2.8, 13.7, 15.1.2 Title to Work 9.3.2, 9.3.3 Transmission of Data in Digital Form 1.6 UNCOVERING AND CORRECTION OF WORK 12 Uncovering of Work 12.1 Unforeseen Conditions, Concealed or Unknown 3.7.4, 8.3.1, 10.3 Unit Prices 7.3.3.2, 7.3.4 Use of Documents 1.1.1, 1.5, 2.2.5, 3.12.6, 5.3 Use of Site 3.13, 6.1.1, 6.2.1 Values, Schedule of 9.2, 9.3.1 Waiver of Claims by the Architect 13.4.2 Waiver of Claims by the Contractor 9.10.5, 13.4.2, 15.1.6 Waiver of Claims by the Owner 9.9.3, 9.10.3, 9.10.4, 12.2.2.1, 13.4.2, 14.2.4, 15.1.6 Waiver of Consequential Damages 14.2.4, 15.1.6 Waiver of Liens 9.10.2, 9.10.4 Waivers of Subrogation 6.1.1, 11.3.7 Warranty 3.5, 4.2.9, 9.3.3, 9.8.4, 9.9.1, 9.10.4, 12.2.2, 13.7 Weather Delays 15.1.5.2 Work, Definition of 1.1.3 Written Consent 1.5.2, 3.4.2, 3.7.4, 3.12.8, 3.14.2, 4.1.2, 9.3.2, 9.8.5, 9.9.1, 9.10.2, 9.10.3, 11.4.1, 13.2, 13.4.2, 15.4.4.2 Written Interpretations 4.2.11, 4.2.12 Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 9 Written Notice 2.3, 2.4, 3.3.1, 3.9, 3.12.9, 3.12.10, 5.2.1, 8.2.2, 9.7, 9.10, 10.2.2, 10.3, 11.1.3, 12.2.2, 12.2.4, 13.3, 14, 15.4.1 Written Orders 1.1.1, 2.3, 3.9, 7, 8.2.2, 12.1, 12.2, 13.5.2, 14.3.1, 15.1.2 Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 10 ARTICLE 1 GENERAL PROVISIONS § 1.1 BASIC DEFINITIONS § 1.1.1 THE CONTRACT DOCUMENTS The Contract Documents are enumerated in the Agreement between the Owner and Contractor (hereinafter the Agreement) and consist of the Agreement, Conditions of the Contract (General, Supplementary and other Conditions), Drawings, Specifications, Addenda issued prior to execution of the Contract, other documents listed in the Agreement and Modifications issued after execution of the Contract. A Modification is (1) a written amendment to the Contract signed by both parties, (2) a Change Order, (3) a Construction Change Directive or (4) a written order for a minor change in the Work issued by the Architect. Unless specifically enumerated in the Agreement, the Contract Documents do not include the advertisement or invitation to bid, Instructions to Bidders, sample forms, other information furnished by the Owner in anticipation of receiving bids or proposals, the Contractor’s bid or proposal, or portions of Addenda relating to bidding requirements. § 1.1.2 THE CONTRACT The Contract Documents form the Contract for Construction. The Contract represents the entire and integrated agreement between the parties hereto and supersedes prior negotiations, representations or agreements, either written or oral. The Contract may be amended or modified only by a Modification. The Contract Documents shall not be construed to create a contractual relationship of any kind (1) between the Contractor and the Architect or the Architect’s consultants, (2) between the Owner and a Subcontractor or a Sub-subcontractor, (3) between the Owner and the Architect or the Architect’s consultants or (4) between any persons or entities other than the Owner and the Contractor. The Architect shall, however, be entitled to performance and enforcement of obligations under the Contract intended to facilitate performance of the Architect’s duties. § 1.1.3 THE WORK The term "Work" means the construction and services required by the Contract Documents, whether completed or partially completed, and includes all other labor, materials, equipment and services provided or to be provided by the Contractor to fulfill the Contractor’s obligations. The Work may constitute the whole or a part of the Project. § 1.1.4 THE PROJECT The Project is the total construction of which the Work performed under the Contract Documents may be the whole or a part and which may include construction by the Owner and by separate contractors. § 1.1.5 THE DRAWINGS The Drawings are the graphic and pictorial portions of the Contract Documents showing the design, location and dimensions of the Work, generally including plans, elevations, sections, details, schedules and diagrams. § 1.1.6 THE SPECIFICATIONS The Specifications are that portion of the Contract Documents consisting of the written requirements for materials, equipment, systems, standards and workmanship for the Work, and performance of related services. § 1.1.7 INSTRUMENTS OF SERVICE Instruments of Service are representations, in any medium of expression now known or later developed, of the tangible and intangible creative work performed by the Architect and the Architect’s consultants under their respective professional services agreements. Instruments of Service may include, without limitation, studies, surveys, models, sketches, drawings, specifications, and other similar materials. § 1.1.8 INITIAL DECISION MAKER The Initial Decision Maker is the person identified in the Agreement to render initial decisions on Claims in accordance with Section 15.2 and certify termination of the Agreement under Section 14.2.2. § 1.2 CORRELATION AND INTENT OF THE CONTRACT DOCUMENTS § 1.2.1 The intent of the Contract Documents is to include all items necessary for the proper execution and completion of the Work by the Contractor. The Contract Documents are complementary, and what is required by one shall be as binding as if required by all; performance by the Contractor shall be required only to the extent consistent with the Contract Documents and reasonably inferable from them as being necessary to produce the indicated results. Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 11 § 1.2.2 Organization of the Specifications into divisions, sections and articles, and arrangement of Drawings shall not control the Contractor in dividing the Work among Subcontractors or in establishing the extent of Work to be performed by any trade. § 1.2.3 Unless otherwise stated in the Contract Documents, words that have well-known technical or construction industry meanings are used in the Contract Documents in accordance with such recognized meanings. § 1.3 CAPITALIZATION Terms capitalized in these General Conditions include those that are (1) specifically defined, (2) the titles of numbered articles or (3) the titles of other documents published by the American Institute of Architects. § 1.4 INTERPRETATION In the interest of brevity the Contract Documents frequently omit modifying words such as "all" and "any" and articles such as "the" and "an," but the fact that a modifier or an article is absent from one statement and appears in another is not intended to affect the interpretation of either statement. § 1.5 OWNERSHIP AND USE OF DRAWINGS, SPECIFICATIONS AND OTHER INSTRUMENTS OF SERVICE § 1.5.1 The Architect and the Architect’s consultants shall be deemed the authors and owners of their respective Instruments of Service, including the Drawings and Specifications, and will retain all common law, statutory and other reserved rights, including copyrights. The Contractor, Subcontractors, Sub-subcontractors, and material or equipment suppliers shall not own or claim a copyright in the Instruments of Service. Submittal or distribution to meet official regulatory requirements or for other purposes in connection with this Project is not to be construed as publication in derogation of the Architect’s or Architect’s consultants’ reserved rights. § 1.5.2 The Contractor, Subcontractors, Sub-subcontractors and material or equipment suppliers are authorized to use and reproduce the Instruments of Service provided to them solely and exclusively for execution of the Work. All copies made under this authorization shall bear the copyright notice, if any, shown on the Instruments of Service. The Contractor, Subcontractors, Sub-subcontractors, and material or equipment suppliers may not use the Instruments of Service on other projects or for additions to this Project outside the scope of the Work without the specific written consent of the Owner, Architect and the Architect’s consultants. § 1.6 TRANSMISSION OF DATA IN DIGITAL FORM If the parties intend to transmit Instruments of Service or any other information or documentation in digital form, they shall endeavor to establish necessary protocols governing such transmissions, unless otherwise already provided in the Agreement or the Contract Documents. ARTICLE 2 OWNER § 2.1 GENERAL § 2.1.1 The Owner is the person or entity identified as such in the Agreement and is referred to throughout the Contract Documents as if singular in number. The Owner shall designate in writing a representative who shall have express authority to bind the Owner with respect to all matters requiring the Owner’s approval or authorization. Except as otherwise provided in Section 4.2.1, the Architect does not have such authority. The term "Owner" means the Owner or the Owner’s authorized representative. § 2.1.2 The Owner shall furnish to the Contractor within fifteen days after receipt of a written request, information necessary and relevant for the Contractor to evaluate, give notice of or enforce mechanic’s lien rights. Such information shall include a correct statement of the record legal title to the property on which the Project is located, usually referred to as the site, and the Owner’s interest therein. § 2.2 INFORMATION AND SERVICES REQUIRED OF THE OWNER § 2.2.1 Prior to commencement of the Work, the Contractor may request in writing that the Owner provide reasonable evidence that the Owner has made financial arrangements to fulfill the Owner’s obligations under the Contract. Thereafter, the Contractor may only request such evidence if (1) the Owner fails to make payments to the Contractor as the Contract Documents require; (2) a change in the Work materially changes the Contract Sum; or (3) the Contractor identifies in writing a reasonable concern regarding the Owner’s ability to make payment when due. The Owner shall furnish such evidence as a condition precedent to commencement or continuation of the Work or Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 12 the portion of the Work affected by a material change. After the Owner furnishes the evidence, the Owner shall not materially vary such financial arrangements without prior notice to the Contractor. § 2.2.2 Except for permits and fees that are the responsibility of the Contractor under the Contract Documents, including those required under Section 3.7.1, the Owner shall secure and pay for necessary approvals, easements, assessments and charges required for construction, use or occupancy of permanent structures or for permanent changes in existing facilities. § 2.2.3 The Owner shall furnish surveys describing physical characteristics, legal limitations and utility locations for the site of the Project, and a legal description of the site. The Contractor shall be entitled to rely on the accuracy of information furnished by the Owner but shall exercise proper precautions relating to the safe performance of the Work. § 2.2.4 The Owner shall furnish information or services required of the Owner by the Contract Documents with reasonable promptness. The Owner shall also furnish any other information or services under the Owner’s control and relevant to the Contractor’s performance of the Work with reasonable promptness after receiving the Contractor’s written request for such information or services. § 2.2.5 Unless otherwise provided in the Contract Documents, the Owner shall furnish to the Contractor one copy of the Contract Documents for purposes of making reproductions pursuant to Section 1.5.2. § 2.3 OWNER’S RIGHT TO STOP THE WORK If the Contractor fails to correct Work that is not in accordance with the requirements of the Contract Documents as required by Section 12.2 or repeatedly fails to carry out Work in accordance with the Contract Documents, the Owner may issue a written order to the Contractor to stop the Work, or any portion thereof, until the cause for such order has been eliminated; however, the right of the Owner to stop the Work shall not give rise to a duty on the part of the Owner to exercise this right for the benefit of the Contractor or any other person or entity, except to the extent required by Section 6.1.3. § 2.4 OWNER’S RIGHT TO CARRY OUT THE WORK If the Contractor defaults or neglects to carry out the Work in accordance with the Contract Documents and fails within a ten-day period after receipt of written notice from the Owner to commence and continue correction of such default or neglect with diligence and promptness, the Owner may, without prejudice to other remedies the Owner may have, correct such deficiencies. In such case an appropriate Change Order shall be issued deducting from payments then or thereafter due the Contractor the reasonable cost of correcting such deficiencies, including Owner’s expenses and compensation for the Architect’s additional services made necessary by such default, neglect or failure. Such action by the Owner and amounts charged to the Contractor are both subject to prior approval of the Architect. If payments then or thereafter due the Contractor are not sufficient to cover such amounts, the Contractor shall pay the difference to the Owner. ARTICLE 3 CONTRACTOR § 3.1 GENERAL § 3.1.1 The Contractor is the person or entity identified as such in the Agreement and is referred to throughout the Contract Documents as if singular in number. The Contractor shall be lawfully licensed, if required in the jurisdiction where the Project is located. The Contractor shall designate in writing a representative who shall have express authority to bind the Contractor with respect to all matters under this Contract. The term "Contractor" means the Contractor or the Contractor’s authorized representative. § 3.1.2 The Contractor shall perform the Work in accordance with the Contract Documents. § 3.1.3 The Contractor shall not be relieved of obligations to perform the Work in accordance with the Contract Documents either by activities or duties of the Architect in the Architect’s administration of the Contract, or by tests, inspections or approvals required or performed by persons or entities other than the Contractor. Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 13 § 3.2 REVIEW OF CONTRACT DOCUMENTS AND FIELD CONDITIONS BY CONTRACTOR § 3.2.1 Execution of the Contract by the Contractor is a representation that the Contractor has visited the site, become generally familiar with local conditions under which the Work is to be performed and correlated personal observations with requirements of the Contract Documents. § 3.2.2 Because the Contract Documents are complementary, the Contractor shall, before starting each portion of the Work, carefully study and compare the various Contract Documents relative to that portion of the Work, as well as the information furnished by the Owner pursuant to Section 2.2.3, shall take field measurements of any existing conditions related to that portion of the Work, and shall observe any conditions at the site affecting it. These obligations are for the purpose of facilitating coordination and construction by the Contractor and are not for the purpose of discovering errors, omissions, or inconsistencies in the Contract Documents; however, the Contractor shall promptly report to the Architect any errors, inconsistencies or omissions discovered by or made known to the Contractor as a request for information in such form as the Architect may require. It is recognized that the Contractor’s review is made in the Contractor’s capacity as a contractor and not as a licensed design professional, unless otherwise specifically provided in the Contract Documents. § 3.2.3 The Contractor is not required to ascertain that the Contract Documents are in accordance with applicable laws, statutes, ordinances, codes, rules and regulations, or lawful orders of public authorities, but the Contractor shall promptly report to the Architect any nonconformity discovered by or made known to the Contractor as a request for information in such form as the Architect may require. § 3.2.4 If the Contractor believes that additional cost or time is involved because of clarifications or instructions the Architect issues in response to the Contractor’s notices or requests for information pursuant to Sections 3.2.2 or 3.2.3, the Contractor shall make Claims as provided in Article 15. If the Contractor fails to perform the obligations of Sections 3.2.2 or 3.2.3, the Contractor shall pay such costs and damages to the Owner as would have been avoided if the Contractor had performed such obligations. If the Contractor performs those obligations, the Contractor shall not be liable to the Owner or Architect for damages resulting from errors, inconsistencies or omissions in the Contract Documents, for differences between field measurements or conditions and the Contract Documents, or for nonconformities of the Contract Documents to applicable laws, statutes, ordinances, codes, rules and regulations, and lawful orders of public authorities. § 3.3 SUPERVISION AND CONSTRUCTION PROCEDURES § 3.3.1 The Contractor shall supervise and direct the Work, using the Contractor’s best skill and attention. The Contractor shall be solely responsible for, and have control over, construction means, methods, techniques, sequences and procedures and for coordinating all portions of the Work under the Contract, unless the Contract Documents give other specific instructions concerning these matters. If the Contract Documents give specific instructions concerning construction means, methods, techniques, sequences or procedures, the Contractor shall evaluate the jobsite safety thereof and, except as stated below, shall be fully and solely responsible for the jobsite safety of such means, methods, techniques, sequences or procedures. If the Contractor determines that such means, methods, techniques, sequences or procedures may not be safe, the Contractor shall give timely written notice to the Owner and Architect and shall not proceed with that portion of the Work without further written instructions from the Architect. If the Contractor is then instructed to proceed with the required means, methods, techniques, sequences or procedures without acceptance of changes proposed by the Contractor, the Owner shall be solely responsible for any loss or damage arising solely from those Owner-required means, methods, techniques, sequences or procedures. § 3.3.2 The Contractor shall be responsible to the Owner for acts and omissions of the Contractor’s employees, Subcontractors and their agents and employees, and other persons or entities performing portions of the Work for, or on behalf of, the Contractor or any of its Subcontractors. § 3.3.3 The Contractor shall be responsible for inspection of portions of Work already performed to determine that such portions are in proper condition to receive subsequent Work. § 3.4 LABOR AND MATERIALS § 3.4.1 Unless otherwise provided in the Contract Documents, the Contractor shall provide and pay for labor, materials, equipment, tools, construction equipment and machinery, water, heat, utilities, transportation, and other Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 14 facilities and services necessary for proper execution and completion of the Work, whether temporary or permanent and whether or not incorporated or to be incorporated in the Work. § 3.4.2 Except in the case of minor changes in the Work authorized by the Architect in accordance with Sections 3.12.8 or 7.4, the Contractor may make substitutions only with the consent of the Owner, after evaluation by the Architect and in accordance with a Change Order or Construction Change Directive. § 3.4.3 The Contractor shall enforce strict discipline and good order among the Contractor’s employees and other persons carrying out the Work. The Contractor shall not permit employment of unfit persons or persons not properly skilled in tasks assigned to them. § 3.5 WARRANTY The Contractor warrants to the Owner and Architect that materials and equipment furnished under the Contract will be of good quality and new unless the Contract Documents require or permit otherwise. The Contractor further warrants that the Work will conform to the requirements of the Contract Documents and will be free from defects, except for those inherent in the quality of the Work the Contract Documents require or permit. Work, materials, or equipment not conforming to these requirements may be considered defective. The Contractor’s warranty excludes remedy for damage or defect caused by abuse, alterations to the Work not executed by the Contractor, improper or insufficient maintenance, improper operation, or normal wear and tear and normal usage. If required by the Architect, the Contractor shall furnish satisfactory evidence as to the kind and quality of materials and equipment. § 3.6 TAXES The Contractor shall pay sales, consumer, use and similar taxes for the Work provided by the Contractor that are legally enacted when bids are received or negotiations concluded, whether or not yet effective or merely scheduled to go into effect. § 3.7 PERMITS, FEES, NOTICES AND COMPLIANCE WITH LAWS § 3.7.1 Unless otherwise provided in the Contract Documents, the Contractor shall secure and pay for the building permit as well as for other permits, fees, licenses, and inspections by government agencies necessary for proper execution and completion of the Work that are customarily secured after execution of the Contract and legally required at the time bids are received or negotiations concluded. § 3.7.2 The Contractor shall comply with and give notices required by applicable laws, statutes, ordinances, codes, rules and regulations, and lawful orders of public authorities applicable to performance of the Work. § 3.7.3 If the Contractor performs Work knowing it to be contrary to applicable laws, statutes, ordinances, codes, rules and regulations, or lawful orders of public authorities, the Contractor shall assume appropriate responsibility for such Work and shall bear the costs attributable to correction. § 3.7.4 Concealed or Unknown Conditions. If the Contractor encounters conditions at the site that are (1) subsurface or otherwise concealed physical conditions that differ materially from those indicated in the Contract Documents or (2) unknown physical conditions of an unusual nature, that differ materially from those ordinarily found to exist and generally recognized as inherent in construction activities of the character provided for in the Contract Documents, the Contractor shall promptly provide notice to the Owner and the Architect before conditions are disturbed and in no event later than 21 days after first observance of the conditions. The Architect will promptly investigate such conditions and, if the Architect determines that they differ materially and cause an increase or decrease in the Contractor’s cost of, or time required for, performance of any part of the Work, will recommend an equitable adjustment in the Contract Sum or Contract Time, or both. If the Architect determines that the conditions at the site are not materially different from those indicated in the Contract Documents and that no change in the terms of the Contract is justified, the Architect shall promptly notify the Owner and Contractor in writing, stating the reasons. If either party disputes the Architect’s determination or recommendation, that party may proceed as provided in Article 15. § 3.7.5 If, in the course of the Work, the Contractor encounters human remains or recognizes the existence of burial markers, archaeological sites or wetlands not indicated in the Contract Documents, the Contractor shall immediately suspend any operations that would affect them and shall notify the Owner and Architect. Upon receipt of such notice, the Owner shall promptly take any action necessary to obtain governmental authorization required to resume Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 15 the operations. The Contractor shall continue to suspend such operations until otherwise instructed by the Owner but shall continue with all other operations that do not affect those remains or features. Requests for adjustments in the Contract Sum and Contract Time arising from the existence of such remains or features may be made as provided in Article 15. § 3.8 ALLOWANCES § 3.8.1 The Contractor shall include in the Contract Sum all allowances stated in the Contract Documents. Items covered by allowances shall be supplied for such amounts and by such persons or entities as the Owner may direct, but the Contractor shall not be required to employ persons or entities to whom the Contractor has reasonable objection. § 3.8.2 Unless otherwise provided in the Contract Documents, .1 Allowances shall cover the cost to the Contractor of materials and equipment delivered at the site and all required taxes, less applicable trade discounts; .2 Contractor’s costs for unloading and handling at the site, labor, installation costs, overhead, profit and other expenses contemplated for stated allowance amounts shall be included in the Contract Sum but not in the allowances; and .3 Whenever costs are more than or less than allowances, the Contract Sum shall be adjusted accordingly by Change Order. The amount of the Change Order shall reflect (1) the difference between actual costs and the allowances under Section 3.8.2.1 and (2) changes in Contractor’s costs under Section 3.8.2.2. § 3.8.3 Materials and equipment under an allowance shall be selected by the Owner with reasonable promptness. § 3.9 SUPERINTENDENT § 3.9.1 The Contractor shall employ a competent superintendent and necessary assistants who shall be in attendance at the Project site during performance of the Work. The superintendent shall represent the Contractor, and communications given to the superintendent shall be as binding as if given to the Contractor. § 3.9.2 The Contractor, as soon as practicable after award of the Contract, shall furnish in writing to the Owner through the Architect the name and qualifications of a proposed superintendent. The Architect may reply within 14 days to the Contractor in writing stating (1) whether the Owner or the Architect has reasonable objection to the proposed superintendent or (2) that the Architect requires additional time to review. Failure of the Architect to reply within the 14 day period shall constitute notice of no reasonable objection. § 3.9.3 The Contractor shall not employ a proposed superintendent to whom the Owner or Architect has made reasonable and timely objection. The Contractor shall not change the superintendent without the Owner’s consent, which shall not unreasonably be withheld or delayed. § 3.10 CONTRACTOR’S CONSTRUCTION SCHEDULES § 3.10.1 The Contractor, promptly after being awarded the Contract, shall prepare and submit for the Owner’s and Architect’s information a Contractor’s construction schedule for the Work. The schedule shall not exceed time limits current under the Contract Documents, shall be revised at appropriate intervals as required by the conditions of the Work and Project, shall be related to the entire Project to the extent required by the Contract Documents, and shall provide for expeditious and practicable execution of the Work. § 3.10.2 The Contractor shall prepare a submittal schedule, promptly after being awarded the Contract and thereafter as necessary to maintain a current submittal schedule, and shall submit the schedule(s) for the Architect’s approval. The Architect’s approval shall not unreasonably be delayed or withheld. The submittal schedule shall (1) be coordinated with the Contractor’s construction schedule, and (2) allow the Architect reasonable time to review submittals. If the Contractor fails to submit a submittal schedule, the Contractor shall not be entitled to any increase in Contract Sum or extension of Contract Time based on the time required for review of submittals. § 3.10.3 The Contractor shall perform the Work in general accordance with the most recent schedules submitted to the Owner and Architect. Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 16 § 3.11 DOCUMENTS AND SAMPLES AT THE SITE The Contractor shall maintain at the site for the Owner one copy of the Drawings, Specifications, Addenda, Change Orders and other Modifications, in good order and marked currently to indicate field changes and selections made during construction, and one copy of approved Shop Drawings, Product Data, Samples and similar required submittals. These shall be available to the Architect and shall be delivered to the Architect for submittal to the Owner upon completion of the Work as a record of the Work as constructed. § 3.12 SHOP DRAWINGS, PRODUCT DATA AND SAMPLES § 3.12.1 Shop Drawings are drawings, diagrams, schedules and other data specially prepared for the Work by the Contractor or a Subcontractor, Sub-subcontractor, manufacturer, supplier or distributor to illustrate some portion of the Work. § 3.12.2 Product Data are illustrations, standard schedules, performance charts, instructions, brochures, diagrams and other information furnished by the Contractor to illustrate materials or equipment for some portion of the Work. § 3.12.3 Samples are physical examples that illustrate materials, equipment or workmanship and establish standards by which the Work will be judged. § 3.12.4 Shop Drawings, Product Data, Samples and similar submittals are not Contract Documents. Their purpose is to demonstrate the way by which the Contractor proposes to conform to the information given and the design concept expressed in the Contract Documents for those portions of the Work for which the Contract Documents require submittals. Review by the Architect is subject to the limitations of Section 4.2.7. Informational submittals upon which the Architect is not expected to take responsive action may be so identified in the Contract Documents. Submittals that are not required by the Contract Documents may be returned by the Architect without action. § 3.12.5 The Contractor shall review for compliance with the Contract Documents, approve and submit to the Architect Shop Drawings, Product Data, Samples and similar submittals required by the Contract Documents in accordance with the submittal schedule approved by the Architect or, in the absence of an approved submittal schedule, with reasonable promptness and in such sequence as to cause no delay in the Work or in the activities of the Owner or of separate contractors. § 3.12.6 By submitting Shop Drawings, Product Data, Samples and similar submittals, the Contractor represents to the Owner and Architect that the Contractor has (1) reviewed and approved them, (2) determined and verified materials, field measurements and field construction criteria related thereto, or will do so and (3) checked and coordinated the information contained within such submittals with the requirements of the Work and of the Contract Documents. § 3.12.7 The Contractor shall perform no portion of the Work for which the Contract Documents require submittal and review of Shop Drawings, Product Data, Samples or similar submittals until the respective submittal has been approved by the Architect. § 3.12.8 The Work shall be in accordance with approved submittals except that the Contractor shall not be relieved of responsibility for deviations from requirements of the Contract Documents by the Architect’s approval of Shop Drawings, Product Data, Samples or similar submittals unless the Contractor has specifically informed the Architect in writing of such deviation at the time of submittal and (1) the Architect has given written approval to the specific deviation as a minor change in the Work, or (2) a Change Order or Construction Change Directive has been issued authorizing the deviation. The Contractor shall not be relieved of responsibility for errors or omissions in Shop Drawings, Product Data, Samples or similar submittals by the Architect’s approval thereof. § 3.12.9 The Contractor shall direct specific attention, in writing or on resubmitted Shop Drawings, Product Data, Samples or similar submittals, to revisions other than those requested by the Architect on previous submittals. In the absence of such written notice, the Architect’s approval of a resubmission shall not apply to such revisions. § 3.12.10 The Contractor shall not be required to provide professional services that constitute the practice of architecture or engineering unless such services are specifically required by the Contract Documents for a portion of the Work or unless the Contractor needs to provide such services in order to carry out the Contractor’s responsibilities for construction means, methods, techniques, sequences and procedures. The Contractor shall not be Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 17 required to provide professional services in violation of applicable law. If professional design services or certifications by a design professional related to systems, materials or equipment are specifically required of the Contractor by the Contract Documents, the Owner and the Architect will specify all performance and design criteria that such services must satisfy. The Contractor shall cause such services or certifications to be provided by a properly licensed design professional, whose signature and seal shall appear on all drawings, calculations, specifications, certifications, Shop Drawings and other submittals prepared by such professional. Shop Drawings and other submittals related to the Work designed or certified by such professional, if prepared by others, shall bear such professional’s written approval when submitted to the Architect. The Owner and the Architect shall be entitled to rely upon the adequacy, accuracy and completeness of the services, certifications and approvals performed or provided by such design professionals, provided the Owner and Architect have specified to the Contractor all performance and design criteria that such services must satisfy. Pursuant to this Section 3.12.10, the Architect will review, approve or take other appropriate action on submittals only for the limited purpose of checking for conformance with information given and the design concept expressed in the Contract Documents. The Contractor shall not be responsible for the adequacy of the performance and design criteria specified in the Contract Documents. § 3.13 USE OF SITE The Contractor shall confine operations at the site to areas permitted by applicable laws, statutes, ordinances, codes, rules and regulations, and lawful orders of public authorities and the Contract Documents and shall not unreasonably encumber the site with materials or equipment. § 3.14 CUTTING AND PATCHING § 3.14.1 The Contractor shall be responsible for cutting, fitting or patching required to complete the Work or to make its parts fit together properly. All areas requiring cutting, fitting and patching shall be restored to the condition existing prior to the cutting, fitting and patching, unless otherwise required by the Contract Documents. § 3.14.2 The Contractor shall not damage or endanger a portion of the Work or fully or partially completed construction of the Owner or separate contractors by cutting, patching or otherwise altering such construction, or by excavation. The Contractor shall not cut or otherwise alter such construction by the Owner or a separate contractor except with written consent of the Owner and of such separate contractor; such consent shall not be unreasonably withheld. The Contractor shall not unreasonably withhold from the Owner or a separate contractor the Contractor’s consent to cutting or otherwise altering the Work. § 3.15 CLEANING UP § 3.15.1 The Contractor shall keep the premises and surrounding area free from accumulation of waste materials or rubbish caused by operations under the Contract. At completion of the Work, the Contractor shall remove waste materials, rubbish, the Contractor’s tools, construction equipment, machinery and surplus materials from and about the Project. § 3.15.2 If the Contractor fails to clean up as provided in the Contract Documents, the Owner may do so and Owner shall be entitled to reimbursement from the Contractor. § 3.16 ACCESS TO WORK The Contractor shall provide the Owner and Architect access to the Work in preparation and progress wherever located. § 3.17 ROYALTIES, PATENTS AND COPYRIGHTS The Contractor shall pay all royalties and license fees. The Contractor shall defend suits or claims for infringement of copyrights and patent rights and shall hold the Owner and Architect harmless from loss on account thereof, but shall not be responsible for such defense or loss when a particular design, process or product of a particular manufacturer or manufacturers is required by the Contract Documents, or where the copyright violations are contained in Drawings, Specifications or other documents prepared by the Owner or Architect. However, if the Contractor has reason to believe that the required design, process or product is an infringement of a copyright or a patent, the Contractor shall be responsible for such loss unless such information is promptly furnished to the Architect. Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 18 § 3.18 INDEMNIFICATION § 3.18.1 To the fullest extent permitted by law the Contractor shall indemnify and hold harmless the Owner, Architect, Architect’s consultants, and agents and employees of any of them from and against claims, damages, losses and expenses, including but not limited to attorneys’ fees, arising out of or resulting from performance of the Work, provided that such claim, damage, loss or expense is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than the Work itself), but only to the extent caused by the negligent acts or omissions of the Contractor, a Subcontractor, anyone directly or indirectly employed by them or anyone for whose acts they may be liable, regardless of whether or not such claim, damage, loss or expense is caused in part by a party indemnified hereunder. Such obligation shall not be construed to negate, abridge, or reduce other rights or obligations of indemnity that would otherwise exist as to a party or person described in this Section 3.18. § 3.18.2 In claims against any person or entity indemnified under this Section 3.18 by an employee of the Contractor, a Subcontractor, anyone directly or indirectly employed by them or anyone for whose acts they may be liable, the indemnification obligation under Section 3.18.1 shall not be limited by a limitation on amount or type of damages, compensation or benefits payable by or for the Contractor or a Subcontractor under workers’ compensation acts, disability benefit acts or other employee benefit acts. ARTICLE 4 ARCHITECT § 4.1 GENERAL § 4.1.1 The Owner shall retain an architect lawfully licensed to practice architecture or an entity lawfully practicing architecture in the jurisdiction where the Project is located. That person or entity is identified as the Architect in the Agreement and is referred to throughout the Contract Documents as if singular in number. § 4.1.2 Duties, responsibilities and limitations of authority of the Architect as set forth in the Contract Documents shall not be restricted, modified or extended without written consent of the Owner, Contractor and Architect. Consent shall not be unreasonably withheld. § 4.1.3 If the employment of the Architect is terminated, the Owner shall employ a successor architect as to whom the Contractor has no reasonable objection and whose status under the Contract Documents shall be that of the Architect. § 4.2 ADMINISTRATION OF THE CONTRACT § 4.2.1 The Architect will provide administration of the Contract as described in the Contract Documents and will be an Owner’s representative during construction until the date the Architect issues the final Certificate for Payment. The Architect will have authority to act on behalf of the Owner only to the extent provided in the Contract Documents. § 4.2.2 The Architect will visit the site at intervals appropriate to the stage of construction, or as otherwise agreed with the Owner, to become generally familiar with the progress and quality of the portion of the Work completed, and to determine in general if the Work observed is being performed in a manner indicating that the Work, when fully completed, will be in accordance with the Contract Documents. However, the Architect will not be required to make exhaustive or continuous on-site inspections to check the quality or quantity of the Work. The Architect will not have control over, charge of, or responsibility for, the construction means, methods, techniques, sequences or procedures, or for the safety precautions and programs in connection with the Work, since these are solely the Contractor’s rights and responsibilities under the Contract Documents, except as provided in Section 3.3.1. § 4.2.3 On the basis of the site visits, the Architect will keep the Owner reasonably informed about the progress and quality of the portion of the Work completed, and report to the Owner (1) known deviations from the Contract Documents and from the most recent construction schedule submitted by the Contractor, and (2) defects and deficiencies observed in the Work. The Architect will not be responsible for the Contractor’s failure to perform the Work in accordance with the requirements of the Contract Documents. The Architect will not have control over or charge of and will not be responsible for acts or omissions of the Contractor, Subcontractors, or their agents or employees, or any other persons or entities performing portions of the Work. Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 19 § 4.2.4 COMMUNICATIONS FACILITATING CONTRACT ADMINISTRATION Except as otherwise provided in the Contract Documents or when direct communications have been specially authorized, the Owner and Contractor shall endeavor to communicate with each other through the Architect about matters arising out of or relating to the Contract. Communications by and with the Architect’s consultants shall be through the Architect. Communications by and with Subcontractors and material suppliers shall be through the Contractor. Communications by and with separate contractors shall be through the Owner. § 4.2.5 Based on the Architect’s evaluations of the Contractor’s Applications for Payment, the Architect will review and certify the amounts due the Contractor and will issue Certificates for Payment in such amounts. § 4.2.6 The Architect has authority to reject Work that does not conform to the Contract Documents. Whenever the Architect considers it necessary or advisable, the Architect will have authority to require inspection or testing of the Work in accordance with Sections 13.5.2 and 13.5.3, whether or not such Work is fabricated, installed or completed. However, neither this authority of the Architect nor a decision made in good faith either to exercise or not to exercise such authority shall give rise to a duty or responsibility of the Architect to the Contractor, Subcontractors, material and equipment suppliers, their agents or employees, or other persons or entities performing portions of the Work. § 4.2.7 The Architect will review and approve, or take other appropriate action upon, the Contractor’s submittals such as Shop Drawings, Product Data and Samples, but only for the limited purpose of checking for conformance with information given and the design concept expressed in the Contract Documents. The Architect’s action will be taken in accordance with the submittal schedule approved by the Architect or, in the absence of an approved submittal schedule, with reasonable promptness while allowing sufficient time in the Architect’s professional judgment to permit adequate review. Review of such submittals is not conducted for the purpose of determining the accuracy and completeness of other details such as dimensions and quantities, or for substantiating instructions for installation or performance of equipment or systems, all of which remain the responsibility of the Contractor as required by the Contract Documents. The Architect’s review of the Contractor’s submittals shall not relieve the Contractor of the obligations under Sections 3.3, 3.5 and 3.12. The Architect’s review shall not constitute approval of safety precautions or, unless otherwise specifically stated by the Architect, of any construction means, methods, techniques, sequences or procedures. The Architect’s approval of a specific item shall not indicate approval of an assembly of which the item is a component. § 4.2.8 The Architect will prepare Change Orders and Construction Change Directives, and may authorize minor changes in the Work as provided in Section 7.4. The Architect will investigate and make determinations and recommendations regarding concealed and unknown conditions as provided in Section 3.7.4. § 4.2.9 The Architect will conduct inspections to determine the date or dates of Substantial Completion and the date of final completion; issue Certificates of Substantial Completion pursuant to Section 9.8; receive and forward to the Owner, for the Owner’s review and records, written warranties and related documents required by the Contract and assembled by the Contractor pursuant to Section 9.10; and issue a final Certificate for Payment pursuant to Section 9.10. § 4.2.10 If the Owner and Architect agree, the Architect will provide one or more project representatives to assist in carrying out the Architect’s responsibilities at the site. The duties, responsibilities and limitations of authority of such project representatives shall be as set forth in an exhibit to be incorporated in the Contract Documents. § 4.2.11 The Architect will interpret and decide matters concerning performance under, and requirements of, the Contract Documents on written request of either the Owner or Contractor. The Architect’s response to such requests will be made in writing within any time limits agreed upon or otherwise with reasonable promptness. § 4.2.12 Interpretations and decisions of the Architect will be consistent with the intent of, and reasonably inferable from, the Contract Documents and will be in writing or in the form of drawings. When making such interpretations and decisions, the Architect will endeavor to secure faithful performance by both Owner and Contractor, will not show partiality to either and will not be liable for results of interpretations or decisions rendered in good faith. § 4.2.13 The Architect’s decisions on matters relating to aesthetic effect will be final if consistent with the intent expressed in the Contract Documents. Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 20 § 4.2.14 The Architect will review and respond to requests for information about the Contract Documents. The Architect’s response to such requests will be made in writing within any time limits agreed upon or otherwise with reasonable promptness. If appropriate, the Architect will prepare and issue supplemental Drawings and Specifications in response to the requests for information. ARTICLE 5 SUBCONTRACTORS § 5.1 DEFINITIONS § 5.1.1 A Subcontractor is a person or entity who has a direct contract with the Contractor to perform a portion of the Work at the site. The term "Subcontractor" is referred to throughout the Contract Documents as if singular in number and means a Subcontractor or an authorized representative of the Subcontractor. The term "Subcontractor" does not include a separate contractor or subcontractors of a separate contractor. § 5.1.2 A Sub-subcontractor is a person or entity who has a direct or indirect contract with a Subcontractor to perform a portion of the Work at the site. The term "Sub-subcontractor" is referred to throughout the Contract Documents as if singular in number and means a Sub-subcontractor or an authorized representative of the Sub-subcontractor. § 5.2 AWARD OF SUBCONTRACTS AND OTHER CONTRACTS FOR PORTIONS OF THE WORK § 5.2.1 Unless otherwise stated in the Contract Documents or the bidding requirements, the Contractor, as soon as practicable after award of the Contract, shall furnish in writing to the Owner through the Architect the names of persons or entities (including those who are to furnish materials or equipment fabricated to a special design) proposed for each principal portion of the Work. The Architect may reply within 14 days to the Contractor in writing stating (1) whether the Owner or the Architect has reasonable objection to any such proposed person or entity or (2) that the Architect requires additional time for review. Failure of the Owner or Architect to reply within the 14-day period shall constitute notice of no reasonable objection. § 5.2.2 The Contractor shall not contract with a proposed person or entity to whom the Owner or Architect has made reasonable and timely objection. The Contractor shall not be required to contract with anyone to whom the Contractor has made reasonable objection. § 5.2.3 If the Owner or Architect has reasonable objection to a person or entity proposed by the Contractor, the Contractor shall propose another to whom the Owner or Architect has no reasonable objection. If the proposed but rejected Subcontractor was reasonably capable of performing the Work, the Contract Sum and Contract Time shall be increased or decreased by the difference, if any, occasioned by such change, and an appropriate Change Order shall be issued before commencement of the substitute Subcontractor’s Work. However, no increase in the Contract Sum or Contract Time shall be allowed for such change unless the Contractor has acted promptly and responsively in submitting names as required. § 5.2.4 The Contractor shall not substitute a Subcontractor, person or entity previously selected if the Owner or Architect makes reasonable objection to such substitution. § 5.3 SUBCONTRACTUAL RELATIONS By appropriate agreement, written where legally required for validity, the Contractor shall require each Subcontractor, to the extent of the Work to be performed by the Subcontractor, to be bound to the Contractor by terms of the Contract Documents, and to assume toward the Contractor all the obligations and responsibilities, including the responsibility for safety of the Subcontractor’s Work, which the Contractor, by these Documents, assumes toward the Owner and Architect. Each subcontract agreement shall preserve and protect the rights of the Owner and Architect under the Contract Documents with respect to the Work to be performed by the Subcontractor so that subcontracting thereof will not prejudice such rights, and shall allow to the Subcontractor, unless specifically provided otherwise in the subcontract agreement, the benefit of all rights, remedies and redress against the Contractor that the Contractor, by the Contract Documents, has against the Owner. Where appropriate, the Contractor shall require each Subcontractor to enter into similar agreements with Sub-subcontractors. The Contractor shall make available to each proposed Subcontractor, prior to the execution of the subcontract agreement, copies of the Contract Documents to which the Subcontractor will be bound, and, upon written request of the Subcontractor, identify to the Subcontractor terms and conditions of the proposed subcontract agreement that may Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 21 be at variance with the Contract Documents. Subcontractors will similarly make copies of applicable portions of such documents available to their respective proposed Sub-subcontractors. § 5.4 CONTINGENT ASSIGNMENT OF SUBCONTRACTS § 5.4.1 Each subcontract agreement for a portion of the Work is assigned by the Contractor to the Owner, provided that .1 assignment is effective only after termination of the Contract by the Owner for cause pursuant to Section 14.2 and only for those subcontract agreements that the Owner accepts by notifying the Subcontractor and Contractor in writing; and .2 assignment is subject to the prior rights of the surety, if any, obligated under bond relating to the Contract. When the Owner accepts the assignment of a subcontract agreement, the Owner assumes the Contractor’s rights and obligations under the subcontract. § 5.4.2 Upon such assignment, if the Work has been suspended for more than 30 days, the Subcontractor’s compensation shall be equitably adjusted for increases in cost resulting from the suspension. § 5.4.3 Upon such assignment to the Owner under this Section 5.4, the Owner may further assign the subcontract to a successor contractor or other entity. If the Owner assigns the subcontract to a successor contractor or other entity, the Owner shall nevertheless remain legally responsible for all of the successor contractor’s obligations under the subcontract. ARTICLE 6 CONSTRUCTION BY OWNER OR BY SEPARATE CONTRACTORS § 6.1 OWNER’S RIGHT TO PERFORM CONSTRUCTION AND TO AWARD SEPARATE CONTRACTS § 6.1.1 The Owner reserves the right to perform construction or operations related to the Project with the Owner’s own forces, and to award separate contracts in connection with other portions of the Project or other construction or operations on the site under Conditions of the Contract identical or substantially similar to these including those portions related to insurance and waiver of subrogation. If the Contractor claims that delay or additional cost is involved because of such action by the Owner, the Contractor shall make such Claim as provided in Article 15. § 6.1.2 When separate contracts are awarded for different portions of the Project or other construction or operations on the site, the term "Contractor" in the Contract Documents in each case shall mean the Contractor who executes each separate Owner-Contractor Agreement. § 6.1.3 The Owner shall provide for coordination of the activities of the Owner’s own forces and of each separate contractor with the Work of the Contractor, who shall cooperate with them. The Contractor shall participate with other separate contractors and the Owner in reviewing their construction schedules. The Contractor shall make any revisions to the construction schedule deemed necessary after a joint review and mutual agreement. The construction schedules shall then constitute the schedules to be used by the Contractor, separate contractors and the Owner until subsequently revised. § 6.1.4 Unless otherwise provided in the Contract Documents, when the Owner performs construction or operations related to the Project with the Owner’s own forces, the Owner shall be deemed to be subject to the same obligations and to have the same rights that apply to the Contractor under the Conditions of the Contract, including, without excluding others, those stated in Article 3, this Article 6 and Articles 10, 11 and 12. § 6.2 MUTUAL RESPONSIBILITY § 6.2.1 The Contractor shall afford the Owner and separate contractors reasonable opportunity for introduction and storage of their materials and equipment and performance of their activities, and shall connect and coordinate the Contractor’s construction and operations with theirs as required by the Contract Documents. § 6.2.2 If part of the Contractor’s Work depends for proper execution or results upon construction or operations by the Owner or a separate contractor, the Contractor shall, prior to proceeding with that portion of the Work, promptly report to the Architect apparent discrepancies or defects in such other construction that would render it unsuitable for such proper execution and results. Failure of the Contractor so to report shall constitute an acknowledgment that Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 22 the Owner’s or separate contractor’s completed or partially completed construction is fit and proper to receive the Contractor’s Work, except as to defects not then reasonably discoverable. § 6.2.3 The Contractor shall reimburse the Owner for costs the Owner incurs that are payable to a separate contractor because of the Contractor’s delays, improperly timed activities or defective construction. The Owner shall be responsible to the Contractor for costs the Contractor incurs because of a separate contractor’s delays, improperly timed activities, damage to the Work or defective construction. § 6.2.4 The Contractor shall promptly remedy damage the Contractor wrongfully causes to completed or partially completed construction or to property of the Owner or separate contractors as provided in Section 10.2.5. § 6.2.5 The Owner and each separate contractor shall have the same responsibilities for cutting and patching as are described for the Contractor in Section 3.14. § 6.3 OWNER’S RIGHT TO CLEAN UP If a dispute arises among the Contractor, separate contractors and the Owner as to the responsibility under their respective contracts for maintaining the premises and surrounding area free from waste materials and rubbish, the Owner may clean up and the Architect will allocate the cost among those responsible. ARTICLE 7 CHANGES IN THE WORK § 7.1 GENERAL § 7.1.1 Changes in the Work may be accomplished after execution of the Contract, and without invalidating the Contract, by Change Order, Construction Change Directive or order for a minor change in the Work, subject to the limitations stated in this Article 7 and elsewhere in the Contract Documents. § 7.1.2 A Change Order shall be based upon agreement among the Owner, Contractor and Architect; a Construction Change Directive requires agreement by the Owner and Architect and may or may not be agreed to by the Contractor; an order for a minor change in the Work may be issued by the Architect alone. § 7.1.3 Changes in the Work shall be performed under applicable provisions of the Contract Documents, and the Contractor shall proceed promptly, unless otherwise provided in the Change Order, Construction Change Directive or order for a minor change in the Work. § 7.2 CHANGE ORDERS § 7.2.1 A Change Order is a written instrument prepared by the Architect and signed by the Owner, Contractor and Architect stating their agreement upon all of the following: .1 The change in the Work; .2 The amount of the adjustment, if any, in the Contract Sum; and .3 The extent of the adjustment, if any, in the Contract Time. § 7.3 CONSTRUCTION CHANGE DIRECTIVES § 7.3.1 A Construction Change Directive is a written order prepared by the Architect and signed by the Owner and Architect, directing a change in the Work prior to agreement on adjustment, if any, in the Contract Sum or Contract Time, or both. The Owner may by Construction Change Directive, without invalidating the Contract, order changes in the Work within the general scope of the Contract consisting of additions, deletions or other revisions, the Contract Sum and Contract Time being adjusted accordingly. § 7.3.2 A Construction Change Directive shall be used in the absence of total agreement on the terms of a Change Order. § 7.3.3 If the Construction Change Directive provides for an adjustment to the Contract Sum, the adjustment shall be based on one of the following methods: .1 Mutual acceptance of a lump sum properly itemized and supported by sufficient substantiating data to permit evaluation; .2 Unit prices stated in the Contract Documents or subsequently agreed upon; .3 Cost to be determined in a manner agreed upon by the parties and a mutually acceptable fixed or percentage fee; or Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 23 .4 As provided in Section 7.3.7. § 7.3.4 If unit prices are stated in the Contract Documents or subsequently agreed upon, and if quantities originally contemplated are materially changed in a proposed Change Order or Construction Change Directive so that application of such unit prices to quantities of Work proposed will cause substantial inequity to the Owner or Contractor, the applicable unit prices shall be equitably adjusted. § 7.3.5 Upon receipt of a Construction Change Directive, the Contractor shall promptly proceed with the change in the Work involved and advise the Architect of the Contractor’s agreement or disagreement with the method, if any, provided in the Construction Change Directive for determining the proposed adjustment in the Contract Sum or Contract Time. § 7.3.6 A Construction Change Directive signed by the Contractor indicates the Contractor’s agreement therewith, including adjustment in Contract Sum and Contract Time or the method for determining them. Such agreement shall be effective immediately and shall be recorded as a Change Order. § 7.3.7 If the Contractor does not respond promptly or disagrees with the method for adjustment in the Contract Sum, the Architect shall determine the method and the adjustment on the basis of reasonable expenditures and savings of those performing the Work attributable to the change, including, in case of an increase in the Contract Sum, an amount for overhead and profit as set forth in the Agreement, or if no such amount is set forth in the Agreement, a reasonable amount. In such case, and also under Section 7.3.3.3, the Contractor shall keep and present, in such form as the Architect may prescribe, an itemized accounting together with appropriate supporting data. Unless otherwise provided in the Contract Documents, costs for the purposes of this Section 7.3.7 shall be limited to the following: .1 Costs of labor, including social security, old age and unemployment insurance, fringe benefits required by agreement or custom, and workers’ compensation insurance; .2 Costs of materials, supplies and equipment, including cost of transportation, whether incorporated or consumed; .3 Rental costs of machinery and equipment, exclusive of hand tools, whether rented from the Contractor or others; .4 Costs of premiums for all bonds and insurance, permit fees, and sales, use or similar taxes related to the Work; and .5 Additional costs of supervision and field office personnel directly attributable to the change. § 7.3.8 The amount of credit to be allowed by the Contractor to the Owner for a deletion or change that results in a net decrease in the Contract Sum shall be actual net cost as confirmed by the Architect. When both additions and credits covering related Work or substitutions are involved in a change, the allowance for overhead and profit shall be figured on the basis of net increase, if any, with respect to that change. § 7.3.9 Pending final determination of the total cost of a Construction Change Directive to the Owner, the Contractor may request payment for Work completed under the Construction Change Directive in Applications for Payment. The Architect will make an interim determination for purposes of monthly certification for payment for those costs and certify for payment the amount that the Architect determines, in the Architect’s professional judgment, to be reasonably justified. The Architect’s interim determination of cost shall adjust the Contract Sum on the same basis as a Change Order, subject to the right of either party to disagree and assert a Claim in accordance with Article 15. § 7.3.10 When the Owner and Contractor agree with a determination made by the Architect concerning the adjustments in the Contract Sum and Contract Time, or otherwise reach agreement upon the adjustments, such agreement shall be effective immediately and the Architect will prepare a Change Order. Change Orders may be issued for all or any part of a Construction Change Directive. § 7.4 MINOR CHANGES IN THE WORK The Architect has authority to order minor changes in the Work not involving adjustment in the Contract Sum or extension of the Contract Time and not inconsistent with the intent of the Contract Documents. Such changes will be effected by written order signed by the Architect and shall be binding on the Owner and Contractor. Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 24 ARTICLE 8 TIME § 8.1 DEFINITIONS § 8.1.1 Unless otherwise provided, Contract Time is the period of time, including authorized adjustments, allotted in the Contract Documents for Substantial Completion of the Work. § 8.1.2 The date of commencement of the Work is the date established in the Agreement. § 8.1.3 The date of Substantial Completion is the date certified by the Architect in accordance with Section 9.8. § 8.1.4 The term "day" as used in the Contract Documents shall mean calendar day unless otherwise specifically defined. § 8.2 PROGRESS AND COMPLETION § 8.2.1 Time limits stated in the Contract Documents are of the essence of the Contract. By executing the Agreement the Contractor confirms that the Contract Time is a reasonable period for performing the Work. § 8.2.2 The Contractor shall not knowingly, except by agreement or instruction of the Owner in writing, prematurely commence operations on the site or elsewhere prior to the effective date of insurance required by Article 11 to be furnished by the Contractor and Owner. The date of commencement of the Work shall not be changed by the effective date of such insurance. § 8.2.3 The Contractor shall proceed expeditiously with adequate forces and shall achieve Substantial Completion within the Contract Time. § 8.3 DELAYS AND EXTENSIONS OF TIME § 8.3.1 If the Contractor is delayed at any time in the commencement or progress of the Work by an act or neglect of the Owner or Architect, or of an employee of either, or of a separate contractor employed by the Owner; or by changes ordered in the Work; or by labor disputes, fire, unusual delay in deliveries, unavoidable casualties or other causes beyond the Contractor’s control; or by delay authorized by the Owner pending mediation and arbitration; or by other causes that the Architect determines may justify delay, then the Contract Time shall be extended by Change Order for such reasonable time as the Architect may determine. § 8.3.2 Claims relating to time shall be made in accordance with applicable provisions of Article 15. § 8.3.3 This Section 8.3 does not preclude recovery of damages for delay by either party under other provisions of the Contract Documents. ARTICLE 9 PAYMENTS AND COMPLETION § 9.1 CONTRACT SUM The Contract Sum is stated in the Agreement and, including authorized adjustments, is the total amount payable by the Owner to the Contractor for performance of the Work under the Contract Documents. § 9.2 SCHEDULE OF VALUES Where the Contract is based on a stipulated sum or Guaranteed Maximum Price, the Contractor shall submit to the Architect, before the first Application for Payment, a schedule of values allocating the entire Contract Sum to the various portions of the Work and prepared in such form and supported by such data to substantiate its accuracy as the Architect may require. This schedule, unless objected to by the Architect, shall be used as a basis for reviewing the Contractor’s Applications for Payment. § 9.3 APPLICATIONS FOR PAYMENT § 9.3.1 At least ten days before the date established for each progress payment, the Contractor shall submit to the Architect an itemized Application for Payment prepared in accordance with the schedule of values, if required under Section 9.2, for completed portions of the Work. Such application shall be notarized, if required, and supported by such data substantiating the Contractor’s right to payment as the Owner or Architect may require, such as copies of requisitions from Subcontractors and material suppliers, and shall reflect retainage if provided for in the Contract Documents. Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 25 § 9.3.1.1 As provided in Section 7.3.9, such applications may include requests for payment on account of changes in the Work that have been properly authorized by Construction Change Directives, or by interim determinations of the Architect, but not yet included in Change Orders. § 9.3.1.2 Applications for Payment shall not include requests for payment for portions of the Work for which the Contractor does not intend to pay a Subcontractor or material supplier, unless such Work has been performed by others whom the Contractor intends to pay. § 9.3.2 Unless otherwise provided in the Contract Documents, payments shall be made on account of materials and equipment delivered and suitably stored at the site for subsequent incorporation in the Work. If approved in advance by the Owner, payment may similarly be made for materials and equipment suitably stored off the site at a location agreed upon in writing. Payment for materials and equipment stored on or off the site shall be conditioned upon compliance by the Contractor with procedures satisfactory to the Owner to establish the Owner’s title to such materials and equipment or otherwise protect the Owner’s interest, and shall include the costs of applicable insurance, storage and transportation to the site for such materials and equipment stored off the site. § 9.3.3 The Contractor warrants that title to all Work covered by an Application for Payment will pass to the Owner no later than the time of payment. The Contractor further warrants that upon submittal of an Application for Payment all Work for which Certificates for Payment have been previously issued and payments received from the Owner shall, to the best of the Contractor’s knowledge, information and belief, be free and clear of liens, claims, security interests or encumbrances in favor of the Contractor, Subcontractors, material suppliers, or other persons or entities making a claim by reason of having provided labor, materials and equipment relating to the Work. § 9.4 CERTIFICATES FOR PAYMENT § 9.4.1 The Architect will, within seven days after receipt of the Contractor’s Application for Payment, either issue to the Owner a Certificate for Payment, with a copy to the Contractor, for such amount as the Architect determines is properly due, or notify the Contractor and Owner in writing of the Architect’s reasons for withholding certification in whole or in part as provided in Section 9.5.1. § 9.4.2 The issuance of a Certificate for Payment will constitute a representation by the Architect to the Owner, based on the Architect’s evaluation of the Work and the data comprising the Application for Payment, that, to the best of the Architect’s knowledge, information and belief, the Work has progressed to the point indicated and that the quality of the Work is in accordance with the Contract Documents. The foregoing representations are subject to an evaluation of the Work for conformance with the Contract Documents upon Substantial Completion, to results of subsequent tests and inspections, to correction of minor deviations from the Contract Documents prior to completion and to specific qualifications expressed by the Architect. The issuance of a Certificate for Payment will further constitute a representation that the Contractor is entitled to payment in the amount certified. However, the issuance of a Certificate for Payment will not be a representation that the Architect has (1) made exhaustive or continuous on-site inspections to check the quality or quantity of the Work, (2) reviewed construction means, methods, techniques, sequences or procedures, (3) reviewed copies of requisitions received from Subcontractors and material suppliers and other data requested by the Owner to substantiate the Contractor’s right to payment, or (4) made examination to ascertain how or for what purpose the Contractor has used money previously paid on account of the Contract Sum. § 9.5 DECISIONS TO WITHHOLD CERTIFICATION § 9.5.1 The Architect may withhold a Certificate for Payment in whole or in part, to the extent reasonably necessary to protect the Owner, if in the Architect’s opinion the representations to the Owner required by Section 9.4.2 cannot be made. If the Architect is unable to certify payment in the amount of the Application, the Architect will notify the Contractor and Owner as provided in Section 9.4.1. If the Contractor and Architect cannot agree on a revised amount, the Architect will promptly issue a Certificate for Payment for the amount for which the Architect is able to make such representations to the Owner. The Architect may also withhold a Certificate for Payment or, because of subsequently discovered evidence, may nullify the whole or a part of a Certificate for Payment previously issued, to such extent as may be necessary in the Architect’s opinion to protect the Owner from loss for which the Contractor is responsible, including loss resulting from acts and omissions described in Section 3.3.2, because of .1 defective Work not remedied; .2 third party claims filed or reasonable evidence indicating probable filing of such claims unless security acceptable to the Owner is provided by the Contractor; Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 26 .3 failure of the Contractor to make payments properly to Subcontractors or for labor, materials or equipment; .4 reasonable evidence that the Work cannot be completed for the unpaid balance of the Contract Sum; .5 damage to the Owner or a separate contractor; .6 reasonable evidence that the Work will not be completed within the Contract Time, and that the unpaid balance would not be adequate to cover actual or liquidated damages for the anticipated delay; or .7 repeated failure to carry out the Work in accordance with the Contract Documents. § 9.5.2 When the above reasons for withholding certification are removed, certification will be made for amounts previously withheld. § 9.5.3 If the Architect withholds certification for payment under Section 9.5.1.3, the Owner may, at its sole option, issue joint checks to the Contractor and to any Subcontractor or material or equipment suppliers to whom the Contractor failed to make payment for Work properly performed or material or equipment suitably delivered. If the Owner makes payments by joint check, the Owner shall notify the Architect and the Architect will reflect such payment on the next Certificate for Payment. § 9.6 PROGRESS PAYMENTS § 9.6.1 After the Architect has issued a Certificate for Payment, the Owner shall make payment in the manner and within the time provided in the Contract Documents, and shall so notify the Architect. § 9.6.2 The Contractor shall pay each Subcontractor no later than seven days after receipt of payment from the Owner the amount to which the Subcontractor is entitled, reflecting percentages actually retained from payments to the Contractor on account of the Subcontractor’s portion of the Work. The Contractor shall, by appropriate agreement with each Subcontractor, require each Subcontractor to make payments to Sub-subcontractors in a similar manner. § 9.6.3 The Architect will, on request, furnish to a Subcontractor, if practicable, information regarding percentages of completion or amounts applied for by the Contractor and action taken thereon by the Architect and Owner on account of portions of the Work done by such Subcontractor. § 9.6.4 The Owner has the right to request written evidence from the Contractor that the Contractor has properly paid Subcontractors and material and equipment suppliers amounts paid by the Owner to the Contractor for subcontracted Work. If the Contractor fails to furnish such evidence within seven days, the Owner shall have the right to contact Subcontractors to ascertain whether they have been properly paid. Neither the Owner nor Architect shall have an obligation to pay or to see to the payment of money to a Subcontractor, except as may otherwise be required by law. § 9.6.5 Contractor payments to material and equipment suppliers shall be treated in a manner similar to that provided in Sections 9.6.2, 9.6.3 and 9.6.4. § 9.6.6 A Certificate for Payment, a progress payment, or partial or entire use or occupancy of the Project by the Owner shall not constitute acceptance of Work not in accordance with the Contract Documents. § 9.6.7 Unless the Contractor provides the Owner with a payment bond in the full penal sum of the Contract Sum, payments received by the Contractor for Work properly performed by Subcontractors and suppliers shall be held by the Contractor for those Subcontractors or suppliers who performed Work or furnished materials, or both, under contract with the Contractor for which payment was made by the Owner. Nothing contained herein shall require money to be placed in a separate account and not commingled with money of the Contractor, shall create any fiduciary liability or tort liability on the part of the Contractor for breach of trust or shall entitle any person or entity to an award of punitive damages against the Contractor for breach of the requirements of this provision. § 9.7 FAILURE OF PAYMENT If the Architect does not issue a Certificate for Payment, through no fault of the Contractor, within seven days after receipt of the Contractor’s Application for Payment, or if the Owner does not pay the Contractor within seven days after the date established in the Contract Documents the amount certified by the Architect or awarded by binding Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 27 dispute resolution, then the Contractor may, upon seven additional days’ written notice to the Owner and Architect, stop the Work until payment of the amount owing has been received. The Contract Time shall be extended appropriately and the Contract Sum shall be increased by the amount of the Contractor’s reasonable costs of shut-down, delay and start-up, plus interest as provided for in the Contract Documents. § 9.8 SUBSTANTIAL COMPLETION § 9.8.1 Substantial Completion is the stage in the progress of the Work when the Work or designated portion thereof is sufficiently complete in accordance with the Contract Documents so that the Owner can occupy or utilize the Work for its intended use. § 9.8.2 When the Contractor considers that the Work, or a portion thereof which the Owner agrees to accept separately, is substantially complete, the Contractor shall prepare and submit to the Architect a comprehensive list of items to be completed or corrected prior to final payment. Failure to include an item on such list does not alter the responsibility of the Contractor to complete all Work in accordance with the Contract Documents. § 9.8.3 Upon receipt of the Contractor’s list, the Architect will make an inspection to determine whether the Work or designated portion thereof is substantially complete. If the Architect’s inspection discloses any item, whether or not included on the Contractor’s list, which is not sufficiently complete in accordance with the Contract Documents so that the Owner can occupy or utilize the Work or designated portion thereof for its intended use, the Contractor shall, before issuance of the Certificate of Substantial Completion, complete or correct such item upon notification by the Architect. In such case, the Contractor shall then submit a request for another inspection by the Architect to determine Substantial Completion. § 9.8.4 When the Work or designated portion thereof is substantially complete, the Architect will prepare a Certificate of Substantial Completion that shall establish the date of Substantial Completion, shall establish responsibilities of the Owner and Contractor for security, maintenance, heat, utilities, damage to the Work and insurance, and shall fix the time within which the Contractor shall finish all items on the list accompanying the Certificate. Warranties required by the Contract Documents shall commence on the date of Substantial Completion of the Work or designated portion thereof unless otherwise provided in the Certificate of Substantial Completion. § 9.8.5 The Certificate of Substantial Completion shall be submitted to the Owner and Contractor for their written acceptance of responsibilities assigned to them in such Certificate. Upon such acceptance and consent of surety, if any, the Owner shall make payment of retainage applying to such Work or designated portion thereof. Such payment shall be adjusted for Work that is incomplete or not in accordance with the requirements of the Contract Documents. § 9.9 PARTIAL OCCUPANCY OR USE § 9.9.1 The Owner may occupy or use any completed or partially completed portion of the Work at any stage when such portion is designated by separate agreement with the Contractor, provided such occupancy or use is consented to by the insurer as required under Section 11.3.1.5 and authorized by public authorities having jurisdiction over the Project. Such partial occupancy or use may commence whether or not the portion is substantially complete, provided the Owner and Contractor have accepted in writing the responsibilities assigned to each of them for payments, retainage, if any, security, maintenance, heat, utilities, damage to the Work and insurance, and have agreed in writing concerning the period for correction of the Work and commencement of warranties required by the Contract Documents. When the Contractor considers a portion substantially complete, the Contractor shall prepare and submit a list to the Architect as provided under Section 9.8.2. Consent of the Contractor to partial occupancy or use shall not be unreasonably withheld. The stage of the progress of the Work shall be determined by written agreement between the Owner and Contractor or, if no agreement is reached, by decision of the Architect. § 9.9.2 Immediately prior to such partial occupancy or use, the Owner, Contractor and Architect shall jointly inspect the area to be occupied or portion of the Work to be used in order to determine and record the condition of the Work. § 9.9.3 Unless otherwise agreed upon, partial occupancy or use of a portion or portions of the Work shall not constitute acceptance of Work not complying with the requirements of the Contract Documents. Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 28 § 9.10 FINAL COMPLETION AND FINAL PAYMENT § 9.10.1 Upon receipt of the Contractor’s written notice that the Work is ready for final inspection and acceptance and upon receipt of a final Application for Payment, the Architect will promptly make such inspection and, when the Architect finds the Work acceptable under the Contract Documents and the Contract fully performed, the Architect will promptly issue a final Certificate for Payment stating that to the best of the Architect’s knowledge, information and belief, and on the basis of the Architect’s on-site visits and inspections, the Work has been completed in accordance with terms and conditions of the Contract Documents and that the entire balance found to be due the Contractor and noted in the final Certificate is due and payable. The Architect’s final Certificate for Payment will constitute a further representation that conditions listed in Section 9.10.2 as precedent to the Contractor’s being entitled to final payment have been fulfilled. § 9.10.2 Neither final payment nor any remaining retained percentage shall become due until the Contractor submits to the Architect (1) an affidavit that payrolls, bills for materials and equipment, and other indebtedness connected with the Work for which the Owner or the Owner’s property might be responsible or encumbered (less amounts withheld by Owner) have been paid or otherwise satisfied, (2) a certificate evidencing that insurance required by the Contract Documents to remain in force after final payment is currently in effect and will not be canceled or allowed to expire until at least 30 days’ prior written notice has been given to the Owner, (3) a written statement that the Contractor knows of no substantial reason that the insurance will not be renewable to cover the period required by the Contract Documents, (4) consent of surety, if any, to final payment and (5), if required by the Owner, other data establishing payment or satisfaction of obligations, such as receipts, releases and waivers of liens, claims, security interests or encumbrances arising out of the Contract, to the extent and in such form as may be designated by the Owner. If a Subcontractor refuses to furnish a release or waiver required by the Owner, the Contractor may furnish a bond satisfactory to the Owner to indemnify the Owner against such lien. If such lien remains unsatisfied after payments are made, the Contractor shall refund to the Owner all money that the Owner may be compelled to pay in discharging such lien, including all costs and reasonable attorneys’ fees. § 9.10.3 If, after Substantial Completion of the Work, final completion thereof is materially delayed through no fault of the Contractor or by issuance of Change Orders affecting final completion, and the Architect so confirms, the Owner shall, upon application by the Contractor and certification by the Architect, and without terminating the Contract, make payment of the balance due for that portion of the Work fully completed and accepted. If the remaining balance for Work not fully completed or corrected is less than retainage stipulated in the Contract Documents, and if bonds have been furnished, the written consent of surety to payment of the balance due for that portion of the Work fully completed and accepted shall be submitted by the Contractor to the Architect prior to certification of such payment. Such payment shall be made under terms and conditions governing final payment, except that it shall not constitute a waiver of claims. § 9.10.4 The making of final payment shall constitute a waiver of Claims by the Owner except those arising from .1 liens, Claims, security interests or encumbrances arising out of the Contract and unsettled; .2 failure of the Work to comply with the requirements of the Contract Documents; or .3 terms of special warranties required by the Contract Documents. § 9.10.5 Acceptance of final payment by the Contractor, a Subcontractor or material supplier shall constitute a waiver of claims by that payee except those previously made in writing and identified by that payee as unsettled at the time of final Application for Payment. ARTICLE 10 PROTECTION OF PERSONS AND PROPERTY § 10.1 SAFETY PRECAUTIONS AND PROGRAMS The Contractor shall be responsible for initiating, maintaining and supervising all safety precautions and programs in connection with the performance of the Contract. § 10.2 SAFETY OF PERSONS AND PROPERTY § 10.2.1 The Contractor shall take reasonable precautions for safety of, and shall provide reasonable protection to prevent damage, injury or loss to .1 employees on the Work and other persons who may be affected thereby; .2 the Work and materials and equipment to be incorporated therein, whether in storage on or off the site, under care, custody or control of the Contractor or the Contractor’s Subcontractors or Sub-subcontractors; and Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 29 .3 other property at the site or adjacent thereto, such as trees, shrubs, lawns, walks, pavements, roadways, structures and utilities not designated for removal, relocation or replacement in the course of construction. § 10.2.2 The Contractor shall comply with and give notices required by applicable laws, statutes, ordinances, codes, rules and regulations, and lawful orders of public authorities bearing on safety of persons or property or their protection from damage, injury or loss. § 10.2.3 The Contractor shall erect and maintain, as required by existing conditions and performance of the Contract, reasonable safeguards for safety and protection, including posting danger signs and other warnings against hazards, promulgating safety regulations and notifying owners and users of adjacent sites and utilities. § 10.2.4 When use or storage of explosives or other hazardous materials or equipment or unusual methods are necessary for execution of the Work, the Contractor shall exercise utmost care and carry on such activities under supervision of properly qualified personnel. § 10.2.5 The Contractor shall promptly remedy damage and loss (other than damage or loss insured under property insurance required by the Contract Documents) to property referred to in Sections 10.2.1.2 and 10.2.1.3 caused in whole or in part by the Contractor, a Subcontractor, a Sub-subcontractor, or anyone directly or indirectly employed by any of them, or by anyone for whose acts they may be liable and for which the Contractor is responsible under Sections 10.2.1.2 and 10.2.1.3, except damage or loss attributable to acts or omissions of the Owner or Architect or anyone directly or indirectly employed by either of them, or by anyone for whose acts either of them may be liable, and not attributable to the fault or negligence of the Contractor. The foregoing obligations of the Contractor are in addition to the Contractor’s obligations under Section 3.18. § 10.2.6 The Contractor shall designate a responsible member of the Contractor’s organization at the site whose duty shall be the prevention of accidents. This person shall be the Contractor’s superintendent unless otherwise designated by the Contractor in writing to the Owner and Architect. § 10.2.7 The Contractor shall not permit any part of the construction or site to be loaded so as to cause damage or create an unsafe condition. § 10.2.8 INJURY OR DAMAGE TO PERSON OR PROPERTY If either party suffers injury or damage to person or property because of an act or omission of the other party, or of others for whose acts such party is legally responsible, written notice of such injury or damage, whether or not insured, shall be given to the other party within a reasonable time not exceeding 21 days after discovery. The notice shall provide sufficient detail to enable the other party to investigate the matter. § 10.3 HAZARDOUS MATERIALS § 10.3.1 The Contractor is responsible for compliance with any requirements included in the Contract Documents regarding hazardous materials. If the Contractor encounters a hazardous material or substance not addressed in the Contract Documents and if reasonable precautions will be inadequate to prevent foreseeable bodily injury or death to persons resulting from a material or substance, including but not limited to asbestos or polychlorinated biphenyl (PCB), encountered on the site by the Contractor, the Contractor shall, upon recognizing the condition, immediately stop Work in the affected area and report the condition to the Owner and Architect in writing. § 10.3.2 Upon receipt of the Contractor’s written notice, the Owner shall obtain the services of a licensed laboratory to verify the presence or absence of the material or substance reported by the Contractor and, in the event such material or substance is found to be present, to cause it to be rendered harmless. Unless otherwise required by the Contract Documents, the Owner shall furnish in writing to the Contractor and Architect the names and qualifications of persons or entities who are to perform tests verifying the presence or absence of such material or substance or who are to perform the task of removal or safe containment of such material or substance. The Contractor and the Architect will promptly reply to the Owner in writing stating whether or not either has reasonable objection to the persons or entities proposed by the Owner. If either the Contractor or Architect has an objection to a person or entity proposed by the Owner, the Owner shall propose another to whom the Contractor and the Architect have no reasonable objection. When the material or substance has been rendered harmless, Work in the affected area shall resume upon written agreement of the Owner and Contractor. By Change Order, the Contract Time shall be Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 30 extended appropriately and the Contract Sum shall be increased in the amount of the Contractor’s reasonable additional costs of shut-down, delay and start-up. § 10.3.3 To the fullest extent permitted by law, the Owner shall indemnify and hold harmless the Contractor, Subcontractors, Architect, Architect’s consultants and agents and employees of any of them from and against claims, damages, losses and expenses, including but not limited to attorneys’ fees, arising out of or resulting from performance of the Work in the affected area if in fact the material or substance presents the risk of bodily injury or death as described in Section 10.3.1 and has not been rendered harmless, provided that such claim, damage, loss or expense is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than the Work itself), except to the extent that such damage, loss or expense is due to the fault or negligence of the party seeking indemnity. § 10.3.4 The Owner shall not be responsible under this Section 10.3 for materials or substances the Contractor brings to the site unless such materials or substances are required by the Contract Documents. The Owner shall be responsible for materials or substances required by the Contract Documents, except to the extent of the Contractor’s fault or negligence in the use and handling of such materials or substances. § 10.3.5 The Contractor shall indemnify the Owner for the cost and expense the Owner incurs (1) for remediation of a material or substance the Contractor brings to the site and negligently handles, or (2) where the Contractor fails to perform its obligations under Section 10.3.1, except to the extent that the cost and expense are due to the Owner’s fault or negligence. § 10.3.6 If, without negligence on the part of the Contractor, the Contractor is held liable by a government agency for the cost of remediation of a hazardous material or substance solely by reason of performing Work as required by the Contract Documents, the Owner shall indemnify the Contractor for all cost and expense thereby incurred. § 10.4 EMERGENCIES In an emergency affecting safety of persons or property, the Contractor shall act, at the Contractor’s discretion, to prevent threatened damage, injury or loss. Additional compensation or extension of time claimed by the Contractor on account of an emergency shall be determined as provided in Article 15 and Article 7. ARTICLE 11 INSURANCE AND BONDS § 11.1 CONTRACTOR’S LIABILITY INSURANCE § 11.1.1 The Contractor shall purchase from and maintain in a company or companies lawfully authorized to do business in the jurisdiction in which the Project is located such insurance as will protect the Contractor from claims set forth below which may arise out of or result from the Contractor’s operations and completed operations under the Contract and for which the Contractor may be legally liable, whether such operations be by the Contractor or by a Subcontractor or by anyone directly or indirectly employed by any of them, or by anyone for whose acts any of them may be liable: .1 Claims under workers’ compensation, disability benefit and other similar employee benefit acts that are applicable to the Work to be performed; .2 Claims for damages because of bodily injury, occupational sickness or disease, or death of the Contractor’s employees; .3 Claims for damages because of bodily injury, sickness or disease, or death of any person other than the Contractor’s employees; .4 Claims for damages insured by usual personal injury liability coverage; .5 Claims for damages, other than to the Work itself, because of injury to or destruction of tangible property, including loss of use resulting therefrom; .6 Claims for damages because of bodily injury, death of a person or property damage arising out of ownership, maintenance or use of a motor vehicle; .7 Claims for bodily injury or property damage arising out of completed operations; and .8 Claims involving contractual liability insurance applicable to the Contractor’s obligations under Section 3.18. § 11.1.2 The insurance required by Section 11.1.1 shall be written for not less than limits of liability specified in the Contract Documents or required by law, whichever coverage is greater. Coverages, whether written on an occurrence or claims-made basis, shall be maintained without interruption from the date of commencement of the Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 31 Work until the date of final payment and termination of any coverage required to be maintained after final payment, and, with respect to the Contractor’s completed operations coverage, until the expiration of the period for correction of Work or for such other period for maintenance of completed operations coverage as specified in the Contract Documents. § 11.1.3 Certificates of insurance acceptable to the Owner shall be filed with the Owner prior to commencement of the Work and thereafter upon renewal or replacement of each required policy of insurance. These certificates and the insurance policies required by this Section 11.1 shall contain a provision that coverages afforded under the policies will not be canceled or allowed to expire until at least 30 days’ prior written notice has been given to the Owner. An additional certificate evidencing continuation of liability coverage, including coverage for completed operations, shall be submitted with the final Application for Payment as required by Section 9.10.2 and thereafter upon renewal or replacement of such coverage until the expiration of the time required by Section 11.1.2. Information concerning reduction of coverage on account of revised limits or claims paid under the General Aggregate, or both, shall be furnished by the Contractor with reasonable promptness. § 11.1.4 The Contractor shall cause the commercial liability coverage required by the Contract Documents to include (1) the Owner, the Architect and the Architect’s consultants as additional insureds for claims caused in whole or in part by the Contractor’s negligent acts or omissions during the Contractor’s operations; and (2) the Owner as an additional insured for claims caused in whole or in part by the Contractor’s negligent acts or omissions during the Contractor’s completed operations. § 11.2 OWNER’S LIABILITY INSURANCE The Owner shall be responsible for purchasing and maintaining the Owner’s usual liability insurance. § 11.3 PROPERTY INSURANCE § 11.3.1 Unless otherwise provided, the Owner shall purchase and maintain, in a company or companies lawfully authorized to do business in the jurisdiction in which the Project is located, property insurance written on a builder’s risk "all-risk" or equivalent policy form in the amount of the initial Contract Sum, plus value of subsequent Contract Modifications and cost of materials supplied or installed by others, comprising total value for the entire Project at the site on a replacement cost basis without optional deductibles. Such property insurance shall be maintained, unless otherwise provided in the Contract Documents or otherwise agreed in writing by all persons and entities who are beneficiaries of such insurance, until final payment has been made as provided in Section 9.10 or until no person or entity other than the Owner has an insurable interest in the property required by this Section 11.3 to be covered, whichever is later. This insurance shall include interests of the Owner, the Contractor, Subcontractors and Sub-subcontractors in the Project. § 11.3.1.1 Property insurance shall be on an "all-risk" or equivalent policy form and shall include, without limitation, insurance against the perils of fire (with extended coverage) and physical loss or damage including, without duplication of coverage, theft, vandalism, malicious mischief, collapse, earthquake, flood, windstorm, falsework, testing and startup, temporary buildings and debris removal including demolition occasioned by enforcement of any applicable legal requirements, and shall cover reasonable compensation for Architect’s and Contractor’s services and expenses required as a result of such insured loss. § 11.3.1.2 If the Owner does not intend to purchase such property insurance required by the Contract and with all of the coverages in the amount described above, the Owner shall so inform the Contractor in writing prior to commencement of the Work. The Contractor may then effect insurance that will protect the interests of the Contractor, Subcontractors and Sub-subcontractors in the Work, and by appropriate Change Order the cost thereof shall be charged to the Owner. If the Contractor is damaged by the failure or neglect of the Owner to purchase or maintain insurance as described above, without so notifying the Contractor in writing, then the Owner shall bear all reasonable costs properly attributable thereto. § 11.3.1.3 If the property insurance requires deductibles, the Owner shall pay costs not covered because of such deductibles. § 11.3.1.4 This property insurance shall cover portions of the Work stored off the site, and also portions of the Work in transit. Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 32 § 11.3.1.5 Partial occupancy or use in accordance with Section 9.9 shall not commence until the insurance company or companies providing property insurance have consented to such partial occupancy or use by endorsement or otherwise. The Owner and the Contractor shall take reasonable steps to obtain consent of the insurance company or companies and shall, without mutual written consent, take no action with respect to partial occupancy or use that would cause cancellation, lapse or reduction of insurance. § 11.3.2 BOILER AND MACHINERY INSURANCE The Owner shall purchase and maintain boiler and machinery insurance required by the Contract Documents or by law, which shall specifically cover such insured objects during installation and until final acceptance by the Owner; this insurance shall include interests of the Owner, Contractor, Subcontractors and Sub-subcontractors in the Work, and the Owner and Contractor shall be named insureds. § 11.3.3 LOSS OF USE INSURANCE The Owner, at the Owner’s option, may purchase and maintain such insurance as will insure the Owner against loss of use of the Owner’s property due to fire or other hazards, however caused. The Owner waives all rights of action against the Contractor for loss of use of the Owner’s property, including consequential losses due to fire or other hazards however caused. § 11.3.4 If the Contractor requests in writing that insurance for risks other than those described herein or other special causes of loss be included in the property insurance policy, the Owner shall, if possible, include such insurance, and the cost thereof shall be charged to the Contractor by appropriate Change Order. § 11.3.5 If during the Project construction period the Owner insures properties, real or personal or both, at or adjacent to the site by property insurance under policies separate from those insuring the Project, or if after final payment property insurance is to be provided on the completed Project through a policy or policies other than those insuring the Project during the construction period, the Owner shall waive all rights in accordance with the terms of Section 11.3.7 for damages caused by fire or other causes of loss covered by this separate property insurance. All separate policies shall provide this waiver of subrogation by endorsement or otherwise. § 11.3.6 Before an exposure to loss may occur, the Owner shall file with the Contractor a copy of each policy that includes insurance coverages required by this Section 11.3. Each policy shall contain all generally applicable conditions, definitions, exclusions and endorsements related to this Project. Each policy shall contain a provision that the policy will not be canceled or allowed to expire, and that its limits will not be reduced, until at least 30 days’ prior written notice has been given to the Contractor. § 11.3.7 WAIVERS OF SUBROGATION The Owner and Contractor waive all rights against (1) each other and any of their subcontractors, sub-subcontractors, agents and employees, each of the other, and (2) the Architect, Architect’s consultants, separate contractors described in Article 6, if any, and any of their subcontractors, sub-subcontractors, agents and employees, for damages caused by fire or other causes of loss to the extent covered by property insurance obtained pursuant to this Section 11.3 or other property insurance applicable to the Work, except such rights as they have to proceeds of such insurance held by the Owner as fiduciary. The Owner or Contractor, as appropriate, shall require of the Architect, Architect’s consultants, separate contractors described in Article 6, if any, and the subcontractors, sub-subcontractors, agents and employees of any of them, by appropriate agreements, written where legally required for validity, similar waivers each in favor of other parties enumerated herein. The policies shall provide such waivers of subrogation by endorsement or otherwise. A waiver of subrogation shall be effective as to a person or entity even though that person or entity would otherwise have a duty of indemnification, contractual or otherwise, did not pay the insurance premium directly or indirectly, and whether or not the person or entity had an insurable interest in the property damaged. § 11.3.8 A loss insured under the Owner’s property insurance shall be adjusted by the Owner as fiduciary and made payable to the Owner as fiduciary for the insureds, as their interests may appear, subject to requirements of any applicable mortgagee clause and of Section 11.3.10. The Contractor shall pay Subcontractors their just shares of insurance proceeds received by the Contractor, and by appropriate agreements, written where legally required for validity, shall require Subcontractors to make payments to their Sub-subcontractors in similar manner. Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 33 § 11.3.9 If required in writing by a party in interest, the Owner as fiduciary shall, upon occurrence of an insured loss, give bond for proper performance of the Owner’s duties. The cost of required bonds shall be charged against proceeds received as fiduciary. The Owner shall deposit in a separate account proceeds so received, which the Owner shall distribute in accordance with such agreement as the parties in interest may reach, or as determined in accordance with the method of binding dispute resolution selected in the Agreement between the Owner and Contractor. If after such loss no other special agreement is made and unless the Owner terminates the Contract for convenience, replacement of damaged property shall be performed by the Contractor after notification of a Change in the Work in accordance with Article 7. § 11.3.10 The Owner as fiduciary shall have power to adjust and settle a loss with insurers unless one of the parties in interest shall object in writing within five days after occurrence of loss to the Owner’s exercise of this power; if such objection is made, the dispute shall be resolved in the manner selected by the Owner and Contractor as the method of binding dispute resolution in the Agreement. If the Owner and Contractor have selected arbitration as the method of binding dispute resolution, the Owner as fiduciary shall make settlement with insurers or, in the case of a dispute over distribution of insurance proceeds, in accordance with the directions of the arbitrators. § 11.4 PERFORMANCE BOND AND PAYMENT BOND § 11.4.1 The Owner shall have the right to require the Contractor to furnish bonds covering faithful performance of the Contract and payment of obligations arising thereunder as stipulated in bidding requirements or specifically required in the Contract Documents on the date of execution of the Contract. § 11.4.2 Upon the request of any person or entity appearing to be a potential beneficiary of bonds covering payment of obligations arising under the Contract, the Contractor shall promptly furnish a copy of the bonds or shall authorize a copy to be furnished. ARTICLE 12 UNCOVERING AND CORRECTION OF WORK § 12.1 UNCOVERING OF WORK § 12.1.1 If a portion of the Work is covered contrary to the Architect’s request or to requirements specifically expressed in the Contract Documents, it must, if requested in writing by the Architect, be uncovered for the Architect’s examination and be replaced at the Contractor’s expense without change in the Contract Time. § 12.1.2 If a portion of the Work has been covered that the Architect has not specifically requested to examine prior to its being covered, the Architect may request to see such Work and it shall be uncovered by the Contractor. If such Work is in accordance with the Contract Documents, costs of uncovering and replacement shall, by appropriate Change Order, be at the Owner’s expense. If such Work is not in accordance with the Contract Documents, such costs and the cost of correction shall be at the Contractor’s expense unless the condition was caused by the Owner or a separate contractor in which event the Owner shall be responsible for payment of such costs. § 12.2 CORRECTION OF WORK § 12.2.1 BEFORE OR AFTER SUBSTANTIAL COMPLETION The Contractor shall promptly correct Work rejected by the Architect or failing to conform to the requirements of the Contract Documents, whether discovered before or after Substantial Completion and whether or not fabricated, installed or completed. Costs of correcting such rejected Work, including additional testing and inspections, the cost of uncovering and replacement, and compensation for the Architect’s services and expenses made necessary thereby, shall be at the Contractor’s expense. § 12.2.2 AFTER SUBSTANTIAL COMPLETION § 12.2.2.1 In addition to the Contractor’s obligations under Section 3.5, if, within one year after the date of Substantial Completion of the Work or designated portion thereof or after the date for commencement of warranties established under Section 9.9.1, or by terms of an applicable special warranty required by the Contract Documents, any of the Work is found to be not in accordance with the requirements of the Contract Documents, the Contractor shall correct it promptly after receipt of written notice from the Owner to do so unless the Owner has previously given the Contractor a written acceptance of such condition. The Owner shall give such notice promptly after discovery of the condition. During the one-year period for correction of Work, if the Owner fails to notify the Contractor and give the Contractor an opportunity to make the correction, the Owner waives the rights to require correction by the Contractor and to make a claim for breach of warranty. If the Contractor fails to correct Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 34 nonconforming Work within a reasonable time during that period after receipt of notice from the Owner or Architect, the Owner may correct it in accordance with Section 2.4. § 12.2.2.2 The one-year period for correction of Work shall be extended with respect to portions of Work first performed after Substantial Completion by the period of time between Substantial Completion and the actual completion of that portion of the Work. § 12.2.2.3 The one-year period for correction of Work shall not be extended by corrective Work performed by the Contractor pursuant to this Section 12.2. § 12.2.3 The Contractor shall remove from the site portions of the Work that are not in accordance with the requirements of the Contract Documents and are neither corrected by the Contractor nor accepted by the Owner. § 12.2.4 The Contractor shall bear the cost of correcting destroyed or damaged construction, whether completed or partially completed, of the Owner or separate contractors caused by the Contractor’s correction or removal of Work that is not in accordance with the requirements of the Contract Documents. § 12.2.5 Nothing contained in this Section 12.2 shall be construed to establish a period of limitation with respect to other obligations the Contractor has under the Contract Documents. Establishment of the one-year period for correction of Work as described in Section 12.2.2 relates only to the specific obligation of the Contractor to correct the Work, and has no relationship to the time within which the obligation to comply with the Contract Documents may be sought to be enforced, nor to the time within which proceedings may be commenced to establish the Contractor’s liability with respect to the Contractor’s obligations other than specifically to correct the Work. § 12.3 ACCEPTANCE OF NONCONFORMING WORK If the Owner prefers to accept Work that is not in accordance with the requirements of the Contract Documents, the Owner may do so instead of requiring its removal and correction, in which case the Contract Sum will be reduced as appropriate and equitable. Such adjustment shall be effected whether or not final payment has been made. ARTICLE 13 MISCELLANEOUS PROVISIONS § 13.1 GOVERNING LAW The Contract shall be governed by the law of the place where the Project is located except that, if the parties have selected arbitration as the method of binding dispute resolution, the Federal Arbitration Act shall govern Section 15.4. § 13.2 SUCCESSORS AND ASSIGNS § 13.2.1 The Owner and Contractor respectively bind themselves, their partners, successors, assigns and legal representatives to covenants, agreements and obligations contained in the Contract Documents. Except as provided in Section 13.2.2, neither party to the Contract shall assign the Contract as a whole without written consent of the other. If either party attempts to make such an assignment without such consent, that party shall nevertheless remain legally responsible for all obligations under the Contract. § 13.2.2 The Owner may, without consent of the Contractor, assign the Contract to a lender providing construction financing for the Project, if the lender assumes the Owner’s rights and obligations under the Contract Documents. The Contractor shall execute all consents reasonably required to facilitate such assignment. § 13.3 WRITTEN NOTICE Written notice shall be deemed to have been duly served if delivered in person to the individual, to a member of the firm or entity, or to an officer of the corporation for which it was intended; or if delivered at, or sent by registered or certified mail or by courier service providing proof of delivery to, the last business address known to the party giving notice. § 13.4 RIGHTS AND REMEDIES § 13.4.1 Duties and obligations imposed by the Contract Documents and rights and remedies available thereunder shall be in addition to and not a limitation of duties, obligations, rights and remedies otherwise imposed or available by law. Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 35 § 13.4.2 No action or failure to act by the Owner, Architect or Contractor shall constitute a waiver of a right or duty afforded them under the Contract, nor shall such action or failure to act constitute approval of or acquiescence in a breach there under, except as may be specifically agreed in writing. § 13.5 TESTS AND INSPECTIONS § 13.5.1 Tests, inspections and approvals of portions of the Work shall be made as required by the Contract Documents and by applicable laws, statutes, ordinances, codes, rules and regulations or lawful orders of public authorities. Unless otherwise provided, the Contractor shall make arrangements for such tests, inspections and approvals with an independent testing laboratory or entity acceptable to the Owner, or with the appropriate public authority, and shall bear all related costs of tests, inspections and approvals. The Contractor shall give the Architect timely notice of when and where tests and inspections are to be made so that the Architect may be present for such procedures. The Owner shall bear costs of (1) tests, inspections or approvals that do not become requirements until after bids are received or negotiations concluded, and (2) tests, inspections or approvals where building codes or applicable laws or regulations prohibit the Owner from delegating their cost to the Contractor. § 13.5.2 If the Architect, Owner or public authorities having jurisdiction determine that portions of the Work require additional testing, inspection or approval not included under Section 13.5.1, the Architect will, upon written authorization from the Owner, instruct the Contractor to make arrangements for such additional testing, inspection or approval by an entity acceptable to the Owner, and the Contractor shall give timely notice to the Architect of when and where tests and inspections are to be made so that the Architect may be present for such procedures. Such costs, except as provided in Section 13.5.3, shall be at the Owner’s expense. § 13.5.3 If such procedures for testing, inspection or approval under Sections 13.5.1 and 13.5.2 reveal failure of the portions of the Work to comply with requirements established by the Contract Documents, all costs made necessary by such failure including those of repeated procedures and compensation for the Architect’s services and expenses shall be at the Contractor’s expense. § 13.5.4 Required certificates of testing, inspection or approval shall, unless otherwise required by the Contract Documents, be secured by the Contractor and promptly delivered to the Architect. § 13.5.5 If the Architect is to observe tests, inspections or approvals required by the Contract Documents, the Architect will do so promptly and, where practicable, at the normal place of testing. § 13.5.6 Tests or inspections conducted pursuant to the Contract Documents shall be made promptly to avoid unreasonable delay in the Work. § 13.6 INTEREST Payments due and unpaid under the Contract Documents shall bear interest from the date payment is due at such rate as the parties may agree upon in writing or, in the absence thereof, at the legal rate prevailing from time to time at the place where the Project is located. § 13.7 TIME LIMITS ON CLAIMS The Owner and Contractor shall commence all claims and causes of action, whether in contract, tort, breach of warranty or otherwise, against the other arising out of or related to the Contract in accordance with the requirements of the final dispute resolution method selected in the Agreement within the time period specified by applicable law, but in any case not more than 10 years after the date of Substantial Completion of the Work. The Owner and Contractor waive all claims and causes of action not commenced in accordance with this Section 13.7. ARTICLE 14 TERMINATION OR SUSPENSION OF THE CONTRACT § 14.1 TERMINATION BY THE CONTRACTOR § 14.1.1 The Contractor may terminate the Contract if the Work is stopped for a period of 30 consecutive days through no act or fault of the Contractor or a Subcontractor, Sub-subcontractor or their agents or employees or any other persons or entities performing portions of the Work under direct or indirect contract with the Contractor, for any of the following reasons: .1 Issuance of an order of a court or other public authority having jurisdiction that requires all Work to be stopped; Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 36 .2 An act of government, such as a declaration of national emergency that requires all Work to be stopped; .3 Because the Architect has not issued a Certificate for Payment and has not notified the Contractor of the reason for withholding certification as provided in Section 9.4.1, or because the Owner has not made payment on a Certificate for Payment within the time stated in the Contract Documents; or .4 The Owner has failed to furnish to the Contractor promptly, upon the Contractor’s request, reasonable evidence as required by Section 2.2.1. § 14.1.2 The Contractor may terminate the Contract if, through no act or fault of the Contractor or a Subcontractor, Sub-subcontractor or their agents or employees or any other persons or entities performing portions of the Work under direct or indirect contract with the Contractor, repeated suspensions, delays or interruptions of the entire Work by the Owner as described in Section 14.3 constitute in the aggregate more than 100 percent of the total number of days scheduled for completion, or 120 days in any 365-day period, whichever is less. § 14.1.3 If one of the reasons described in Section 14.1.1 or 14.1.2 exists, the Contractor may, upon seven days’ written notice to the Owner and Architect, terminate the Contract and recover from the Owner payment for Work executed, including reasonable overhead and profit, costs incurred by reason of such termination, and damages. § 14.1.4 If the Work is stopped for a period of 60 consecutive days through no act or fault of the Contractor or a Subcontractor or their agents or employees or any other persons performing portions of the Work under contract with the Contractor because the Owner has repeatedly failed to fulfill the Owner’s obligations under the Contract Documents with respect to matters important to the progress of the Work, the Contractor may, upon seven additional days’ written notice to the Owner and the Architect, terminate the Contract and recover from the Owner as provided in Section 14.1.3. § 14.2 TERMINATION BY THE OWNER FOR CAUSE § 14.2.1 The Owner may terminate the Contract if the Contractor .1 repeatedly refuses or fails to supply enough properly skilled workers or proper materials; .2 fails to make payment to Subcontractors for materials or labor in accordance with the respective agreements between the Contractor and the Subcontractors; .3 repeatedly disregards applicable laws, statutes, ordinances, codes, rules and regulations, or lawful orders of a public authority; or .4 otherwise is guilty of substantial breach of a provision of the Contract Documents. § 14.2.2 When any of the above reasons exist, the Owner, upon certification by the Initial Decision Maker that sufficient cause exists to justify such action, may without prejudice to any other rights or remedies of the Owner and after giving the Contractor and the Contractor’s surety, if any, seven days’ written notice, terminate employment of the Contractor and may, subject to any prior rights of the surety: .1 Exclude the Contractor from the site and take possession of all materials, equipment, tools, and construction equipment and machinery thereon owned by the Contractor; .2 Accept assignment of subcontracts pursuant to Section 5.4; and .3 Finish the Work by whatever reasonable method the Owner may deem expedient. Upon written request of the Contractor, the Owner shall furnish to the Contractor a detailed accounting of the costs incurred by the Owner in finishing the Work. § 14.2.3 When the Owner terminates the Contract for one of the reasons stated in Section 14.2.1, the Contractor shall not be entitled to receive further payment until the Work is finished. § 14.2.4 If the unpaid balance of the Contract Sum exceeds costs of finishing the Work, including compensation for the Architect’s services and expenses made necessary thereby, and other damages incurred by the Owner and not expressly waived, such excess shall be paid to the Contractor. If such costs and damages exceed the unpaid balance, the Contractor shall pay the difference to the Owner. The amount to be paid to the Contractor or Owner, as the case may be, shall be certified by the Initial Decision Maker, upon application, and this obligation for payment shall survive termination of the Contract. Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 37 § 14.3 SUSPENSION BY THE OWNER FOR CONVENIENCE § 14.3.1 The Owner may, without cause, order the Contractor in writing to suspend, delay or interrupt the Work in whole or in part for such period of time as the Owner may determine. § 14.3.2 The Contract Sum and Contract Time shall be adjusted for increases in the cost and time caused by suspension, delay or interruption as described in Section 14.3.1. Adjustment of the Contract Sum shall include profit. No adjustment shall be made to the extent .1 that performance is, was or would have been so suspended, delayed or interrupted by another cause for which the Contractor is responsible; or .2 that an equitable adjustment is made or denied under another provision of the Contract. § 14.4 TERMINATION BY THE OWNER FOR CONVENIENCE § 14.4.1 The Owner may, at any time, terminate the Contract for the Owner’s convenience and without cause. § 14.4.2 Upon receipt of written notice from the Owner of such termination for the Owner’s convenience, the Contractor shall .1 cease operations as directed by the Owner in the notice; .2 take actions necessary, or that the Owner may direct, for the protection and preservation of the Work; and .3 except for Work directed to be performed prior to the effective date of termination stated in the notice, terminate all existing subcontracts and purchase orders and enter into no further subcontracts and purchase orders. § 14.4.3 In case of such termination for the Owner’s convenience, the Contractor shall be entitled to receive payment for Work executed, and costs incurred by reason of such termination, along with reasonable overhead and profit on the Work not executed. ARTICLE 15 CLAIMS AND DISPUTES § 15.1 CLAIMS § 15.1.1 DEFINITION A Claim is a demand or assertion by one of the parties seeking, as a matter of right, payment of money, or other relief with respect to the terms of the Contract. The term "Claim" also includes other disputes and matters in question between the Owner and Contractor arising out of or relating to the Contract. The responsibility to substantiate Claims shall rest with the party making the Claim. § 15.1.2 NOTICE OF CLAIMS Claims by either the Owner or Contractor must be initiated by written notice to the other party and to the Initial Decision Maker with a copy sent to the Architect, if the Architect is not serving as the Initial Decision Maker. Claims by either party must be initiated within 21 days after occurrence of the event giving rise to such Claim or within 21 days after the claimant first recognizes the condition giving rise to the Claim, whichever is later. § 15.1.3 CONTINUING CONTRACT PERFORMANCE Pending final resolution of a Claim, except as otherwise agreed in writing or as provided in Section 9.7 and Article 14, the Contractor shall proceed diligently with performance of the Contract and the Owner shall continue to make payments in accordance with the Contract Documents. The Architect will prepare Change Orders and issue Certificates for Payment in accordance with the decisions of the Initial Decision Maker. § 15.1.4 CLAIMS FOR ADDITIONAL COST If the Contractor wishes to make a Claim for an increase in the Contract Sum, written notice as provided herein shall be given before proceeding to execute the Work. Prior notice is not required for Claims relating to an emergency endangering life or property arising under Section 10.4. § 15.1.5 CLAIMS FOR ADDITIONAL TIME § 15.1.5.1 If the Contractor wishes to make a Claim for an increase in the Contract Time, written notice as provided herein shall be given. The Contractor’s Claim shall include an estimate of cost and of probable effect of delay on progress of the Work. In the case of a continuing delay, only one Claim is necessary. Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 38 § 15.1.5.2 If adverse weather conditions are the basis for a Claim for additional time, such Claim shall be documented by data substantiating that weather conditions were abnormal for the period of time, could not have been reasonably anticipated and had an adverse effect on the scheduled construction. § 15.1.6 CLAIMS FOR CONSEQUENTIAL DAMAGES The Contractor and Owner waive Claims against each other for consequential damages arising out of or relating to this Contract. This mutual waiver includes .1 damages incurred by the Owner for rental expenses, for losses of use, income, profit, financing, business and reputation, and for loss of management or employee productivity or of the services of such persons; and .2 damages incurred by the Contractor for principal office expenses including the compensation of personnel stationed there, for losses of financing, business and reputation, and for loss of profit except anticipated profit arising directly from the Work. This mutual waiver is applicable, without limitation, to all consequential damages due to either party’s termination in accordance with Article 14. Nothing contained in this Section 15.1.6 shall be deemed to preclude an award of liquidated damages, when applicable, in accordance with the requirements of the Contract Documents. § 15.2 INITIAL DECISION § 15.2.1 Claims, excluding those arising under Sections 10.3, 10.4, 11.3.9, and 11.3.10, shall be referred to the Initial Decision Maker for initial decision. The Architect will serve as the Initial Decision Maker, unless otherwise indicated in the Agreement. Except for those Claims excluded by this Section 15.2.1, an initial decision shall be required as a condition precedent to mediation of any Claim arising prior to the date final payment is due, unless 30 days have passed after the Claim has been referred to the Initial Decision Maker with no decision having been rendered. Unless the Initial Decision Maker and all affected parties agree, the Initial Decision Maker will not decide disputes between the Contractor and persons or entities other than the Owner. § 15.2.2 The Initial Decision Maker will review Claims and within ten days of the receipt of a Claim take one or more of the following actions: (1) request additional supporting data from the claimant or a response with supporting data from the other party, (2) reject the Claim in whole or in part, (3) approve the Claim, (4) suggest a compromise, or (5) advise the parties that the Initial Decision Maker is unable to resolve the Claim if the Initial Decision Maker lacks sufficient information to evaluate the merits of the Claim or if the Initial Decision Maker concludes that, in the Initial Decision Maker’s sole discretion, it would be inappropriate for the Initial Decision Maker to resolve the Claim. § 15.2.3 In evaluating Claims, the Initial Decision Maker may, but shall not be obligated to, consult with or seek information from either party or from persons with special knowledge or expertise who may assist the Initial Decision Maker in rendering a decision. The Initial Decision Maker may request the Owner to authorize retention of such persons at the Owner’s expense. § 15.2.4 If the Initial Decision Maker requests a party to provide a response to a Claim or to furnish additional supporting data, such party shall respond, within ten days after receipt of such request, and shall either (1) provide a response on the requested supporting data, (2) advise the Initial Decision Maker when the response or supporting data will be furnished or (3) advise the Initial Decision Maker that no supporting data will be furnished. Upon receipt of the response or supporting data, if any, the Initial Decision Maker will either reject or approve the Claim in whole or in part. § 15.2.5 The Initial Decision Maker will render an initial decision approving or rejecting the Claim, or indicating that the Initial Decision Maker is unable to resolve the Claim. This initial decision shall (1) be in writing; (2) state the reasons therefor; and (3) notify the parties and the Architect, if the Architect is not serving as the Initial Decision Maker, of any change in the Contract Sum or Contract Time or both. The initial decision shall be final and binding on the parties but subject to mediation and, if the parties fail to resolve their dispute through mediation, to binding dispute resolution. § 15.2.6 Either party may file for mediation of an initial decision at any time, subject to the terms of Section 15.2.6.1. Init. / AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 39 § 15.2.6.1 Either party may, within 30 days from the date of an initial decision, demand in writing that the other party file for mediation within 60 days of the initial decision. If such a demand is made and the party receiving the demand fails to file for mediation within the time required, then both parties waive their rights to mediate or pursue binding dispute resolution proceedings with respect to the initial decision. § 15.2.7 In the event of a Claim against the Contractor, the Owner may, but is not obligated to, notify the surety, if any, of the nature and amount of the Claim. If the Claim relates to a possibility of a Contractor’s default, the Owner may, but is not obligated to, notify the surety and request the surety’s assistance in resolving the controversy. § 15.2.8 If a Claim relates to or is the subject of a mechanic’s lien, the party asserting such Claim may proceed in accordance with applicable law to comply with the lien notice or filing deadlines. § 15.3 MEDIATION – 15.3.1 through 15.4.4.3 DELETED (Paragraph deleted) § 15.3.1. § 15.3.2 § 15.3.3 § 15.4 ARBITRATION (Paragraph deleted) § 15.4.1. § 15.4.1.1 § 15.4.2 § 15.4.3 § 15.4.4 CONSOLIDATION OR JOINDER § 15.4.4.1 § 15.4.4.2 § 15.4.4.3 Additions and Deletions Report for AIA® Document A201TM – 2007 This Additions and Deletions Report, as defined on page 1 of the associated document, reproduces below all text the author has added to the standard form AIA document in order to complete it, as well as any text the author may have added to or deleted from the original AIA text. Added text is shown underlined. Deleted text is indicated with a horizontal line through the original AIA text. Note: This Additions and Deletions Report is provided for information purposes only and is not incorporated into or constitute any part of the associated AIA document. This Additions and Deletions Report and its associated document were generated simultaneously by AIA software at 16:42:53 on 10/04/2017. Additions and Deletions Report for AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 1 PAGE 1 Transit Operations and Maintenance Facility 2844 Regency Boulevard Augusta, GA 30901 … Augusta, Georgia 535 Telfair Street Augusta, GA 30901 … (Name, legal status and address) Wendel Architecture PC 375 Essjay Road, Suite 200 Williamsville, NY 14221 PAGE 39 § 15.3 MEDIATION – 15.3.1 through 15.4.4.3 DELETED § 15.3.1 Claims, disputes, or other matters in controversy arising out of or related to the Contract except those waived as provided for in Sections 9.10.4, 9.10.5, and 15.1.6 shall be subject to mediation as a condition precedent to binding dispute resolution. § 15.3.1. § 15.3.2 The parties shall endeavor to resolve their Claims by mediation which, unless the parties mutually agree otherwise, shall be administered by the American Arbitration Association in accordance with its Construction Industry Mediation Procedures in effect on the date of the Agreement. A request for mediation shall be made in writing, delivered to the other party to the Contract, and filed with the person or entity administering the mediation. The request may be made concurrently with the filing of binding dispute resolution proceedings but, in such event, mediation shall proceed in advance of binding dispute resolution proceedings, which shall be stayed pending mediation for a period of 60 days from the date of filing, unless stayed for a longer period by agreement of the parties or court order. If an arbitration is stayed pursuant to this Section 15.3.2, the parties may nonetheless proceed to the selection of the arbitrator(s) and agree upon a schedule for later proceedings. § 15.3.3 The parties shall share the mediator’s fee and any filing fees equally. The mediation shall be held in the place where the Project is located, unless another location is mutually agreed upon. Agreements reached in mediation shall be enforceable as settlement agreements in any court having jurisdiction thereof. … Additions and Deletions Report for AIA Document A201™ – 2007. Copyright © 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1970, 1976, 1987, 1997 and 2007 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 2 § 15.4.1 If the parties have selected arbitration as the method for binding dispute resolution in the Agreement, any Claim subject to, but not resolved by, mediation shall be subject to arbitration which, unless the parties mutually agree otherwise, shall be administered by the American Arbitration Association in accordance with its Construction Industry Arbitration Rules in effect on the date of the Agreement. A demand for arbitration shall be made in writing, delivered to the other party to the Contract, and filed with the person or entity administering the arbitration. The party filing a notice of demand for arbitration must assert in the demand all Claims then known to that party on which arbitration is permitted to be demanded. § 15.4.1. § 15.4.1.1 A demand for arbitration shall be made no earlier than concurrently with the filing of a request for mediation, but in no event shall it be made after the date when the institution of legal or equitable proceedings based on the Claim would be barred by the applicable statute of limitations. For statute of limitations purposes, receipt of a written demand for arbitration by the person or entity administering the arbitration shall constitute the institution of legal or equitable proceedings based on the Claim. § 15.4.2 The award rendered by the arbitrator or arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. § 15.4.3 The foregoing agreement to arbitrate and other agreements to arbitrate with an additional person or entity duly consented to by parties to the Agreement shall be specifically enforceable under applicable law in any court having jurisdiction thereof. … § 15.4.4.1 Either party, at its sole discretion, may consolidate an arbitration conducted under this Agreement with any other arbitration to which it is a party provided that (1) the arbitration agreement governing the other arbitration permits consolidation, (2) the arbitrations to be consolidated substantially involve common questions of law or fact, and (3) the arbitrations employ materially similar procedural rules and methods for selecting arbitrator(s). § 15.4.4.2 Either party, at its sole discretion, may include by joinder persons or entities substantially involved in a common question of law or fact whose presence is required if complete relief is to be accorded in arbitration, provided that the party sought to be joined consents in writing to such joinder. Consent to arbitration involving an additional person or entity shall not constitute consent to arbitration of any claim, dispute or other matter in question not described in the written consent. § 15.4.4.3 The Owner and Contractor grant to any person or entity made a party to an arbitration conducted under this Section 15.4, whether by joinder or consolidation, the same rights of joinder and consolidation as the Owner and Contractor under this Agreement. AIA Document D401™ – 2003. Copyright © 1992 and 2003 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This document was produced by AIA software at 16:42:53 on 10/04/2017 under Order No.0904861768_1 which expires on 01/01/2018, and is not for resale. User Notes: (1702383417) 1 Certification of Document’s Authenticity AIA® Document D401™ – 2003 I, Curtis Elswick, hereby certify, to the best of my knowledge, information and belief, that I created the attached final document simultaneously with its associated Additions and Deletions Report and this certification at 16:42:53 on 10/04/2017 under Order No. 0904861768_1 from AIA Contract Documents software and that in preparing the attached final document I made no changes to the original text of AIA® Document A201™ – 2007, General Conditions of the Contract for Construction, as published by the AIA in its software, other than those additions and deletions shown in the associated Additions and Deletions Report. _____________________________________________________________ (Signed) _____________________________________________________________ (Title) _____________________________________________________________ (Dated) Commission Meeting Agenda 10/17/2017 2:00 PM Award Roof Coating Fleet Fire Maintenance Department:Central Services Department:Central Services Caption:Motion to approve award for coating of the metal roof at the Fire Department Fleet Maintenance Facility on Broad Street to Horizon Roofing of Monroe, Georgia in the total amount of $46,800.00. Bid Item 17-237 (Approved by Administrative Services Committee October 10, 2017) Background:The roofs on the Fire Department Service Building at the Fleet Maintenance Facilities located on Broad Street has been in place for well over 30 years and has been leaking in a number of locations. Invitation to Bid (ITB) 17-237 was issued to obtain pricing for coating the existing metal roof with a silicone material to prevent leaks. Bids were received on August 31, 2017. Analysis:Horizon Roofing of Monroe, Georgia submitted the low bid of $46,800. The bid price submitted is in line with the anticipated cost for this item and is within budget. Financial Impact:The cost for application of the roof coating is $46,800. Alternatives:1. Approve award for coating of the metal roof at the Fire Department Fleet Maintenance Facility on Broad to Horizon Roofing of Monroe, Georgia in the total amount of $46,800.00. 2. Do not approve the purchase. Recommendation:Approve award for coating of the metal roof at the Fire Department Fleet Maintenance Facility on Broad to Horizon Roofing of Monroe, Georgia in the total amount of $46,800.00. Funds are Available in the Following Accounts: This project is funded through SPLOST VII funding designated for Fleet Management. General Ledger 329-05-1120, Job Ledger 216-05-7101 Cover Memo REVIEWED AND APPROVED BY: Finance. Procurement. Law. Administrator. Clerk of Commission Cover Memo Invitation to Bid Sealed bids will be received at this office until Thursday, August 31, 2017 @ 11:00 a.m. for furnishing: Bid Item #17-237 Roof Coating – Fire Department Service Building at Broad Street Shops for Augusta, Georgia – Central Service Department – Facility Maintenance Division Bids will be received by Augusta, GA Commission hereinafter referred to as the OWNER at the offices of: Geri A. Sams, Director Augusta Procurement Department 535 Telfair Street - Room 605 Augusta, Georgia 30901 Bid documents may be viewed on the Augusta, Georgia web site under the Procurement Department ARCbid. Bid documents may be obtained at the office of the Augusta, GA Procurement Department, 535 Telfair Street – Room 605, Augusta, GA 30901. Documents may be examined during regular business hours at the offices of Augusta, GA Procurement Department. A Mandatory Pre Proposal Conference will be held on Friday, August 11, 2017, @ 10:00 a.m. in the Procurement Department, 535 Telfair Street, Room 605. All questions must be submitted in writing by fax to 706 821-2811 or by email to procbidandcontract@augustaga.gov to the office of the Procurement Department by Tuesday, August 15, 2017 @ 5:00 P.M. No bid will be accepted by fax, all must be received by mail or hand delivered. The local bidder preference program is applicable to this project. To be approved as a local bidder and receive bid preference an eligible bidder must submit a completed and signed written application to become a local bidder at least thirty (30) days prior to the date bids are received on an eligible local project. An eligible bidder who fails to submit an application for approval as a local bidder at least thirty (30) days prior to the date bids are received on an eligible local project, and who otherwise meets the requirements for approval as a local bidder, will not be qualified for a bid preference on such eligible local project. No bids may be withdrawn for a period of sixty (60) days after bids have been opened, pending the execution of contract with the successful bidder. Invitation for bids and specifications. An invitation for bids shall be issued by the Procurement Office and shall include specifications prepared in accordance with Article 4 (Product Specifications), and all contractual terms and conditions, applicable to the procurement. All specific requirements contained in the invitation to bid including, but not limited to, the number of copies needed, the timing of the submission, the required financial data, and any other requirements designated by the Procurement Department are considered material conditions of the bid which are not waiveable or modifiable by the Procurement Director. All requests to waive or modify any such material condition shall be submitted through the Procurement Director to the appropriate committee of the Augusta, Georgia Commission for approval by the Augusta, Georgia Commission. Please mark BID number on the outside of the envelope. Bidders are cautioned that acquisition of BID documents through any source other than the office of the Procurement Department is not advisable. Acquisition of BID documents from unauthorized sources placed the bidder at the risk of receiving incomplete or inaccurate information upon which to base his qualifications. Correspondence must be submitted via mail, fax or email as follows: Augusta Procurement Department Attn: Geri A. Sams, Director of Procurement 535 Telfair Street, Room 605 Augusta, GA 30901 Fax: 706-821-2811 or Email: procbidandcontract@augustaga.gov No bid will be accepted by fax, all must be received by mail or hand delivered. GERI A. SAMS, Procurement Director Publish: Augusta Chronicle July 20, 27, August 3, 10, 2017 Metro Courier July 26, 2017 OFFICIAL VENDORS Attachment "B"E-Verify Addendum 1 SAVE Form Bid Price Horizon Roofing 15575 South Broad Street Monroe, GA 30054 YES 1124455 YES YES $46,800.00 Ideal Building Solutions 6753 Jones Mill Court Suite F Norcross, GA 30092 YES 325529 YES YES $68,000.00 Academy Roofing Systems 2910 Cherokee Street. Suite100 Kennesaw, GA 30144 YES 768603 YES YES $124,800.00 Total Number Specifications Mailed Out: 12 Total Number Specifications Download (Demandstar):4 Total Electronic Notifications (Demandstar):7 Mandatory Pre-Bid Attendees:17 Total packages submitted: 3 Total Noncompliant: 0 Bid Opening for Bid Item #17-237 Roof Coating-Fire Department Service Building at Broad Street for Augusta, GA- Central Services Department-Facility Maintenance Division Bid Date:Thursday, August 31, 2017 @ 11:00 a.m. Page 1 of 1 -t ff l*** d " ;,:,.Psp.?"TJm,i 3^L,,A Rick Acree, Proiect Manager Q06) 821-2426 phone p06)799-5077 Frx TO: THROUGH: DATE: SUBJECT: MEMORANDUM MQGeri Sams, Director, Procurement Department dYrt.Takiyah A. Douse, Director, Central Services September 5,2017 Bid ltem #17-237 Roof coating - Fire Department Service Building atBroad Street Shops - Recommendation Bids were received on the referenced project on August 91, 2017. The low bid was submitted by Horizon Roofing out of Monroe, GA in the amount of $46,800 and is within budget. We recommend award of this project to the low bidder. Thank you for your assistance in securing this pricing. Please do not hesitate to call ifyou have any questions or need additional clarification. Cc:Lonnie Wimberly Takiyah Douse Ron Crowden 'i? IEi? * +ri E:-lU Commission Meeting Agenda 10/17/2017 2:00 PM Motion to Approve the Transfer of $58,340 from 101022110-5224111 (Building Rental) to 101022110- 5111110 (Perf. Full-Time S&W-Reg) and Other Necessay Object Codes for the Creation of a Law Clerk Position Department:Juvenile Court Department:Juvenile Court Caption:Motion to approve the transfer of $58,340 from 101022110- 5224111 (Building Rental) to 101022110-5111110 (Perf. Full- Time S&W-Reg) and other necessary Object Codes for the creation of a new Law Clerk position. (Approved by Administrative Services, Finance and Public Safety Committees October 10, 2017) Background:The Richmond County Juvenile Court is in need of a judicial law clerk, who will be assigned to all RC Juvenile Court judges. This new position will be tasked with: 1) Ensuring the Court's compliance with the highly complex and continually evolving juvenile code, as well as the Juvenile Justice reform act of 2013 2) Reviewing of all court orders 3) Reviewing and conducting necessary research for all petitions filed with the Court 4) Legal research and analysis 5) Testing of theories, as presented by attorneys during criminal, deprivation, truancy, traffic cases, etc. This position is crucial to providing the most efficient and effective services to our youth, our families, and the general public. Analysis: Financial Impact:Base salary: $44,121.23 Benefits: $14,209.14 *We are simply asking to move existing budget funds in order to create this position. Alternatives: Recommendation:Approve Cover Memo Funds are Available in the Following Accounts: 100% of funding source: 101022110-5224111 REVIEWED AND APPROVED BY: Cover Memo Commission Meeting Agenda 10/17/2017 2:00 PM 911 System Upgrade Department:911 Department:911 Caption:Motion to approve request for 911 system upgrade. (Approved by Public Safety Committee October 10, 2017) Background:The current 911 software platform was installed in 2013. Many features and functionalities within the 911 software have been enhanced by the vendor since the 2013 installation. The new upgraded platform includes, but is not limited to, an updated user interface, updated integrated call playback functionality, customer record error reporting and automatic abandoned callback capability. Analysis:We currently are under a software support and maintenance contract with AT&T for 911 services until the renewal in mid-year 2018. The software support contract coverage includes the licenses for the 911 call handling software and records management system. The majority of the costs for the upgrade are installation and training fees. Additional costs within the upgrade involve a gateway and associated equipment. Financial Impact:The cost for the upgrade is $56,090.00. This purchase meets the allowable expenditure qualifications in O.C.G.A 46-5-134. Without a software support contract in place with the current vendor, this upgrade would cost over $200,000, thus the request for sole source is budget conscious for the best use of available funding. Alternatives:N/A Recommendation:Approve the software upgrade. Funds are Available in the Following Funds are available in FY17 budget. Fund 215037210/5223112.Cover Memo Accounts: REVIEWED AND APPROVED BY: Finance. Law. Administrator. Clerk of Commission Cover Memo The terms and conditions available at west.com/legal-privacy/terms/call-handling will apply to this Quote, unless the parties have entered into a separate mutually executed agreement, or Customer is purchasing under a cooperative purchasing agreement. The terms of this Quote will govern any conflict with the above-mentioned terms, and Customer’s issuance of a purchase order for any or all of the items described in this Quote will constitute acknowledgement and acceptance of such terms. No additional terms in Customer’s purchase order will apply. This document contains confidential and proprietary information owned by West Safety Solutions Corp. or its affiliates, and such information may not be used or disclosed by any person without prior written consent. Software Upgrade for Augusta 911, GA (AT&T Southeast) Quote Number: 21034 Version: 2 Page 2 of 9 August 31, 2017 The information contained in this document is proprietary to West Safety Solutions Corp and is offered solely for the purpose of evaluation. Copyright 2017 West Safety Solutions Corp CONFIDENTIAL 21034 v2- Augusta 911, GA Summary - City of Augusta Item Cost VIPER $13,427.00 Power 911 $0.00 Power MIS $0.00 ePrinter $0.00 MapFlex $3,068.00 Professional Services $39,595.00 Total: $56,090.00 Page 3 of 9 August 31, 2017 The information contained in this document is proprietary to West Safety Solutions Corp and is offered solely for the purpose of evaluation. Copyright 2017 West Safety Solutions Corp CONFIDENTIAL 21034 v2- Augusta 911, GA Configuration Parameters - City of Augusta Answering Positions Total Number of Positions 20 Model# Description Qty Selling Price Total VIPER 912871/BB Mediant 1000B Prebuilt Building Block 1 $2,554.00 $2,554.00 912890/BB Media Kit Prebuilt Building Block 1 $0.00 $0.00 912870/1T1 Mediant 1000 Spare Part Digital Voice Module Single Span 1 $3,123.00 $3,123.00 912870/LIC Mediant 1000 Access License (per Chassis) 1 $6,750.00 $6,750.00 912811/U Application Server Position Access License Upgrade 22 $0.00 $0.00 912812/U PBX Access License Upgrade 20 $0.00 $0.00 Subtotal $13,427.00 Power 911 913100/BAK/U Power 911 Backup License Upgrade 4 $0.00 $0.00 913100/U Power 911 Client Access License Upgrade 16 $0.00 $0.00 913202/U Power 911 Server Access License Upgrade 20 $0.00 $0.00 Subtotal $0.00 Power MIS 920100/CD Power MIS 1 $0.00 $0.00 920100/U Power MIS Software, Server Software License (SSL) Upgrade 1 $0.00 $0.00 920101/U Power MIS Concurrent Client Access License (CCAL) Upgrade 1 $0.00 $0.00 920102/U Power MIS Data Access License Upgrade 20 $0.00 $0.00 Subtotal $0.00 Page 4 of 9 August 31, 2017 The information contained in this document is proprietary to West Safety Solutions Corp and is offered solely for the purpose of evaluation. Copyright 2017 West Safety Solutions Corp CONFIDENTIAL 21034 v2- Augusta 911, GA ePrinter 917310/U ePrinter Software Upgrade 1 $0.00 $0.00 Subtotal $0.00 MapFlex MF-DMS/U MapFlex 9-1-1 Client Upgrade 16 $0.00 $0.00 MF-SRV/U MapFlex Server Upgrade 1 $0.00 $0.00 MF-DMSBU/U MapFlex 9-1-1 Client License Upgrade (Backup) 4 $317.00 $1,268.00 MF-DP-UPG MapFlex GIS Data Prep - Minor Version Upgrade 1 $1,800.00 $1,800.00 Subtotal $3,068.00 Project Survey 950100 Project Survey (per Site) 1 $1,800.00 $1,800.00 960575 Living Expense per Day per Person 3 $240.00 $720.00 960580 Travel Fee per Person 1 $1,500.00 $1,500.00 Subtotal $4,020.00 Installation 950104 Professional Services (per Day) 10 $1,800.00 $18,000.00 960575 Living Expense per Day per Person 12 $240.00 $2,880.00 960580 Travel Fee per Person 1 $1,500.00 $1,500.00 Subtotal $22,380.00 Refresher Training 960575 Living Expense per Day per Person 5 $240.00 $1,200.00 960580 Travel Fee per Person 1 $1,500.00 $1,500.00 960780 Power 911 Administrator Training 1 $1,800.00 $1,800.00 960801 Power 911 User Training 2 $1,800.00 $3,600.00 Subtotal $8,100.00 Page 5 of 9 August 31, 2017 The information contained in this document is proprietary to West Safety Solutions Corp and is offered solely for the purpose of evaluation. Copyright 2017 West Safety Solutions Corp CONFIDENTIAL 21034 v2- Augusta 911, GA CCS Training P10087 CCS Training 1 $1,800.00 $1,800.00 960575 Living Expense per Day per Person 3 $240.00 $720.00 960580 Travel Fee per Person 1 $1,500.00 $1,250.00 Subtotal $4,020.00 Project Management Services 950510 Project Management Services 1 $1,075.00 $1,075.00 Subtotal $1,075.00 Total $56,090.00 Page 6 of 9 August 31, 2017 The information contained in this document is proprietary to West Safety Solutions Corp and is offered solely for the purpose of evaluation. Copyright 2017 West Safety Solutions Corp CONFIDENTIAL 21034 v2- Augusta 911, GA Notes 1 This quote provides software updates to the latest version of Viper/Power911/MapFlex. Quote assumes that all hardware is current and does need to be replaced. Quote assumes that the site is covered under an active Software Subscription service and all software upgrades are not charged. Please note that Power MIS is a Manufacture Discontinued product, and that no further development or upgrades will be available for this product moving forward. West strongly recommends that the Customer consider upgrading their reporting system to our Power Metrics offering as soon as possible. Please contact your local Account Executive for pricing and information. 2 MapFlex is a viewing software. Customers must supply and maintain GIS data unless West Safety Solutions Corp. has been contracted to fulfill this role. GIS Services included with MapFlex Server Staging:  Re-creation of GIS package (Data schema, Map configuration, and/or MF version changes) leading up to FA.  All GIS data staging activities Post-Deployment GIS Services included with Maintenance:  Creation of data package in support of a MapFlex version upgrade tied to a “break fix”. GIS effort (potentially) involved in upgrading a bug fix related to software. Post-Deployment GIS Services not included with Maintenance (chargeable):  GIS Data Validation  Re-creation of data package (e.g. schema, symbology, search settings, cache, dynamic layer, or other map changes) MapFlex 5.X Data Update (one-time or recurring) 3 Professional Services: This quote represents an estimate of labor costs to perform the work described in this quote. If the amount of labor needed to correct the issue can’t be accomplished time allotted in this quote, West will contact the customer representative before performing additional labor. If the actual labor to perform the work is significantly less than the amount quoted, the final charge may be adjusted. 4 The Project Survey is intended to identify any additional miscellaneous equipment or services required to ensure smooth installation and operation of the quoted system. Additional costs may be incurred upon completion of the Project Survey. Page 7 of 9 August 31, 2017 The information contained in this document is proprietary to West Safety Solutions Corp and is offered solely for the purpose of evaluation. Copyright 2017 West Safety Solutions Corp CONFIDENTIAL 21034 v2- Augusta 911, GA 5 Basic Project Management This is a limited service designed for partners that have a Project Manager assigned to the project, where West Safety Solutions Corp. Project Management supports the activities of the partner Project Manager. Basic Project Management is provided at 2% of Hardware and Software price to channel partner. This level of service includes the following: • Serving as West Safety Solutions Corp. single point of contact during project implementation. • Validating the order against the price quote that was provided by our quotations group. • Conducting a Line by Line order review with sales and technical staff to ensure solution correctness and follow up change order process as required. • Develop a project plan and schedule jointly with the partner Project manager. • Complete a basic Scope of Work (SOW) for inclusion in the partner’s comprehensive SOW. o Assess project risk jointly with partner Project Manager. o Support the effort to gather customer information required for staging (if ordered) the system. • Ensuring that equipment is shipped per a mutually agreed upon schedule (normal processing is 8 weeks from receipt of order). • Develop and communicate Communication and Escalation plans. • Ensuring that Services are provided per a mutually agreed upon schedule. o Schedule and coordinate site survey, installation and training resources as purchased. • Participate in customer kickoff meeting by phone. • Participate in weekly or bi-weekly customer status meetings by phone. • Coordinate all West Safety Solutions Corp. on site resource activities including customer communication, checklists, resource release, etc. • Maintain West Safety Solutions Corp. issue list during implementation and provide follow up resolution. • Maintain West Safety Solutions Corp. post-cut punch list and provide follow up on resolution. • Complete project acceptance documentation and handover to service. This level of service assumes that a partner Project Manager or equivalent personnel will be responsible for scheduling and managing all other activity related to the project. Page 8 of 9 August 31, 2017 The information contained in this document is proprietary to West Safety Solutions Corp and is offered solely for the purpose of evaluation. Copyright 2017 West Safety Solutions Corp CONFIDENTIAL 21034 v2- Augusta 911, GA Terms VENDOR NAME West Safety Solutions Corp 1601 Dry Creek Drive Longmont, CO 80503 Include quote number and customer EIN/Tax Identification Number on P.O. SUBMIT P.O. ordermanagement.safetyservices@west.com PRICING All prices are in USD Taxes, if applicable, are extra. Shipping charges are extra unless specified on the quote. SHIPPING TERMS FCA (Montreal), INCOTERMS 2010 PAYMENT Per Contract DELIVERY TBD VALIDITY Quote is valid for 120 Days. However, part numbers beginning with Q, such as QXXXXX, constitute unique third-party components. These components, including model and price, (i) may be subject to change at any time; and (ii) are non-cancellable, non-refundable, and non- exchangeable at any time. Page 9 of 9 August 31, 2017 The information contained in this document is proprietary to West Safety Solutions Corp and is offered solely for the purpose of evaluation. Copyright 2017 West Safety Solutions Corp CONFIDENTIAL 21034 v2- Augusta 911, GA Revision History Revision Level Proposal Writer Notes Date Revised 1 RSOOR Original August 29, 2017 2 RSOOR Added Mediant Gateway for Auto- Abandon CallBack feature August 31, 2017 Commission Meeting Agenda 10/17/2017 2:00 PM FY 2018 Metropolitan Transportation Planning Services Contract, Supplemental Agreement Department:Planning and Development Department:Planning and Development Caption:Motion to approve the FY 2018 Metropolitan Transportation Planning Services contract between Augusta, Georgia and the Georgia Department of Transportation. (Approved by Finance Committee October 10, 2017) Background:The Planning and Development Department provides transportation planning services for the Augusta Regional Transportation Study (ARTS). The scope of these services is outlined in the ARTS Unified Planning Work Program, and funding for them is subject to renewal each year through a contract with the Georgia Department of Transportation. Analysis:Approving the contract will ensure continued funding for the Augusta Regional Transportation Study activities included in the ARTS Unified Planning Work Program and provided by staff of the Planning & Development Department. Financial Impact:The contract stipulates that the Georgia Department of Transportation will reimburse the city for eighty percent (80%) of the eligible costs incurred for providing regional transportation planning services. The funding amount is similar to the funding level last year, so that the twenty percent (20%) local match will be similar to the 2017 budget for the Planning and Development Department. Alternatives:None recommended Recommendation:Approve the FY 2018 Metropolitan Transportation Planning Services contract between Augusta, Georgia and the Georgia Department of Transportation Funds are Available Cover Memo in the Following Accounts: REVIEWED AND APPROVED BY: Finance. Law. Administrator. Clerk of Commission Cover Memo Commission Meeting Agenda 10/17/2017 2:00 PM Miller Theater Project - SPLOST VI Department:Administrator/Finance Department:Administrator/Finance Caption:Motion to approve a Memorandum of Understanding between Augusta and the Downtown Development Authority of Augusta, Georgia (“DDA”) regarding the use of SPLOST funds for the renovation and rehabilitation of the Miller Theater. (Approved by Finance Committee October 10, 2017) Background:The Miller Project is a downtown revitalization and quality of life project led by the Symphony Orchestra Augusta (“SOA”) and supported by numerous private and public supporters. The project will renovate the historic Miller Theater and a neighboring building (the old Cullum’s Department Store) into a 1,300 seat, modern performing arts venue that will accommodate a wide variety of artistic and cultural performances and events. The Miller Project is a $23,000,000 project. All funding has been secured, and the renovation is scheduled to be complete in the Fall of 2017. Funding for this project includes a $5,142,856 allocation from Richmond County’s SPLOST VI (the SOA’s required twenty-five percent match has been met and verified and the source of funding for the balance of the construction cost has been verified). The funding for the project includes approximately $7,000,000 in state and federal historic tax credits that have been awarded to this project. Analysis:The motion and MOU is a request to have the SPLOST funding paid the DDA in order for the SOA to take advantage of the significant tax credits available for the project. By utilizing the DDA to receive the funds and for the structuring and leasing of the project, the public’s interest in the project can be preserved while allowing for the necessary lease structure needed to qualify for the tax credits. Under the proposed structure, the SPLOST allocation would be directed to the DDA, and the DDA would then be responsible, with oversight by Augusta, to reimburse the SOA upon proof of payment of construction costs. The attached MOU addresses the obligations of the DDA to utilize the funds as Cover Memo directed by the Commission. Financial Impact:The SPLOST allocation will be expended on the project. Approving the MOU facilitates the SOA’s ability to obtain and utilize tax credits. Alternatives:Approve the MOU to facilitate the SOA’s obtaining the tax credits at no cost to Augusta or do not approve the MOU Recommendation:Approve the MOU. Funds are Available in the Following Accounts: 328-06-4310 REVIEWED AND APPROVED BY: Finance. Law. Administrator. Clerk of Commission Cover Memo i LEASE between MILLER THEATER, LLC, as Landlord DOWNTOWN DEVELOPMENT AUTHORITY OF AUGUSTA, GEORGIA, as Tenant and MT AUGUSTA PROPERTY, LLC, as Subtenant Dated as of __________, 2017 1 LEASE THIS LEASE (together with Exhibits hereto, which are incorporated herein by this reference, and the DDA Lease (as hereinafter defined) and Sublease (as hereinafter defined) which are included herein, and all amendments and extensions hereof, collectively, “this Lease”) is made on the ___ day of ___________, 2017, by and among MILLER THEATER, LLC, a Georgia limited liability company, having an address at 1301 Greene St., Suite 200 in Augusta, Georgia (“Landlord”), DOWNTOWN DEVELOPMENT AUTHORITY OF AUGUSTA, GEORGIA, having an address at ___________________ in Augusta, Georgia (“DDA”) and MT AUGUSTA PROPERTY LLC, a Georgia limited liability company, having an address at 1301 Greene St., Suite 200 in Augusta, Georgia (“Operating Tenant”). This Lease amends and restates the Lease between Landlord and Operating Tenant dated as of February 28, 2016, effective July 25, 2015, related to the Land (as hereinafter defined) (said Lease being herein referred to as the “Original Lease”), to reflect the interest of the DDA in this Lease. RECITALS WHEREAS, Landlord is the owner in fee simple title of certain Land (as defined herein), which it has agreed to lease under the terms and conditions hereof to Operating Tenant for Operating Tenant’s development, rehabilitation and construction upon the Land of a historic building (“Project”); WHEREAS, Operating Tenant has been in possession of the Land under the Original Lease and has been conducting rehabilitation and construction activities substantially consistent with that certain Standard Form of Agreement Between Owner and Architect on AIA Document B101-2017 by and among Miller Theater, LLC and Lord, Aeck & Sargent, Inc. (“Architect”), dated June 5, 2012 (the “Architect Agreement”), which Architect Agreement has been assigned by Miller Theater, LLC to MT Augusta Property LLC (the “Rehabilitation Plan”); WHEREAS, DDA is entitled to receive the sum of $5,142,856.00 from the proceeds of a the Special Purpose County One Percent Sales and Use Tax (the “SPLOST Funds”) under that certain SPLOST VI Outside Agency Agreement (the “SPLOST Agreement”) dated the ______ day of __________, 2017, with Augusta, Georgia, a political subdivision of the State of Georgia (hereinafter referred to as “Augusta”); WHEREAS, DDA desires to invest the SPLOST Funds in the Project in order to acquire a 49-year leasehold interest as tenant in the Project, and desires to sublease its leasehold interest to Operating Tenant to allow Operating Tenant to complete the Rehabilitation Plan, to use the SPLOST Funds and to use and occupy the Project under the terms of this Lease; NOW THEREFORE, IN CONSIDERATION of the covenants and agreements of the parties hereto, as are hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by each party hereto, Landlord hereby leases to DDA and DDA hereby subleases to Operating Tenant all of that tract of land (the “Land”), in Augusta-Richmond County, Georgia, which is more particularly described in Exhibit A attached hereto, 2 TOGETHER WITH any and all rights, alleys, ways, waters, privileges, roads, appurtenances, easements and advantages, to the same belonging or in any way appertaining, including the existing and future Improvements on or under the Land (all of which, together with the Land, are hereinafter referred to collectively as the “Premises”), TO HAVE AND TO HOLD the Premises unto Operating Tenant, its successors and permitted assigns, for and during the Term set forth herein, ON THE TERMS AND SUBJECT TO THE CONDITIONS which are hereinafter set forth: Section 1. DEFINITIONS. 1.1. Specific. As used herein, the following terms have the following meanings: “Annual Rent” has the meaning given it in subsection 3.1. “Annual Subrent” has the meaning given it in subsection 3.1. “Augusta” has the meaning given it in the Recitals. “Bankruptcy” shall be deemed, for any person, to have occurred either (a) if and when such person (i) applies for or consents to the appointment of a receiver, trustee or liquidator of such person or of all or a substantial part of its assets, (ii) files a voluntary petition in bankruptcy or admits in writing its inability to pay its debts as they come due, (iii) makes an assignment for the benefit of its creditors, (iv) files a petition or an answer seeking a reorganization or an arrangement with its creditors or seeks to take advantage of any insolvency law, or (v) files an answer admitting the material allegations of a petition filed against such person in any bankruptcy, reorganization or insolvency proceeding; or (b) if (i) an order, judgment or decree is entered by any court of competent jurisdiction adjudicating such person a bankrupt or an insolvent, approving a petition seeking such a reorganization, or appointing a receiver, trustee or liquidator of such person or of all or a substantial part of its assets, or (ii) there otherwise commences with respect to such person or any of its assets any proceeding under any bankruptcy, reorganization, arrangement, insolvency, readjustment, receivership or similar law, and if such order, judgment, decree or proceeding continues unstayed for any period of one hundred twenty (120) consecutive days after the expiration of any stay thereof. “Business Day” means any day other than a Saturday, Sunday or a legal holiday on which banks are authorized or required to be closed for the conduct of commercial banking business in Augusta, Georgia. “Commencement Date” has the meaning given it in paragraph 2.1.1. 3 “Default Rate” shall mean a per annum rate of simple interest equal to the lesser of (i) 10% per annum and (ii) the maximum non-usurious interest rate that may be charged under applicable law. “DDA” means Downtown Development Authority of Augusta, Georgia, and any successor governmental or quasi-governmental entity thereto. “DDA Lease” means the lease from Landlord to DDA contained within this Lease for the DDA Lease Term. “DDA Lease Term” has the meaning given it in subsection 2.1.1. “DDA Lease Termination Date” has the meaning given it in subsection 2.1.1. “Effective Date” means _____________ ___, 2017. “Environmental Laws” shall mean any and all Federal, State or local laws, pertaining to health, safety, or the environment now or at any time hereafter in effect and any judicial or administrative interpretation thereof (including, but not limited to, any judicial or administrative order, consent decree or judgment relating to the environment or hazardous substances (as such term is defined in any such law), or exposure to hazardous substances) including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Superfund Amendments and Reorganization Act of 1986, as amended, the Resource, Conservation and Recovery Act of 1976, as amended, the Clean Air Act, as amended, the Federal Water Pollution Control Act, as amended, the Oil Pollution Act of 1990, as amended, the Safe Drinking Water Act, as amended, the Hazardous Materials Transportation Act, as amended, the Toxic Substances Control Act, as amended, the federal Clean Water Act of 1977, all regulations and laws adopted by the Occupational Safety and Health Administration, and any other environmental or health conservation or protection laws. “Event of Default” has the meaning given it in subsection 13.1. “Fee Mortgage” means any Mortgage encumbering, inter alia, the Landlord’s fee interest in the Land and any present and future interest of Landlord in the Property. “Fee Mortgagee” means the Person secured by a Fee Mortgage. “Force Majeure” means any (a) strike, lock-out or other labor troubles, (b) governmental restrictions or limitations, (c) failure or shortage of materials, electrical power, gas, water, fuel oil, or other utility or service, (d) riot, war, insurrection or other national or local emergency, (e) accident, flood, fire or other casualty, (f) adverse weather condition, (g) other act of God, or (h) other cause similar or dissimilar to any of the foregoing and beyond the reasonable control of the person in question. “Historic Tax Credits” means rehabilitation tax credits provided by Section 47 of the Internal Revenue Code of 1986, as amended, and any successor provisions thereto, allocated in connection with the Improvements. 4 “Improvements” mean the historic building located on the Land, and all fixtures and personal property, all off-street parking areas on the Property; an undivided interest in all common areas at the Property, and all replacements, additions and alterations thereto. “Land Records” means the records of the Clerk of Superior Court of Richmond County, Georgia. “Landlord” means Miller Theater, LLC, a Georgia limited liability company, and its successors and assigns as owner of the fee simple title to the Land. “Lease” means this Lease (as defined in the first paragraph hereof), including amendments hereto and extensions hereof, if any. “Lease Year” means (a) the period commencing on July 25, 2015 and terminating on the first (1st) anniversary of the last day of the calendar month containing the Commencement Date, and (b) each successive period of twelve (12) calendar months thereafter during the Term. “Leasehold Estate” means the leasehold estate in the Premises held by Operating Tenant under this Lease, any interest in future improvements made by Operating Tenant on the Premises during this Lease and any fee or other interest in the Property acquired by Operating Tenant hereafter. “Leasehold Mortgage” means any Mortgage encumbering Operating Tenant’s Leasehold Estate. “Leasehold Mortgagee” means the Person secured by a Leasehold Mortgage. “Legal Requirements” has the meaning given it in paragraph 4.3.8. “Mortgage” means any mortgage, deed to secure debt or deed of trust, as amended and/or modified from time to time, at any time encumbering any or all of the Property (or all or any interest in the Property), and any other security interest therein existing at any time under any other form of security instrument or arrangement used from time to time in the locality of the Property (including but not limited to any such other form of security arrangement arising under any deed of trust, sale-and-leaseback documents, lease-and-leaseback documents, security deed or conditional deed, or any financing statement, security agreement or other documentation used pursuant to the Uniform Commercial Code or any successor or similar statute), provided that such mortgage, deed to secure debt, deed of trust or other form of security instrument, and an instrument evidencing any such other form of security arrangement, has been recorded among the records of the Clerk of Superior Court of Richmond County, Georgia or in such other place as is, under applicable law, required for such instrument to give constructive notice of the matters set forth therein. “Mortgagee” means the Person secured by a Mortgage. “Operating Tenant” means MT Augusta Property LLC, a Georgia limited liability company, and its successors and permitted assigns as holder of the Leasehold Estate. 5 “Original Lease” has the meaning assigned to said term in the first paragraph of this Lease. “Permitted Encumbrances” means any and all encumbrances of record existing as of the date hereof with respect to all or any of the Property and any encumbrances hereafter consented to in writing by Landlord, Operating Tenant, the Registered Leasehold Mortgagee and the Fee Mortgagee. Each of the parties hereto hereby consent to and acknowledge as Permitted Encumbrances, the Leasehold Deed to Secure Debt, Security Agreement and Assignment of Leases and Rents from Operating Tenant in favor of AFB&T, a division of Synovus Bank granting and conveying to AFB&T, a division of Synovus Bank, security title to and security interest in the Operating Tenant’s interest under this Lease and the Operating Tenant’s rights, title and interest in the Property, and any amendments and/or modifications thereof, and the Deed to Secure Debt, Security Agreement and Assignment of Leases and Rents from Landlord in favor of AFB&T, a division of Synovus Bank granting and conveying to AFB&T, a division of Synovus Bank, security title to and security interest in the Land and Landlord’s rights, title and interest in the Property, and any amendments and/or modifications thereof. “Person” means a natural person(s), a trustee, a corporation, a partnership, a limited liability company and any other form of legal entity. “Premises” has the meaning assigned to such term in the recitals of this Lease. “Project” or “Property” means collectively the Premises, including the Improvements. “Public Uses” means uses that benefit a cultural, recreational or historical purpose or some combination of such purposes, within the meaning of O.C.G.A. Section 48-8-111(a)(1)(E). (For avoidance of doubt, “Public Uses” does not require the use to be free). “Public Use Requirement” means, commencing when the Improvements are placed in service, use of the Property (i) as a performing arts center, including other uses permitted by law incident thereto which would not preclude use of the Property as a performance hall for Symphony Orchestra Augusta, (ii) if, after exercising reasonable commercial efforts, it becomes economically infeasible to continue to operate the Property as a performing arts center, then for any other Public Uses approved by Augusta, which approval shall not be unreasonably withheld, (iii) after the Registered Leasehold Mortgagee exercises its remedies under Article 18 or under the Registered Leasehold Mortgage or other loan documents related thereto, then for any Public Uses, or (iv) any other use approved by Augusta. The fact the Property is not being used (i.e., is “dark”), if it is reasonably determined to be economically infeasible to operate as a performing arts center, is not a violation of the Public Use Requirement and the fact the Property is used for uses in addition to Public Uses is not a violation of the Public Use Requirement. “Recapture Period” means the period commencing as of the date hereof and ending on the next business day following the fifth (5th) anniversary of the date on which the last “qualified rehabilitation expenditure” as defined in Section 47(c)(3) of the Code with respect to the Property is first placed in service or ending sooner, upon the payment of the recapture amount as provided in any subordination, non-disturbance and attornment agreement entered into in connection with this Lease among Landlord, Operating Tenant, DDA, Fee Mortgagee and/or 6 Registered Leasehold Mortgagee, and the federal historic tax credit investor that becomes a member of Borrower. “Registered Leasehold Mortgage” has the meaning set forth in paragraph 18.2 hereof. “Registered Leasehold Mortgagee” has the meaning set forth in paragraph 18.2 hereof. ”Rehabilitation Plan” has the meaning given it in the Recitals. “Rent” means all Annual Rent. “Restoration” means the repair, restoration or rebuilding of any or all of the Property after any damage thereto or destruction thereof, with such alterations or additions thereto as are made by Operating Tenant in accordance with this Lease, together with any temporary repairs or improvements made to protect the Property pending the completion of such work. “Servitude” means the twenty-five (25) year period commencing on ______ ____, 2017 and ending on ___________ ___, 2042. “SNDA” means a Subordination, Non-Disturbance and Attornment Agreement entered into by Landlord, DDA, Operating Tenant and Fee Mortgagee, substantially in the form of Exhibit C hereof. “SPLOST Agreement” has the meaning given it in the Recitals. “SPLOST Funds” has the meaning given it in the Recitals. “SPLOST Repayment” means an amount equal to the product of a fraction determined by the number of years remaining on the Servitude at the time of the determination of the SPLOST Repayment as the numerator and the total number of years of the Servitude (i.e., 25 years) as the denominator multiplied by the lesser of (i) $5,142,856.00 or (ii) the total amount of SPLOST Funds that are paid to Landlord and/or Augusta Symphony, Inc. and/or Operating Tenant and/or Registered Leasehold Mortgagee and applied to costs associated with the Rehabilitation Plan. “Sublease” means the sublease contained herein of the DDA’s interest under this Lease to Operating Tenant; provided, however, if the DDA should cease to have an interest in this Lease (either by voluntary cancellation or surrender, by termination or by expiration), then the Sublease shall refer to this Lease as a direct lease between Landlord and Operating Tenant expiring on the Termination Date, unless sooner terminated pursuant to the terms hereof. “Sublease Commencement Date” means the date of this Agreement as stated in the first paragraph. “Term” has the meaning given it in subsection 2.1.1. “Termination Date” has the meaning given it in subsection 2.1.1. 7 1.2. General. Any other term to which meaning is expressly given in this Lease shall have such meaning. Section 2. TERM. 2.1. Length. 2.1.1. Original Term. With respect to the Operating Tenant, this Lease shall be for a term (“Term”) commencing on July 25, 2015 (which was the commencement date of the Original Lease) (“Commencement Date”), and terminating on July 25, 2070 (the “Termination Date”, except that if the date of such termination is hereafter advanced to an earlier date or postponed pursuant to any provision of this Lease, or by express, written agreement of the parties hereto, or by operation of law, the date to which it is advanced or postponed shall thereafter be the “Termination Date” for all purposes of this Lease). With respect to the DDA Lease, this Lease shall be for a term (“DDA Lease Term”) commencing on the Sublease Commencement Date, and terminating on the forty-ninth (49th) anniversary of the Sublease Commencement Date (the “DDA Lease Termination Date”, except that if the date of such termination is hereafter advanced to an earlier date or postponed pursuant to any provision of this Lease, or by express, written agreement of the parties hereto, or by operation of law, the date to which it is advanced or postponed shall thereafter be the “DDA Termination Date” for all purposes of this Lease). Operating Tenant was in possession of the Premises on the Sublease Commencement Date, and shall remain in possession thereof under the terms of this Lease. 2.1.2. Surrender. (a) DDA shall, at the expiration of the DDA Lease Term or any earlier termination of this Lease or DDA Lease, promptly yield up to Landlord the Property, and personal property which remains at the Property as of the DDA Lease Termination Date, in reasonable order and repair, ordinary wear and tear and damage by casualty, or condemnation excepted. Upon such expiration or termination (whether by reason of an Event of Default or otherwise), (i) DDA shall not thereafter have any right at law or in equity in or to any or all of the Property (including the Improvements) and shall be conclusively deemed to have abandoned same, and Landlord, or if the Lease remains in effect with Operating Tenant, Operating Tenant, shall automatically be deemed immediately thereupon to have succeeded to all of the same, free and clear of the right, title or interest therein of DDA (but subject to any Fee Mortgage and to the lien of all Permitted Encumbrances then outstanding), and (ii) DDA hereby waives any and all rights of redemption which it may otherwise hold under any applicable law, and (iii) upon such termination or expiration of the DDA Lease, unless the Lease has terminated or expired as contemplated in the next paragraph, this Lease shall continue as between Landlord, as lessor, and Operating Tenant, as lessee, on the same terms as this Lease and the Sublease contained herein and upon the termination of the DDA Lease, the term of the Sublease shall refer to the Term of the Lease; provided, however, the Landlord shall not be liable to Operating Tenant for any act, omission, negligence or default of DDA under this Lease or the Sublease that occurred prior to the termination, cancellation or surrender of the DDA Lease; shall not be bound by any pre- payment of rents or other amounts paid by Operating Tenant to DDA under the Sublease more 8 than one month in advance of its due date (other than the pre-payment of Sublease Annual Rent stated in section 3.1.1 hereof); and shall not be subject to any offsets, credits, claims or defenses which Operating Tenant might have against DDA under this Lease or the Sublease contained herein. (b) Operating Tenant shall, at its expense, at the expiration of the Term or any earlier termination of this Lease, promptly yield up to Landlord the Property, and personal property which remains at the Property as of the Termination Date, in reasonable order and repair, ordinary wear and tear and damage by casualty, or condemnation excepted. Upon such expiration or termination (whether by reason of an Event of Default or otherwise), (i) neither DDA nor Operating Tenant shall thereafter have any right at law or in equity in or to any or all of the Property (including the Improvements) and shall be conclusively deemed to have abandoned same, and Landlord shall automatically be deemed immediately thereupon to have succeeded to all of the same, free and clear of the right, title or interest therein of DDA or Operating Tenant (but subject to any existing Permitted Encumbrances then outstanding), and (ii) each of DDA and Operating Tenant hereby waive any and all rights of redemption which it may otherwise hold under any applicable law. 2.2. Holding Over. 2.2.1. Nothing in this Lease shall be deemed in any way to permit Operating Tenant or DDA to use or occupy the Premises after the expiration of the Term (or in the case of DDA, after the expiration of the DDA Lease Term) or any earlier termination of this Lease (or in the case of the DDA, after the early termination of the DDA Lease); provided, however, any such early termination would be subject to the rights of the Registered Leasehold Mortgagee under Section 18 of this Lease. If and only if Operating Tenant continues to occupy the Premises after such expiration or termination after obtaining Landlord’s express, written consent thereto; (a) such occupancy shall (unless the parties hereto otherwise agree in writing) be deemed to be under a month-to-month tenancy, which shall continue until either party hereto notifies the other in writing, by at least thirty (30) days before the end of any calendar month, that the party giving such notice elects to terminate such tenancy at the end of such calendar month, in which event such tenancy shall so terminate; and (b) subject to the provisions of subparagraph 2.2.2, but anything in the remaining provisions of this Section to the contrary notwithstanding, the monthly rent payable with respect to each such monthly period shall equal one-twelfth (1/12) of the Annual Rent (such amount being the “Monthly Rent”) for the Lease Year during which such expiration or termination occurred, as aforesaid plus, the additional rent provided in subparagraph 2.2.2. below. 2.2.2. If Operating Tenant continues to occupy the Premises after the expiration of the Term or any earlier termination of this Lease without having obtained Landlord’s express, written consent thereto and the written consent of any existing Fee Mortgagee, then without altering or impairing any of Landlord’s rights under this Lease or applicable law, (a) Operating Tenant hereby agrees to pay to Landlord immediately on demand by Landlord as monthly rent for the Premises, for each calendar month or portion thereof after such expiration of the Term or such earlier termination of this Lease, as aforesaid, until Operating Tenant surrenders possession 9 of the Premises to Landlord, a sum equaling One Hundred and 00/100 Dollars ($100.00) per each day of such holdover occupancy, and (b) Operating Tenant shall surrender possession of the Premises to Landlord immediately on Landlord’s having demanded the same. Nothing in this Lease shall be deemed in any way to give Operating Tenant any right to remain in possession of the Premises after such expiration or termination, regardless of whether Operating Tenant has paid any such rent to Landlord. 2.3. Title to and Alterations of Improvements. Notwithstanding any provision in this Lease to the contrary, at all times during the Term of this Lease, the Improvements and all alterations and additions shall be deemed owned by Operating Tenant for tax purposes (subject to a right of reversion in favor of Landlord) and Operating Tenant alone shall be entitled to all of the tax attributes of ownership, including, without limitation, the right to claim depreciation or cost recovery deductions and the right to claim the federal historic rehabilitation tax credits pursuant to Section 47 of the Internal Revenue Code of 1986, as amended (the “Code”) and the right to amortize capital costs and to claim any other federal or state tax benefits attributable to the Improvements. At the expiration or earlier termination of the Term of this Lease, or any portion thereof, in accordance herewith, Operating Tenant shall peaceably leave, quit and surrender the Premises in the manner required under paragraph 2.1.2, and said ownership of the Improvements, including all alterations and improvements thereto, shall revert to the Landlord at the time of such expiration or termination of this Lease. Upon such expiration or termination, the Property, including any Improvements remaining (other than personal property and equipment owned by Operating Tenant that are not fixtures and are removed by Operating Tenant from the Property at or prior to the termination or expiration of the Lease), shall become the sole property of the Landlord at no cost to Landlord in an “as is” condition, and subject to the Permitted Encumbrances then outstanding and any other encumbrance consented to by Landlord in writing, and Operating Tenant shall execute and deliver to Landlord such quit claim deed, bill of sale and other instruments reasonably required by Landlord to confirm said ownership of the Property to said Landlord. Section 3. RENT. 3.1. Amount. As rent for the Premises, (i) DDA, during the DDA Lease Term, shall pay to Landlord annual rent in the amount of One and No/100ths Dollars ($1.00) (“Annual Rent”) payable in single annual installments for a period of forty nine (49) years beginning on the Sublease Commencement Date, and (ii) thereafter Operating Tenant shall pay Annual Rent directly to Landlord until the termination of the Lease. As rent for the Premises, Operating Tenant shall pay to DDA annual rent in the amount of One and No/100ths Dollars ($1.00) (“Annual Subrent”) payable in single annual installments for a period of forty nine (49) years beginning on the Sublease Commencement Date. For convenience, the Operating Tenant may pay its Annual Subrent directly to the Landlord, in satisfaction of both its obligation to pay Annual Subrent to DDA and DDA’s obligation to pay Annual Rent to Landlord. Landlord, DDA and Operating Tenant hereby acknowledge that the Annual Rent and Annual Subrent has been pre-paid for the entire Term, and DDA and Operating Tenant agree that such pre-paid rent shall be, notwithstanding any provisions herein to the contrary, non-refundable in the event of the early termination of the Sublease, the DDA Lease or the Lease. 3.2. Security Deposit. None. 10 3.3. Leasehold Obligations. 3.3.1. Net Lease. Other than as is expressly set forth in this Lease, all costs, expenses, liabilities, charges or other deductions whatsoever with respect to the Property and the construction, ownership, leasing, operation, maintenance, repair, rebuilding, use, occupation of, or conveyance of any or all of the Property, or this Lease generally shall be the sole responsibility of and payable by Operating Tenant, including, but not limited to any cost, expenses, liabilities, charges or other sums, in connection with the closing of the loan secured by the Registered Leasehold Mortgage. Landlord shall be and remain liable for all obligations respecting the Premises incurred by Landlord as well as any property tax liability imposed upon the Land (however, Operating Tenant shall pay any portion of such property tax liability attributable to the Improvements, and if the invoice for said taxes does not allocate the taxes between the Land and the Improvements, such allocation shall be made by Landlord in its reasonable, good faith judgment). Operating Tenant shall be responsible for any property tax liability attributable to the DDA Lease, the Operating Tenant’s Leasehold Estate and the Improvements. 3.3.2 DDA’s Obligations. The parties understand and agree that the DDA shall not have any financial obligations or liabilities relating to the ownership or operation of the Property, unless and until the DDA assumes the obligations of the Operating Tenant, and DDA shall have no right to terminate this Lease or the Sublease without the prior written consent of Landlord, Operating Tenant, and the Registered Leasehold Mortgagee (if any). The DDA hereby acknowledges that the Landlord and Operating Tenant are relying on the disbursement of SPLOST Funds as and when contemplated in the SPLOST Agreement, and DDA agrees that DDA will comply with and perform its obligations under the SPLOST Agreement and will not agree to any amendment, modification or termination of the SPLOST Agreement without the prior written consent of Landlord, Operating Tenant and the Registered Leasehold Mortgagee. DDA hereby agrees to enter into such subordination, non-disturbance and attornment agreement approved by Landlord, Operating Tenant, Fee Mortgagee and/or Registered Leasehold Mortgagee and the investor in Borrower purchasing the federal Historic Tax Credits provided such agreement does not place any liability on DDA beyond its interest in the Lease and any rents, profits and/or income derived from the Property and recognizes the Public Use Requirement provided in 3.4 below. 3.4 SPLOST Funds. DDA agrees to pay the SPLOST Funds immediately (and in any event within five (5) days upon receipt) to Landlord in further consideration of the DDA’s interest in this Lease. Landlord agrees to make the SPLOST Funds Landlord receives immediately available to Operating Tenant for the purpose of using the funds in payment of the costs of the Rehabilitation Plan. For convenience, DDA may pay the SPLOST Funds directly to Operating Tenant or the Registered Leasehold Mortgagee. The parties have agreed that during the Servitude the uses of the Property shall satisfy the Public Use Requirement. In the event that during the Servitude the Operating Tenant (or any of its affiliates or successors in interest) uses the Project such that the uses do not satisfy the Public Use Requirement, or if Operating Tenant sells, disposes of or transfers title or ownership of the Project, and subsequent to such sale, disposition or transfer the uses of the Project during the Servitude do not satisfy the Public Use Requirement, DDA shall notify the Operating Tenant 11 (with a copy to the Registered Leasehold Mortgagee) in writing of the violation of the Public Use Requirement, and the Operating Tenant shall have ninety (90) days after receipt of such notice to cure such violation, and if Operating Tenant does not cure such violation within said ninety (90) day period, the Registered Leasehold Mortgagee shall have the extended cure rights under Section 18 of this Lease. For avoidance of doubt, at the conclusion of the Servitude or upon payment of the SPLOST Repayment or termination of the DDA Lease, the Public Use Requirement shall no longer be applicable and the DDA shall no longer have any rights under this paragraph regarding the use of the Property. At any time, the Operating Tenant and/or the Landlord may cause the termination of the DDA Lease and the Public Use Requirement by paying to the DDA the SPLOST Repayment, calculated as of the effective date of any such termination (with a credit for any payments made pursuant to the SPLOST Agreement in re-payment of the SPLOST Funds), and upon such payment, the DDA Lease shall terminate and the Sublease shall immediately become a direct lease between the Landlord and Operating Tenant pursuant to the terms hereof, and DDA shall have no further interest under this Lease. Nothing in this Lease (and for avoidance of doubt, nothing in the Sublease) obligates the Operating Tenant, Landlord or any Mortgagee to pay, or makes Operating Tenant, Landlord or any Mortgagee liable for the payment of, the SPLOST Repayment, and any obligation under the SPLOST Agreement for the payment of the SPLOST Repayment is an agreement between the DDA, Augusta and the Augusta Symphony, Inc. that is outside the obligations of this Lease (and the Sublease). The fact a violation of the Public Use Requirement could be cured by paying the SPLOST Repayment does not deem such violation to be a monetary default but the same shall be deemed a non-monetary default (i.e., one that is not curable by the payment of money) with respect to any and all notice, grace and cure provisions contained in this Lease. Section 4. USE OF PROPERTY. 4.1. Nature of Use. Operating Tenant may throughout the Term use and operate the Property including the Improvements for the following uses and such other uses as are reasonably and customarily attendant to such uses: rehabilitation, construction, development, using or marketing for lease or license and leasing or licensing of space in the Property as a performing arts center, any other uses satisfying the Public Use Requirement and/or any other uses permitted by applicable law incident thereto. In particular, Operating Tenant agrees to conduct rehabilitation and construction activities substantially consistent with the Rehabilitation Plan (including any amendments thereto before or after the Effective Date so long as such amendment is agreed to by Landlord). 4.2. Compliance with Environmental Laws. Operating Tenant, throughout the Term and at its sole expense, in its rehabilitation, possession and use of the Improvements or other use of the Property, shall not (a) cause or permit the escape, disposal or release of any biologically or chemically active or other Hazardous Substances brought onto the Property by Operating Tenant or its agents or contractors in violation of applicable laws and/or regulations, or (b) allow the storage or use of such Hazardous Substances in any manner not sanctioned or permitted by law or by the standards prevailing in the industry for the storage and use of such substances or 12 materials, or (c) allow any Hazardous Substances to be brought onto the Property except to use in the ordinary course of Operating Tenant’s business and in compliance with Environmental Laws. For purposes of this Lease, “Hazardous Substances” shall include those substances and materials subject to regulation under any applicable Environmental Law. If any Mortgagee or governmental agency responsible for monitoring Hazardous Substances reasonably requires testing to ascertain whether or not there has been any release of hazardous materials on the Property for which Operating Tenant is responsible hereunder while this Lease is in effect, then the costs thereof shall be paid by Operating Tenant if such requirement applies to the Property. Operating Tenant shall execute affidavits, representations and the like from time to time at Landlord’s request concerning Operating Tenant’s best knowledge and belief regarding the presence of hazardous substances or materials on the Property. 4.3. Representations, Warranties and Covenants of Landlord. As an inducement to DDA and Operating Tenant to enter into and proceed under this Lease, Landlord warrants and represents to DDA and Operating Tenant as follows, which warranties, representations and covenants are true and correct as of the date of this Lease: 4.3.1. Landlord has good and marketable, fee simple title to the Premises, free and clear of all other liens and encumbrances except for any Permitted Encumbrances, and has the right, power and authority to enter into this Lease, to lease the Premises to DDA and Operating Tenant in accordance with the terms, provisions and conditions contained in this Lease, and has received all applicable governmental consents and approvals in connection therewith, and no other party has any right or option to or in connection with the Premises other than AFB&T, a division of Synovus Bank, as Fee Mortgagee and a Leasehold Mortgagee. 4.3.2. There is no litigation proceeding, or other action pending or, to the best knowledge and belief of Landlord, threatened, affecting the Premises or Landlord’s estate therein; 4.3.3. Landlord has received no written notice, and has no knowledge, nor has Landlord been otherwise advised, of any pending or threatened condemnation, building or zoning code violation relating to all or any part of the Property; 4.3.4. Landlord has received no written notice and has no knowledge of the intention of any party holding an easement affecting the Premises or any part thereof to expand the exercise of any such easement beyond the scope of the present exercise thereof (as by replacing or expanding existing facilities, conduits (including underground or overhead wires, cables or pipes) or systems for sewers, water, electric, gas, cable and other utilities); 4.3.5. The entry by Landlord into this Lease with DDA and Operating Tenant and the performance of all of the terms, provisions and conditions contained herein will not, or with the giving of notice or the passage of time, or both, would not, violate or cause a breach or default under any other agreement relating to the Property to which Landlord is a party or by which it is bound; 4.3.6 The Property is unoccupied and vacant, except for the occupancy of Operating Tenant, and there is no tenant, lessee or other occupant of the Property having any right or claim to possession or use of the Premises except as provided in this Lease; and possession of the 13 Premises is hereby delivered free of the rights or claims of any third party tenants, occupants or other parties in possession of, or claiming any right to possession or use of the Premises; 4.3.7. There are no unpaid special assessments of which Landlord has received notice for sewer, sidewalk, water, paving, gas, electrical or utility improvements or other capital expenditures, matured or un-matured, affecting the Property; 4.3.8. There are no outstanding notices of, nor, to Landlord’s knowledge, any violations of any applicable laws, ordinances, notices, orders, rules, regulations and requirements of applicable federal, state and municipal governments, public or quasi-public authorities and all departments, commissions, bureaus boards and officers thereof affecting any portion of the Property (collectively the “Legal Requirements”); 4.3.9. Landlord is not obligated under any contract, lease (other than this Lease) or agreement, oral or written, with respect to the ownership, use, operation or maintenance of the Property, other than the Fee Mortgage and related documents with AFB&T, a division of Synovus Bank; and 4.3.10. Landlord hereby consents to Operating Tenant’s encumbering its interest in the Property with a Leasehold Mortgage; provided, however, at no times shall there be more than one Leasehold Mortgage outstanding, unless such additional Leasehold Mortgage(s) are consented to by Landlord, Operating Tenant, the Fee Mortgagee and the Registered Leasehold Mortgagee. 4.4. Consent of DDA. DDA hereby consents to Operating Tenant’s encumbering its interest in the Property with Leasehold Mortgage(s) and acknowledges the right of Landlord to encumber its fee interest (and reversionary rights) with Fee Mortgage(s) provided such Fee Mortgagees enter into a SNDA. 4.5 Consent of Operating Tenant. Operating Tenant hereby consents to Landlord encumbering its interest in the Property with Fee Mortgage(s) provided, however, at no time shall there be more than one Fee Mortgage outstanding at any one time that has priority over this Lease and such Fee Mortgagee shall enter into a SNDA, and upon request of Landlord, neither DDA nor Operating Tenant shall unreasonably withhold, condition or delay its execution of a SNDA with respect to a Fee Mortgage provided there is no more than one Fee Mortgage outstanding at any one time that has priority over this Lease and provided the SNDA is in substantially the form of Exhibit C hereof. For avoidance of doubt, AFB&T, a division of Synovus Bank (and its successors and assigns) is the current Fee Mortgagee and has the rights and benefits of a Fee Mortgagee under this Lease. Only a Fee Mortgagee that has entered into a SNDA shall have the rights and benefits of the Fee Mortgagee under this Lease. Section 5. OPERATING EXPENSES. 5.1. Operating Expenses. 5.1.1. Operating Tenant’s Obligation. Operating Tenant will pay (or cause to be paid) directly to the providers of such services all costs and expenses attributable to or incurred in 14 connection with the development, construction, completion, marketing, leasing and occupancy of the Property including the Improvements (collectively, “Operating Expenses”) including without limitation (a) all energy sources for the Improvements, such as propane, butane, natural gas, steam, electricity, solar energy and fuel oil; (b) all water, sewer and trash disposal services; (c) all rehabilitation, maintenance, repair, replacement and rebuilding of the Improvements, (d) all landscaping, maintenance, repair and striping of all parking areas; (e) all insurance premiums relating to the Property including the Improvements, including fire and extended coverage, public liability insurance, rental insurance and all risk insurance; and (f) the cost and expenses of all capital improvements or repairs (whether structural or non-structural) required by any governmental or quasi-governmental authority having jurisdiction over the Property including the Improvements. 5.1.2. Permits and Licenses. Operating Tenant shall procure, or cause to be procured, at Operating Tenant’s sole cost and expense, any and all necessary permits, licenses, or other authorizations required for the rehabilitation, construction and occupancy of the Improvements and the lawful and proper installation and maintenance upon the Premises of wires, pipes, conduits, tubes, and other equipment and appliances for use in supplying any such service to the Improvements and upon the Premises. Landlord agrees to use Landlord’s best reasonable efforts, at Operating Tenant’s sole cost and expense, to cooperate with Operating Tenant in obtaining any and all permits, licenses, easements and other authorizations required by any governmental authority with respect to any construction or other work to be performed on the Premises and grant (or cooperate in processing as regards third party providers), all permits, licenses, easements and other governmental authorizations that are necessary or helpful for electric, telephone, gas, cable television, water, sewer, drainage, access and such other public or private utilities or facilities as may be reasonably necessary or desirable in connection with the construction or operation of the Improvements. Landlord shall use Landlord’s reasonable efforts, at Operating Tenant’s sole cost and expense, to cooperate in the relocation or termination of easements currently encumbering the Premises to the extent that same may be reasonably necessary or desirable in connection with the Improvements. Operating Tenant shall be entitled, without payment to Landlord, for tap or connection fees, to tap into the existing lines, facilities and systems of applicable electric, gas, cable, water, sewer, sewer treatment and other utilities serving the Premises. Landlord agrees to use Landlord’s reasonable efforts to assist Operating Tenant to obtain waiver, reduction or deferral, as applicable, of all fees and other charges otherwise payable in connection with obtaining any permits, licenses, easements and other authorizations required by any governmental authority with respect to any construction or other work to be performed on the Property in connection with the Improvements. Section 6. INSURANCE AND INDEMNIFICATION. 6.1. Insurance to be maintained by Operating Tenant. Operating Tenant shall maintain at its expense throughout the Term casualty and commercial general liability insurance with respect to the Property. The casualty insurance shall be in an amount equal to the full replacement cost of the Improvements (and any upgrades and additions thereto) and the liability insurance shall be in an amount equal to at least $1,000,000 per occurrence. 15 6.2. Insureds. Each such policy shall name Landlord (and each Fee Mortgagee that has entered into a SNDA and each Registered Leasehold Mortgagee) as an additional insured thereon. 6.3. Insurer. All insurance required and all renewals of insurance shall be issued by companies of recognized responsibility licensed to issue such policies and otherwise transact business in the State of Georgia. All insurance policies will expressly provide that such policies will not be cancelled or altered without thirty (30) days’ prior written notice to Landlord. 6.4. Subrogation. Anything in this Lease to the contrary notwithstanding, Operating Tenant hereby waives any and all rights of recovery, claim, action, or cause of action, against Landlord, its agents, officers, or employees, for any loss or damage that may occur to the Property, or any Improvements, or any personal property of such party therein, or for any loss of life or injury to persons by reason of fire, the elements, or any other cause(s) which are insured against under the terms of the insurance policies referred to herein, regardless of cause or origin, including negligence of Landlord, its agents, officers, or employees, and covenants that no insurer shall hold any right of subrogation against Landlord. Operating Tenant’s insurance policies shall include appropriate clauses waiving all rights of subrogation against Landlord with respect to losses payable under such policies. Section 7. IMPROVEMENTS TO PREMISES. 7.1. Rehabilitation of Improvements. 7.1.1. Alterations. Landlord and DDA agree that Operating Tenant shall have the right to make such alterations, additions and changes to the Property as Operating Tenant deems necessary or appropriate, including, without limitation, replacement and disposal thereof; provided, however, material alterations, additions and changes that are not substantially in accordance with the Rehabilitation Plan shall require the prior written approval of Landlord, which approval will not be unreasonably withheld. 7.1.2. Estoppel Certificates. Landlord, DDA and Operating Tenant agree that at any time and from time to time upon not less than twenty (20) days’ prior written notice by the other party, or upon request from a Fee Mortgagee, Registered Leasehold Mortgagee, a permitted assignee or other interested party, Landlord, DDA and/or Operating Tenant will execute, acknowledge and deliver to the other party a statement in writing certifying: (a) that this Lease is unmodified (or if modified, stating such modifications) and in full force and effect; (b) the date through which the Rents have been paid and any outstanding payment obligations then due under the Lease; and (c) that, to the knowledge of the Person executing such certification (if such be the case), there is no default, set-off, defense or other claim against Landlord, DDA or Operating Tenant, as applicable, other than those, if any, so specified under the provisions of this Lease; and (d) as long as the DDA Lease is in effect, the amount of the SPLOST Repayment as of the date of such certificate. It is intended that any such statement may be relied upon by any such Persons. 7.1.3. DDA Lease. DDA shall not execute any Mortgage or other encumbrance or security instrument with respect to DDA’s interest under this Lease (or the Sublease), without 16 the prior written consent of Landlord, Operating Tenant, any Registered Leasehold Mortgagee and the Fee Mortgagee that is a party to a SNDA, which consent may be withheld in the reasonable discretion of such Persons, and without such consent, such encumbrance or security instrument shall be void. For avoidance of doubt, Landlord and Operating Tenant have consented to any such encumbrance by DDA to AFB&T, a division of Synovus Bank, as the current Fee Mortgagee and Registered Leasehold Mortgagee. 7.1.4. Leasehold Mortgages. Operating Tenant shall provide written notice to Landlord and DDA of the name and address of each Leasehold Mortgagee under this Lease. Such Leasehold Mortgagee of which Landlord and DDA has been notified of in writing (such notice to be given in the manner provided in the notice provision of Section 15 hereof and shall detail the name and notice address of such Leasehold Mortgagee) shall be a Registered Leasehold Mortgagee, and as hereinafter provided, at no time shall there be more than one Registered Leasehold Mortgagee. Landlord and DDA hereby acknowledge that they have been properly notified that AFB&T, a division of Synovus Bank holds a Leasehold Mortgage and hereby confirm AFB&T, a division of Synovus Bank is the Registered Leasehold Mortgagee for all purposes of this Lease, and as long as AFB&T, a division of Synovus Bank (or its successor and/or assign) is the Registered Leasehold Mortgagee, there shall be no other Registered Leasehold Mortgagee unless consented to in writing by AFB&T, a division of Synovus Bank (or its successor or assign). 7.2. Joinder. Without limiting Landlord’s or DDA’s obligations under any other provision of this Lease, Landlord and DDA shall, promptly at Operating Tenant’s request and expense at any time during the Term (and provided that Landlord or DDA thereby assumes no liability or obligation), join in any and all applications for building permits, subdivision plat approvals or certificates of dedication thereon, public works or other agreements and permits for sewer, water or other utility services, other instruments of dedication or other permits or approvals, the granting of or entry into which by any governmental or quasi-governmental authority having jurisdiction over the Property is necessary to permit (a) the development, rehabilitation, improvement, use and occupancy of the Property for the purposes permitted by this Lease, without violating applicable law; and (b) the dedication to Augusta-Richmond County and/or the State of Georgia after the Commencement Date of such title to or easements for utility, roadway and slope or storm drainage areas or facilities as are, in Operating Tenant’s opinion, necessary or desirable in connection therewith; provided, however, any such easement, transfer or dedication shall be subject to each Fee Mortgage and Leasehold Mortgage unless consented to in writing by such Fee Mortgagee and Leasehold Mortgagee. Section 8. REPAIRS AND MAINTENANCE. 8.1. Repairs. Operating Tenant shall, throughout the Term and at its expense, (a) keep the Premises in good order and condition (ordinary wear and tear excepted) and in compliance with applicable building and health and safety codes; and (b) promptly make any and all repairs, ordinary or extraordinary, foreseen or unforeseen, to the Property (including but not limited to the landscaping thereon) as are necessary to maintain it in good condition, subject, in the event of casualty or 17 condemnation to receipt of applicable insurance and/or condemnation proceeds therefor, and Landlord shall have no obligation hereunder as to the same. 8.2. Maintenance. Operating Tenant shall keep and maintain all of the Property in a clean and orderly condition, free of accumulation of dirt and rubbish. Section 9. LANDLORD’S RIGHT OF ENTRY. 9.1. Inspection and Repair. Subject to the rights of any tenant under any lease of space in the Property, Landlord shall be entitled to enter the Property during Operating Tenant’s normal business hours to (a) inspect the Property at any time, upon forty-eight (48) hours’ advance written notice and (b) make any repairs thereto and/or take any other action therein which is required by applicable law, or which Landlord is permitted to make by any provision of this Lease, after giving Operating Tenant at least twenty (20) Business Days’ prior written notice of Landlord’s intention to take such action and provided Operating Tenant doesn’t timely cure same (and any sums expended by Landlord in making such repairs and/or taking any such actions (and all interest thereon) shall be immediately due from Operating Tenant to Landlord and from the date such sums are paid by Landlord, interest shall accrue daily on such sums at the Default Rate). Landlord may, while taking any such action upon the Property, store therein any and all necessary materials, tools and equipment, and Operating Tenant shall have no liability to Landlord for any damage to or destruction of any such materials, tools and equipment, except if and to the extent that such damage or destruction is proximately caused by the gross negligence of Operating Tenant. Landlord shall use its best efforts to not disrupt the rights of tenants at the Property. Provided further, in the event the Operating Tenant fails to pay or perform any obligations of Operating Tenant under this Lease, the Landlord may pay and/or perform any such obligations and any costs incurred by Landlord in connection therewith shall be immediately due from Operating Tenant to Landlord, with interest thereon from the date incurred until re-paid at the Default Rate. Nothing herein obligates Landlord to make any such inspection or any such repairs or to cure any such failure on the part of Operating Tenant. Section 10. FIRE AND OTHER CASUALTIES. 10.1. Damages or Destruction to Premises. Operating Tenant shall give prompt notice to Landlord and DDA (if the DDA Lease is in effect) after the occurrence of any fire, earthquake, act of God or other casualty to or in connection with the Property, the Improvements or any portion thereof (hereinafter sometimes referred to as a “Casualty”). Subject to Section 10.2 below, if during the Term the Property shall be damaged or destroyed by Casualty, to the extent permitted by the Registered Leasehold Mortgagee (which consent shall not be unreasonably withheld), Operating Tenant shall repair or restore the Property, so long as Operating Tenant reasonably determines that Restoration is feasible and provided that sufficient insurance proceeds are available to do so. In the event that Operating Tenant shall determine by notice to Landlord and DDA (if the DDA Lease is in effect) given within ninety (90) days after such Casualty, that it is not economically practical to restore the Property to substantially the same condition in which they existed prior to the occurrence of such Casualty (or that the Registered Leasehold Mortgagee is not allowing the insurance proceeds to be used for Restoration), then Operating Tenant may terminate this Lease as of a date that is not less than 18 thirty (30) days after the date of such notice, subject to the rights of the Registered Leasehold Mortgagee under Section 18 hereof. 10.2. Distribution of Insurance Proceeds. In the event that this Lease is terminated pursuant to Section 10.1 hereof, the insurance proceeds received as the result of such Casualty shall be distributed as follows: (a) first, to the Operating Tenant, in an amount equal to market value of the Improvements less the residual value of the Improvements at the conclusion of the Term (with such proceeds payable to the Operating Tenant being paid to the Registered Leasehold Mortgagee pursuant to term of the Leasehold Mortgage and related loan documents between Operating Tenant and Registered Leasehold Mortgagee), and (b) to the Landlord, the remainder of the proceeds (with such proceeds payable to Landlord being paid to the Fee Mortgagee pursuant to term of the Fee Mortgage and related loan documents between Landlord and Fee Mortgagee); provided, however, if the Property is subject to the Public Use Requirement and the Public Use Requirement is no longer being satisfied, any proceeds retained by Operating Tenant after payment in full of the indebtedness owing to any Registered Leasehold Mortgagee shall be applied to the SPLOST Repayment. For avoidance of doubt, and notwithstanding the forgoing, as long as AFB&T, a division of Synovus Bank has a Leasehold Mortgage and/or a Fee Mortgage encumbering all or any of the Property securing, inter alia, the construction loan for the rehabilitation of the Project or any debt related to any amendment, modification, extension, renewal, restructuring or refinancing thereof, all insurance proceeds shall be payable to AFB&T, a division of Synovus Bank for application as provided in said Mortgages. DDA hereby acknowledges that DDA has no interest in any such insurance proceeds other than with application of proceeds to the SPLOST Repayment provided above and any insurance proceeds payable to DDA as sublessor would be paid to Landlord (subject to the rights of any Fee Mortgagee thereto). Section 11. CONDEMNATION. 11.1. Notice of Taking. Forthwith upon receipt by either Landlord, DDA or Operating Tenant of notice of the institution of any proceedings for the taking or condemnation of all or a portion of the Property or Improvements by the government of the United States, State of Georgia, Augusta-Richmond County, or any other governmental authority, or any corporation under the right of eminent domain (a “Taking”), the party receiving such notice shall promptly give notice thereof to the others, and such other parties may also appear in such proceeding and be represented by counsel, who may be counsel for the party receiving such notice. 11.2. Special Account. If a Total Taking (as defined in Section 11.3), the full amount of any award for any Taking (the “Award”), shall, notwithstanding any allocation made by the awarding authority, be paid, and allocated (x) to the Operating Tenant, an amount equal to the amount allocated to the Improvements minus the residual fair market value of the Improvements as of the expiration of the Term, and (y) to the Landlord, the rest of the Award; provided, however, any Award payable to Operating Tenant shall be paid to the Registered Leasehold Mortgagee (with such portion of the Award being paid to the Registered Leasehold Mortgagee having first priority) and any portion payable to Landlord shall be paid to any Fee Mortgagee (with such portion of the Award being paid to the Fee Mortgagee having first priority). The portion of the Award so allocated to the Landlord shall be known herein as the “Landlord’s Award,” and the portion so allocated to the Operating Tenant shall be known herein as the 19 “Operating Tenant’s Award.” For avoidance of doubt, and notwithstanding the forgoing, as long as AFB&T, a division of Synovus Bank has a Leasehold Mortgage and/or a Fee Mortgage encumbering all or any of the Property securing the construction loan for the rehabilitation of the Project, or any debt related to any amendment, modification, extension, renewal, restructuring or refinancing thereof, all Awards shall be payable to AFB&T, a division of Synovus Bank for application as provided in said Mortgages. 11.3. Total Taking. In the event of a permanent Taking of the fee title to or of control of the Premises or of the entire Leasehold Estate hereunder or the entire Improvements (a “Total Taking”), this Lease shall thereupon terminate as of the effective date of such Total Taking, without liability or further recourse to the parties (and the reversion of title to the Improvement contemplated 2.3 shall be deemed to have occurred at the time of such termination), provided that any Rent payable or obligations owed by the Operating Tenant to the Landlord as of the date of said Total Taking shall be paid or otherwise carried out in full. 11.4. Partial Taking; Procedures and Criteria for Course of Action. In the event of a permanent Taking of less than all of the Premises (a “Partial Taking”), (a) if Operating Tenant reasonably determines that the continued use and occupancy of the remainder of the Premises by the Operating Tenant is or can reasonably be made to be economically viable, structurally sound, and otherwise feasible based upon the amount of eminent domain proceeds available for the purpose of paying for such restoration (the “Restoration Criteria”), then, upon receipt of the consent of the Registered Leasehold Mortgagee having the first priority Registered Leasehold Mortgage, the entire Award shall be applied to restoration of the Premises and the Premises shall be restored pursuant to Section 10.1; or (b) if the continued use and occupancy of the remainder of the Premises by the Operating Tenant is not or cannot, in Operating Tenant’s reasonable judgment, be made to be economically viable, structurally sound, and otherwise feasible (or if the first priority Registered Leasehold Mortgagee does not permit such Restoration), then this Lease may be terminated by Operating Tenant pursuant to Section 10.1 and the Award applied pursuant to Section 11.2; provided, however, any such termination shall be subject to the rights of the Registered Leasehold Mortgagee to a New Lease as contemplated in Section 18 hereof. 11.5. Restoration. If a decision is made pursuant to Section 10.1 to restore the remainder of the Property following receipt of the Award, the Operating Tenant shall promptly proceed, at its expense, to commence and complete the restoration pursuant to the provisions of Section 10, using the Award for such restoration, with any excess remaining after the completion of the restoration being payable to Operating Tenant and Landlord, using the calculation set forth in such Section 11.2. If Operating Tenant has decided pursuant to Section 10.1 to restore the remainder of the Property, and if the cost of the restoration shall exceed the amount of the entire Award, the deficiency shall be paid by the Operating Tenant. Operating Tenant’s obligation hereunder shall be subject to receipt of the entire Award of funds and approval of the Registered Leasehold Mortgagee. 20 11.6. Termination upon Non-Restoration. Following a Partial Taking, if a decision is made pursuant to Section 11.4(b) that the remaining portion of the Premises is not to be restored, the DDA and Operating Tenant shall surrender the Premises to the Landlord and this Lease shall thereupon be terminated without liability or further recourse to the parties hereto; provided, however, if the Registered Leasehold Mortgagee elects to enter into (or have its nominee, assignee or designee enter into) a New Lease under Section 18 hereof, the entire Award shall be made available to such Registered Leasehold Mortgagee for the Restoration, and any remainder after such Restoration shall may be retained by the tenant under such New Lease or retained by said Registered Leasehold Mortgagee, in its sole discretion. 11.7. No Waiver. No provisions in this Lease limit the rights of any of the Landlord or Operating Tenant to seek compensation from a condemning authority as provided by statute, common law, or the United States Constitution. DDA hereby acknowledges that unless DDA has taken over the Operating Tenant’s obligations under this Lease, the DDA shall not be entitled to retain any Award and portion of any Award paid to DDA shall paid to Landlord in accordance with the above. Section 12. ASSIGNMENT AND SUBLETTING. 12.1. Transfer by Operating Tenant. 12.1.1. Operating Tenant shall have the right to assign, sublet and encumber its interest under this Lease, from time to time, in full or in part, subject to the approval of Landlord (but without requiring the approval of DDA), which consent shall not be unreasonably withheld or delayed (provided, however, license or occupancy agreements, or similar agreements, entered into by Operating Tenant in the ordinary course of business for the short-term rental or use of the Property for performances, public or private functions and other uses shall not require the approval of Landlord or DDA). In no event shall Operating Tenant be permitted to assign any of its interest under this Lease without the prior written consent of the Registered Leasehold Mortgagee, which consent may be withheld in the sole discretion of the Registered Leasehold Mortgagee. During the Recapture Period, Operating Tenant shall not enter into any sublease of any portion of the Premises whose occupancy thereof would, singularly, or in the aggregate with other subtenants or sub-subtenants of the Premises, cause the Premises to be deemed to be “tax- exempt use property” under Sections 47(c)(2)(B)(v) or 168(h) of the Code (or any corresponding or related provision of the Code). 12.2. Transfer by Landlord. 12.2.1. Subject to the provisions of Section 12.2.2 below, Landlord may assign this Lease and Landlord’s reversion hereunder without the necessity of obtaining DDA’s or Operating Tenant’s consent or permission; provided, however, at all times the interest of the Landlord under this Lease shall be held by the fee simple owner of the Land and the reversionary interest in the Improvements run with the Land and pass to the owner of the Land (Landlord may not assign its interest in the Lease or any reversionary interest herein contemplated to any Person other than the Person owning the Land and/or pursuant to a Fee Mortgage); provided, however, 21 any Fee Mortgage shall be subordinate to this Lease unless the Fee Mortgagee enters into a SNDA (and each of Operating Tenant and DDA will, upon request of Landlord, enter into a SNDA in substantially the form attached hereto as Exhibit C hereof and provided at no time shall there be more than one Fee Mortgage outstanding having priority over this Lease (and that Operating Tenant shall cause each Leasehold Mortgagee to join such SNDA and agrees that the Leasehold Mortgage and Leasehold Mortgagee (and any party acquiring the Operating Tenant’s interest in this Lease (and the Sublease) through the foreclosure or enforcement of, and/or assignment in lieu of foreclosure with respect to, said Leasehold Mortgage shall be subject to the terms of SNDA as a successor and assign to Operating Tenant). Notwithstanding the foregoing, as long as AFB&T, a division of Synovus Bank is the holder of any Mortgage encumbering all or any of the Property, no Fee Mortgage will be permitted, other than a Fee Mortgage in favor of AFB&T, a division of Synovus Bank, without the prior written consent of AFB&T, a division of Synovus Bank. 12.2.2. Notwithstanding anything herein to the contrary, during the Recapture Period, Landlord shall not assign or transfer this Lease to a person or entity that would cause a recapture or loss of all or any portion of the Historic Tax Credits. 12.3. Transfer by DDA. 12.3.1. DDA may not assign its interest in this Lease or enter into any property management agreement with respect to the DDA’s interest in the Lease, without the necessity of obtaining the prior written consent or permission of Landlord, Operating Tenant and any Fee Mortgagee a party to an SNDA with DDA, which consent may be withheld in the reasonable discretion of such Landlord, Operating Tenant and Fee Mortgagee, and any such assignment or management agreement without such prior written consent shall be void and of no effect. Operating Tenant and Landlord do hereby consent to DDA entering into an Assignment of Leases and Rents with AFB&T, a division of Synovus Bank. 12.3.2. Notwithstanding anything herein to the contrary, DDA shall not assign or transfer its interest in this Lease to a person or entity that would cause a recapture or loss of all or any portion of the Historic Tax Credits. Section 13. DEFAULT. 13.1. Definition. As used in this Lease, each of the following events shall constitute an “Event of Default” by DDA, Operating Tenant or Landlord, as applicable, unless such Event of Default is caused, in full or in part, by Force Majeure: (a) if DDA or Operating Tenant fails (a) to pay any Annual Rent or Annual Sub-Rent or other sum which it is obligated to pay under this Lease, when and as it is due and payable hereunder, or (b) to perform any of its obligations under this Lease or observe or comply with any provision of this Lease, in each case not cured within the grace or cure period set forth below; (b) if Landlord (a) fails to pay any sum which it is obligated to pay under this Lease when and as it is due and payable hereunder, or (b) if Landlord fails to perform any of its 22 obligations under this Lease, in each case not cured within the grace or cure period set forth below; (c) if DDA fails to pay (and Augusta does not otherwise directly pay) SPLOST Funds to Landlord or Operating Tenant or the Registered Leasehold Mortgagee as and when disbursement of such funds are made available for disbursement under the SPLOST Agreement and in any event prior to April 1, 2018 (for avoidance of doubt, a default under this subpart (c) may, at the option of Operating Tenant (with the consent of the Registered Leasehold Mortgagee), terminate DDA’s interest in the Lease and Sublease but not the rights of Operating Tenant to continue the Lease and Sublease directly with Landlord); (d) if a Bankruptcy of DDA or Operating Tenant occurs (for avoidance of doubt, the Bankruptcy of DDA shall terminate DDA’s interest in the Lease and Sublease but not the rights of Operating Tenant to continue the Lease and Sublease directly with Landlord). 13.2. Notice; Grace Period. Anything in this Section to the contrary notwithstanding, if an Event of Default occurs neither Landlord, DDA nor Operating Tenant shall exercise any right or remedy on account thereof which it holds under this Lease or applicable law unless and until: (a) The non-defaulting party gives written notice thereof to the defaulting party; (b) If such Event of Default consists of a failure to pay money, within twenty (20) days after the non-defaulting party gives such written notice, the defaulting party fails to pay all of such money, or if such Event of Default consists of something other than a failure to pay money, within sixty (60) days after the non-defaulting party gives such written notice such Event of Default is not cured, or if such Event of Default is not reasonably curable within such period, the defaulting party has not commenced to proceed within such period actively, diligently and in good faith to begin to cure such Event of Default and to continue thereafter to do so until it is fully cured; (c) Following the grace periods set forth in this Section 13.2, the non- defaulting party shall be entitled, upon notice to the defaulting party, to pursue its available remedies at law or in equity; provided, that if the default is a default by Operating Tenant and is caused, directly or indirectly, by a default by a subtenant of Operating Tenant, Operating Tenant shall be given such additional grace period as reasonably necessary to cause its subtenant to cure such default. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IN NO EVENT WILL THIS LEASE (OR THE SUBLEASE) BE TERMINATED WITHOUT THE PRIOR WRITTEN CONSENT OF AFB&T, A DIVISION OF SYNOVUS BANK (OR ITS SUCCESSORS AND/OR ASSIGNS) AS LONG AS AFB&T, A DIVISION OF SYNOVUS BANK IS THE HOLDER OF A LEASEHOLD MORTGAGE AND/OR FEE MORTGAGE, BUT UNLESS THE PUBLIC USE REQUIREMENT HAS TERMINATED AS PROVIDED HEREIN, THE PUBLIC USE REQUIREMENT SHALL REMAIN IN EFFECT. THE DDA LEASE SHALL BE TERMINATED UPON THE PAYMENT IN FULL OF THE SPLOST REPAYMENT AMOUNT CALCULATED AS OF THE DATE 23 OF SUCH REPAYMENT AND THE DDA LEASE MAY BE TERMINATED AT THE OPTION OF LANDLORD IN THE EVENT DDA FAILS TO MAKE ANY PAYMENT OF SPLOST FUNDS AS AND WHEN DUE, UNLESS AUGUSTA CURES SUCH FAILURE TO PAY (AND IN THE EVENT OF SUCH TERMINATION OF THE DDA LEASE, THE SUBLEASE WILL SURVIVE AS A DIRECT LEASE BETWEEN LANDLORD AND OPERATING TENANT). Section 14. CONDITION OF TITLE AND PREMISES. 14.1. Quiet Enjoyment. Landlord hereby (a) covenants and agrees that, at the time of the execution and delivery of this Lease by the parties hereto, it (i) is the owner of a fee simple estate in and to the Premises, subject to the operation and effect of and only of the Permitted Encumbrances, and (ii) has the full right, power and authority to enter into this Lease and, thereby to lease the Premises; and (b) warrants that Operating Tenant will have quiet and peaceful possession of the Premises during the Term so long as all of Operating Tenant’s obligations hereunder are timely performed, except if and to the extent that such possession is terminated pursuant to Sections 10, 11 or 13 or any other provision of this Lease. Section 15. NOTICES. 15.1. Any notice, demand, consent, approval, request or other communication or document to be provided hereunder to Landlord, DDA or Operating Tenant (a) shall be in writing, and (b) shall be deemed to have been provided on the earlier of (i) (1) forty-eight (48) hours after being sent as certified or registered mail in the United States mails, postage prepaid, return receipt requested, or (2) the next Business Day after having been deposited (in time for delivery by such service on such Business Day) with Federal Express or another national courier service, or (3) (if such party’s receipt thereof is acknowledged in writing) upon having been sent by telefax or another means of immediate electronic communication, in each case to the address of such party set forth hereinabove or to such other address in the United States of America as such party may designate from time to time by notice to each other party hereto, or (ii) (if such party’s receipt thereof is acknowledged in writing) its having been given by hand or other actual delivery to such party. 15.2. All notices required or permitted to be given under this Lease shall be deemed given in accordance with the foregoing paragraph of this Section 15, and addressed as set forth in Exhibit B. Any party may change its address by timely notice to the other party. Section 16. [Intentionally Omitted]. Section 17. GENERAL. 17.1. Effectiveness. This Lease shall be effective as of the Effective Date. 24 17.2. Complete understanding. This Lease represents the complete understanding between the parties hereto as to the subject matter hereof. 17.3. Amendment. This Lease may be amended, modified and/or extended by and only by an instrument executed and delivered by each party hereto, and as long as there is any Fee Mortgage and the Fee Mortgagee has entered into a SNDA, any such amendment, modification or extension shall not be effective without the written consent of the first priority Fee Mortgagee, which consent may be withheld in the reasonable discretion of the Fee Mortgagee, and as long as there is any Registered Leasehold Mortgage, any such amendment, modification or extension shall not be effective without the prior written consent of the Registered Leasehold Mortgagee, which consent may be withheld in the reasonable discretion of the Registered Leasehold Mortgagee. NOTWITHSTANDING THE FOREGOING, AS LONG AS AFB&T, A DIVISION OF SYNOVUS BANK HOLDS A MORTGAGE THEN THIS LEASE MAY NOT BE AMENDED, MODIFIED AND/OR EXTENDED WITHOUT THE PRIOR WRITTEN CONSENT OF AFB&T, A DIVISION OF SYNOVUS BANK, WHICH CONSENT MAYBE WITHHELD IN THE REASONABLE DISCRETION OF AFB&T, A DIVISION OF SYNOVUS BANK. 17.4. Waiver. No party hereto shall be deemed to have waived the exercise of any right which it holds hereunder unless such waiver is made expressly and in writing (and, without limiting the generality of the foregoing, no delay or omission by any party hereto in exercising any such right shall be deemed a waiver of its future exercise). No such waiver made in any instance involving the exercise of any such right shall be deemed a waiver as to any other such instance, or any other such right. 17.5. Applicable law. This Lease shall be given effect and construed by application of the law of the State of Georgia, and any action or proceeding arising hereunder shall be brought in the courts of Georgia. 17.6. Time of essence. Time shall be of the essence of this Lease, except that, whenever the last day for the exercise of any right or the discharge of any obligation hereunder falls on a Saturday, Sunday or statutory holiday, the party having such right or obligation shall have until 5:00 p.m. (Eastern Time) on the next succeeding day which is not a Saturday, Sunday or statutory holiday to exercise such right or discharge such obligation. 17.7. Headings. The headings of the Sections, subsections, paragraphs and subparagraphs hereof are provided herein for and only for convenience of reference, and shall not be considered in construing their contents. 17.8. Construction. As used herein, all references made (a) in the neutral, masculine or feminine gender shall be deemed to have been made in all such genders, (b) in the singular or plural number shall be deemed to have been made, respectively, in the plural or singular number as well, and (c) to any Section, subsection, paragraph or subparagraph shall be deemed, unless otherwise expressly indicated, to have been made to such Section, subsection, paragraph or subparagraph of this Lease. 25 17.9. Exhibits. Each writing or plat referred to herein as being attached hereto as an exhibit or otherwise designated herein as an exhibit hereto is hereby incorporated herein and made a part hereof. 17.10. Severability. No determination by any court, governmental or administrative body or agency or otherwise that any provision of this Lease or any amendment hereof is invalid or unenforceable in any instance shall affect the validity or enforceability of (a) any other such provision, or (b) such provision in any circumstance not controlled by such determination. Each such provision shall remain valid and enforceable to the fullest extent allowed by, and shall be construed wherever possible as being consistent with, applicable law. 17.11. Disclaimer of Partnership Status. Nothing in this Lease shall be deemed in any way to create between the parties hereto any relationship of partnership, joint venture or association, and the parties hereto hereby disclaim the existence of any such relationship. 17.12. Commissions. Each party hereto hereby represents and warrants to the other that, in connection with the leasing of the Premises hereunder, the party so representing and warranting has not dealt with any real estate broker, agent or finder, and there is no commission, charge or other compensation due on account thereof. Each party hereto shall defend, indemnify and hold harmless the other against and from any liability, claim of liability or expense arising out of any inaccuracy in such party’s representation. 17.13. Prevailing Party. In the event any party hereunder initiates judicial action against the other in order to enforce the terms, covenants and provisions of this Lease, the non-prevailing party in such judicial action shall reimburse the prevailing party in such judicial action for all reasonable expenses, fees, costs, including reasonable attorneys’ fees actually incurred by the prevailing party in connection with such judicial action. 17.14 Liability. Any liability of Landlord under this Lease shall be limited to the Landlord’s interest in the Property. Any liability of DDA under this Lease shall be limited to the DDA’s interest in the Property, and any liability of Operating Tenant under this Lease shall be limited to the Operating Tenant’s interest in the Property. The parties understand and agree that the DDA is an accommodating party serving without compensation to facilitate the Rehabilitation Plan for the benefit of Augusta-Richmond County, Georgia, and shall have no liability to Landlord, Operating Tenant or any third party during or following the termination of this Lease, except for acts constituting known intentional wrong doing and except pursuant to Section 17.13 hereof if the DDA is the non-prevailing party, and DDA has no right to terminate this Lease or the Sublease, however, DDA may terminate the DDA Lease and thereby cause the Sublease to be a direct lease between Landlord and Operating Tenant. Operating Tenant shall reimburse DDA for its reasonable and necessary increase in costs, if any, incurred with respect to its audited financial statements attributable to this Lease and for its attorney fees or other costs incurred attributable to this Lease. 17.15. Benefit and Burden. This Lease shall be binding on and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Each Fee Mortgagee who enters into a SNDA and each Registered Leasehold Mortgagee is a third party beneficiary of the terms of this Lease, however, no Fee Mortgagee shall have any liability under this Lease unless 26 such Fee Mortgagee succeeds to the interest of the Landlord under this Lease and then such liability shall be limited to such Fee Mortgagee’s interest in the Property, and no Leasehold Mortgagee (including, without limitation, any Registered Leasehold Mortgagee) shall have any liability under this Lease unless such Leasehold Mortgagee succeeds to the interest of Operating Tenant under this Lease and then such liability shall be limited to the such Leasehold Mortgagee’s interest in the Property. SECTION 18 Rights of Leasehold Mortgagees 18.1 Leasehold Mortgages. (a) Operating Tenant may mortgage or convey security title to its entire interest under this Lease and in and to the Improvements to a Leasehold Mortgagee; provided however, only a Registered Leasehold Mortgage and a Registered Leasehold Mortgagees shall have the benefits of this Section 18. Notwithstanding anything herein to the contrary, at no time shall there be more than one Registered Leasehold Mortgage or Registered Leasehold Mortgagee, and the parties agree that as of the date hereof the Registered Leasehold Mortgagee is AFB&T, a division of Synovus Bank. (i) No amendment or modification of this Lease shall be made without the prior written consent of the Registered Leasehold Mortgagee, which consent may be withheld in the reasonable discretion of such Registered Leasehold Mortgagee. (ii) Substantially concurrently with Landlord’s giving to DDA or Operating Tenant, or DDA’s giving to Landlord or Operating Tenant, or Operating Tenant’s giving to Landlord or DDA, any notice of default or other notice given under or pursuant to this Lease, Landlord or DDA or Operating Tenant, as applicable, will send a copy of such notice to the Registered Leasehold Mortgagee pursuant to paragraph 18.2 below. (b) Any restrictions contained in this Lease on the assignment or transfer of Operating Tenant’s interest in this Lease shall not apply to any purchases at a foreclosure sale (or sale under power of sale) under a Leasehold Mortgage, or the foreclosure or enforcement by Leasehold Mortgagee (or its assignee, designee or nominee) of its security title or interest herein, or the acceptance by Leasehold Mortgagee (or its assignee, designee or nominee) of a deed in lieu thereof (such foreclosure purchaser or Leasehold Mortgagee (or its assignee, designee or nominee), as applicable, a “Successor Operating Tenant”), or to the assignment or transfer of such Leasehold Mortgagee’s (or its designee’s or nominee’s) interest in this Lease. 18.2 Notices to Leasehold Mortgagees; Leasehold Mortgagee’s Right to Cure. Whenever a Registered Leasehold Mortgage exists, Landlord shall deliver to any Registered Leasehold Mortgagee written notice of any default by DDA or Operating Tenant or notice of termination or election to terminate this Lease, the DDA Lease or the Sublease simultaneously with providing notice to DDA and/or Operating Tenant, and no such notice to DDA or Operating 27 Tenant, and no exercise of any remedy by Landlord or DDA as a result of any such default or termination of this Lease, shall be effective against the Registered Leasehold Mortgagee until such notice shall have been delivered to Registered Leasehold Mortgagee at its address specified in its notice given to Landlord in accordance with paragraph 7.1.4 hereof (or in the case of AFB&T, a division of Synovus Bank, at the address provided below). Landlord hereby covenants and agrees that such Registered Leasehold Mortgagee shall have the right, but not the obligation, to cure any default by DDA or Operating Tenant under this Lease (and DDA hereby agrees Registered Leasehold Mortgagee shall have the right, but not the obligation, to cure any default by Operating Tenant under the Sublease). The Registered Leasehold Mortgagee shall have a period of twenty (20) Business Days with respect to the nonpayment of rent or any other amount payable by Operating Tenant under this Lease (or the Sublease) beyond any cure period expressly provided to Operating Tenant herein, or, ninety (90) days with respect to any other Event of Default by Operating Tenant beyond any cure period expressly provided to Operating Tenant herein, in which to cure or cause to be cured any such Event of Default; provided however, in the event that any such default cannot, with reasonable diligence, be cured within such ninety (90) day period, such longer time as may be required to complete such cure, provided such Registered Leasehold Mortgagee commits in writing to Landlord (and if the DDA Lease is in effect, commits to DDA) to cure such default and such Registered Leasehold Mortgagee promptly commences and diligently pursues such cure to completion. Landlord (and if applicable, DDA) shall accept any such performance by a Registered Leasehold Mortgagee as though the same had been done or performed by Operating Tenant. Landlord hereby acknowledges and agrees that AFB&T, a division of Synovus Bank, a Georgia banking corporation (also known as Synovus Bank), has complied with the requirements of paragraph 7.1.4 hereof, is the “Registered Leasehold Mortgagee” and its Leasehold Mortgage (and any amendments and/or modifications thereof) is the “Registered Leasehold Mortgage” as of the date of this Lease, and its address for purposes hereof is: AFB&T, a division of Synovus Bank, Attn: Mac McKnight, 1148 Broadway, P.O. Box 120, Columbus, Georgia 31902, with a copy to AFB&T, a division of Synovus Bank, Attn: Mac McKnight, 150 West Hancock Avenue (P.O. Box 1747), Athens, Georgia 30603. 18.3 Leasehold Mortgagee’s Obtaining of Possession. If a Registered Leasehold Mortgagee cannot cure any such default as contemplated in 18.2 above without having taken over possession of the Premises by a receiver or otherwise through enforcement of the remedies under its Leasehold Mortgage, then neither Landlord nor DDA shall exercise any (if any) right is has to terminate this Lease (or in the case of DDA, the Sublease) by reason of any Event of Default which is not curable by the payment of money (which the parties agree includes, without limitation, any violation of the Public Use Requirement) and which by its nature may only be cured by the Registered Leasehold Mortgagee’s taking possession of the Premises and the Improvements, or by reason of any default that is personal to Operating Tenant (e.g., bankruptcy, breach of any use requirement etc.) which cannot be cured by the Registered Leasehold Mortgagee, in each case as long as the Registered Leasehold Mortgagee (a) within the time allotted for Registered Leasehold Mortgagee’s cure under Section 18.2 above, commits to Landlord and/or DDA in writing that it shall proceed promptly and diligently to prosecute its rights and remedies under and in respect of its Registered Leasehold Mortgage in order to obtain possession of the Premises and the Improvements and obtain the Leasehold Estate in and to the Premises by foreclosure or otherwise, and to thereafter cure such Event of Default (to the extent same are susceptible of cure) that were the grounds for the termination of this Lease, and (b) 28 thereafter does so within one hundred eighty (180) days of such written commitment (or such longer period as is required if such obtaining of possession is restricted during the Recapture Period, including, without limitation, any restriction in any subordination, non-disturbance or attornment agreement entered into by Landlord, Operating Tenant, DDA, Registered Leasehold Mortgagee and the investor in Borrower acquiring the federal Historic Tax Credits (regardless of whether such Recapture Period could be terminated by paying any “recapture amount” to the such investor; nothing herein obligates Registered Leasehold Mortgagee to pay any such recapture amount to end the Recapture Period), or such longer time as may be reasonably necessary under the circumstances so long as Registered Leasehold Mortgagee diligently and continuously pursues the same to completion (provided, however, that any default that is personal to Operating Tenant and cannot be cured by the Registered Leasehold Mortgagee shall be deemed waived upon the Registered Leasehold Mortgagee taking possession of the Premises and Improvements and foreclosing or accepting a deed in lieu of foreclosure as aforesaid). If a Registered Leasehold Mortgagee succeeds to the interest of Operating Tenant, then for so long as such Registered Leasehold Mortgagee is the “Operating Tenant” hereunder, the Registered Leasehold Mortgagee’s liability hereunder shall be limited to its interest in the Premises and when the Registered Leasehold Mortgagee disposes of its interest in the Premises, the Registered Leasehold Mortgagee shall be relieved of any further liability to Landlord and/or DDA with respect to this Lease. 18.4 Termination of Lease; New Lease. (a) If the Lease or the Sublease is to be terminated or surrendered prior to the expiration date of the Term for whatever reason, the Landlord will so notify the Registered Leasehold Mortgagee in writing, and, at the option of the Registered Leasehold Mortgagee, Landlord and DDA (if the DDA Lease remains in effect) hereby agrees to enter into a new lease of the Premises and as applicable, the Property with such Registered Leasehold Mortgagee (or its assignee, designee or nominee) for the remainder of the original stated Term of this Lease at the rent and upon substantially all of the covenants, agreements, terms, provisions and limitations of this Lease and the Sublease but with such modifications as may be reasonably necessary or appropriate to reflect the terms of this Section 18.4 and changes in the factual circumstances reflected herein (the “New Lease”), effective as of the date of such termination, but only if such Registered Leasehold Mortgagee commits in writing to Landlord and DDA (if the DDA Lease remains in effect), in a written notice delivered to Landlord, within ninety (90) days after Landlord delivers the termination notice to such Registered Leasehold Mortgagee, that the Registered Leasehold Mortgagee (or its assignee, designee or nominee) will enter into a New Lease). (b) If Landlord, the DDA (if the DDA Lease remains in effect) and Registered Leasehold Mortgagee, or its nominee, assignee or designee (the “New Operating Tenant”), enter into a New Lease pursuant to this Section 18.4, any interest of the prior Operating Tenant in the Improvements that reverted to Landlord or DDA upon termination of this Lease shall be deemed the property of the New Operating Tenant under the New Lease on and subject to the terms and provisions of the New Lease, to the same extent as the prior Operating Tenant’s interest therein under this Lease and subject to the Landlord’s reversionary interest therein and thereto. 29 (c) Nothing contained in this Section 18.4 shall be deemed to limit or affect Landlord’s interest in and to such property existing upon the expiration of the Term of the New Lease. The provisions of this Section 18.4 shall survive the termination of this Lease and shall continue in full force and effect thereafter to the same extent as if this Section 18.4 were a separate and independent contract made by Landlord, DDA (if the DDA Lease remains in effect) and the Registered Leasehold Mortgagee, and (provided that the Registered Leasehold Mortgagee shall have affirmed in writing its intent to enter into (or have its assignee, designee or assignee enter into) and be bound by a New Lease) from the effective date of such termination of this Lease to the date of execution and delivery of the New Lease, the Registered Leasehold Mortgagee (or its assignee, designee or nominee) may use and enjoy the Leasehold Estate created by this Lease and the Improvements without hindrance by Landlord or DDA, but only on and subject to the terms and provisions of this Lease (and the Sublease contained herein). Any Fee Mortgage (and related fee loan documents) existing as of the date of execution of any New Lease shall continue to constitute a collateral assignment of Landlord’s interest in such New Lease (and such New Lease shall maintain the benefits and rights under any SNDA that existed with respect to this Lease as a replacement of this Lease), however, if requested by the New Operating Tenant, the existing Fee Mortgagee, DDA (if the DDA Lease remains in effect) and Landlord shall enter into a SNDA with respect to the New Lease. (d) Intentionally Omitted. (e) If a Registered Leasehold Mortgagee enters into a New Lease with Landlord directly under this Section 18.4, then for so long as Registered Leasehold Mortgagee is the “Operating Tenant” thereunder, the Registered Leasehold Mortgagee’s liability under the New Lease shall be limited to its interest in the Premises, and when the Registered Leasehold Mortgagee disposes of its interest in the Premises, the Registered Leasehold Mortgagee shall be relieved of any further liability to Landlord or DDA with respect to such New Lease. The restrictions contained in this Lease on the assignment or transfer of Operating Tenant’s interest in this Lease shall not apply to the assignment or transfer of such Registered Leasehold Mortgagee’s interest in such a New Lease, except during the Recapture Period, the New Operating Tenant shall not be a person that would cause a recapture or loss of all or a portion of the Historic Tax Credits. 18.5 Rejection by Bankruptcy Trustee; New Lease. (a) If this Lease (or the Sublease contained herein) is rejected or disaffirmed pursuant to any bankruptcy law or proceeding or other similar law or proceedings affecting creditors’ rights generally, Landlord and DDA (if applicable) shall, if timely requested to do so by a Registered Leasehold Mortgagee as provided herein, enter into a New Lease of the Premises and as applicable, the Property with the Registered Leasehold Mortgagee (or its assignee, designee or nominee) not later than sixty (60) days after the Registered Leasehold Mortgagee delivers to Landlord its written request therefor, which New Lease shall be effective as of the date of such rejection or disaffirmance, but the Landlord will be obligated to do so only if such Registered Leasehold Mortgagee commits in writing to Landlord, in a written notice delivered to Landlord, within ninety (90) days after the effective date that Registered Leasehold Mortgagee receives written notice of such rejection or disaffirmance, as the case may be, that the Registered Leasehold Mortgagee (or its assignee, designee or nominee) will enter into a New Lease and in 30 such case, such New Lease will be entered promptly after such commitment is sent by the Registered Leasehold Mortgagee and in substantially the same for as the Lease for the remaining term of this Lease. (b) Notwithstanding anything to the contrary contained herein, if Landlord, DDA (if applicable) and a Registered Leasehold Mortgagee (or its assignee, designee or nominee), as a “New Operating Tenant”, enter into a New Lease pursuant to this Section 18.5, any interest of the prior Operating Tenant in the Improvements which reverts to Landlord upon the termination of this Lease shall be deemed the property of the New Operating Tenant under the New Lease on and subject to the terms and provisions of the New Lease, to the same extent as the interest therein of the prior Operating Tenant under this Lease, subject to the Landlord’s reversionary interest therein and thereto. (c) Nothing contained in this Section 18.5 shall be deemed to limit or affect Landlord’s interest in and to such property existing upon the expiration of the Term of the New Lease. The provisions of this Section 18.5 shall survive the rejection or disaffirmance of this Lease (or Sublease) and shall continue in full force and effect thereafter to the same extent as if this Section 18.5 were a separate and independent contract made by Landlord, DDA and the Registered Leasehold Mortgagee, and (provided that the Registered Leasehold Mortgagee shall have affirmed in writing its intent to enter into (or have its assignee, designee or nominee enter into) and be bound by a New Lease) from the effective date of such rejection or disaffirmance of this Lease to the date of execution and delivery of the New Lease, the Registered Leasehold Mortgagee (or its assignee, designee or nominee) may use and enjoy the Leasehold Estate created by this Lease without hindrance by Landlord or DDA, but only on and subject to the terms and provisions of this Lease. Any Fee Mortgage (and related fee loan documents) existing as of the date of execution of any New Lease shall continue to constitute a collateral assignment of Landlord’s interest in such New Lease (and such New Lease shall maintain the benefits and rights under any SNDA that existed with respect to this Lease as a replacement of this Lease), however, if requested by the New Operating Tenant, the existing Fee Mortgagee, DDA (if the DDA Lease remains in effect) and Landlord shall enter into a SNDA with respect to the New Lease. (d) Intentionally Omitted. (e) If a Registered Leasehold Mortgagee enters into a New Lease with Landlord directly under this Section 18.5, then for so long as Registered Leasehold Mortgagee is the “New Operating Tenant” thereunder, Registered Leasehold Mortgagee’s liability under the New Lease shall be limited to its interest in the Premises and when the Registered Leasehold Mortgagee disposes of its interest in the Premises, the Registered Leasehold Mortgagee shall be relieved of any further liability to Landlord with respect to such New Lease. The restrictions contained in this Lease on the assignment or transfer of operating tenant’s interest in this Lease shall not apply to the assignment or transfer of such Registered Leasehold Mortgagee’s interest in such a New Lease, except during the Recapture Period, the New Operating Tenant shall not be a person that would cause a recapture or loss of all or a portion of the Historic Tax Credits. 18.6 Recognition by Landlord of Leasehold Mortgagee. If there is more than one Leasehold Mortgagee, only the Registered Leasehold Mortgagee, to the exclusion of all other 31 Leasehold Mortgagees, shall have the benefit of and right to exercise the leasehold lender protections under this Section 18 and elsewhere in this Lease (including, without limitation, any right to receive notices of default and termination, any right to grant consents or approvals, any Leasehold Mortgagee cure rights, and the right to enter into a New Lease under Sections 18.4 and 18.5), unless such Registered Leasehold Mortgagee has designated in writing another Leasehold Mortgagee to exercise such rights. As of the date hereof, Landlord and DDA and Operating Tenant agree that AFB&T, a division of Synovus Bank shall be deemed to have the rights as the Registered Leasehold Mortgagee hereunder. 18.7 Extension of Periods. Any cure or notice provisions provided in this Section 18 shall be tolled for the time period that the Registered Leasehold Mortgagee is prohibited from exercising any rights afforded the Registered Leasehold Mortgagee hereunder or under the Leasehold Mortgage, including, without limitation, if during the Recapture Period the Registered Leasehold Mortgagee is prohibited or restricted from foreclosing or enforcing its rights under the Registered Leasehold Mortgage pursuant to any subordination, non-disturbance and attornment agreement entered into by, inter alia, Landlord, DDA, Operating Tenant, Fee Mortgagee (and/or Registered Leasehold Mortgagee) and any investor in Operating Tenant acquiring the Historic Tax Credits, such notice and cure periods of the Registered Leasehold Mortgagee shall be tolled (and nothing herein shall obligate Registered Leasehold Mortgagee to pay any recapture amount to end such Recapture Period). 18.8 Surrender. Operating Tenant may not cancel or surrender this Lease (including, without limitation, the Sublease) without the prior written consent of Registered Leasehold Mortgagee, and even with such consent, such Registered Leasehold Mortgagee shall maintain its right to a New Lease as contemplated under this Section 18. 18.9 Amendments and Modifications. Landlord and DDA hereby agree that references herein to any Registered Leasehold Mortgage shall apply to any amendments, modifications, extensions and/or restatements thereof, and any such amendments, modifications, extensions and/or restatements shall not require consent by DDA or Landlord. [SIGNATURES – NEXT PAGE] 1 IN WITNESS WHEREOF, each party hereto has caused this Lease to be executed on its behalf by its duly authorized representatives, to be made effective the day and year first above written. LANDLORD: MILLER THEATER, LLC, a Georgia limited liability company By: DDA: DOWNTOWN DEVELOPMENT AUTHORITY OF AUGUSTA, GEORGIA By: OPERATING TENANT: MT AUGUSTA PROPERTY, LLC, a Georgia limited liability company By: 1 00930167-2 EXHIBIT B Notice Addresses Landlord: Miller Theater, LLC 1301 Greene St; Suite 200 Augusta, GA 30901 Attn: President DDA: Downtown Development Authority of Augusta, Georgia __________ Augusta, GA _____ Attn: __________ Operating Tenant : MT Augusta Property, LLC 1301 Greene St; Suite 200 Augusta, GA 30901 Attn: President With copies to the following parties: Augusta Symphony, Inc. 1301 Greene St; Suite 200 Augusta, GA 30901 Attn: Executive Director 1 UPON RECORDING RETURN TO: George W. Mize, Jr., Esq. Page, Scrantom, Sprouse, Tucker & Ford, P.C. P.O. Box 1199 Columbus, Georgia 31902 STATE OF GEORGIA COUNTY OF RICHMOND ASSIGNMENT OF LEASES AND RENTS THIS ASSIGNMENT OF LEASES AND RENTS (this “Assignment”) is made and entered into as of July ____, 2017 by and between DOWNTOWN DEVELOPMENT AUTHORITY OF AUGUSTA-RICHMOND COUNTY, as assignor (hereinafter referred to as the “Authority") whose address is ________________________, and AFB&T, A DIVISION OF SYNOVUS BANK, a banking corporation organized under the laws of the State of Georgia, as assignee, whose address is 1148 Broadway, Columbus, Georgia 31901 and whose mailing address is P. O. Box 120, Columbus, Georgia 31902 (hereinafter referred to as "Lender"); W I T N E S S E T H T H A T : THAT FOR AND IN CONSIDERATION of the sum of Ten and No/l00ths ($l0.00) Dollars and other good and valuable consideration, the receipt and sufficiency whereof are hereby acknowledged, and in order to secure the indebtedness, liabilities and other obligations hereinafter set forth, the Authority does hereby grant, transfer and assign to Lender, its successors, successors-in-title and assigns, all of the Authority’s right, title and interest in, to and under each and every lease, sublease, rental agreement, tenant contract, and rental contract, whether written or oral, which may now exist or hereafter be made in which the Authority is lessor, sublessor, landlord or holds a similar designation, including any and all extensions, 2 renewals and modifications thereof and guaranties of the performance or obligations of any tenants or lessees (or sublessees) thereunder (said leases, subleases, agreements and contracts are hereinafter referred to collectively as the "Leases", and said tenants, lessees and sublessees are hereinafter referred to collectively as "Tenants" or individually as "Tenant" as the context requires), which cover, affect or relate to all or any portion of that certain property located in Richmond County, Georgia, more particularly described on Exhibit "A" attached hereto and made a part hereof, together with all or any portion of the improvements now or hereafter located thereon (such land and improvements hereinafter referred to as the "Premises"); together with all of the Authority’s rights, title and interest in and to all rents, issues, cash flow, revenues and profits from the Leases and from the Premises. TO HAVE AND TO HOLD unto Lender, its successors and assigns forever, subject to and upon the terms and conditions set forth herein. This Assignment is made for the purpose of securing (a) the full and prompt payment when due, whether by acceleration, at maturity or otherwise, with such interest as may accrue thereon, either before or after maturity thereof, the indebtedness, liabilities and obligations MT AUGUSTA PROPERTY LLC, a Georgia limited liability company, as assignor (hereinafter referred to as the “Borrower") (whether now existing or hereafter arising) evidenced by or arising at any time and from time to time under that certain Promissory Note dated as of June 14, 2017 made by Borrower payable to the order of Lender in the stated principal amount of Ten Million and No/100th Dollars ($10,000,000.00), together with any and all renewals, modifications, consolidations, restatements and/or extensions thereof (such Promissory Note and all amendments, modifications, extensions, renewals and/or restatements thereof, hereinafter referred to as the "Note"); (b) the full and prompt payment and performance of any and all indebtedness, liabilities and obligations of Miller Theater, LLC (“Owner”) to Lender secured by that certain Deed to Secure Debt, Security Agreement and Assignment of Leases and Rents between Owner, as grantor, and Lender, as grantee, dated as of June 14, 2017, which encumbers to the Premises and secures, inter alia, the indebtedness, liabilities and obligations of Borrower under the Note and is recorded in Book ____, Page _______ of the records of the Office of the Clerk of Superior Court of Richmond County, Georgia (such Deed to Secure Debt, Security Agreement and Assignment of Leases and Rents and all amendments, modifications, extensions, and restatements thereof, hereinafter referred to as the "Security Instrument") together with all amendments, extensions and/or restatements thereof, (c) the full and prompt payment and performance of any and all other indebtedness, liabilities and obligations of Borrower to Lender under any other instruments now or hereafter evidencing, securing, or otherwise relating to the indebtedness, liabilities and obligations evidenced by the Note, including, without limitation, that certain Construction Loan Agreement dated June 14, 2017 entered into by Borrower and Lender, together with all amendments, modifications and/or restatements thereof (such Construction Loan Agreement, as the same may be amended and/or modified from time to time, the “Loan Agreement”) and the full and prompt payment and performance of the Indebtedness (as defined in the Loan Agreement), and (d) the full and prompt payment when due of all other indebtedness, obligations and liabilities of Borrower and/or Owner to Lender of every kind and description whatsoever, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter incurred, contracted or arising, or acquired by Lender from any source, joint or several, 3 liquidated or un-liquidated, regardless of how they arise or by agreement or instrument they may be evidenced or whether they are evidenced by any agreement or instrument, and whether incurred as maker, endorser, surety, guarantor or otherwise and any and all extensions, restatements and renewals of any of the same (the Note, Security Instrument, the Loan Agreement and said other instruments and all amendments, modifications, extensions or renewals of any thereof are hereinafter referred to collectively as the "Security Documents", and said indebtedness, liabilities and obligations secured hereby are hereinafter referred to as the "Indebtedness"). 1. Warranties of the Authority. The Authority hereby warrants and represents as follows: (a) The Authority is the sole holder of the sublessor’s interest under the Leases, is entitled to receive the rents, issues and profits from the Leases and from the Premises, and has good right to sell, assign, transfer and set over the same and to grant to and confer upon Lender the rights, interests, powers, and authorities herein granted and conferred; (b) The Authority has made no assignment other than this Assignment (and other, if any, assignments in favor of Lender) of any of its rights under any of the Leases or with respect to any of said rents, issues or profits; (c) The Authority has neither done any act nor to its knowledge, omitted to do any act which might prevent Lender from, or limit Lender in, acting under any of the provisions of this Assignment; (d) Neither the execution and delivery of this Assignment or any of the Leases, the performance of each and every covenant of the Authority under this Assignment and the Leases, nor the meeting of each and every condition contained in this Assignment, conflicts with, or constitutes a breach or default under any agreement, indenture or other instrument to which the Authority is a party, or any law, ordinance, administrative regulation or court decree which is applicable to the Authority; (e) The Authority knows of no default or the existence of any state of facts which would, with the passage of time or the giving of notice, or both, constitute a default or event of default under any of the Leases; and (f) No action has been brought or, so far as is known to the Authority, is threatened, which would interfere in any way with the right of the Authority to execute this Assignment and perform all of its obligations contained in this Assignment and in the Leases. 2. Covenants of the Authority. The Authority hereby covenants and agrees as follows: (a) The Authority shall (i) fulfill, perform and observe each and every material condition and covenant of the Authority contained in each of the Leases; (ii) at no cost or expense to Lender, enforce, short of termination, the performance and observance of each and 4 every material covenant and condition of each of the Leases to be performed or observed by the Tenant thereunder; and (iii) appear in and defend any action arising out of, or in any manner connected with, any of the Leases, or the obligations or liabilities of the Authority thereunder, or of the Tenant or any guarantor thereunder; (b) The Authority shall not, without the prior written consent of Lender, which consent may be withheld in the reasonable discretion of Lender, (i) enter into any Leases or modify or amend any of the Leases or enter into any management agreement for the management, leasing, and/or operating of the Premises; (ii) terminate the term or accept the surrender of any of the Leases; (iii) waive or release the Tenant from the performance or observance by the Tenant of any obligation or condition of any of the Leases; (iv) permit the prepayment of any rents or other payments under any of the Leases for more than one (1) month prior to the accrual thereof; (v) give any consent to any assignment or sublease by the Tenant under any of the Leases; or (vi) assign all or any portion of its interest in, to or under the Leases or the rents, issues, cash flow, revenues and/or profits from the Leases and from the Premises to any person or entity other than Lender; (c) Without the prior written approval of Lender, which approval may be withheld in the reasonable discretion of Lender, the Authority shall take no action which will cause or permit the estate of the Tenant under any of the Leases to merge with the interest of the Authority in the Premises or any portion thereof; (d) Lender shall not be obligated to perform or discharge, nor does it hereby undertake to perform or discharge, any obligation, duty or liability under the Leases, or under or by reason of this Assignment. In the exercise of the powers herein granted to the Lender, no liability shall be asserted or enforced against the Lender by the Authority, all such liability being expressly waived and released by the Authority. The Authority shall protect, indemnify and save harmless Lender from and against all liabilities, obligations, claims, damages, penalties, causes of action, costs and expenses (including, without limitation, attorney's fees and expenses) imposed upon or incurred by Lender by reason of this Assignment and any claim or demand whatsoever which may be asserted against Lender by reason of any alleged obligation or undertaking to be performed or discharged by Lender under this Assignment, except for any such claims, demands or damages caused by the gross negligence of Lender. In the event Lender incurs any liability, loss or damage by reason of this Assignment, or in the defense of any claim or demand arising out of or in connection with this Assignment, the amount of such liability, loss or damage shall be added to the Indebtedness, shall bear interest at the Default Rate (as defined in the Security Instrument) from the date incurred until paid and shall be payable on demand; (e) The Authority shall authorize and direct, and does hereby authorize and direct each and every present and future Tenant of the whole or any part of the Premises to pay all rental to Lender upon receipt of written demand from Lender to so pay the same; and (f) From time to time, within thirty (30) days after request by Lender, the Authority will furnish Lender copies of all executed Leases. 5 3. Covenants of Lender. Lender hereby covenants and agrees with the Authority as follows: (a) Although this Assignment constitutes a present and current assignment of all rents, issues and profits from the Leases and Premises, so long as there shall exist no Event of Default, as defined in Paragraph 4 below, Lender shall not demand that such rents from the Leases be paid directly to Lender, and the Authority, except as otherwise provided in any other agreement to which the Authority is a party, shall have a revocable license to collect, but not more than one (1) month prior to accrual, such rents from the Leases. Upon the occurrence of an Event of Default, as hereinafter defined, the license granted to the Authority to collect such rents herein shall automatically be revoked without notice to the Authority or any further action on the part of Lender and Lender shall immediately be entitled to possession of all rents and sums received pursuant to any Lease whether or not Lender enters upon or takes control of the Premises; and (b) Upon the final and indefeasible payment in full of the Indebtedness, with Lender having no further commitment or obligation to advance funds to or on account of the Borrower and the recording or filing of an instrument of satisfaction or full cancellation of the Security Instrument signed by Lender without the recording of another security instrument in favor of Lender affecting the Premises or any portion thereof, this Assignment shall be terminated and released of record by Lender and shall thereupon be of no further force or effect 4. Event of Default. The term "Event of Default", as used herein, shall mean any one or more the following events: (a) The occurrence of any "Default" or "Event of Default" (as defined in such other documents) under the Note, the Loan Agreement or any of the Security Documents; or (b) The failure by the Authority duly and fully to comply with any covenant, condition or agreement of this Assignment (provide, however, except, respect to any failure addressed elsewhere in this Section 4, the Authority shall have ten (10) days after written notice of such failure is given by Lender to the Authority to cure any such failure that can be cured by the payment of money and shall have thirty (30) days after written notice of such failure is given by Lender to the Authority to cure any such failure that is susceptible to cure but cannot be cured by the payment of money); or (c) The breach of any warranty by the Authority contained in this Assignment. Any cure period contained herein shall run concurrently and not consecutively with any cure period contained in any of the other Security Documents. 5. Remedies. Upon the occurrence of any Event of Default, Lender may at its option, with or without notice or demand of any kind, exercise any one or more of the following remedies: (a) Declare any part or all of the Indebtedness to be due and payable, whereupon the same shall become immediately due and payable; 6 (b) Perform any and all obligations of the Authority under any or all of the Leases or this Assignment and exercise any and all rights of the Authority herein or therein as fully as the Authority itself could do, including, without limiting the generality of the foregoing: Enforcing, modifying, compromising, waiving or increasing any or all of the rents payable thereunder; and obtaining new tenants and entering into new leases on the Premises on any terms and conditions deemed desirable by Lender, and, to the extent Lender shall incur any costs in connection with the performance of any such obligations of the Authority, including costs of litigation, then all such costs shall become a part of the Indebtedness, shall bear interest from the incurring thereof until repaid at the Default Rate (as defined in the Security Instrument) and shall be due and payable on demand; (c) In the Authority’s or Lender's name, institute any legal or equitable action which Lender in its sole discretion deems desirable to collect and receive any or all of the rents, issues and profits assigned herein; and/or (d) Collect the rents, issues and profits and any other sums due under the Leases and with respect to the Premises, and apply the same in such order as Lender in its sole discretion may elect against (i) all costs and expenses, including, without limitation, reasonable attorneys' fees, incurred in connection with the operation of the Premises, the performance of the Authority’s obligations under the Leases and collection of the rents thereunder; (ii) all the costs and expenses, including, without limitation, reasonable attorney's fees, incurred in the collection of any or all of the Indebtedness, including, without limitation, all costs, expenses and attorneys' fees incurred in seeking to realize on or to protect or preserve Lender's interest in any other collateral securing any or all of the Indebtedness; and (iii) the Indebtedness, in such order of application determined by Lender. Lender shall have full right to exercise any or all of the foregoing remedies without regard to the adequacy of security for any or all of the Indebtedness, and with or without the commencement of any legal or equitable action or the appointment of any receiver or trustee, and shall have full right to enter upon, take possession of, use and operate all or any portion of the Premises which Lender in its sole discretion deems desirable to effectuate any or all of the foregoing remedies. Notwithstanding such rights, Lender may also apply for the appointment of a receiver of the rents, incomes, issues and profits of or from the Premises, without notice to the Authority. The Authority hereby consents to the appointment of such receiver and agrees that Lender shall be entitled to the appointment of such receiver as a matter of right, without regard to the value of the Premises as security for the debt secured hereby or the solvency of any person or legal entity liable for the payment of all or any part of such debt. 6. Successors and Assigns. This Assignment shall inure to the benefit of and be binding upon the Authority and Lender and their respective successors and assigns. Whenever a reference is made in this Assignment to "Authority" or "Lender", such reference shall be deemed to include a reference to the successors and assigns of the Authority or Lender. 7. Terminology. All personal pronouns used in this Assignment, whether used in the masculine or neuter gender, shall include all other genders, and the singular shall include the 7 plural, and vice versa. Titles of articles are for convenience only and neither limit nor amplify the provisions of this Assignment. 8. Severability. If any provision of this Assignment or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Assignment and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. 9. Applicable Law. This Assignment shall be interpreted, construed and enforced according to the laws of the state in which the Premises is situated. 10. No Third Party Beneficiaries. This Assignment is made solely for the benefit of Lender and its successors and assigns. No Tenant under any of the Leases nor any other person shall have standing to bring any action against Lender as the result of this Assignment, or to assume that Lender will exercise any remedies provided herein, and no person other than Lender shall under any circumstances be deemed to be a beneficiary of any provision of this Assignment. 11. No Oral Modifications. Neither this Assignment nor any provisions hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against whom enforcement of the change, waiver, discharge or termination is sought. 12. Cumulative Remedies. The remedies herein provided shall be in addition to and not in substitution for the rights and remedies vested in Lender in any of the Security Documents or in law or equity, all of which herein provided or otherwise available to Lender shall be cumulative and may be exercised concurrently. The failure to exercise any of the remedies herein provided shall not constitute a waiver thereof, nor shall use of any of the remedies herein provided prevent the subsequent or current resort to any other remedy or remedies. It is intended that this clause shall be broadly construed so that all remedies herein provided or otherwise available to Lender shall continue and be each and all available to Lender until the Indebtedness shall have been paid in full. 13. Cross-Default. The occurrence of an Event of Default under this Assignment shall constitute the occurrence of an Event of Default under, and as defined in, the Note and other Security Documents. 14. Counterparts. This Assignment may be executed in any number of counterparts all of which taken together shall constitute one and the same instrument, and any of the parties or signatories hereto may execute this Assignment by signing any such counterpart. 15. Further Assurance. At any time and from time to time, upon request by Lender, the Authority will make, execute and deliver, or cause to be made, executed and delivered, to Lender and, where appropriate, cause to be recorded and/or filed and from time to time thereafter to be re-recorded and/or refiled at such time and in such offices and places as shall be deemed desirable by Lender, any and all such other and further assignments, financing statements, continuation statements, instruments of further assurance, certificates and other documents as may, in the opinion of Lender, be necessary or desirable in order to effectuate, complete, or 8 perfect, or to continue and preserve (a) the obligations of the Authority under this Assignment and (b) the security interest created by this Assignment as a valid lien and security interest upon the Leases and the rents, issues and profits from the Premises. Upon any failure by the Authority so to do, Lender may make, execute, record, file, re-record and/or refile any and all such assignments, deeds to secure debt, mortgages, deeds of trust, security agreements, financing statements, continuation statements, instruments, certificates, and documents for and in the name of the Authority, and the Authority hereby irrevocably appoints Lender the agent and attorney- in-fact of the Authority so to do. 16. Notices. Any and all notices, elections or demands permitted or required to be made under this Assignment shall be in writing, signed by the party giving such notice, election or demand and shall be delivered personally, or sent by certified United States Mail, postage prepaid, return receipt requested, or sent by a nationally recognized overnight courier provided a receipt for delivery is obtained from the recipient to the other party at the address set forth below, or at such other address within the continental United States of America as may have theretofore been designated in writing to the other party. Any such notice or other document shall be deemed delivered (i) if personally delivered, when actually received by the party to whom directed at the address specified pursuant to this Section, or (ii) if sent by U.S. Mail, three (3) days after such notice or document is deposited in the United States Mail, addressed as provided herein, or (iii) if sent by overnight courier, addressed as provided herein, on the date of receipt or refusal to accept delivery, as evidenced on the return receipt or other shipping invoice. For the purposes of this Assignment: The address of Lender is: AFB&T, a Division of Synovus Bank Attention: Mac McKnight 1148 Broadway P.O. Box 120 Columbus, Georgia 31902 With a copy to: AFB&T, a Division of Synovus Bank Attention: Mac McKnight 150 West Hancock Avenue P.O. Box 1747 Athens, Georgia 30603 The Address of Authority is: Downtown Development Authority of Augusta- Richmond County ________________________________________ 17. Modifications, etc. The Authority hereby consents and agrees that Lender may at any time, and from time to time, without notice to or further consent from the Authority, either with or without consideration, surrender any property or other security of any kind or nature whatsoever held by it or by any person, firm or corporation on its behalf or for its account, 9 securing the Indebtedness; substitute for any collateral so held by it, other collateral of like kind, or of any kind; agree to modification of the terms of any of the Security Documents; extend or renew any of the Security Documents for any period; grant releases, compromises and indulgences with respect to the Security Documents to any person or entity now or hereafter liable thereunder or hereunder; release any guarantor or endorser of the Note, the Security Instrument, or any other Security Documents; or take or fail to take any action of any type whatsoever; and no such action which Lender shall take or fail to take in connection with the Security Documents, or any of them, or any security for the payment of the Indebtedness or for the performance of any obligations or undertakings of the Authority, nor any course of dealing with the Authority, Borrower or any other person, shall release the Authority’s obligations hereunder, affect this Assignment in any way or afford the Authority any recourse against Lender. 18. Intentionally Omitted 19. Definitions. Capitalized terms not otherwise defined herein that are defined in the Loan Agreement shall have the meaning assigned thereto in the Loan Agreement which meanings are incorporated herein by reference. Defined terms in the singular shall include the plural as well as the singular and vice versa. 20. Other Instruments. All references in this Assignment to a separate instrument are to such separate instrument as the same may be amended, supplemented, renewed or extended from time to time. 21. Person. As used in this Assignment, the term “person” shall include any individual, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization, any entity of any other type whatsoever and any government agency or any agency or political subdivision thereof. 22. The Authority, on behalf of the Authority and its successors, assigns, transferees, and other entities acting by, through or on its behalf, does hereby represent, warrant and covenant that it will receive a direct substantial benefit by Lender extending credit to Borrower and that the value of such benefit exceeds, or is reasonably equivalent to, the value of the Authority’s promises, covenants, assignments, obligations and agreements hereunder. 23. Lender shall not enforce the liabilities and obligations of the Authority contained in this Assignment by any action or proceeding wherein a money judgment shall be sought against the general assets of the Authority, except that Lender may take appropriate action or proceeding to enable Lender to enforce and realize upon and collect rents, issues, profits, cash flows, revenues and income from the Premises hereby granted and assigned to Lender; provided, however, that any judgment in any such action or proceeding shall be enforceable against the Authority only to the extent of the Authority’s interest in the Premises and the rents, issues, profits, cash flows, revenues and income from the Premises. 10 IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Assignment, under seal, as of the date first above written. AUTHORITY: DOWNTOWN DEVELOPMENT AUTHORITY OF AUGUSTA-RICHMOND COUNTY By: _________________________________ Name: ___________________________ Title: ___________________________ Attest: _________________________________ Name: ___________________________ Title: ___________________________ (SEAL) Signed, sealed and delivered in the presence of: ___________________________ Witness ___________________________ Notary Public My Commission Expires: (NOTARIAL SEAL) 11 LENDER: AFB&T, A DIVISION OF SYNOVUS BANK, a Georgia banking corporation By: _________________________________ Name: Mac McKnight Title: Senior Vice President (CORPORATE SEAL) Signed, sealed and delivered in the presence of: ___________________________ Witness ___________________________ Notary Public My Commission Expires: (NOTARIAL SEAL) 12 Acknowledged and consented to by: MT AUGUSTA PROPERTY LLC, a Georgia limited liability company By: ______________________________ Levi W. Hill, IV, its President (SEAL) Signed, Sealed and Delivered in the presence of: ____________________________ Witness ____________________________ Notary My Commission Expires: [Notary Seal] MILLER THEATER, LLC, a Georgia limited liability company By: ______________________________ Levi W. Hill, IV, its President (SEAL) Signed, Sealed and Delivered in the presence of: ____________________________ Witness ____________________________ Notary My Commission Expires: [Notary Seal] EXHIBIT “A” Property Description ALL THAT TRACT or parcel of land, with improvements thereon, situate, lying and being in the State of Georgia, County of Richmond and being shown and designated as Tract “A” on that certain plat of survey prepared for Miller Theater, LLC by Cranston Engineering Group, P.C., dated September 4, 2013, and recorded in the Office of the Clerk of Superior Court of Richmond County, Georgia, in Plat Book 10, page 24. Reference is hereby made to said plat for a more complete and accurate description as to the metes, bounds and location of said property. Said property is known under the current system of street numbering in August-Richmond County, Georgia as 708 Broad Street, Augusta, Georgia 30901. Tax Map and Parcel No. 047-1-051-00-0 1 (DDA SNDA) Upon recording return to: Cross Reference: _____________________ Memorandum of Lease _____________________ recorded in Book _____, Page _____ _____________________ of the records of the Office of the _____________________ Clerk of Superior Court of Richmond, County, Georgia; Deed to Secure Debt, Security Agreement and Assignment of Leases and Rents recorded in Book ______, Page _____, aforesaid records. SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this "Agreement") is made as of the ________ day of ____________, 2017 by and among SYNOVUS BANK, a Georgia banking corporation (also known as AFB&T, a division of Synovus Bank), having an address of P.O. Box 120, 1148 Broadway, Columbus, Georgia 31902, as grantee under the below-referenced Security Instrument (together with its successors and assigns, "Fee Mortgagee"), MILLER THEATER, LLC, a Georgia limited liability company, having an address at 1301 Greene Street, Suite 200, Augusta, Georgia 30901 (“Landlord”), DOWNTOWN DEVELOPMENT AUTHORITY OF AUGUSTA, GEORGIA, having an address of ________________________ (“DDA”), and MT AUGUSTA PROPERTY LLC, a Georgia limited liability company, having an address at 1301 Greene Street, Suite 200, Augusta, Georgia 30901 ("Operating Tenant"). RECITALS: A. Landlord, as landlord, DDA, as lessee/sub-lessor, and Operating Tenant, as tenant/sub-lessee, have entered into that certain Lease dated __________, 2017, whereby Landlord leases to DDA the property described on Exhibit “A” attached hereto and incorporated herein by this reference and any improvements thereon (the “Property”) and DDA subleases said property to Operating Tenant (as amended and modified through the date hereof, such Lease (and DDA Lease (as defined in the Lease) and the Sublease (as defined in the Lease) contained therein) is herein referred to as the “Lease”) (as used herein, and in the Lease, the lease within the Lease by Landlord to DDA is called the “DDA Lease” and the sublease from DDA to Operating Tenant within the Lease is referred to in the Lease and herein as the “Sublease”); and B. The Property is encumbered by a Deed to Secure Debt, Security Agreement and Assignment of Leases and Rents (together with any amendments, modifications and/or restatements thereof, the "Security Instrument") from Landlord in favor of Fee Mortgagee and recorded in Book _____, Page _____, of the records of the Office of the Clerk of Superior Court of Richmond County, Georgia; and 2 (DDA SNDA) C. DDA and Operating Tenant have agreed to subordinate the Lease, and their respective interest therein and in the Property, to the Security Instrument and to the security title and security interest thereof and to Fee Mortgagee’s interest in the Property, and Fee Mortgagee has agreed to grant non-disturbance to DDA under the DDA Lease on the terms and conditions hereinafter set forth. AGREEMENT: NOW, THEREFORE, for good and valuable consideration flowing among the parties hereto, the receipt and sufficiency of which is hereby acknowledged, the parties hereto mutually agree as follows: 1 Subordination. The Lease, as in effect on the date hereof and as the same may be hereafter amended, modified, extended and/or restated, is currently (and for avoidance of doubt, is hereby made) and shall remain at all times, subject and subordinate in all respects to the security title and security interest and terms of the Security Instrument, to any and all advances to be made thereunder and to all renewals, modifications, amendments, consolidations, restatements, replacements and extensions thereof. 2 Non-disturbance of DDA Lease. Except as provided below, the DDA Lease will not be disturbed during the term of the DDA Lease by reason of a foreclosure (as hereinafter defined). Notwithstanding the preceding sentence, such non-disturbance of the DDA Lease shall not apply, and Fee Mortgagee shall be entitled to cancel and terminate the DDA Lease and/or entire Lease upon foreclosure (as hereinafter defined) after the earlier to occur of the (i) expiration or early termination of the DDA Lease or (ii) the expiration of the Servitude (as defined in the Lease) or (iii) the payment of the SPLOST Repayment (as defined in the Lease), or (iv) taking of a material portion of the Property through condemnation or eminent domain, or (v) the failure or refusal of DDA and/or Augusta, Georgia to disburse SPLOST Funds as and when required under the SPLOST Agreement (as defined in the Lease) or as and when required in the Lease or (vi) the amendment or modification of the SPLOST Agreement (as defined in the Lease) in a manner that affects the payment of SPLOST Funds without the prior written approval of Landlord, Operating Tenant and Fee Mortgagee. For purposes of this Agreement, a "foreclosure" shall mean a sale under the power of sale contained in the Security Instrument, the foreclosure of the Security Instrument under applicable law, and any other transfer of the Landlord's interest in the Property under peril of foreclosure of the Security Instrument, including, without limitation, to the generality of the foregoing, an assignment or sale in lieu of foreclosure. Nothing contained herein shall be deemed or construed as limiting or restricting the enforcement by Fee Mortgagee of any of the terms, covenants, provisions or remedies of the Security Instrument with respect to Landlord or Landlord’s interest in the Property or prohibit Fee Mortgagee’s right to foreclose, or sell under power of sale, or accept a deed in lieu of 3 (DDA SNDA) foreclosure, with respect to the Security Instrument or exercise any other rights and/or remedies under any of the Loan Documents (as defined in the Security Instrument). 3 Attornment. Each of DDA and Operating Tenant agrees to attorn to, be bound to, accept and recognize any person or entity which acquires the Property through a foreclosure (together with their successors and assigns, a "Successor Landlord") as the landlord under the Lease for the then remaining balance of the term of the Lease. The foregoing provision shall be self-operative and shall not require the execution of any further instrument or agreement by DDA or Operating Tenant as a condition to its effectiveness. Each of DDA and Operating Tenant agrees, however, to execute and deliver, at any time and from time to time, upon the request of Successor Landlord any reasonable instrument which may be necessary or appropriate to evidence such attornment. 4. Replacement Sublease. The DDA hereby agrees that the DDA will not exercise any, if any, right of the DDA to terminate the Sublease without the prior written consent of Landlord and Fee Mortgagee (and any such termination would be subject to the rights of the Registered Leasehold Mortgagee provided in the Lease), and in the event the Sublease is terminated or cancelled (other than in connection with a New Lease (as defined in the Lease)), the DDA shall not enter into any sublease of the Property without the prior written consent of Landlord (or Successor Landlord, if applicable) and Fee Mortgagee, and instead, the DDA, as the tenant under the Lease, shall enter into a new sublease of the Property with a replacement subtenant (the “Replacement Operating Tenant”) as is reasonably required by Landlord (or if applicable, Successor Landlord), and approved by the Fee Mortgagee (the “Replacement Sublease”) provided such Replacement Sublease: (i) requires that uses of the Property include “Public Uses” (as defined in the Lease); (ii) provides that DDA shall have no pecuniary obligations or pecuniary liability under said Replacement Sublease; (iii) provides for rents and terms (including, without limitation, terms with respect to distribution and allocation of insurance proceeds and condemnation awards) acceptable to Landlord (or Successor Landlord, if applicable) and Fee Mortgagee; and (iv) provides that all such rents due under the Replacement Sublease shall be payable to Landlord (or as applicable, Successor Landlord), and not DDA, as additional rent under the Lease due the Landlord (or as applicable, Successor Landlord) under the Lease. In the event of the termination or cancellation of any Replacement Sublease, the requirements of this section 4 shall continue as to any subsequent Replacement Sublease. The failure of DDA to enter into any such Replacement Sublease as and when reasonably requested shall be considered a default on the part of DDA hereunder and under the Lease. The provisions of this section 4 shall survive the foreclosure or termination of the Security Instrument and are a continuing agreement between Landlord (and any Successor Landlord) and DDA as long as the DDA Lease is in effect. If required by Landlord (or Successor Landlord) or Fee Mortgagee, prior to entering into any Replacement Sublease, an amendment to the Lease reasonably acceptable to Landlord (or Successor Landlord, as applicable) and Fee Mortgagee shall be entered by Landlord (or Successor Landlord), DDA, and the Replacement Operating Tenant to reflect the intent of this paragraph and any amendment to the rent and terms contemplated hereby. 4 (DDA SNDA) 5 No Liability. Notwithstanding anything to the contrary contained herein or in the Lease, it is specifically understood and agreed that neither Fee Mortgagee nor any Successor Landlord shall be: (a) liable for any act, omission, negligence or default of any prior landlord (including, without limitation, Landlord); (b) liable for any failure of any prior landlord (including, without limitation, Landlord) to construct any improvements or liable to complete any construction of improvements on the Property; (c) subject to any offsets, credits, claims or defenses which DDA or Operating Tenant might have against any prior landlord (including, without limitation, Landlord); (d) bound by any rent or additional rent which DDA or Operating Tenant might have paid for more than one (1) month in advance to any prior landlord (including, without limitation, Landlord), except of the Annual Rent and Annual Sub-Rent that has been pre-paid as provided in Section 3.1 of the Lease; (e) bound by any supplement to the Lease or any amendment, modification and/or restatement of the Lease or termination of the Sublease contained in the Lease not expressly consented to in writing by Fee Mortgagee; or (f) liable to DDA or Operating Tenant hereunder or under the terms of the Lease beyond its interest in the Property. Landlord, DDA and Operating Tenant each acknowledges that the assignment of the Lease to Fee Mortgagee pursuant to the Security Instrument or any other security instrument does not impose on Fee Mortgagee any liability with respect to any of Landlord’s obligations under the Lease accruing before Fee Mortgagee becomes owner of the Property by foreclosure or otherwise, and then the Fee Mortgagee’s liability shall be limited to its interest in the Property as provided above. 6 Rent. Each of DDA and Operating Tenant has notice that the Lease and the rents and all other sums due Landlord thereunder have been (or will be) assigned to Fee Mortgagee as security for the indebtedness secured by the Security Instrument. In the event Fee Mortgagee notifies DDA and Operating Tenant of the occurrence of a default under the Security Instrument and demands that rents and all other sums due or to become due to Landlord under the Lease directly to Fee Mortgagee, DDA and Operating Tenant shall honor such demand and pay its rent and all other sums due from DDA and/or Operating Tenant to Landlord under the Lease directly to Fee Mortgagee or as otherwise authorized in writing by Fee Mortgagee. Landlord hereby irrevocably authorizes DDA and Operating Tenant to make the foregoing payments to Fee Mortgagee upon such notice and demand. If Fee Mortgagee exercises this right to receive rents and other sums payable by DDA and/or Operating Tenant to Landlord under the Lease, Fee 5 (DDA SNDA) Mortgagee shall not thereby become obligated for the performance of any of the terms, covenants, conditions or agreements of Landlord under the Lease. 7 Fee Mortgagee to Receive Notices. Operating Tenant shall notify Fee Mortgagee in writing of any default by Landlord or DDA under the Lease. Likewise, DDA shall notify Fee Mortgagee in writing of any default by Landlord or Operating Tenant under the Lease of which DDA has notice. DDA and Operating Tenant agree that, notwithstanding any provisions of the Lease to the contrary, neither DDA nor Operating Tenant may cancel the Lease (or the Sublease) or exercise any remedies under the Lease (or under the Sublease) unless Fee Mortgagee has received from Operating Tenant and/or DDA written notice of the default giving rise to such right of cancellation or exercise of remedies by Operating Tenant and/or DDA under the Lease, and Fee Mortgagee shall have failed within sixty (60) days after receipt of such notice to cure such default, or if such default cannot be cured within sixty (60) days, shall have failed within sixty (60) days after receipt of such notice to commence and thereafter diligently pursue any action necessary to cure such default. Nothing herein obligates Fee Mortgagee to pursue any cure of any default under the Lease (or under the Sublease contained in the Lease). Additionally, nothing herein prevents the early termination of the DDA Lease pursuant to the terms of the Lease or voluntary termination of the DDA Lease by DDA; provided, however, such termination of the DDA Lease shall not terminate the Lease (and in the event of the termination of the DDA Lease, the Sublease shall continue in accordance with its terms as a direct lease between Landlord and Operating Tenant), and following the termination of the DDA Lease, DDA shall have no further rights or obligations under the Lease or this Agreement. 8 NOTICES. All notices or other written communications hereunder shall be deemed to have been properly given (i) upon delivery, if delivered in person with receipt acknowledged by the recipient thereof, (ii) one (1) Business Day (hereinafter defined) after having been deposited for overnight delivery with any reputable overnight courier service, or (iii) three (3) Business Days after having been deposited in any post office or mail depository regularly maintained by the U.S. Postal Service and sent by registered or certified mail, postage prepaid, return receipt requested, addressed to the receiving party at its address set forth below: If to Fee Mortgagee: Synovus Bank Attention: Mac McKnight (AFB&T) 1148 Broadway P.O. Box 120 Columbus, Georgia 31902 With a copy to: Synovus Bank Attention: Mac McKnight (AFB&T) 150 West Hancock Avenue P.O. Box 1747 Athens, Georgia 30603 If to Operating Tenant: MT Augusta Property LLC 6 (DDA SNDA) Attention: President 1301 Greene Street, Suite 200 P.O. Box 579 Augusta, GA 30901 If to Landlord: Miller Theater, LLC Attention: President 1301 Greene Street, Suite 200 P.O. Box 579 Augusta, GA 30901 If to DDA: Downtown Development Authority of Augusta, Georgia Attention: President _____________________________ Augusta, GA 30901 or addressed as such party may from time to time designate by written notice to the other parties. For purposes of this Paragraph 8, the term "Business Day" shall mean any day other than Saturday, Sunday or any other day on which banks are required or authorized to close in Columbus, Georgia. Any party by notice to the other parties may designate additional or different addresses for subsequent notices or communications. 9 Successors. The obligations and rights of the parties pursuant to this Agreement shall bind and inure to the benefit of the successors, assigns, heirs and legal representatives of the respective parties. 10. Registered Leasehold Mortgagee. Landlord, Fee Mortgagee, DDA and Operating Tenant further hereby recognize Synovus Bank (also known as AFB&T, a division of Synovus Bank) as the Registered Leasehold Mortgagee under, and as defined in, the Lease, and recognizes the rights of said Registered Leasehold Mortgagee under the Lease and agree that the exercise of any rights and/or remedies of the Registered Leasehold Mortgagee under the Registered Leasehold Mortgage shall not constitute a default under the Sublease. Nothing contained herein shall be deemed or construed as limiting or restricting the enforcement by Registered Leasehold Mortgagee (as defined in the Lease) of any of the terms, covenants, provisions or remedies of the Registered Leasehold Mortgage (as defined in the Lease) or any other security instrument with respect to Operating Tenant or Operating Tenant’s interest in the Property or Sublease or prohibit Registered Leasehold Mortgagee’s right to foreclose, or sell under power of sale, or accept a deed in lieu of foreclosure, with respect to the Registered Leasehold Mortgage or any other security instrument entered into by Operating Tenant with, or in favor of, Registered Leasehold Mortgagee. The DDA and Landlord each hereby agrees that they will recognize as the sub-lessee under the Sublease (i.e., “Operating Tenant” under the Lease) any person or entity 7 (DDA SNDA) (including, without limitation, Registered Leasehold Mortgagee) who succeeds to the interest of Operating Tenant under the Lease by virtue of a leasehold foreclosure (as hereinafter defined) without the need for any further approval or consent by DDA or Landlord (however, as long as the DDA Lease is in effect, the use of the Premises will remain subject to the Public Use Requirement (as provided in the Lease)). For purposes of this Agreement, a "leasehold foreclosure" shall mean a sale under the power of sale contained in the Registered Leasehold Mortgage, the foreclosure of the Registered Leasehold Mortgage under applicable law, and any other transfer of the Operating Tenant’s interest under the Lease under peril of foreclosure of the Registered Leasehold Mortgage, including, without limitation, to the generality of the foregoing, an assignment or sale in lieu of foreclosure. 11. Duplicate Originals; Counterparts. This Agreement may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original. This Agreement may be executed in several counterparts, each of which counterparts shall be deemed an original instrument and all of which together shall constitute a single Agreement. The failure of any party hereto to execute this Agreement, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder. 12. Governing Law. This Agreement shall be governed by the laws of the State of Georgia. 13. Severability; Amendments. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, all of which shall remain in full force and effect. This Agreement contains the complete and entire agreement among the parties as to the matters covered, rights granted and the obligations assumed in this Agreement. This Agreement may not be amended or modified except by written agreement signed by the parties hereto. 14. Defined Terms. Unless otherwise provided herein, all capitalized terms used herein that are not defined herein but are defined in the Lease shall have the meaning ascribed thereto in the Lease. [SIGNATURE PAGE FOLLOWS] 8 (DDA SNDA) IN WITNESS WHEREOF, Operating Tenant, Landlord, Fee Mortgagee and DDA have duly executed this Agreement as of the date first above written. OPERATING TENANT: MT AUGUSTA PROPERTY LLC, a Georgia limited liability company By: ________________________________ Levi W. Hill, IV, its President (SEAL) Signed, sealed and delivered in the presence of: ___________________________ Witness ___________________________ Notary Public My Commission Expires: (NOTARIAL SEAL) 9 (DDA SNDA) LANDLORD: MILLER THEATER, LLC, a Georgia limited liability company By: ________________________________ Levi W. Hill, IV, its President (SEAL) Signed, sealed and delivered in the presence of: ___________________________ Witness ___________________________ Notary Public My Commission Expires: (NOTARIAL SEAL) 10 (DDA SNDA) FEE MORTGAGEE: SYNOVUS BANK, a Georgia banking corporation By: _________________________________ Name: Mac McKnight Title: Authorized Signer (CORPORATE SEAL) Signed, sealed and delivered in the presence of: ___________________________ Witness ___________________________ Notary Public My Commission Expires: (NOTARIAL SEAL) 11 (DDA SNDA) DDA: DOWNTOWN DEVELOPMENT AUTHORITY OF AUGUSTA, GEORGIA By: _________________________________ Name: ___________________________ Title: ___________________________ Attest: _________________________________ Name: ___________________________ Title: ___________________________ (SEAL) Signed, sealed and delivered in the presence of: ___________________________ Witness ___________________________ Notary Public My Commission Expires: (NOTARIAL SEAL) 12 (DDA SNDA) Acknowledged and consented to by the undersigned Registered Leasehold Mortgagee: AFB&T, A DIVISION OF SYNOVUS BANK, a Georgia banking corporation By: _________________________________ Name: Mac McKnight Title: Senior Vice President (CORPORATE SEAL) Signed, sealed and delivered in the presence of: ___________________________ Witness ___________________________ Notary Public My Commission Expires: (NOTARIAL SEAL) 13 (DDA SNDA) EXHIBIT “A” See Attached Legal Description \ Commission Meeting Agenda 10/17/2017 2:00 PM Approve and Adopt Revised Ordinance Regarding Residential Parking Permit Zones File Reference: 013-017(a) Department:Engineering Department:Engineering Caption:Motion to approve and adopt proposed Ordinance changes to the Augusta, Georgia code section 3-5-95.11 to create a Residential Parking Permit Program. (Approved by Engineering Services Committee October 10, 2017) Background:The residents of the neighborhoods in and around the Augusta University downtown campus have brought forward concerns regarding nuisance parking related to students. Many residents claim that students who attend the nearby colleges are parking for long hours in front of their homes to avoid paying university parking pass fees. This influx of vehicles is creating hardship and safety issues for residents who live in these neighborhoods. Analysis:Throughout the country, many communities who have similar situations have programs in place to deal with nuisance parking created by nearby facilities. The ordinance modifications involve revising the residential parking section of code 3-5-95.11 to allow for a residential application and study process, a public hearing, and a petition and designation process. The proposed changes have been vetted through the residents, Administrator’s Office, Attorney’s Office, Richmond County Sheriff’s Office, and Augusta University. Financial Impact:None Currently Alternatives:Do not approve proposed changes to Residential Parking Ordinance 3-5-95.11. Recommendation: Approve proposed revisions to Residential Parking Ordinance 3- 5-95.11 to allow for the creation of a Residential Parking Pass Program to be administered by the Augusta Engineering Cover Memo Department. Funds are Available in the Following Accounts: N/A REVIEWED AND APPROVED BY: Finance. Law. Administrator. Clerk of Commission Cover Memo ORDINANCE NO. AN ORDINANCE TO PROVIDE FOR RESIDENTAIL PARKING PERMIT ZONE. THE AUGUSTA, GEORGIA COMMISSION ordains as follows: SECTION 1. The Augusta-Richmond County Code by adding a new section to be numbered 3-5- 95.1 1, to read as follows: Section 3-5-95.11. Residential parking permit zone. ..SEE ATTACHED HERETO" Duly adopted by the Augusta, Georgia Commission on this day of ,2017 . HARDIE DAVIS, JR. As its Mayor Attest: Lena J. Bonner, Clerk of Commission First Reading: Second Reading: CERTIFICATION The undersigned Clerk of Commission, Lena J. Bonner, hereby certifies that the foregoing ordinance was duly adopted by the Augusta, Georgia Commission on , and the undersigned further certifies that attached hereto is a true copy of the Ordinance which was approved and adopted in the foregoing meeting(s). Lena J. Bonner, Clerk of Commission Sec.3-5-95.11. Residential parking permit zone. a) Study. Upon citizen request or on its own initiative, Augusta, Georgia maystudy the feasibility and desirability of establishing or eliminating one or moreresidential parking permit zones within the public right-of-way. A study shall consider, among other things: (1) The effect on the safefy of residents of the area under consideration from intensive use by non-residents for parking of vehicres. (2) The need of area residents for adequate on-street parking in the targeted area. (3) The difficulty or inability of area residents to secure on-street parking in the targeted area due to the use of available parking spaces in that area by non-resident motorists. (4) The impact of major public facilities and programs on the health, safety, and welfare of the area residents and any unreasonable burdens placed on those residents in securing adequate on-street parking and gaining access to their residences by virtue of such facilities and programs. (5) The likelihood of alleviating, by use of a parking permit system, any problem of unavailability of residential parking spaces. (6) The desire of the residents in the area for the institution of a parking permit system and the willingness of those residents to bear the administrative costs incidental to the issuance of permits authorized by this section. (7) The need for parking spaces in the target area for use by visitors and the general public. (9) Such other factors as the Director of Engineering shall deem applicable. (b) Public hearing. A public hearing may be held in accordance with the following: (1) Following the completion of a study conducted pursuant to subsection (a) of this section, the Director of Engineering, or his or her designee, shall Page I of3 conduct a public hearing at which time interested persons may appear and be heard. (2) Within 45 calendar days following the close of the pubtic hearing, the Director of Engineering shall decide whether to propose the designation of the area under consideration as a residential parking permit zone or to remove the designation of an established residential parking permit zone. (c) Petition. Procedures for submitting a petition for creating of the residential parking permit zone are as follows: (1) If the Director of Engineering proposes to establish a residential parking permit zone, residents within the targeted area may petition for the establishment of the zone. Petitions shall be on forms prepared and promulgated by the Director of Engineering. Petitions shall be submitted to the Director of Engineering who shall determine their sufficiency. rnsufficient and/or incomplete petitions will not be processed. (2) No residential parking permit zone shall be established unless at least a simple majority (50 percent plus one), of the property owners within the proposed zone have properly signed a petition. (3) Property tax records provided from the Board of Tax Assessors shall be used to veriff the eligibility of property owner petition signatures. (d) Designation. Procedures for adding residential parking pass zone areas are as follows: (1) Following the completion and vetting of the petition pursuant to subsection (c) of this section, the Director of Engineering will provide the Augusta, Georgia Commission the opportunity to add proposed residential parking permit zone to a list of such designated areas by majority vote of the Commission body. (2) Upon approval of the establishment of a residential parking permit zone by the Augusta, Georgia Commission, the Director of Engineering shall cause parking signs to be posted in the zone. Such signs shatl prescribe times, locations and conditions which govern parking in the targeted area. Page 2 of3 (3) The Director of Engineering shall have authority to promulgate regulations necessary to the administration of this program, including,but not limited to, the issuance, display, renewal, revocationo und replacement of decals, and the establishment of reasonable fees for the users of the program. Page 3 of3 Commission Meeting Agenda 10/17/2017 2:00 PM Berckmans Road Widening & Realignment, Phase II Department:Engineering Department:Engineering Caption:Motion to approve entering into an agreement with Georgia Power stating that the City of Augusta, GA will pay for the GP Transmission (GPT) Facility Relocation Costs on the Berckmans Road Widening & Realignment Phase II Project in accordance with the estimate totaling $318,673.00. Also, approve the Utility Relocation Agreement to be executed by the Augusta, GA Legal Counsel and the Mayor and approve payment upon completion of the work as requested by Augusta Engineering Department. (Approved by Engineering Services Committee October 10, 2017) Background:Berckmans Road Widening & Realignment is one (1) of fifty (50) City of Augusta, Georgia TIA (aka TSPLOST) projects. Project will be completed in two phases (Phase 1 and Phase 2). Project limits are Washington Road to Wheeler Road. Improvement includes; constructing, three lane roadway, with curb, gutter, storm conveyance system, sidewalks, underpasses, lighting and associated landscaping. Project phase 1 construction is completed and Phase II is under construction with utilities relocation in progress. Roadway improvements require relocation of Georgia Power Transmission facilities. Analysis:The Berckmans Road Widening & Realignment Phase II Project will require that Georgia Power Company relocate some transmission facilities and Augusta would be required to enter into an agreement that Augusta will pay the estimated amount of $318,673.00. This is a cost that is required to be paid by the City of Augusta, GA to complete needed improvements. Financial Impact:Funds are available in Project TIA funds. Alternatives:1). Approve entering into an agreement with Georgia Power, stating that the City of Augusta, GA will pay for the GP Cover Memo Transmission (GPT) Facility Relocation Costs on the Berckmans Road Widening & Realignment Phase II Project in accordance with the estimate totaling $318,673.00. Also, approve the Utility Relocation Agreement to be executed by the Augusta, GA Legal Counsel and the Mayor, and approve payment upon completion of the work as requested by Augusta Engineering Department. 2). Do not approve and find alternative to complete the project and meet TIA project completion schedule. Recommendation:Approve Alternate one. Funds are Available in the Following Accounts: Fund 371 REVIEWED AND APPROVED BY: Finance. Procurement. Law. Administrator. Clerk of Commission Cover Memo 1 UTILITY RELOCATION AGREEMENT Augusta, Georgia Project Name: BERCKMANS ROAD IMPROVEMENTS PHASE II PI#: 0011413 TRANSMISSION FACILITY RELOCATION This AGREEMENT, made and entered into as of the day of , 2017 by and between Augusta, State of Georgia (hereinafter referred to as the “Augusta, Georgia”), and GEORGIA POWER COMPANY (hereinafter referred to as the “Company”). This Agreement may refer to either Augusta, Georgia or Company, or both, as a "Party" or "Parties.” W I T N E S S E T H: WHEREAS, Augusta, Georgia proposes under the above written Project to construct the “BERCKMANS ROAD IMPROVEMENTS PHASE II” (hereinafter referred to as the “Project”); and WHEREAS, due to the construction of this Project, it will become necessary for the Company to remove, relocate, or make certain adjustments to the Company’s existing facilities (facilities includes electrical and communications facilities and is referred to herein collectively as the “Facilities” or the “Facility”), in accordance with the estimate of Three Hundred Eighteen Thousand Six Hundred Seventy Three dollars ($318,673) (the “Estimate”), a copy of which estimate is attached hereto, and incorporated into this Agreement as Exhibit “A”. The Estimate is limited: (a) to the costs of removing, relocating or adjusting those Facilities, which are physically in place and in conflict with the proposed construction and/or maintenance, (b) where replacement is necessary, to the costs of replacement in kind and such cost excludes the proportion of the costs representing improvement or betterment in a Facility, except to the extent that such improvement or betterment is made necessary by the construction and/or maintenance, and (c) to the costs incurred in acquiring additional easements or private rights of way, including, without limitation, easements for lines, access, tree trimming, guy wires, anchors and other devices, appliances and other equipment, and any and all other such easements and property rights as may be reasonably necessary for the Company’s installation, operation and maintenance of its Facilities. The proportion of the costs representing improvement or betterment in a Facility while excluded from the Estimate, except to the extent that such improvement or betterment is made necessary by the construction and/or maintenance, shall be shown on the Estimate; and WHEREAS, the Company has presented evidence to Augusta, Georgia that it contends supports its claim that it acquired property interests and utilized such property interests for the placement of its Facilities prior in time to acquisition of the road right of way(s), all as involved in said Project; and WHEREAS, Augusta, Georgia agrees to bear hundred percent (100%) of the actual costs of said relocation expenses, which is estimated to be Three Hundred Eighteen Thousand Six Hundred Seventy Three dollars ($318,673), subject to Augusta, Georgia’s reasonable approval (not to be unreasonably withheld) of the evidence presented by the Company supporting its claim for prior rights, which may include any documents or information demonstrating the location of the Facilities in relationship to those property interests, the relationship of those property interests to current and previous road right-of-way, and any other information or documents reasonably required by Augusta, Georgia to verify the Company’s claim, and subject to further Augusta, Georgia’s reasonable approval (not to be unreasonably withheld) should actual expenses exceed the Estimate; and WHEREAS, Augusta, Georgia will use its best efforts to make a determination regarding the Company’s claim for prior rights prior to the Company being required to commence the removal, relocation, or adjustment of its Facilities, and shall provide its determination in writing along with the written support for any such determination. If Augusta, Georgia determines that the Company’s presented information is insufficient to make a determination, Augusta, Georgia will provide the Company the basis for such insufficiency, and request that the Company provide additional information. If a determination, however, cannot be made prior to the time the Company’s Facilities need to be removed, relocated, or adjusted in order for the Project not to be delayed (provided that Augusta, Georgia certifies in writing to the Company that such Project is time-sensitive due to construction scheduling with the possibility of damages for delay, safety concerns, or critical funding deadlines), the Company will remove, relocate, 2 or adjust its Facilities without a determination having been made and neither Party’s rights, claims, or defenses with regard to the issue of property interests, compensable interest or prior rights will be waived or affected in any manner. In such instance, Augusta, Georgia will make such determination regarding the Company’s claim for prior rights no later than six (6) months from the date of Augusta, Georgia’s receipt of information sufficient for Augusta, Georgia to make a determination (which determination shall be in writing accompanied by written support) or otherwise the Company’s claim for prior rights will be deemed approved by Augusta, Georgia. NOW, THEREFORE, in consideration of the promises and the mutual covenants of the Parties hereinafter set forth, the receipt and sufficiency of which are hereby acknowledged by the Parties, it is agreed: Section 1. The Company, with its regular construction or maintenance crews and personnel, at its standard schedule of wages and working hours (as may be applicable from time to time during this Agreement), and working in accordance with the terms of its agreements with such employees, will make such changes in its Facilities as previously agreed upon with Augusta, Georgia. The Company may elect to contract any portion of the work contemplated. Section 2. Prior to the Company commencing any of its removal, relocation or adjustment work, including obtaining any easements, Augusta, Georgia will provide written assurances (including information on the property rights acquired) to Company that it has acquired the necessary new road right-of-way. Section 3. Upon the completion by the Company of the work contemplated herein, Augusta, Georgia will pay the Company a sum equal to the lesser of HUNDRED percent (100%) of: (a) the Company’s actual cost of the total Project relocation expenses or (b) the Estimate, subject to the reasonable acceptance by Augusta, Georgia (not to be unreasonably withheld) of the evidence presented by the Company supporting its claim for prior rights. Pursuant to the Franchise Agreement (as defined below), in particular its Sections 4 and 8, the Company will exercise its rights to have Augusta, Georgia pay the Company its relocation costs associated with this Project. Section 4. Augusta, Georgia will neither be bound to pay any costs related to the Facilities’ removal, relocation, or adjustment which are in excess of the reimbursable portion of the Estimate, nor for any items of relocation work not provided for in said Estimate, except as shall be specifically approved in writing by Augusta, Georgia. In the event there is a change in the Project, including, without limitation, a change in scope, design, plans, service, property interests to be acquired or engineering, due to events or circumstances beyond Company’s reasonable control, Company will notify Augusta, Georgia of such change and the Parties will negotiate in good faith a mutually agreeable agreement or amendment to this Agreement to address such change. Section 5. The recitals set forth in the Whereas clauses of this Agreement are a material part of this Agreement and binding upon the Parties hereto. Section 6. The Company shall make a reasonable effort to provide signing and other traffic control measures during construction as contemplated under this Agreement in accordance with PART VI of the U. S. Department of Transportation Manual on Uniform Traffic Control Devices, current edition, all at the expense of Augusta, Georgia. Section 7. The covenants herein contained, including the covenants contained in the “Whereas” clauses hereto, shall, except as otherwise provided, accrue to the benefit of and be binding upon the successors and assigns of the Parties hereto. Section 8. It is mutually agreed between the Parties hereto that this Agreement shall be deemed to have been executed in Georgia. Section 9. 9.1 The Parties agree they will in good faith share information with each other related to the issue of prior rights. Should the Company disagree with Augusta, Georgia’s determination with regard to the Company’s claim for prior rights and if the Parties are unable to settle the issue through informal negotiations, then, at the request of either Party, the Parties agree to escalate the matter pursuant to Section 9.2 below. 9.2 Except as otherwise set forth in this Agreement, any controversy or claim arising out of or relating to this Agreement, or the breach thereof, will be settled: (a) first, by good faith efforts to reach mutual agreement of the Parties; and (b) second, if mutual agreement is not reached within thirty (30) calendar days of a written request by a Party to resolve the controversy or claim, each of the Parties will appoint a designated representative who 3 has authority to settle the dispute (or who has authority to recommend to the governing body a settlement of the dispute) and who is at a higher level of management than the persons with direct responsibility for administration of this Agreement. The designated representatives will meet as often as they reasonably deem necessary in order to discuss the dispute and negotiate in good faith in an effort to resolve such dispute. The specific format for such discussions will be left to the discretion of the designated representatives provided, however, that all reasonable requests for relevant information made by one Party to the other Party will be honored if such information is reasonably available. If the Parties are unable to resolve issues related to the dispute within thirty (30) days after the Parties' appointment of designated representatives or Augusta, Georgia’s City Council fails to approve any tentative agreement reached, the Parties agree to participate in non- binding mediation pursuant to Section 9.3 below. It being understood, however, that nothing herein will diminish or relieve either Party of its rights or obligations under this Section 9. 9.3 If the Parties are unable to resolve a dispute through informal negotiations or pursuant to Section 9.2, the Parties agree to participate in non-binding mediation by an impartial, third party mediator mutually agreed upon by the Parties, at a mutually convenient location, with each Party being responsible for its own attorneys’ fees and expenses and for providing its own information and documentation applicable to the dispute to such mediator. The Parties agree that a potential mediator’s experience in prior rights and real estate law will be relevant factors in selecting a mediator. All other agreed upon costs of the mediation will be apportioned equally to each Party. Any dispute not so resolved by negotiation, escalation or mediation may then be submitted to a court of competent jurisdiction, and either Party may invoke any remedies at law or in equity. (Nothing contained herein, however, will preclude the Parties from first seeking temporary injunctive or other equitable relief). Section 10. 10.1 If the Company chooses to submit progress payments, Augusta, Georgia will pay them within thirty (30) days from receipt of the invoice, subject to Verification (as defined below) thereof by Augusta, Georgia. Upon completion of the work, the Company shall submit a final bill to Augusta, Georgia and Augusta, Georgia shall make a final payment within thirty (30) days from receipt of the final bill, subject to Verification of the final bill by Augusta, Georgia. 10.2 For purposes of this Section 10.1, “Verification” means that Augusta, Georgia has reasonably determined that there is a material discrepancy between the Company’s invoiced charges and Augusta, Georgia’s calculation of charges owed, which invoiced charges are subject to a bona fide dispute; provided, however, Augusta, Georgia agrees to provide the Company with written notice, including supporting documentation, illustrating the basis for such bona fide dispute, within sixty (60) days of receipt of the invoice in dispute. Should Augusta, Georgia fail to provide such documentation within the specified time period, Augusta, Georgia must pay the disputed amount. Augusta, Georgia must pay any undisputed portion of the invoice total within thirty (30) days after its receipt of the invoice. Augusta, Georgia must pay any disputed portion of the invoice total within thirty (30) days of the date the dispute is resolved, to the extent the dispute is resolved in favor of the Company. 10.3 At any time within thirty-six (36) months after the date of the final payment, Augusta, Georgia, at its sole expense, may audit the cost records, support documentation, and accounts of the Company pertaining to this Project to solely assess the accuracy of the invoices submitted by the Company and notify the Company of any amount of any unallowable expenditure made in the final payment of this Agreement, or, if no unallowable expenditure is found, notify the Company of that fact in writing. Any such audit will be conducted by representatives of Augusta, Georgia or, if applicable, the Georgia Department of Transportation or the Federal Highway Administration, after reasonable advance written notice to the Company and during regular business hours at the offices of the Company in a manner that does not unreasonably interfere with the Company’s business activities and subject to the Company’s reasonable security requirements. As a prerequisite to conducting such audit, Augusta, Georgia or, if applicable, the Georgia Department of Transportation or the Federal Highway Administration, will sign the Company’s Nondisclosure Agreement. The Company may redact from its records provided to Augusta, Georgia information that is confidential and irrelevant to the purposes of the audit. The Company will reasonably cooperate in any such audit, providing access to the Company records that are reasonably necessary to enable Augusta, Georgia to test the accuracy of the invoices to which the audit pertains, provided that Augusta, Georgia or, if applicable, the Georgia Department of Transportation or the Federal Highway Administration, may only review, but not copy, such records. If the Company agrees with the audit results and does not pay any such bill within ninety (90) days of receipt of the bill from Augusta, Georgia (based on the mutually agreed upon audit results), Augusta, Georgia may set off the amount of such bill against the amounts owed the Company on any then-current contract between the Company and Augusta, Georgia. If, following the audit, the Parties are unable to resolve any dispute concerning the results of the 4 audit through informal negotiation, the provisions of Sections 9.2 and 9.3 will govern the resolution of the dispute. Augusta, Georgia may not perform an audit pursuant to this Agreement more frequently than once per calendar year and may not conduct audits twice within any six (6) months. Section11. Duplicate originals of this Agreement will be executed, each of which will be deemed an original but both of which together will constitute one and the same instrument. This Agreement may be modified only by an amendment executed in writing by a duly authorized representative for each Party. This Agreement contains the entire agreement of the Parties and there are no oral or written representations, understandings or agreements between the Parties respecting the subject matter hereof which are not fully expressed herein. This Agreement neither will supersede nor is in conflict with that certain Ordinance Granting Franchise (the “Franchise Agreement”). This Agreement will be governed by and construed in accordance with the laws of the State of Georgia. [SIGNATURES ON THE FOLLOWING PAGE] 5 IN WITNESS WHEREOF, this instrument has been and is executed on behalf of AUGUSTA, GEORGIA being duly authorized to do so by its authorized representative. The parties to those present have executed this Contract in two (2) counterparts, each of which shall be deemed an original in the year and day first above mentioned. BY:____________________________(SEAL) MAYOR Signed, sealed and delivered this day of ___________, 20__, in the presence of ATTEST: _______________________________ ____________________________________ Treasurer NOTARY PUBLIC ATTEST: ____________________________________ MUNICIPAL CLERK APPROVED AS TO FORM: ____________________________________ City Attorney FEIN _______________________________ GEORGIA POWER COMPANY By: (SEAL) Title: Date: ATTEST: By: Title: Witness: Notary: (SEAL) Give proper title of each person executing Agreement. Attach seal as required. 6 Exhibit A TEAMS ESTIMATES 1561501 Augusta-Richmond County, Georgia BE IT ORDAINED by the Commission-Council of Augusta-Richmond County, Georgia that the following Capital Project Budget is hereby amended: Section 1: The project is authorized to CPB#371-041110-T14041211. This request is to enter into an Agreement with Georgia Power stating that the City of Augusta will pay for the GP Facility Relocation Costs in the amount of $318,673.00 for the Berckmans Road Widening & Relialignment, Phase I. Funding is available TIA project funds. Section 2: The following revenues are anticipated to be available to the Consolidated Government to complete the project. Berckman Rd Realignment SPLOST VI 360,000$ Berckman Rd Over Raes Creek 790,000$ TIA Discretionary 30,320$ TIA Project Funds 11,896,933$ 13,077,253$ Section 3: Copies of this Capital Project Budget shall be made available to the Comptroller for direction in carrying out this project. Adopted this ____________________ day of ______________________. Approved _________________________________________________ Honorable Hardie Davis, Jr., Mayor CAPITAL PROJECT BUDGET CPB#371-041110-T14041211 Berckmans Road Widening, Realignment & Bridge Replacement (RFP 15-214) 9.29.2017 Augusta-Richmond County, Georgia CAPITAL PROJECT BUDGET CPB#371-041110-T14041211 Berckmans Road Widening, Realignment & Bridge Replacement (RFP 15-214) CPB AMOUNT CPB New SOURCE OF FUNDS CPB Addition CPB Berckmans Rd Realignment PHASE VI ($360,000)($360,000) Berckmans Rd Over Raes Creek ($790,000)($790,000) TIA Discretionary ($30,320)($30,320) TIA Project Funds ($75,910)($75,910) TIA Project Funds Berckman Road 371-041110-T14041211 ($11,502,350) ($318,673) ($11,821,023) TOTAL SOURCES: ($12,758,580) ($318,673) ($13,077,253) USE OF FUNDS ENGINEERING 328-041110-5212115-211828701 $390,320 $390,320 328-041110-5212115-211828704 $790,000 $790,000 ENGINEERING 371-041110-5212115-T14041211 $75,910 $75,910 371-041110-5414110/T14041211 $11,502,350 $318,673 $11,821,023 TOTAL USES:$12,758,580 $318,673 $13,077,253 9.29.2017 Commission Meeting Agenda 10/17/2017 2:00 PM Druid Park Improvements (Walton Way to Wrightsboro Road) Department:Engineering Department:Engineering Caption:Motion to approve and authorize supplemental reimbursement to Georgia Power Transmission (GPT) in amount of $186,300 for cost to relocate their transmission facilities for improving Druid Park Improvements Project. Also approve modifying the Utility Relocation Agreement between GPT and the City from $849,328.00 to $1,035,628.00 as requested by Augusta Engineering Department. (Approved by Engineering Services Committee October 10, 2017) Background:The Druid Park Improvements Project is on the approved Band 1 list of Richmond County’s Transportation Investment Act of 2010 (aka, TIA, TSPLOST) projects. Project consists of improving roadway operation, safety, surface drainage, and produce enhanced multi-modal facilities through the use of context sensitive design including a new roundabout, landscaped medians, bicycle lanes and shared-use signage. The project is under construction and utility relocation phase is substantially completed. Roadway improvements required relocation of Power facilities and other utilities. Analysis:Due to ROW constrains and close proximity of other utilities, GPT has to assign additional resources (engineering, material & labor) to relocate specific poles structures. Such arrangement was warranted to keep roadway construction activities on schedule. Utilization of increase resources lead to cost increase. Under agreement with GPT, this is a cost that is required to be paid by the City of Augusta to complete needed improvements. Financial Impact:Funds are available in Project TIA funds. Alternatives:1). Approve and authorize supplemental reimbursement to Georgia Power Transmission (GPT) in amount of $186,300 for cost to relocate their transmission facilities for improving Druid Cover Memo Park Improvements Project. Also approve modifying the Utility Relocation Agreement between GPT and the City from $849,328.00 to $1,035,628.00 as requested by Augusta Engineering Department. 2). Do not approve and find alternative way to reimburse GPT. Recommendation:Approve Alternate one. Funds are Available in the Following Accounts: fund 371 REVIEWED AND APPROVED BY: Finance. Procurement. Law. Administrator. Clerk of Commission Cover Memo Augusta-Richmond County, Georgia BE IT ORDAINED by the Commission-Council of Augusta-Richmond County, Georgia that the following Capital Project Budget is hereby amended: Section 1: The project is authorized to CPB# 371-041110-T13041219. This request is to enter into an Agreement with Georgia Power Transmission (GPT) in the amount of $186,300 for cost to relocate their transmission facilities for improving Druid Park Road Improvements Project. from $849,328 to $1,035,628. Section 2: The following revenues are anticipated to be available to the Consolidated Government to complete the project. 724,741$ TIA Discretionary Funds 411,527$ 1,035,628$ 2,171,896$ Section 3: Copies of this Capital Project Budget shall be made available to the Comptroller for direction in carrying out this project. Adopted this ____________________ day of ______________________. Approved _________________________________________________ Original-Commission Council Office Copy-Engineering Department Copy-Finance Department Copy-Procurement Department Honorable Hardie Davis, Jr., Mayor CPB#371-041110-T13041219 Special 1% Sales Tax, Phase VI TIA Funds Also approve modifying the Utility Relocation Agreement between GPT and the City CAPITAL PROJECT BUDGET Druid Park Improvements (Walton Way to Wrightsboro Road) 9.29.2017 Augusta-Richmond County, Georgia CPB#371-041110-T13041219 CAPITAL PROJECT BUDGET Druid Park Improvements (Walton Way to Wrightsboro Road) CPB AMOUNT ADDITION NEW SOURCE OF FUNDS CPB REQUEST CPB SPECIAL 1% SALES TAX, PHASE VI 328-041110-6011110-212828012 ($724,741)($724,741) TIA Discretionary Funds 235-041110-6011110 ($411,527)($411,527) TIA Funds 371-041110-T13041219 ($849,328) ($186,300) ($1,035,628) TOTAL SOURCES: ($1,985,596) ($186,300) ($2,171,896) USE OF FUNDS ENGINEERING 328-041110-5212115-212828012 $724,741 $724,741 TIA Engineering 235-041110-5212115 $411,527 $411,527 TIA Funds 371-041110-5212115 $849,328 $186,300 $1,035,628 TOTAL USES: $1,985,596 $186,300 $2,171,896 9.29.2017 Commission Meeting Agenda 10/17/2017 2:00 PM Enhance Operational Efficiency of Various Intersections Project - (CSA) Department:Engineering Department:Engineering Caption:Motion to approve and award the Engineering Design Services Consultant Services Agreement (CSA), to Hussey Gay Bell in the amount of $1,136,478.00 for the Enhance Operational Efficiency of Various Intersections for Augusta, Georgia Project as requested by AED/TE. Award is contingent upon receipt of signed Agreement. RFQ 17-127 (Approved by Engineering Services Committee October 10, 2017) Background:These projects are listed in the Transportation Improvement Program (TIP). The Enhance Operational Efficiency of Various Intersections Project will improve traffic flow, increase capacity, and decrease delay at three busy locations in Augusta including Wheeler Road @ Robert C Daniel Jr. Parkway, Barton Chapel Road @ Gordon Hwy, and along Wheeler Rd between Interstate 20 and Augusta West Parkway. These projects will expand intersections, add additional traffic controls, and add additional infrastructure at these locations. Analysis:RFQ’s were received on Tuesday, January 10, 2017 and firms were evaluated based on qualifications, project approach, and experience. The following firms submitted RFQs for evaluation: 1. Hussey Gay Bell 2. Clark Patterson Lee 3. Moreland Altobelli Associates 4. Cranston Engineering 5. W.R. Toole Engineers, Inc. Hussey Gay Bell was selected based on the evaluation procedures used for this project. Financial Impact:GDOT identified federal and state funding source to complete design phase. It is reimbursable expense. Augusta entered in agreement (Project Framework Agreement) with GDOT for utilizing federal and state funding for project up to amount of $1,252,000.00 [PI#0012868=$277,000; PI#0012867=$750,000; PI#0012866=$225,000]. Cover Memo Alternatives:1) Approve and award the Engineering Design Services Consultant Services Agreement (CSA), to Hussey Gay Bell in the amount of $1,136,478.00 for the Enhance Operational Efficiency of Various Intersections for Augusta, Georgia Project as requested by AED/TE. Award is contingent upon receipt of signed Agreement. 2) Do not approve. Recommendation:Approve Alternate Number One. Funds are Available in the Following Accounts: Transportation Improvement Program (GDOT utilizing state and federal funds). Fund 340 REVIEWED AND APPROVED BY: Finance. Procurement. Law. Administrator. Clerk of Commission Cover Memo Request for Qualifications Request for Qualifications will be received at this office until Tuesday, January 10, 2017 @ 11:00 a.m. for furnishing: RFQ Item #17-127 Engineering Design Services to Enhance the Operational Efficiency of Various Intersection for Augusta Engineering Department RFQs will be received by: The Augusta Commission hereinafter referred to as the OWNER at the offices of: Geri A. Sams, Director Augusta Procurement Department 535 Telfair Street - Room 605 Augusta, Georgia 30901 RFQ documents may be viewed on the Augusta Georgia web site under the Procurement Department ARCbid. RFQ documents may be obtained at the office of the Augusta, GA Procurement Department, 535 Telfair Street – Room 605, Augusta, GA 30901. All questions must be submitted in writing by fax to 706 821-2811 or by email to procbidandcontract@augustaga.gov to the office of the Procurement Department by Tuesday, December 27, 2016, @ 5:00 P.M. No RFQ will be accepted by fax, all must be received by mail or hand delivered. No RFQ may be withdrawn for a period of sixty (60) days after qualifications have been opened, pending the execution of contract with the successful vendor. Request for qualifications (RFQ) and specifications. An RFQ shall be issued by the Procurement Office and shall include specifications prepared in accordance with Article 4 (Product Specifications), and all contractual terms and conditions, applicable to the procurement. All specific requirements contained in the request for qualification including, but not limited to, the number of copies needed, the timing of the submission, the required financial data, and any other requirements designated by the Procurement Department are considered material conditions of the bid which are not waivable or modifiable by the Procurement Director. All requests to waive or modify any such material condition shall be submitted through the Procurement Director to the appropriate committee of the Augusta, Georgia Commission for approval by the Augusta, Georgia Commission. Please mark RFQ number on the outside of the envelope. Proponents are cautioned that acquisition of RFQ documents through any source other than the office of the Procurement Department is not advisable. Acquisition of RFQ documents from unauthorized sources places the proponent at the risk of receiving incomplete or inaccurate information upon which to base his qualifications. Correspondence must be submitted via mail, fax or email as follows: Augusta Procurement Department Attn: Geri A. Sams, Director of Procurement 535 Telfair Street, Room 605 Augusta, GA 30901 Fax: 706-821-2811 or Email: procbidandcontract@augustaga.gov GERI A. SAMS, Procurement Director Publish: Augusta Chronicle December 1, 8, 15, 22, 2016 Metro Courier December 7, 2016 OFFICIAL VENDORS Attachment "B"E-Verify #SAVE Form Addendum 1 Original 6 Copies Cranston Engineering 452 Ellis Street Augusta, GA 30901 Yes 64684 Yes Yes Yes Yes WR Toole Engineering 1005 Broad St., Suite 200 Augusta, GA 30901 Yes 62985 Yes Yes Yes Yes Moreland Altobelli Assoc 2450 Commerce Ave. Duluth, GA 30096 Yes 53328 Yes Yes Yes Yes Clark Patterson Lee 3011 Sutton Gate Dr., Suite 130 Suwanee, GA 30024 Yes 209339 Yes Yes Yes Yes Hussey Gay Bell 329 Commercial Dr., Suite 200 Savannah, GA 31406 Yes 398475 Yes Yes Yes Yes Qualifications Opening RFQ Item #17-127 Engineering Design Services to Enhance the Operational Efficiency of Various Intersection for Augusta, Georgia - Engineering Department RFQ Due: Tuesday, January 10, 2017 @ 11:00 a.m. Total Number Specifications Mailed Out: 24 Total Number Specifications Download (Demandstar): 8 Total Electronic Notifications (Demandstar): 433 Pre-Qualifications/Telephone Conference Attendees: NA Total packages submitted: 5 Total Noncompliant: 0 Page 1 of 1 Augusta-Richmond County, Georgia BE IT ORDAINED by the Commission-Council of Augusta-Richmond County, Georgia that the following Capital Project Budget is hereby amended: Section 1: The project is authorized to NA. This request is to award the Design Contract to Hussey Gay Bell in the amount of $1,136,478.00 for TIP project Operational Efficiency of Various Intersections for Augusta, GA. Funding is available in the Transportation Improvement Program funds. Section 2: The following revenues are anticipated to be available to the Consolidated Government to complete the project. 277,000$ 750,000$ 225,000$ 1,252,000$ Section 3: Copies of this Capital Project Budget shall be made available to the Comptroller for direction in carrying out this project. Adopted this ____________________ day of ______________________. Approved _________________________________________________ Honorable Hardie Davis, Mayor CAPITAL PROJECT BUDGET CPB Operational Efficiency of Various Intersections for Augusta, Georgia Project TIP Project Funds -Wheeler Rd @ Robert C Daniel Jr Parkway TIP Project Funds -Barton Chapel Rd @ Gordon Highway TIP Project Funds - Wheeler Rd between I-20 & Augusta West Pkwy 1.14.2015 Augusta-Richmond County, Georgia CAPITAL PROJECT BUDGET CPB Operational Efficiency of Various Intersections for Augusta, Georgia Project CPB AMOUNT CPB New SOURCE OF FUNDS CPB Addition CPB Transportation Impvt Program PI-0012868 Wheeler Rd @ Robert C Daniel Jr Parkway ($277,000)($277,000) Transportation Impvt Program PI-0012867 Barton Chapel Rd @ Gordon Highway ($750,000)($750,000) Transportation Impvt Program PI-0012866 Wheeler Rd between I-20 & Augusta West Pkwy ($225,000)($225,000) TOTAL SOURCES:($1,252,000)($1,252,000) USE OF FUNDS ENGINEERING - DESIGN 340-041110-52.12115 $1,252,000 $1,252,000 TOTAL USES:$1,252,000 $1,252,000 1.14.2015 Cranston Engineering 452 Ellis Street Augusta, GA 30901 WR Toole Engineering 1005 Broad St., Suite 200 Augusta, GA 30901 Moreland Altobelli Assoc 2450 Commerce Ave. Duluth, GA 30096 Clark Patterson Lee 3011 Sutton Gate Dr., Suite 130 Suwanee, GA 30024 Hussey Gay Bell 329 Commercial Dr., Suite 200 Savannah, GA 31406 A. Package submitted by the deadline Pass/Fail PASS PASS PASS PASS PASS B. Package is complete (includes requested information as required per this solicitation)Pass/Fail PASS PASS PASS PASS PASS C. Overall Quality of RFP (concise and to-the-point) 50 41.0 40.0 42.5 50.0 49.0 1. Technical Approach 100 81.5 82.5 84.0 96.0 97.5 2. Financial Responsibility 100 97.5 95.0 97.5 95.0 97.5 3. Project Management 95 85.0 90.0 97.5 97.5 96.0 4. Key Personnel & Staff 90 80.0 85.0 87.5 90.0 90.0 5. Organizational Qualifications 85 66.5 37.5 75.0 72.5 75.0 6. Optional Interview (Potential Bonus Points)10 D. TOTAL 480 410.5 390 441.5 451 456 1. Specific relevant experience of your company (specific to “intersection operation efficiency” concept and design). 75 62.5 67.5 73.5 75.0 75.0 2. A detailed description of the proposed technical approach to be taken for the performance of the required services. 100 80.0 77.5 81.0 97.5 97.5 3. Conceptual project schedule. 25 20.0 21.0 21.5 22.5 23.5 E. TOTAL 200 162.5 166 176 195 196 Within Richmond County 10 10 10 Within CSRA 8 Within Georgia 6 6 6 6 Within SE United States (includes AL, TN, NC, SC, FL) 4  All Others 2 TOTAL 10 10.0 10.0 6.0 6.0 6.0 H. References 10 10.0 10.0 10.0 10.0 10.0 Total 750 634 616 676 712 717 Evaluation Sheet - RFQ Item #17-127 Engineering Design Services to Enhance the Operational Efficiency of Various Intersection for Augusta, Georgia - Engineering Department Evaluation Meeting: Tuesday, January 24, 2017 @ 10:00 a.m. Vendors Total (Total Possible Score 750) Second Round Elimination (Total Points 50) (MUST ACHIEVE 35 POINTS FOR CONTINUED CONSIDERATION) (MUST PASS FOR CONTINUED CONSIDERATION) RANKING - First Round Elimination Proximity to Area (Total Points 10) F. Proximity to Area Scope of Services (Total Points 200) Proposer’s Overall Ability to Provide the Services (Total Points 470) Reference(s) (Total Points 10 Procurement DepartmentRepresentative:______________Nancy Williams ________________________________ Procurement Department Completion Date: 1/24/17 Internal Use Only Note: Respondent/Offeror(s) receiving 600 or more points will be invited to do presentations to provide additional information if deemed necessary. Submittal and Quality of RFP D. Narrative E. Scope of Services Quality of RFP Evaluator: Cumulative Date: 1/24/17 ENGINEERING DEPARTMENT Abie L. Ladson, PE, CPESC, Director MEMORANDUM ',I*, lil DATE: SUBJECT: '1? FEB 14*,rSS:41 Ms Geri Sams, Procurement - Director Abie L. Ladson, PE, CPESC, Director- Engineering Wednesday, FebruarY 22, 20L7 Engineering Design Services to Enhance the Operational Efficiency of Various lntersections - RFQ - L7 -127 File reference: 16-014(A) Ms. Sams, it is the recommendation of AED to award the design and engineering services for the subject project to Hussey Gay Bell. AED also request that the scope of work be initiated and enter into fee negotiations. Should you require additional information please contact John Ussery at 706.821.!7\0 or i ussery@ augustaga.gov. Thonk you for your attention to this motter. ALL/vra cc: John Ussery, PE, Assistant Director - Traffic Engineering Division Hameed Malik, Ph.D., PE, Assistant Director- Engineering Division Valerie Jenkins, AED Accountant File Augusta Engineering Administretion 535 Telfair Street, Bldg 4000 - Augusta, Georgia 30901 Phone (706) 796-5040 - Fax: (706) 796-5045 www.augustaga.gov Commission Meeting Agenda 10/17/2017 2:00 PM Motion to Authorize Condemnation to Acquire Property in Fee Simple Interests (Parcel 087-4-106-00-0) - 2046 Golden Rod Street Department:Law Department:Law Caption:Motion to authorize condemnation to acquire property in Fee Simple Interests (Parcel 087-4-106-00-0) - 2046 Golden Rod Street. (Approved by Engineering Services Committee October 10, 2017) Background:The owners died intestate and all heirs cannot be determined or located. In order to proceed and avoid further project delays, it is necessary to condemn the subject property. The required property consists of 7,500 sq. ft. in fee. The appraised value is $6,300.00. Analysis:Condemnation is necessary in order to acquire the required property. Financial Impact:The necessary costs will be covered under the project budget. Alternatives:Deny condemnation. Recommendation:Approve condemnation. Funds are Available in the Following Accounts: G/L: 328-041110-52.12122 J/L: 212828203-52.12122 REVIEWED AND APPROVED BY: Finance. Law. Administrator. Clerk of Commission Cover Memo AGENDA ITEM __________ EDITION __________ CAPTION: Motion to authorize condemnation to acquire property in fee simple interests (Parcel 087-4-106-00-0) 2046 Golden Rod Street BACKGROUND: The owners died intestate and all heirs cannot be determined or located. In order to proceed and avoid further project delays, it is necessary to condemn the subject property. The required property consists of 7,500 sq. ft. in fee. The appraised value is $6,300.00. ANALYSIS: Condemnation is necessary in order to acquire the required property. FINANCIAL IMPACT: The necessary costs will be covered under the project budget. ALTERNATIVES: Deny condemnation. RECOMMENDATION: Approve condemnation. AGENDA DATE: October 10, 2017. DEPARTMENT DIRECTOR: FUNDS ARE AVAILABLE IN THE FOLLOWING ACCOUNTS: G/L: 328-041110-52.12122 J/L: 212828203-52.12122 ADMINISTRATOR: _________________________ FINANCE: _______________________________ DATE: September 22, 2017 TO: The Honorable Hardie Davis, Jr. Mayor Members of the Augusta Commission Members of the Public Services Committee FROM: Randolph Frails, Esquire and Andrew MacKenzie, General Counsel SUBJECT: Acquisition of 7,500 sq. ft. to City of Augusta, Georgia from Eloise Kimble and Leola Kimble, by and through their known and unknown heirs 2046 Golden Rod Street Augusta Information Technology - GIS Division, Augusta, GA September 22, 2017 0 50 10025 ft 0 10 205 m 1:564 Disclaimer: While every effort is made to keep information provided over the internet accurate and up-to-date, Augusta does not certify the authenticity or accuracy of such information. No warranties, express or implied, are provided for the records and/or mapping data herein, or for their use or interpretation by the User. Commission Meeting Agenda 10/17/2017 2:00 PM Motion to Authorize Condemnation to Acquire Property in Fee Simple Interests (Parcel 087-4-107-00-0) - 2048 Golden Rod Street Department:Law Department:Law Caption:Motion to authorize condemnation to acquire property in Fee Simple Interests (Parcel 087-4-107-00-0) - 2048 Golden Rod Street. (Approved by Engineering Services Committee October 10, 2017) Background:The owners died intestate and all heirs cannot be determined or located. In order to proceed and avoid further project delays, it is necessary to condemn the subject property. The required property consists of 7,500 sq. ft. in fee. The appraised value is $10,000.00. Analysis:Condemnation is necessary in order to acquire the required property. Financial Impact:The necessary costs will be covered under the project budget. Alternatives:Deny condemnation. Recommendation:Approve condemnation. Funds are Available in the Following Accounts: G/L: 328-041110-52.12122 J/L: 212828203-52.12122 REVIEWED AND APPROVED BY: Finance. Law. Administrator. Clerk of Commission Cover Memo AGENDA ITEM __________ EDITION __________ CAPTION: Motion to authorize condemnation to acquire property in fee simple interests (Parcel 087-4-107-00-0) 2048 Golden Rod Street BACKGROUND: The owners died intestate and all heirs cannot be determined or located. In order to proceed and avoid further project delays, it is necessary to condemn the subject property. The required property consists of 7,500 sq. ft. in fee. The appraised value is $10,000.00. ANALYSIS: Condemnation is necessary in order to acquire the required property. FINANCIAL IMPACT: The necessary costs will be covered under the project budget. ALTERNATIVES: Deny condemnation. RECOMMENDATION: Approve condemnation. AGENDA DATE: October 10, 2017. DEPARTMENT DIRECTOR: FUNDS ARE AVAILABLE IN THE FOLLOWING ACCOUNTS: G/L: 328-041110-52.12122 J/L: 212828203-52.12122 ADMINISTRATOR: _________________________ FINANCE: _______________________________ DATE: September 22, 2017 TO: The Honorable Hardie Davis, Jr. Mayor Members of the Augusta Commission Members of the Public Services Committee FROM: Randolph Frails, Esquire and Andrew MacKenzie, General Counsel SUBJECT: Acquisition of 7,500 sq. ft. to City of Augusta, Georgia from Eloise Kimble and Leola Kimble, by and through their known and unknown heirs 2048 Golden Rod Street Augusta Information Technology - GIS Division, Augusta, GA September 22, 2017 0 50 10025 ft 0 10 205 m 1:564 Disclaimer: While every effort is made to keep information provided over the internet accurate and up-to-date, Augusta does not certify the authenticity or accuracy of such information. No warranties, express or implied, are provided for the records and/or mapping data herein, or for their use or interpretation by the User. Commission Meeting Agenda 10/17/2017 2:00 PM On-Call Asphalt Patch Concrete Repair Department:Utilities Department:Utilities Caption:Motion to approve budget increase for on-call asphalt and concrete repairs for Bid 16-224. (Approved by Engineering Services Committee December 13, 2016 and October 10, 2017) Background:Georgia Carolina Paving Company was awarded Bid #16-224 to provided on-call asphalt and concrete repairs. This service is used when repair of Augusta Utilities underground assets requires removal of asphalt and concrete. Utilizing an on-call contractor, we can repair road or sidewalk cuts more quickly. Analysis:We are requesting the budget be increased by $75,000. This amount will be sufficient for the rest of 2017, at which time we will re-bid the contract. Financial Impact:The requested amount of increase is $75,000. Funds are available in account 506043410-5311912. Alternatives:Deny the request Recommendation:We recommend approval of the increase in purchase order to Georgia Carolina Paving Company Funds are Available in the Following Accounts: Funds are available from 506043410-5311912 REVIEWED AND APPROVED BY: Finance. Procurement. Cover Memo Law. Administrator. Clerk of Commission Cover Memo Commission Meeting Agenda 10/17/2017 2:00 PM Revenue Enhancement and Recovery Project Department:Utilities Department Department:Utilities Department Caption:Motion to approve the Award of RFP Item #17-167 for The Revenue Enhancement and Recovery Project to Utility Revenue Management. (Approved by Engineering Services Committee October 10, 2017) Background:AUD currently serves 63,598 residential and 7,305 commercial and industrial water customers. The number of customers also receiving sewer service is slightly less. In addition, we monitor 40 industrial users, 17 of which pay an industrial surcharge for high strength waste. AUD requested proposals from qualified respondents to provide review and corrections to its water and wastewater billing and records systems that result in identifying lost, unbilled, or under-recovered revenue for the utility. The respondent that is selected will examine the AUD billing system and billing policies, the water distribution system, various field operations including meter reading and meter technology, customer consumption records, as well as various aspects of the wastewater collection system, etc. The objective of this examination will be the identification and correction of billing and/or field problems, errors, inaccuracies, or omissions, etc. that are causing or potentially causing reduced revenue impacts for AUD. Analysis:AUD has evaluated and ranked all RFP submittals and Utility Revenue Management was the firm selected by an RFP committee. Financial Impact:Utility Revenue Management will only be paid if they identify corrections or changes that result in increased revenue collection for Augusta Utilities Department. URM will be paid 40% of increased revenue resulting from their work collected for a term of thirty-six (36) months after corrections are made and a one-time payment of 30% for all back-billing collected. Cover Memo Alternatives:Do not approve the award. Recommendation:Augusta Utilities Department recommends the Commission approve the award to Utility Revenue Management. Funds are Available in the Following Accounts: No funding required at this time. When shared savings are paid, they will be paid from: 506-04-3110-5212999 REVIEWED AND APPROVED BY: Finance. Procurement. Law. Administrator. Clerk of Commission Cover Memo -1- CONTRACT FOR PROFESSIONAL SERVICES STATE OF § § KNOW ALL MEN BY THESE PRESENTS § THIS CONTRACT FOR PROFESSIONAL SERVICES (this "Contract”) made on the ____ day of _____, 2017, hereinafter specified, by and between ______________ (the “Utility”), a __________ governmental agency, and UTILITY REVENUE MANAGEMENT COMPANY, INC., a Texas corporation, with its principal office located in Houston, Harris County, Texas (the "Contractor"). The initial addresses of the parties are as follows: UTILITY CONTRACTOR Utility Revenue Management Company, Inc. 99 Detering St. Suite 130 Houston, TX 77007 W I T N E S S E T H: WHEREAS, the Utility desires to secure the performance of professional services of the highest quality by trained, skilled personnel; and WHEREAS, the Contractor desires to provide such services in exchange for the fees hereinafter specified; NOW, THEREFORE, for and in consideration of the premises and mutual covenants herein contained, and other valuable consideration, the parties hereto agree as follows: ARTICLE I. DEFINITIONS Section 1.01. Meanings of Words and Terms. As used in this Contract, the following words and terms shall have the respective indicated meanings: "Account" means any water, wastewater or storm water service of any nature whatsoever being rendered or delivered by the Utility or City of Augusta for the benefit of any person or entity for which service the Utility is entitled to receive payment, including all unauthorized and/or undiscovered connections to the Utility’s water and wastewater systems which may be discovered by the Contractor and brought to the attention of the Utility that had not previously been assigned an Account number by the Utility. “Base Revenue" means the average monthly billings on an Account for up to the twelve-month period immediately preceding the Contractor's Documenting the Find. "Bonus Payment" means the fee to be paid by the Utility to the Contractor for the Contractor's performance of its duties under this Contract, computed in accordance with Section 5.01(A) hereof. "Utility" means ___________________. “City of Augusta” means _________________. -2- "Contractor" means the entity designated as such in the introduction of this Contract and includes its successors and assigns. "City Information System" (“CIS”) means the system used by the Utility to bill Accounts for water and wastewater service provided to its customers. "Department" means the Water, Wastewater or Engineering Departments of the Utility or the City of Augusta and any successor thereto. "Director" means the Utility’s designated administrator of this Contract. "Documenting the Find" means the notation by the Contractor on the Research Report to the Utility of an error on an Account. "Force Majeure," as used herein, shall include, but not be limited to, acts of God, acts of the public enemy, wars, blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, storms, floods, washouts, tornadoes, hurricanes, arrests, and restraints of government and people, explosions, breakage or damage to machinery or equipment and any other inabilities of either party, whether similar to those enumerated or otherwise, and not within the reasonable control of the party claiming such inability. "Increased Revenues" means the amount of monthly, bimonthly or quarterly income received by the Utility or the City on an Account, over and above the Base Revenue (including back bills and impact fees) subsequent to corrective action being taken on said Account. "Out-of-Pocket Expenses" means an amount equal to the actual costs and expenses for implementing changes accomplished by the Contractor or the Utility pursuant to Section 5.02 hereof. "Project" means the Work to be done in connection with any account approved by the Project Manager. "Project Manager" means that person designated by the Utility, by notice to the Contractor, to administer this Contract on behalf of the Utility. This individual shall have a working knowledge of the Utility’s protocol and the day- to-day operating procedures of the Utility’s Water and/or Wastewater Departments and shall have the authority and responsibility of administering all aspects of this Contract on behalf of the Utility. "Research Report" means the report described and defined in Section 2(C) (1). "Work" means the Contractor's efforts towards making changes or modifications to an Account in order for the particular water and/or wastewater service being provided to said account to be properly and accurately billed. "Work Order” means the Contractor's work order approval form set forth in the Exhibit attached to this Contract to be used by Contractor in submitting recommendations for Work to be done with regard to any of the Accounts. Section 1.02. Miscellaneous Definitions. Words of the masculine gender shall be deemed and construed to be correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, singular terms used herein shall include the plural number should the context so require. Section 1.03. Titles and Headings. The titles and headings of the articles and sections of this Contract have been inserted for convenience of reference only and are not to be considered a part hereof, and shall not in any way modify or restrict any of the terms or provisions hereof and shall never be considered or given any effect in construing this Contract or any provision hereof or in ascertaining intent, if any question of intent shall arise. -3- ARTICLE II. SCOPE OF SERVICES Section 2.01. Basic Services. The Contractor shall provide the investigation, Work Order, and field services necessary in order to maximize the billable revenues to all Accounts for water, wastewater or storm water service provided by the Utility to said Accounts. (A) Investigation and Field Work. Upon receiving the Account information described in Section 3.01(A), the Contractor shall: (1) Investigate each Account and determine if there is a loss of revenue to the Utility associated with each said Account; (2) Submit Work Orders and recommendations for Work to be done with regard to any of said Accounts, including the estimated cost of anticipated repairs and modifications required by any of said Accounts; (3) Upon receipt of the Project Manager's approval, the Utility shall proceed to make (or cause to be made) all necessary changes to the billing information or physical service to any of said Accounts for which such approval has been given; (4) (a) The Work done on each Account shall not exceed the estimated cost approved by the Project Manager, or (b) If the Contractor, after commencing work, determines that the estimated cost of the Project exceeds the original estimated cost approved by the Project Manager, the Contractor will immediately notify the Project Manager of the revised estimate. Upon review of the revised estimated cost of the Project submitted by the Contractor, the Project Manager may approve said revised estimate. (B) Water Meter Replacement. (1) If the Contractor is requested by the Utility to replace a water meter or a water meter register, the Contractor shall provide to the Project Manager the following information: (a) Account number, (b) Account or service address, (c) Meter number, type and size of old meter to be replaced, (d) Meter reading on the old meter or register, (e) Repair date, (f) Meter reading on the new meter or register, and (g) Meter number, type and size of new meter; (2) The Contractor shall also return to the Utility the replaced meter (if purchased under the terms of this contract) with a tag indicating the Account or service address; (3) The items required pursuant to Sections 2.01(B)(1) and 2.01(B)(2) shall be submitted to the Project Manager on a meter installed basis; and (4) Title to all replacement meters shall vest in the Utility. -4- (C) Reports. (1) The Contractor shall provide to the Utility on a periodic basis a Research Report (the "Research Report") containing individual Accounts or a complete list of all Accounts researched by the Contractor for which the Contractor has identified potential Increased Revenues for the Utility. This Research Report shall be submitted for the purpose of "Documenting the Find" and the Contractor shall be entitled to its agreed-upon portion of the Increased Revenues on each of said Accounts; (2) The Contractor shall provide the Project Manager with a monthly status report. This report is to be inclusive of all Accounts which are deemed by the Contractor to justify action and on which a Work Order has been generated in the prior month. This report shall be due no later than the 10th calendar day of each month; and (3) If the Contractor is requested to complete the Work described in a Work Order, the Contractor, upon completion of the Work, shall provide to the Project Manager a copy of the completed Work Order, listing who performed the Work; their labor classification and rates; the hours each individual worked; the materials used, by type; the quantities of the materials expended and the equipment and vehicles used, by type, with time charges; along with the itemized costs totaled for the completed Project. (4) For each Account for which the Contractor has Documented the Find and the Utility has collected billing revenues, the Contractor shall issue to the Utility, at least monthly, a report listing the following information: (1) Account name, (2) Account number, (3) Service address, (4) Billing period, (5) Amount billed, (6) Base Revenue in dollars, (7) Amount of monies collected, (8) Amount of monies owed to the Contractor, and (9) Contractor's Work Order number. (D) Warranties for the Contractor. The Contractor warrants that all work shall be performed in a good and workmanlike manner according to AWWA Standards and meeting the standards of quality prevailing in the metropolitan area for work of like kind. The Contractor further warrants that trained and skilled personnel shall perform all Work. Section 2.02. Services in General. The Contractor shall coordinate all of its activities herein described with the Utility’s representative, if other than the Project Manager, the various Department Directors, the Project Manager, or any of their designated representatives. Section 2.03. The Utility’s Existing Programs. The Contractor hereby acknowledges that the Utility has indicated that it has certain existing policies, procedures and programs pertaining to the evaluation of meter and billing problems, and the maintenance and replacement of meters. The Contractor acknowledges that the Utility has engaged Contractor to supplement and augment any existing programs the Utility has in place and the Utility acknowledges that it desires to utilize the Contractor's services in such a manner so as to maximize the revenues of the Utility. Therefore, the parties agree that the Contractor has the right to submit Work Order on any and all Accounts the Contractor has identified a loss of revenue to the Utility with recommended changes to correct such loss of revenue. The Project Manager shall approve and process any such Work Order so long as the Utility has not identified the problem and specified corrective actions to be taken within 30 days of the date of submission of the Contractor's Work Order. The Utility hereby agrees that for purposes of this Section 2.03 that the day of submission of the Contractor's Work Order is the day that said Work -5- Order is delivered to the Project Manager, regardless of the day the Work Order is approved by the Project Manager through his execution thereof. ARTICLE III. DUTIES, DATA RECORDS, WORK PRODUCTS, ETC. Section 3.01. Certain Duties of the Utility (A) The Utility to Provide Access to Accounts. In addition to its other duties under this Contract, the Utility shall, to the extent permitted by law, provide access to all the data and records in its possession for each Account, and shall provide copies of any documents in its possession or control or available to it which are requested by the Contractor and are reasonably necessary for the Contractor to perform its duties under this Contract. Upon request, the Utility shall make available to the Contractor the Utility’s Customer Information System (“CIS”) via a computer link for the viewing and extracting of information only. At no time will the Contractor be able to change or modify the information reflected in the Utility’s Customer Information System for any Account. (B) Post-Award Contract Meeting. Upon execution of this Contract by all parties, the Utility will coordinate a post-award contract meeting with the Contractor and all designated management personnel representing the Utility under this Contract in order to fully explain all aspects of this Contract. (C) Review of Work Order. The Utility shall review all Work Orders submitted by the Contractor under Section 2.01(A) as soon as reasonably practical to do so. Within five (5) working days of the date of submittal of a Work Order, the Utility shall advise the Contractor of the disposition of the said Work Order. (D) Replacement Water Meters. The Contractor will request replacement water meters from the Utility. If the meters so requested are not available from the Utility’s stock within then (10) working days of said request, the Contractor may purchase form outside sources replacement water meters that conform to the Utility’s specifications at a price to be agreed upon by the Utility and the Contractor. (E) Project Manager's Assistance. The Project Manager shall assist the Contractor in its dealings with the Utility, including any of its departments or divisions. (F) Acknowledgement of Receipt of Research Reports. The Utility shall acknowledge receipt of the Contractor's Research Reports by entering the appropriate information related to the Accounts within the Utility’s Customer Information System. This entry shall preclude any action on the Accounts by the Utility prior to or during the Work Order approval process. (G) Unspecified Areas. The Project Manager and the Contractor shall establish mutually agreed upon written procedures to handle matters and areas not specifically covered by this Contract. (H) Observance of Spirit of Contract. During all times that this Contract shall remain in effect, both the Utility and the Contractor shall observe and comply with the spirit of this Contract. The Contractor is rendering a service to the Utility by increasing the revenues of the Utility. The Utility has granted to the Contractor authorization to perform the defined duties of this Contract and the Utility will neither hinder, restrict, delay nor compete with the Contractor's performance of said duties. -6- ARTICLE IV. INDEMNIFICATION AND INSURANCE Section 4.01. Indemnification. The Contractor hereby agrees at all times to defend, indemnify and hold the Utility harmless from and against any and all liabilities, losses or costs arising from claims for damages, or suits for loss or damage, including without limitation, reasonable attorney fees, which arise as a result of the performance of or failure to properly perform its duties under this Contract, whether such claims are asserted before or after the termination of this Contract. Section 4.02. Insurance. During the term of this Contract, the Contractor shall carry and maintain the following insurance coverage with a company or companies satisfactory to the Utility, under policies of insurance that meet the requirements of the State of _________. The Utility shall be named as an additional insured for all liability policies, with a waiver of subrogation on all applicable policies. Each of said policies shall provide that the Utility shall be given at least thirty (30) days prior written notice of change or cancellation. Such insurance coverage shall have the minimum limits of liability in not less than the following amounts: (A) Commercial General Liability, including commercial form, premises – operators, products/completed operations hazard, contractual insurance, independent contractors and personal injury: $1,000,000 Combined Single Limit (B) Automobile Liability, including owned, non-owned or rented: $1,000,000 Combined Single Limit (C) Workers Compensation with Employees Liability, which complies with the ___________ Workers’ Compensation Act: $100,000 ARTICLE V. PAYMENT Section 5.01. Limitation on Sources of Payment. Any and all fees due to the Contractor for services rendered under this Contract shall be payable solely from Increased Revenues. The Contractor acknowledges and agrees that the Utility’s liability for any and all payments hereunder shall be limited by this provision. No other funds are or will be appropriated for purposes of payment under this Contract. Section 5.02. Payment of Out-of-Pocket Expenses. All Out-of-Pocket Expenses incurred by the Contractor in repairing or replacing meters per Section 2.01 (A) (4) of this Contract shall first be paid from the aggregate amount of Increased Revenues from all Accounts that the Contractor has performed Work on. If the Increased Revenues for a particular month are insufficient to cover all Out-of-Pocket Expenses for that month, the un-reimbursed portion of said Out-of Pocket Expenses will be carried over to the next month for inclusion in that month’s Out-of-Pocket reimbursement. Section 5.03. Payment for Services. (A) Bonus Payment to Contractor. If any Work performed by the Contractor on an Account results in Increased Revenues for the Utility, the Contractor shall be entitled to a Payment for such work equal to FIFTY PERCENT (50%) of all Increased Revenues for a term of FORTY EIGHT (48) MONTHS thereafter. (B) When Bonus Payments Due. Bonus Payments are due to the Contractor monthly within thirty (30) days of receipt of Increased Revenues by the Utility. -7- (C) Good Faith Estimate of Bonus Payments. If all of the data necessary to compute a Bonus Payment is not available in time to make such payment when due, the Utility shall make a good faith estimate of such data and compute the Bonus Payment accordingly. Adjustments to such Bonus Payment shall be made in succeeding monthly payments after the necessary data has become available. ARTICLE VI. TERM AND TERMINATION Section 6.01. Term. This Contract shall be effective as of _________________ and shall continue for a primary term of twenty-four (24) months, ending on _________________, 20__. At the end of the primary term of this Contract, the Utility, at its sole option and discretion, may renew this Contract for three (3) additional twelve (12) month periods, pending the availability of Utility appropriated funds, contract terms/conditions, and satisfactory performance of the Contractor under this Contract. Section 6.02. Termination. Either party hereto may terminate this Contract at any time by giving thirty (30) days prior written notice to the other party of its intent to terminate this Contract. Section 6.03. Termination of Contract Not to Affect Earned Bonus Payments. The duties and obligations of the Utility to pay the Contractor any Bonus Payments earned prior to the termination of this Contract under the terms of Article V hereof, shall continue in full force and effect as provided in said Article V regardless of the termination of this Contract by either party. ARTICLE VII. MISCELLANEOUS PROVISIONS Section 7.01. Independent Contractor. The relationship between the Contractor and the Utility shall be that of an independent contractor. Section 7.02. Business Structure and Assignments. The Contractor may not delegate or assign any portion of this Contract without the prior written consent of the Utility. The Contractor may assign any portion of its earned Bonus Payments hereunder; provided, however, prior to any assignment thereof, the Contractor shall furnish reasonable proof of the assignment thereof by providing to the Utility a written notice containing the following information: (i) the name, address and telephone number of the Contractor with a clear reference to this Contract; (ii) the name, address and telephone number of the assignee; and (iii) the identity of the earned Bonus Payments to be assigned (such identity to be established by indicating the invoice number, task description and the amount of said Bonus Payment associated therewith being assigned). If reasonable proof, as described above, is not provided to the Utility, the Utility may continue to pay the Contractor. Section 7.03. Subcontracting. The Contractor may subcontract any part of its duties and obligations to be performed hereunder only with the prior approval of the Utility to do so. All subcontractors and their employees shall be treated as if they were employees of the Contractor, except with regard to fees to be paid to said subcontractors. Section 7.04. Parties in Interest. This Contract shall not bestow any rights upon any third parties, but rather, shall inure to the benefit of and bind the Utility and the Contractor only. Section 7.05. Non-waiver. Failure of either party hereto to insist on the strict performance of any of the agreements contained herein or to exercise any rights or remedies accruing hereunder upon default or failure of performance shall not be considered a waiver of the right to insist on or to enforce by any appropriate remedy and/or strict compliance with any other obligation hereunder or to exercise any right or remedy occurring as a result of any future default or failure of performance. -8- Section 7.06. Applicable Laws. This Contract shall be construed in accordance with, and shall be subject to the laws of the State of Georgia, any ordinances, resolutions, or other similar enactments of the Utility and the City, the laws of the United States of America and all rules and regulations of any regulatory body or officer having jurisdiction over matters which are the subject of this Contract. Section 7.07. Notices. All notices required or permitted under this Contract shall be in writing and shall be deemed delivered when actually received or, if earlier, on the third day following deposit in a United States Postal Services post office or receptacle with proper postage affixed (certified mail, return receipt requested) addressed to the respective other party at the address prescribed in the introduction hereof or at such other address as the receiving party may have theretofore indicated by written notice to the sending party. Section 7.08. Equal Employment Opportunities. The Contractor will comply with all laws, ordinances and policies set by the Utility with regard to equal employment opportunities. Section 7.09. Force Majeure. In the event either party is rendered unable, wholly or in part, by Force Majeure to perform under this Contract, it is agreed that, upon such party's giving notice and full particulars of such Force Majeure in writing to the other party as soon as possible after the occurrence of the cause relied upon, the obligations of the party giving such notice, to the extent it is affected by Force Majeure and to the extent that due diligence is being used to resume performance at the earliest practicable time, shall be suspended during the continuance of any inability so caused as to the extent provided, but for no longer period. Such cause shall as far as possible be remedied with all reasonable dispatch. Section 7.10. Approvals; Utility. Approval by the Utility’s Project Manager or by any other representative of the Utility, of any part of the services rendered by the Contractor under this Contract other than in accordance with the terms and provisions of this Contract shall not be construed to be a waiver of the Contractor's compliance with said terms and provisions or to establish a standard of performance other than required by this Contract or by law. Neither the Director nor the Project Manager is authorized to vary the terms and provisions of this Contract. Section 7.11. Remedies Cumulative. The rights and remedies contained in this Contract shall not be exclusive, but shall be cumulative of all other rights and remedies, now or hereafter existing, whether by statue, at law, or in equity; provided, however, that none of the parties to this Contract shall terminate it except in accordance with the provisions hereof. Section 7.12. Representations. The Contractor represents that it and its employees, agents and subcontractors are fully competent and qualified to perform all the service required to be performed under this Contract. The Contractor represents that it has experience in performing all of the services to be performed hereunder and these services shall be of the highest professional quality. Section 7.13. Personnel of Contractor. The Contractor shall replace any personnel assigned to provide services under this Contract who shall have been deemed to be unsuitable by the Utility. Section 7.14. Multiple Counterparts. This Contract may be executed in multiple counterparts, each of which shall be regarded for all purposes as an original; and such counterpart shall constitute but one and the same instrument. Section 7.15. Entire Agreement. This Contract contains all the agreements of the parties hereto relating to the subject matter hereof and is the full and final expression of the agreement between the parties hereto. -9- CONTRACTOR: UTILITY: UTILITY REVENUE MANAGEMENT COMPANY, INC. By:_____________________________ By: ____________________________ A. Mitch Robertson, President Name: __________________________ Title: ___________________________ ATTEST: ATTEST: By:_________________________ By: ____________________________ William P. Bulloch, Jr., Sr. V.P. Name: __________________________ Title: ___________________________ COUNTERSIGNED: By: ____________________________ Authorized Official (SEAL) -10- Request for Proposal Request for Proposals will be received at this office until Friday, April 21, 2017 @ 11:00 a.m. for furnishing: RFP Item # 17-167 Revenue Enhancement and Recovery Project for the Augusta Utilities Department RFPs will be received by: The Augusta Commission hereinafter referred to as the OWNER at the offices of: Geri A. Sams, Director Augusta Procurement Department 535 Telfair Street - Room 605 Augusta, Georgia 30901 RFP documents may be viewed on the Augusta Georgia web site under the Procurement Department ARCbid. RFP documents may be obtained at the office of the Augusta, GA Procurement Department, 535 Telfair Street – Room 605, Augusta, GA 30901. All questions must be submitted in writing by fax to 706 821-2811 or by email to procbidandcontract@augustaga.gov to the office of the Procurement Department by Friday, March 31, 2017, @ 5:00 P.M. No RFP will be accepted by fax, all must be received by mail or hand delivered. No RFP may be withdrawn for a period of 60 days after bids have been opened, pending the execution of contract with the successful bidder(s). Request for proposals (RFP) and specifications. An RFP shall be issued by the Procurement Office and shall include specifications prepared in accordance with Article 4 (Product Specifications), and all contractual terms and conditions, applicable to the procurement. All specific requirements contained in the request for proposal including, but not limited to, the number of copies needed, the timing of the submission, the required financial data, and any other requirements designated by the Procurement Department are considered material conditions of the bid which are not waivable or modifiable by the Procurement Director. All requests to waive or modify any such material condition shall be submitted through the Procurement Director to the appropriate committee of the Augusta, Georgia Commission for approval by the Augusta, Georgia Commission. Please mark RFP number on the outside of the envelope. Proponents are cautioned that acquisition of RFP documents through any source other than the office of the Procurement Department is not advisable. Acquisition of RFP documents from unauthorized sources places the proponent at the risk of receiving incomplete or inaccurate information upon which to base his qualifications. Correspondence must be submitted via mail, fax or email as follows: Augusta Procurement Department Attn: Geri A. Sams, Director of Procurement 535 Telfair Street, Room 605 Augusta, GA 30901 Fax: 706-821-2811 or Email: procbidandcontract@augustaga.gov GERI A. SAMS, Procurement Director Publish: Augusta Chronicle March 9, 16, 23, 30, 2017 Metro Courier March 15, 2017 OFFICIAL VENDORS Attachment "B"E-Verify SAVE Form Addendum 1 Original 6 Copies Fee Proposal ISI Water Company 5215 Fidelty Street Houston, TX 77029 YES 252860 YES No Non Compliant YES YES YES Raftelis Financial Consultants 227 W. Trade Street Charlotte, NC 28202 YES 266589 YES YES YES YES YES Revenue Enhancement Services PO Box 1371 Walker, LA 70785 YES Non Compliant 1190425 YES YES YES YES YES Utility Revenue Management 99 Detering St. Suite 130 Houston, TX 77007 YES 487284 YES YES YES YES YES RFP Opening Item #17-167 Revenue Enhancement and Recovery Project for Augusta, GA- Utilities Department RFP Due: Friday, April 21, 2017 @ 11:00 a.m. Total Number Specifications Mailed Out: 13 Total Number Specifications Download (Demandstar): NA Total Electronic Notifications (Demandstar): NA Pre Proposal Telephone Conference Attendees: NA Total packages submitted: 4 Total Noncompliant: 2 The following vendors were deemed non-compliant for not acknowledging Addendum 1: ISI Water Company The following vendor was deemed non-compliant for not providing a business license number: Revenue Enhancement Services. Page 1 of 1 Raftelis Financial Consultants 227 W. Trade Street Charlotte, NC 28202 Utility Revenue Management 99 Detering St. Suite 130 Houston, TX 77007 ISI Water Company 5215 Fidelty Street Houston, TX 77029 Revenue Enhancement Services PO Box 1371 Walker, LA 70785 A. Package submitted by the deadline Pass/Fail PASS PASS PASS PASS B. Package is complete (includes requested information as required per this solicitation)Pass/Fail PASS PASS FAIL FAIL C. Overall Quality of RFP (concise and to-the-point) 50 35.0 48.3 1. Technical Approach 100 71.7 98.3 2. Financial Responsibility 100 100.0 95.0 3. Project Management 95 81.7 93.3 4. Key Personnel & Staff 90 73.3 88.3 5. Organizational Qualifications 75 65.0 73.3 6. Optional Interview (Potential Bonus Points)10 D. TOTAL 470 391.7 448.3 1. Firm’s proposed review of departmental policies and procedures 50 38.3 45.7 2. Firm’s proposed review of existing accounts. 50 41.7 49.0 3 Firm’s proposed field services 50 43.3 49.0 4. Firm’s review of other field, administrative or billing and collection practices that may result in lost 50 44.0 49.0 Total 200 167.3 192.7 Within Richmond County 10 Within CSRA 8 Within Georgia 6 Within SE United States (includes AL, TN, NC, SC, FL) 4 4  All Others 2 2 TOTAL 10 4 2 Lowest Fees 10 10 Second 8 8 Third 6 Forth 4 Fifth 2 TOTAL 10 8 10 H. References 10 10 10 Total 750 616.0 711.3 RFP Evaluation Meeting Item #17-167 Revenue Enhancement and Recovery Project for Augusta, GA- Utilities Department Date: Wednesday, May 10, 2017 @ 10:00 a.m. Vendors Total (Total Possible Score 750) Second Round Elimination (Total Points 50) (MUST ACHIEVE 35 POINTS FOR CONTINUED CONSIDERATION) (MUST PASS FOR CONTINUED CONSIDERATION) RANKING - First Round Elimination Proximity to Area (Total Points 10) F. Proximity to Area Scope of Services (Total Points 200) Proposer’s Overall Ability to Provide the Services (Total Points 470) Cost/Fee Consideration Reference(s) (Total Points 10 Procurement DepartmentRepresentative:_________Nancy Williams_____________________________________ Evaluator: Cumulative Date: 5/10/17 Procurement Department Completion Date: 5/10/17 Internal Use Only Note: Respondent/Offeror(s) receiving 600 or more points will be invited to do presentations to provide additional information if deemed necessary. Submittal and Quality of RFP D. Narrative E. Scope of Services G. Proximity to Area Quality of RFP Commission Meeting Agenda 10/17/2017 2:00 PM Street Light Request Granite Hill Section 4 (Covington Court, Burlington Drive, and Marble Court) Department:Traffic Engineering Department:Traffic Engineering Caption:Motion to approve the installation of Twenty Streetlights on Covington Court, Burlington Drive, and Marble Court at a cost of $124.80 per year. This is also to approve a new lighting tax district for the 51 lots associated with the above roads. Funding is available in the Street Lighting budget account #2760416105312310. (Approved by Engineering Services Committee October 10, 2017) Background:Georgia Power Company will install twenty lights on Convington Court, Burlington Drive, and Marble Court. The upfront cost of installation to include trenching, conductor, poles and lights is $18,500.00. The Yearly cost for these lights will be $5,280.00 which is to be paid for by the 51 lots associated with this road in a special taxing district to appear on the 2018 tax bill. The cost per lot to be added to the tax bill is $467.00 the first year and $124.80 each year thereafter to cover the cost of the light and maintenance. Analysis:The cost proposal was received by Georgia Power on July 31, 2017 in the amount of: CONTRACTOR BID 1.Georgia Power Upfront Cost$18,500.00 Yearly Cost - $5,280 Financial Impact:Adequate funds are available and expenditure of this amount will leave sufficient funds for any emergencies that may arise before the end of the year. Alternatives:1. Approve installation of new streetlights by Georgia Power and approve the creation of a new taxing district on Covington Court, Burlington Drive, and Marble Court, in the amount of $467.00 for the first year and $124.80 for every year thereafter for the 51 lots associated. 2. Do not approve and disregard proposal. Recommendation:Approve Alternative Number One.Cover Memo Funds are Available in the Following Accounts: 276-04-1610-5312310 REVIEWED AND APPROVED BY: Finance. Law. Administrator. Clerk of Commission Cover Memo Commission Meeting Agenda 10/17/2017 2:00 PM Minutes Department: Department: Caption:Motion to approve the minutes of the regular meeting held October 3, 2017, and Special Called meeting held October 10, 2017. Background: Analysis: Financial Impact: Alternatives: Recommendation: Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: Cover Memo d-t IA Commission Meeting Agenda Commission Chambe r - l0t3t20l7 ATTENDANCE: Present: Hons. Hardie Davis, Jr., Mayor; Jefferson, Guilfoyle, Sias, Frantom, Davis, Fennoy, D. Williams and Hasan, members of Augusta Richmond County Commission. Absent: Hons. M. Williams and Smith, members-of Augusta Richmond County Commission. INVOCATION: Reverend Augusta H. Hall, Jr., Pastor, Bethel African Methodist Episcopal Church. PLEDGE OF ALLEGIANCE TO THE FLAG OF THE TJNITED STATES OF AMERICA Five ($ minute time limit per delegation DELBGATIONS A. Greater Augusta Arts Council's presentation of the City Arts Grant Awards.Item Action: None lB Greater Auquste Arts Council l0.3.l7.odf B ltemApprovalsheet.html Motions Y:li" Motion TextI ype Presentation is made by the Greater Augusta Arts Council. CONSENT AGENDA Made Seconded MotionBy By Result (Items l-25) PLANNING l. Z-17-25 - A request for conculrence with the Augusta Planning Commission to Itemapprove with the following conditions a petition by Michael Thurman Action:requesting a change of _zoning from Zone R-lC (One-family Residentiat) to ApprovedZone P-l (Professional) for the purpose of establishing paii surfac. p*(ing - ---- areas consisting ofthree tax parcels totally .70 acres and known as l21gAugusta Avenue, 1204 Holley Street and 1236 R A Dent Boulevard. Tax Map 046-3-248-00-0, 046-3-185-00-0 and 046-3-184-00-0 Divided into 2 petitions. Postponed to September meeting. DISTRICT I 1. The lot be fenced to prevent the current use from continuing until such time as all improvements can be executed;2. The applicant move to start development within the proscribed timeframe of six (6) months or the property reverts to its previous zoning designation of residential use which prevents the use of the property as it currently operates; 3. The applicant provide a detailed engineered site plan that meet all development regulations in place at the time of site review; 4. The site shall not be available for use until such time as all requirements have been met; 5. A business license for the operation of a paid parking lot shall be acquired. @ z-17-25.pdf IH ttemAnnrovalsheet.html Motions X::"t Motion Text Made Byr ype seconded By Motion Result Commissioner Commisioner Sean passesSammie Sias Frantom Motion to ^ aDDrove.APProve uotion passes 8- 0. 2. Z-17-32 - A request for concurrence with the Augusta Planning Commission to Item approve with the following conditions a petition by Michael Thurman Action: requesting a change of zoning from Zone R-lC (One-family Residential) to Approved Zone P-l (Professional) for the purpose of establishing paid surface parking areas consisting of two tax parcels totally .27 acres and known as 1223 and 1227 Augusta Avenue, Tax Map 046-3-253-00-0 and 046-3-252-00-0Divided into 2 petitions. Postponed to September meeting. DISTRICT I 1. The lot be fenced to prevent the current use from continuing until such time as all improvements can be executed; 2. The applicant move to start development within the proscribed timeframe of six (6) months or the property reverti to its previous zoning designation of residential use which prevents the use of the property as it currently operates; 3. The applicant provide a detailed engineeredsite plan that meet all development regulations 1n place at the timJ of site review; 4. The site shall not be available for use until such time as all requirements have been met; 5. A business license for the operation of a paidparking lot shall be acquired. (Deferred from the Commisiion's September 19,2017 meeting) Et z-17-32.odf li3 ltemAoorovalsheet.html Motions Motion tz,. ,. Motion;----- Motion Text Made By Seconded By iffiil^I vDeJI Motion to approve with the addition of the reversionary clause. Voting No: Approve $",ll,T#;jffilr, fi,",Ilffi'i:ff:, ff,T,T,,j'Jl*.' passes Commissioner Dennis Williams. Motion Passes 6-2. PUBLIC SERVICES 3. Motion to approve New Application: A.N. t7-29: a request by Cheong M. Item Rhee for an on premise consumption Liquor, Beer & Wine License to be used Action: in connection with Harbor Inn Seafood Restaurant locate d at 3404 Wrightsboro ApprovedRd. There will be Sunday Sales. District 5. Super District 9. (Approved by Public Services Committee September 2612017) B Harbor Inn Seafoo<l Restaurant.pdf tB ItemApprovelsheet.html Motions X:11"t Motion Text Made By seconded By Motion I YPe Result Motion to Approve ffiffiil'i*ses 8- S;#ff'j'Ji*.' Frffi,Til'"ner Sean passes 0. 4. Motion to approve award of Bid ltem#17-216 to Doyle Dickerson Tenazzo in ltemthe amount of $64,960 iN approved by the Augusta Aviation Commission on Action:August 31, 2017. (Approved by Public Services Committee September 26, Approved 2017) E 17.216 ITB - SENT To PAPER.Ddf tB Bid Price Teb Oflicial.pdf [3 Department Recommendrtion Lptfer n.lf IB Mail Labels.pdf lH ltem.{onrovalSheet.html Motions X::"" Motion Text Made By seconded By Motion I YPe ' ---- -r Result Motion to Approve il|#rrsses 8- ffffi#'Jl*" lrgmisioner Sean passes 0. 5. Motion to approve acceptance of bid from Aero Specialties for $47,944 for the Item purchase of an Aircraft Belt Loader. (Approved by Public Services Committee Action: September 26,2017) epproved E I7-222 oFFIC.AL TAB.Ddf H l7-222 ITB_- SENT_TO PAPER.odf E Dlptrtment Recommendation Lefter.pdf E l\lail List and Demandstar planholders,pdf lB ltrmAnorovalsheet.html Motions X:'1" Motion Text Made By seconded By Motion I YPe ''---- -" Result Motion to ^ auprove. Commissioner Commisioner SeApprove il;rron passes g- Sammie sias Frantom 'un Purr., 0. 6. Motion to approve bid award # 17-235 to J & B Tractor Co. in the amount of Item $53,155 for the purchase of a new Utility Tractor. (Approved by Public Action: Services Committee September 26,2Lfi) Approved B Tractor Bid.pdf tB lz-zls trn - sexr to peprn.oor lE Denartment Recommendation Letter.ndf lg llail List and Demendstar planholders.pdf IE ltenr.{ oorovelsheet.html Motions Y.|jl"Il Motion Text Made By seconded By Motion lYPe -.---- -r vvvv'svs Yr ReSUlt 7. Motion to approve the acceptance of FAA Grant 3-13-001 l-O4O-2017 for the Itemdesign of Airport Access Controls, Air Canier and GA Apron Rehab, and Action: -Airport Drainage Master Plan. (Approved by Pubtic Services Committee ApprovedSeptember 26,2017) B F.AA AtP Grent 3-13-00il-040-20l7.pdf E f.l.C, resolution Mavor fo sion (lrqnri n,tf Motion to ^ aDDrove.APProve vtotion passes g- 0. [3 ItemApprovelsheet.html Motions f#:"" Motion rext Made By Motion to Approve ffi3i,Ht rsses 8- 0. Commissioner Commisioner Sean passesSammie Sias Frantom Motion to ^ dDDrove.APProve vtotion passes g- 0. 8. Motion to approve Change Modification#2 Griffin Contracting Inc. associated ltemwith the ARFF Pavement Rehabilitation Project at Augusta {egional Airport. Action:(Approved by Public Services Committee Septemberi6,20lTl Approved seconded By Motion Result Commissioner Commisioner Sean passesSammie Sias Frantom lB Asenda Item -_Chanse Order #2 ARFF-pavement_Rehab.odf IB ltemApnrovrlsheet html Motions X*:" Motion Text Made Byrype seconded By Motion Result Commissioner Commisioner Sean passesSammie Sias Frantom 9.Ygtr-ol to approve a Facility Agreement for Diamond Lakes Tennis Center andMACH Academy. (Approved by Public Services Committee September 26,2017\ Item Action: Approved l1i1 Facilitv Asreemenf-Diamond Lakes Tennis center- RNII edits.odf lB ItcmAonrovalsheet.htnr I Motions X*:"' Motion Text Made By seconded By Motion t YPe ^'---- "J vvlv'uLu uJ ReSUlt Motion to Approve i[|u*;,"sses 8- ff##"j'Ji*., f;;mmisioner Sean passes 0. ADMINISTRATIVE SERVICES 10. Motion to approve Probate Court Lobby Renovation in order to increase the Itemsecurity of the Probate Court for the Judge, staff and public. (Bid 17-120A) Action:(Approved by Administrative Services Committee Sefitember 27rZ0l7) Approved E l7-120A-ITB_ro paper.pdf E Bid price Tab - Official l7-l2oA.pdf tB Mandatorv pre Bid Sisn ln Sheet.odf B 17-120A Department Recommendation of Awrrd.pdf El Mail Lebels -Rebid Irem l7-l2oA.pdf B Aususta Probate-court Lobbv R€novstions_Larrv pittman Associetes lnc .pdf IE Renovrtions probate Court l0.J.l7.ndf LB Ite mAnorovalsheet. html Motions [|j:"' Motion Texr Made By seconded By MotionlYPe -'---- -J vvlvuquu sJ ReSUIt Motion to a -^___- approve. Commissioner CommisionerApprove naotio, passes g- Sammie Sias Sean Frantom Passes 0. 11. Motion to approve a request from the Augusta Council of Garden Clubs for Itemthe placement and care of a Blue Star Marker in accordance with ARC policy. Action:(Approved by Administrative Services Committee September 26rZOil1 Approved lB Blue Star Marker Reouest odf lB Policy for placement of monuments and other markers.pdf IE} ItemAnnrovalsheet.html Motions X:l:" Motion Text Made By seconded By Motion'l'YPe ^'^--- -J Result Motion to A ....-^-.^ approve. Commissioner CommisionerApprove Motion passes g- Sammie sias sean Frantom Passes 0. 12. Motion to approve amending the 2011,2013, 2014 and 2015 Action Plans to Item Re-program $152,095.00, and Revise the Scope of Work in Community Action: Development Block Grant (CDBG) funds subjeit to 30-day public .ornrn.nt Approved period. (Approved by Administrative Services Committee August 29, 2017) B ItemAoorovalsheet.html Motions Motion Morion Text Made By seconded By f""rTi,,I ype Motion to approve with no funds to be expended rt^**:^^:^-Approve for any purpose .*.ili- Commissioner Commissioner as express,, uooror.St Mary Davis Ben Hasan by the Commission. No action is taken on this motion due to the passage of the substitute motion. Motions []j:' Motion Text Made By Seconded By MotionlYPe Result Substitute motion to Approve 3i#::'the item as $:T#'dl,1lril,,, $",il,T#I:ffi:, passes Motion Passes 8-0. 13. Motion to approve 2017 Budget Adjustment for the Housing and Community ItemDevelopment Department. (Approved by Administiative Services Action:Committee September 26,2017\ Approved lB ltemAoorovelshcet html Motions X:il"' Motion rext Made By seconded By fJ.Tilrype Motion to A._.^-^__^ approve. Commissioner CommissionerApprove triotio, passes 8- wayne Guilfoyle Dennis williams Passes 0. 14. Motion to approve the Memorandum of Understanding (MOU) for Item Commercial and Retail Development between Augusta, GA and the Action: Development Authority of Richmond County dlblaAugusta Economic Approved Development Authority as approved by the Commercial and Retail Sub- Committee on September 25,2017. (Approved by Administrative Services Committee September 26, 20t7) B .Attachments - Memorandum of Understandinq.odf IB Item.4,onrovalsheet. html Motions Motion r,r^1:^_ m-__1 rr_ -r, h ^ Motion;-"'"" Motion Text Made By Seconded Byf YPe ----- -r --------- -J Result Motion to Approve il|#i,sses 8- ff##,'j'ji*.' !:#T;;f,ffi passes 0. 15. Motion to authorize Recodification of the Augusta, GA Code, Agreement for Item on-going Supplementation and Online Code Publication. (Approved by Action: Administrative Services Committee September 2612017) Approved IB Attrchment l.pdf [= AttechmentJ.pdf IB Attechment 3.ndf E ltemAoorovalsheet.htnrl Motions f#:" Motion Text Made By seconded By f*Xii Motion to Approve f,l3i""l';,*ses 8_ s;ffi:'Ji*" s:#Hf*H passes 0. PUBLIC SAFETY 16. Motion to approve a request from the Richmond County Sheriffs Office Item funding in the amount of $39,303.85 to satisff the remaining balance owed to Action: New World (Tyler Technologies). (Approved by Public Safety Committee Approved September 26,20L7\ E New World (Tyler Tech) Invoire.pdf [-i New World (Tvler Tech)- P2l4895.odf g LOll New rilorld_(Tvler Tech ).pdf [3 Commission Anoroval 2-21-12 Snlost Funds.ndf IB ItemAnprovalsheet.html Motions Motion Motion Textr ype Motion to ^ aDDrove.APProve uotio, passes 8- 0. Motion to ^ aDDrove.APProve vtotio, passes 8- 0. Made By Seconded By Motion Result Commissioner Commisioner Sammie Sias Sean Frantom Passes 17. Motion to approve a grant from Maddie's Fund in the amount of $5000.00 to Item support public education efforts to advance animal lifesaving and reduce Action: euthanasia. (Approved by Public Safety Committee September 2612017) Approved Id Maddie s Fund Innovation Grants.pdf iB New srrnt nronosel.odf IE] ltemAonrovalsheet.html Motions X:t:"' Morion Text Made Byrype seconded By Motion Result Commissioner Commisioner Sammie Sias Sean Frantom Passes ENGINEERING SERVICES 18. Motion to determine that the Alley East of Eleventh Street, One Block South ltemof Telfair Street and One Block North of Walker Street as shown on the Action: attached plat has ceased to be used by the public to the extent that no Approved substantial public purpose is served by it or that its removal from the county road system is otherwise in the best public interest, pursuant to O.C.G.A. $32-7-2, with the abandoned property to be quit-claimed to the appropriate pa(ry (ies), as provided by law and an easement to be retained over the entire abandoned portion for existing or future utilities as directed by Augusta Engineering Department and Augusta Utilities Department. (Approved by Engineering Services Committee September 26, 2017\ I!* Abandonment_Allet, at llth_Telfair Walker - lst_Readinp.pdf E Man - Allev at llth. Tplfair- \f,rclker ndf Motion to ^ &DDrOVe.APProve vtotion passes 8- 0. 19. Motion to determine that Woodsedge Drive as shown on the attached plat has Item ceased to be used by the public to the extent that no substantial public purpose Action: is served by it or that its removal from the county road system is otheiwiie in Approved the best public interest, pursuant to O.C.G.A. $32-7-2, with the abandoned property to be quit-claimed to the appropriate party(ies), as provided by law and an easement to be retained over the entire abandoned portion for existing or future utilities as directed by Augusta Engineering Department and Augusti Utilities Department. (Approved by Engineering Services Committee September 26,2017) H ItemApprovelsheet.html Motions Motion;----" Motion Text Made By'l vDe Motion to ^ apDrove.APProve uotion passes 8- 0. seconded By Motion Result Commissioner Commisioner Sammie Sias Sean Frantom Passes [3 Abandonment Woodsedse Drive - lst Readinq.odf lE Plat - Woodsedse Drive.ndf IH ItemAoorovalsheet.htm! Motions H:':"' Motion Text Made By Seconded Byrype Commissioner Commisioner Sammie Sias Sean Frantom Motion Result Passes 20. Motion to determine that the Alley between Heard Avenue and Russell Street,Item as shown on the attached plat has ceased to be used by the public to the extent Action: that no substantial public purpose is served by it or that its removal from the Approved county road system is otherwise in the best public interest, and to receive as information the results of the public hearing held regarding the issue of abandonment pursuant to o.C.G.A. $32-7-2,with the abandoned property to be quit-claimed to the appropriate party(ies), as provided by law and an easement to be retained over the entire abandoned portion for existing or future utilities - as directed by Augusta Engineering Department and Augusta Utilities Department and adopt the attached Resolution. (Approved by Engineering Services Committee September 26, 2017) H Allev - Heard .Ave Russell Street_-_2nd Readine.ndf [3 PIat - Allev Heard Ave Russell Street.pdf [3 Resolution_- Allev betu,een Heard_Avenue and Russell_Street.docx E ItemApprovalsheet.html Motions *::" Motion Text Made Byrype seconded By Motion Result Commissioner Commisioner Sammie Sias sean Frantom Passes 21. Motion to authorize condemnation to acquire title of a portion of property for Item right-of-way (Parcel 057-4-118-00-0) - 189 YzDan Bowles Road. (Approved Action: by Engineering Services Committee September 26rz0l7) Approved Motion to Approve ffi3rlil'i"sses 8- 0. Ill Condemnation Request - 189 balf Dan Bowles Road.pdf B Mao - 189 Dan Bowles Roed.ndf IB ItemAonrovalsheet.html Motions X:':"' Motion Text Made Bytype Motion to ^ approve.APProve votio, passes 8- 0. seconded By Motion Result Commissioner Commisioner Sammie Sias Sean Frantom Passes 22- Motion to approve proposal for standardization of AUD securigr, fire alarm, Item access and surveillance systems from Tyco Integrated Systems. (Approved by Action: Engineering Services Committee September 26, 2017.) B 2017-Tvco Intesrated security - l73l robacco Road standardization contract.pdf E ItemAoorovalsheet.html Motions Made By Commissioner Sammie Sias Seconded By Seconded By Commisioner Sean Frantom Motion Result Motion Result Passes Approved Item Action: Approved +'#:"' Motion rext Made By Motion to Approve ffi3ffi*ses 8- 0. 23. M91io1t to approve authorization to proceed with the purchase of the TrafficJet Item1638 Print System at a total cost of $63,280.40 for the Augusta Engineering Action:Department Traffic Engineering Division. (Approved Uy Engineering approved Services Committee Septem ber 26, 2017) Commissioner Commisioner Sammie Sias Sean Frantom Passes E Sole Source Traffic .Iet Prinier.nrtf B ltemAoorovalsheet.html Motions Y3:tb' Motion Texttype Motion to Approve ffiffiHt "sses 8- 0. 24. Motion to approve the minutes of 2017, and Special Called meetings' 2017. the regular meeting held September 21 19, 26, held and September September B Reqular Commission Meetins Seotember l9 20l7.ndf B Called Conmission Meetins September 21 20l7.pdf IB Called Commission Meetinp Seotember 26 20l7.ndf IB ItemApprovalsheet.html Motions SUBCOMMITTEE Pension Committee 25' Motion to approve Resolution adopting amendments made by the Board ofTrustees of the Gegsia Municipal ETnlirees Benefit System (GMEBS) to theGMEBS Master Defined Benefit nitirlment Plan rjorurn.nr in the year2017;1)Amended Adoption Agreement; 2)Amended General Addendum; 3)Amended Service purchase -Addendum. (Approved by the pensionCommittee September 19, 2017) \--r +';':" Motion rext Made By Motion to Approve ffi#"ltr"sses 8- 0. Motions ilil:"I' Motion rext Made By Motion to APprove ffi3ffi^ses 8- 0. seconded By Motion Result Commissioner Commisioner Sammie Sias Sean Frantom Passes Item Action: Approved E E Aususte Cover Letter 9 li l7.9.l9.I7.ndf lB Aususta I AA 9 lJ 17. 9.l9.l7.pdf B e [3 ltemApprovalsheet html Seconded By Commissioner Commisioner Sammie Sias Sean Frantom Motion Result Passes ** **END CONSENT AGENDA**** AUGUSTA COMMISSION 10t3t2017 AUGUSTA COMMISSION REGULAR AGENDA t0t3t20t7 (Items 26-31) ADMINISTRATIVE SERVICES 26. Motion to approve the agreements with Blue required documents. 2018 Third party administrator (TpA) and stop loss Item cross Blue Shield and authorize the Mayor to sign Action: Approved E.{ugustaRichmondCtyRenen,al 2018 FINAL Agenda attachmentpdf E ItenrAonrovalsheet.html Motions Motionh Motion Text Made Byrype Motion to ^ apDrove.APProve vtotion passes 8- 0. seconded By Motion Result Commisioner Commissioner Sean Frantom Mary Davis Passes FINANCE 27. Motion to approve acap of all General Fund payments to non-profit ltemorganizations at $25K with the exception of the three-agencies listed below. A Action:cap of $25K for all General Fund requests and considei an accounting review Approvedprocess that is not detrimental to the smaller non-profits The following non-profits would be considered exempt up to the amount designated:The ARC Museum of History St jSf The Lucy Craft Laney Museum $f25K The Arts Council Operations $ l43r42OK (No recommendation from Finance committee september 26rz0l7\ I!3 Comm. Sias Non Profits 9.t2.l7.pdf lB ltemAoorovalsheet.html Motions ffit:" Motion rext Made By Seconded By Motion Result Motion to delete thiDelete item from the agendsa fom{ssioner Commisioner Motion passes g-0. Sammie Sias Sean Frantom Passes ENGINEERING SERVICES 28' Report from theAugusta Delegation relativeto the September l4th meeting ltemwith officials from the Georgia Department of Transporiation. (Requested by Action: Commissioner Bill Fennoy-deferred Commission meeting) El ltem.{pprovalsheet html Motions $1tion Motion Textrype Motion to approve Approve receiving this item as information. Made By Seconded By It was the consensus of the commission that this item be receivedinformation. Discuss renaming the John c. calhoun Expressway toExpressway. (No recommendation from itrngineeringcommittee september 12, 2017- deferred from the septe-il.. Commission meeting) from the September 19,20L7 Approved Motion Result Commissioner Commissioner William Fennoy Mary Davis 29. as Veterans ltemServices Action: 19r 2017 Disapproved lB ItemAoorovalsheet.html Motions Y:-tion Motion Textrype Motion to approve supporting a resolution to be sent to the General Assembly to rename the John C. Calhoun Expressway as Veterans Expressway. Mr. Sias. abstains.APProve voting No: Commissioner Mary Davis, Commisioner Sean Frantom, Commissioner Wayne Guilfoyle, Commissioner Andrew Jefferson. Made By Seconded By Motion Result Commissioner William Fennoy Commissioner -iliil;;"-'Fals Made Seconded MotionBy By Result Presentation is made to Ms. Joan West. 31. Approve recommendation from Administration to waive rental fees as follows Itemin association with Augusta On Ice Event the $8,000 for set up days and the Action:$36,400 for event days totaling $44,600. (Requested by the Adminisirator) approved Augusta on Ice Fees Set Up Fees - October 30th - November l4th Rental $500.00 x 16 Days : $8000.00 Motions f#:" Motion rext Rental Fees - November l5th - January 6thRental $700.00 x 52 Days : $36,400.00 Clean -Up Fee $400.00 x 52 Days : $20,800.00 Other Fees StaffSuperintendent $ 7,786.00Electrician $ 9,394.00 Clean-Up Team $ 18,480.00 (Overtime) Total Cost $100,860.00 Motion Fails 3-4 -1. ADDENDUM 30. Recognition of Ms. Joan West, 2017 Employee of the Month. Augusta Utilities B Augusta On lce attachments.ndf IB ItemAnorovalsheet.html Motions il,T:" Motion rext Unanimous consent is given to add this item to the agenda. Motions X:t:"' Motion Text Made Byrype Department, as September, Item Action: None Made Seconded MotionBy By Result Motion ResultSeconded By Motion to Approve ffi|,|il'r"sses 8- $:il,tr'j:ffi:, fi:;T'jJi,,- passes 0. LEGAL MEETING A. Pending and Potential Litigation. B. Real Estate. C. Personnel. 32' Motion to approve execution by the Mayor of the affidavit of ltemcompliance with Georgia's Open Meeting Act. Action: None Upcoming Meetings __--..-__iwww.augustasa.sov CALLED MEETING COMMISSION CHAMBER October 10,2017 Augusta nlc[mona County Commission convened at l1:00 a.m., Tuesday, october 10,2017, the Honorable Hardie Davis, Jr., Mayor, presiding. PRESENT: Hons. Jefferson, Sias, Frantom, M. Williams, Davis, Fennoy, Hasan andSmith, members of Augusta Richmond county commission. ABSENT: Hons. Guilfoyle and D. Williams, members of Augusta Richmond CountyCommission. Mr' Mayor: We'll call this meeting to order. The Chair recognizes Attomey MacKenzie. I. LEGAL MEETING A. Pending and potential litigationB. ReaI estate C. Personnel Mr' MacKenzie: I would entertain a motion to go into an executive session to discuss,pending and potentiar litigation, rear estate and personnel. Mr. Sias: So move. Mr. Frantom: Second. Mr. Mayor: Voting. Ms. Davis and Mr. Smith out. Motion carries 6-0. [LEGAL MEETING] Mr' Mayor: We'll call this meeting back to order. The Chair recognizes AttorneyMacKenzie. 2' Motion to authorize execution by the Mayor of the affidavit of compliance withGeorgia,s Open Meeting Act. Mr' MacKenzie: I would entertain a motion to execute the closed meeting affidavit. Mr. Hasan: So move. Mr. Sias: Second. Motion carries 8-0. Mr. Mayor: The Chair recognizes the commissioner from the 4th for a motion. Mr. Sias: Thank you, Mr. Mayor. It is my pleasure to make this motion. Toauthorize the promotion of David. Jenkins to the positio, of Operations Manager at anannual salary of$50,000 per year and to transfer $12,000 from 101-101110-5129998 GeneralFund to the salary line item of the Animal Services Department budget. Thank you. Mr. Frantom: Second. Mr. Mayor: We've got a motion and a second. Voting. Motion carries 8-0. Mr. Mayor: The chair recognizes the Mayor pro Tem for a motion. Ms. Davis: Thank you, Mr. Mayor. I'd like to make a motion to waive Section800.006 of the Personnel Polices and Procedures Manual to allow for employee ShawndelAgrippa to be promoted to the position of Application Support Analyst lleven though theemployee has not been in her current position for at least six months. Mr. Fennoy: Second. Mr. Mayor: A motion and a second. Voting. Motion carries 8-0. Mr. Mayor: The Chair recognizes the commissioner from the 6ft for a motion. Mr. Hasan: A motion to direct staff to initiate the process to obtain the RichmondCounty Ambulanc e 7.one. Mr. Frantom: Second. Mr. Mayor: We have a motion and a second. Voting. Motion carries E-0. N{r. Mayor: I want to give everybody an opportunity to get the additions to the agenda infront of you. This is for our special called meeting-and we'li *uI. sure everybody,s goti copy.All right. The chair recognizes Attorney MacKenzie for a motion. Mr. MacKenzie: I would entertain a motion to amend the Augusta, Georgia CodeSection 1-7'Sl relating to the adoption of the Personnel, Policies and-procedures Manualspecifically amending Section 500.314 of the Personne! Policies and procedures Manual soas to extend the maximum accrual of SES employees annual leave from 25 hours to 350hours. Mr. Mayor: Okay, all right, we have a motion. Mr. Sias: Second. Mr' Mayor: Okay, all right. The motion was made by the commissioner from the 4tr. Mr. Sias: So move. Mr. Fennoy: Second. Mr. M. williams: They're going to get it right after awhile. Mr. Mayor: yeah, they're going to get it right. Mr. MacKenzie: Arso to include waiving the second reading. Mr. Mayor: yeah. Mr. Sias: That too. Mr. Mayor: All right, the chair recognizes Administrator Jackson. Ms' Jackson: Thank you, sir. The next item is to approve consulting services for - Mr' Mayor: Ms-. Jackson, suspend for a moment. I wanted you to give a liule backgroundif you felt like you needed to. Ms. Jackson: All right. Mr' Mayor: This is the same thing that we heard back there but if you want to give somebackground, I think we all know what it is. wtrat Andrew just said. That,s item number two onyour addition. All right, the commissioner from the 76 has a question. Ms. Jackson: Certainly, sir. Mr. Frantom: Thank you, Mr. Mayor. How many employees does this affect? Ms' Jackson: There are a total of 44 SES level employees. Currently there are 14employees that have 315 hours or more of annual leave on the books. Mr. Frantom: Thank you, Mr. Mayor. Mr' Mayor: Absolutely. All right, we've got a motion and a proper second. Voting. Motion carries 8-0. Mr. Mayor: Alr right, the chair recognizes Madam Administrator. Ms' Jaekson: Item number one on the addendum agenda is approving Consultingservices Agreement for Programmatic, operation* ana Financial ars"sor.ot for AugustarsEnvironmental services Dipartment. w._"r" proposing to enter into agreement with ,*";#$consultants of Atlanta, Georgia for the p"i." of$e9,820 for phase r and $30,000 Mr. Fennoy: So move. Mr. Hasan: Second. Mr' Mayor: All right, we have a series of questions. The chair recognizes thecommissioner from the 6ft. Mr' Hasan: Thank y.ou,-N[r. Mayo1. Mr. Mayor, I'd like to address Madam Administratorif you don't mind, please, sir. Madam Administrator, ir.t"*s of having some sense of data, doyou have any idea when you first get something, I think-you jurt identifii it being two phased, sowhen will you have something from the first pf,ase? J - * Ms' Jackson: The first phase is a 30-day phase and the second phase is also 30 days so we ffit'"* the complete t"pott in 60 days .o it"y will be able to deliver an interim report in the Mr. Hasan: Thank you, ma,am. Mr. Mayor: I do want to draw know if it's all here -- Thank you, Mr. Mayor. everybody's attention to the information that is, I don,t Ms. Jackson: what's in your packet is the actual contract document. Mr' Mayor: -- and the schedule so okay,he disappeared. In your packages that you havein front of you is the.contractual agreement which shows ihe amount of the contract, but you alsohave to the commissioner from the 6n's question you have the proposed schedule by task, that,sPhases I and Phase II that's included in there ^ *"tt. n ut'. in your package. It,s the last page,the schedule is the last page. Ms. Jackson, do you want to speak to that at afl? Ms' Jackson: Just to emphasize that the financial aspects of the review will come first,particularly glven the fact that wl're in our budget ,"r.ion I wanted that information as soon aspossible so they'll be looking at the financial *i prot*atic operations first as program andordinances affect the finances. The second part of iheieview will get into the daily operations. Mr' Mayor: And for those of you that looked at the entire package that was sent by Ms.Bonner I would ask you in that first documt to draw your attentionio pai". 12 through 22,pages12 through 22' Thiy speak specifically to the deliveiables. They speak to the deliverables, the financial, the operational,.and the programmatic review. You can all of that in pages 12 through22 and it'll give you a quick synopsis orwhat is going to Le done in this scope of work. Again,that is pages 12 through 22 if youll pay close atte]rtioi to that as well as the schedule. All right,the Chair recognizes the commissioner from the 9th. Mr' M' Williams: Mr. Mayor, just want to make sure that we realize this, is it coming outof the budget or what? Mr. Mayor: All right, Madam Administrator. Ms' Jackson: It comes out of the Environmental Services Department budget from theenterprise fund. Mr. M. williams: I wanted to make sure that was crear. Mr. Mayor: I think we've got a motion and a second. voting. Mr. M. Williams votes No. Motion carries 7-1. Mr. Mayor: Attorney MacKenzie, will there be anything else before us? Mr. MacKenzie: That's all I have. The Mayor makes announcements about the ACCG Fall Leadership Meeting being held inAugusta from october I I through 13, 2017 andthe demonstration by the Sheriff s Department ofa Milo Range Simulator on October 12,2017. IMEETING ADJOURNED] Lena J. Bonner Clerk of Commission CERTIFICATION: I' Lena J' Bonner, clerk of commission, hereby certifies that the above is a true and correct copyof the minutes of the called Meeting of the irgril R;;h-ond countv co--irsion held onOctober 10,2017. Clerk of Commission Commission Meeting Agenda 10/17/2017 2:00 PM District 3 Appointment Department: Department: Caption:Motion to approve the appointment of Mr.Kelvin Rhodes to the General Aviation Commission (Daniel Field Airport) to fill the unexpired term of Frank Scharite representing District 3. Background: Analysis: Financial Impact: Alternatives: Recommendation: Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: Cover Memo Commission Meeting Agenda 10/17/2017 2:00 PM District 6 appointment Department: Department: Caption:Motion to approve the appointment of Mr. Gaylon Tootle to the Augusta Public Transit Citizens Advisory Board representing District 6. Background: Analysis: Financial Impact: Alternatives: Recommendation: Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: Cover Memo Title First Name * Middle Name * Last Name * Suffix Date Of Birth * Address * Home Phone * Work Phone Registered Voter Marital Status * Education * Race * Gender* Occupation * lnte rests 1 0/30/1 959 Sreet Address 4308 Sanderling Drive Address Lrne 2 otv Augusta fostal / Zip Oode 30906 (706) 399-81 1 B (706) 724-6262 C District 1 f District 3 C District 5 C District 7 C None Married Some College Black Male lndependent Living Advocate Sate/ftovince/fugion Georgia Country Richmond C District 2 C District 4 6, District 6 C District 8 Commission, Authorities, & Boards Talent Bank Application Mr. Gaylon Lee Tootle Advocacy for the Disable, Politics and Sports Commissions, Ar-rthorities, & Boards Volunteer For* Community Service Board of East Central Georgia Oick add belo,v to apdy for nore lhan one board. Commission Meeting Agenda 10/17/2017 2:00 PM Sale of Water and Sewer Revenue Bonds, Series 2017 Department:Utilities / Finance Department:Utilities / Finance Caption:Approve Water and Sewer Revenue Bonds, Series 2017 supplemental bond resolution and authorize the Mayor and Clerk to sign all necessary documents to refund the Augusta Georgia Water and Sewer Revenue Bonds, Series 2007, currently outstanding in the aggregate principal amount of $123,775,000. Background:On September 5, 2017 the commission authorized the refunding of the Water and Sewer bonds, Series 2007 with the issuance of Water and Sewer Bonds, Series 2017. Bids from interested underwriters will be received October 17, 2017 and evaluated by Augusta Financial Adviser, Davenport and Co. Analysis:This is the last step in the process of refinancing the 2007 series bonds. The results of the issuance process are being presented. Financial Impact:Current interest rates on tax exempt municipal bonds are lower than the rates of the existing bonds which makes refunding the 2007 series bonds a prudent financial decision. The Augusta 29, 2017 projections showed present value interest savings of approximately $19.4 million by refunding the bonds. The actual savings amounts will be determined by the results of today's sale. Alternatives: Recommendation:Approve supplemental resolution issuing Water and Sewer Bonds, Series 2017 Funds are Available in the Following Accounts: This is an enterprise fund and does not impact the General Fund. Receipts from operations will pay debt service. Cover Memo REVIEWED AND APPROVED BY: Finance. Law. Administrator. Clerk of Commission Cover Memo 38485273.v2 SUPPLEMENTAL SERIES 2017 BOND RESOLUTION WHEREAS, Augusta, Georgia (the “Consolidated Government”) adopted its Series 2017 Bond Resolution (the “Original Resolution”) on September 5, 2017, authorizing the issuance and sale of its Water and Sewerage Revenue Refunding Bonds, Series 2017 (the “Series 2017 Bonds”), for the purpose of refunding $123,755,000 in aggregate principal amount of the Consolidated Government’s Water and Sewerage Revenue Refunding Bonds, Series 2007 maturing October 1, 2018 and thereafter (the “Refunded Bonds”), and paying the expenses necessary to accomplishing the foregoing; and WHEREAS, certain capitalized terms used in this Supplemental Series 2017 Bond Resolution (this “Supplemental Resolution”) shall have the meaning given to them in the Original Resolution; and WHEREAS, the Original Resolution provides that the Series 2017 Bonds (1) shall be issued in an original aggregate principal amount to be specified in a Supplemental Resolution to be adopted by the Governing Body, but which shall not in any event exceed a maximum aggregate principal amount of $125,000,000, (2) shall bear interest at the rates per annum to be specified in a Supplemental Resolution to be adopted by the Governing Body (but which shall not in any event exceed a maximum per annum rate of interest of 5.00%), computed on the basis of a 360-day year consisting of twelve 30-day months, payable on April 1, 2018, and semiannually thereafter on each October 1 and April 1 of each year and shall mature on October 1, in the years (with a final maturity not later than October 1, 2030) and in the principal amounts to be specified in a Supplemental Resolution to be adopted by the Governing Body (provided the principal of and interest on the Series 2017 Bonds payable in any Fiscal Year shall not in any event exceed a maximum amount of $17,000,000), unless earlier called for redemption, (3) that mature on October 1 of the years to be specified in a Supplemental Resolution to be adopted by the Governing Body will be Term Bonds, and (4) will be subject to optional and mandatory redemption prior to maturity as specified in a Supplemental Resolution to be adopted by the Governing Body; and WHEREAS, the Original Resolution provides that (1) the Series 2017 Bonds are authorized to be sold pursuant to competitive sale, (2) a Notice of Sale and a Preliminary Official Statement be prepared and distributed to all securities dealers deemed to have an interest in purchasing all, but not a part, of the Series 2017 Bonds, and (3) once the bids are received for the sale of the Series 2017 Bonds pursuant to the Notice of Sale, the Administrator of the Consolidated Government is authorized to identify the bid with the lowest total interest cost and the Governing Body will adopt a Supplemental Resolution accepting the winning bid for the Series 2017 Bonds and setting forth, among other things, the final interest rates on, maturities, redemption provisions, principal amount of the Series 2017 Bonds, which interest rates and principal amounts shall be within the parameters set forth in the Original Resolution; and WHEREAS, pursuant to an Official Notice of Sale with respect to the Series 2017 Bonds circulated by the Consolidated Government (the “Notice of Sale”), providing for the receipt by the Consolidated Government of electronic bids submitted via PARITY for the purchase of the Series 2017 Bonds on October 17, 2017, the Consolidated Government has received electronic bids submitted via PARITY for the purchase of the Series 2017 Bonds; and -2- 38485273.v2 WHEREAS, the Notice of Sale provided that the Series 2017 Bonds would be sold to the responsible bidder specifying interest rates and prices that would result in the lowest true interest cost to the Consolidated Government for the Series 2017 Bonds, and the bids were as follows: BIDDER TRUE INTEREST COST BID WHEREAS, the bid of a responsible bidder resulting in the lowest true interest cost to the Consolidated Government and within the parameters set forth in the Original Resolution was submitted by _______________ (the “Purchaser”), and a copy of such bid is attached to this Supplemental Resolution as Exhibit A and incorporated herein by reference; and WHEREAS, after due consideration it is deemed advisable and in the best interest of the Consolidated Government that the Series 2017 Bonds be sold to the Purchaser, the Purchaser having in all respects complied with the terms of the Notice of Sale; NOW, THEREFORE, BE IT RESOLVED by the Augusta-Richmond County Commission, as follows: 1. All actions heretofore taken by the Governing Body and the officers and agents of the Consolidated Government directed toward the issuance and sale of the Series 2017 Bonds be and the same are hereby ratified, approved, and confirmed. 2. The Series 2017 Bonds shall be issued in the original aggregate principal amount of $___________. The Series 2017 Bonds shall bear interest at the rates per annum set forth below, computed on the basis of a 360-day year consisting of twelve 30-day months, payable on April 1, 2018, and semiannually thereafter on each October 1 and April 1 of each year and shall mature on October 1, in the years and in the principal amounts as follows, unless earlier called for redemption: -3- 38485273.v2 Year of Maturity Principal Amount Interest Rate 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 3. The Series 2017 Bonds maturing on or after October 1, 2028, may be redeemed prior to their respective maturities at the option of the Consolidated Government on or after October 1, 2027, in whole or in part at any time, in the order of maturities selected by the Consolidated Government (less than all of such Series 2017 Bonds of a single maturity to be selected by lot in a manner as the Consolidated Government may determine) from any moneys available therefor at the redemption price equal to the principal amount of the Series 2017 Bonds to be redeemed plus accrued interest to the redemption date. 4. From the proceeds derived from the sale of the Series 2017 Bonds ($___________), the following payments shall be made, simultaneously with the issuance and delivery of the Series 2017 Bonds, to the extent and in the manner set forth herein and in the Original Resolution: (a) The sum of $___________, or such other amount as shall be necessary, shall be deposited into the 2007 Defeasance Account and applied to pay the principal of and premium and interest on the Refunded Bonds on November 14, 2017; (b) The balance of the proceeds ($__________ or such other remaining balance) from the sale of the Series 2017 Bonds shall be deposited into the 2017 Expense Account. In addition, the sum of $___________ released from the funds and accounts held under the Prior Lien Resolution upon redemption in full of the Refunded Bonds (or such other amount released therefrom), shall be applied as follows: (a) The sum of $__________, or such other amount as shall be necessary, shall be deposited into the Debt Service Reserve Account; and (b) The balance of such sum ($__________ or such other remaining balance) shall be deposited into the Utility General Fund. -4- 38485273.v2 5. The bid submitted by the Purchaser to purchase the Series 2017 Bonds, attached hereto as Exhibit A, is hereby accepted, and all other bids so received are hereby rejected, and any actions of the Mayor or the Administrator of the Consolidated Government, for and on behalf of the Consolidated Government, are hereby ratified and approved relating to any earlier notification to all bidders of the acceptance and rejection of such bids by the Consolidated Government. The purchase price for the Series 2017 Bonds is equal to $___________ ($___________ plus net premium of $___________ less Purchaser’s discount of $___________). The Bonds shall, in due course, be delivered to the Purchaser against payment for the Series 2017 Bonds in accordance with the Notice of Sale and the Purchaser’s bid accepted by the Consolidated Government. 6. As required by Section 2.2 of the Original Resolution as a condition precedent to the issuance of the Series 2017 Bonds as Additional Bonds, attached hereto as Exhibit A is a certificate of the Consolidated Government: (i) setting forth the aggregate amount of interest and principal of all Prior Lien Bonds and Senior Bonds falling due during the current Fiscal Year and for each subsequent Fiscal Year to and including the Fiscal Year of the last maturity of any Prior Lien Bonds and Senior Bonds Outstanding (A) with respect to all Prior Lien Bonds and Senior Bonds Outstanding immediately prior to the date of authentication and delivery of the Series 2017 Bonds (consisting of the Refunded Bonds, the Series 2012 Bonds, the Series 2013 Bonds, and the Series 2014 Bonds) and (B) with respect to all Prior Lien Bonds and Senior Bonds to be Outstanding immediately thereafter (consisting of the Series 2012 Bonds, the Series 2013 Bonds, the Series 2014 Bonds, and the Series 2017 Bonds and taking into effect the redemption of the Refunded Bonds); and (ii) demonstrating that the amount set forth for each Fiscal Year pursuant to (i)(B) above is no greater than the amount set forth for such Fiscal Year pursuant to (i)(A) above. 7. The use and distribution of the Preliminary Official Statement and the Official Statement with respect to the Series 2017 Bonds shall be and is hereby authorized, ratified, confirmed, and approved, and the execution and delivery of the Official Statement in final form shall be and is hereby authorized, ratified, confirmed, and approved. The Mayor is hereby authorized and directed to ratify, confirm, approve, execute, and deliver the Official Statement on behalf of the Consolidated Government, and the execution of an Official Statement by the Mayor shall constitute conclusive evidence of the Mayor’s ratification, confirmation, approval, and delivery thereof on behalf of the Consolidated Government. 8. The Consolidated Government hereby confirms the existence and applicability of the Original Resolution and ratifies, restates, and reaffirms its representations, warranties, covenants, and agreements and all of the applicable terms, conditions, and provisions as set forth in the Original Resolution and as supplemented and amended by this Supplemental Resolution. Except where otherwise expressly indicated in this Supplemental Resolution, the provisions of the Original Resolution are to be read as part of this Supplemental Resolution as though copied verbatim herein, and provisions of this Supplemental Resolution shall be read as additions to, and not as substitutes for or modifications of (except as otherwise specifically provided herein), the provisions of the Original Resolution. Except as expressly amended, modified, or supplemented by this Supplemental Resolution, all of the terms, conditions, and provisions of the Original Resolution shall remain in full force and effect. In executing and delivering this Supplemental Resolution, the Consolidated Government shall be entitled to all powers, -5- 38485273.v2 privileges, and immunities afforded to the Consolidated Government and shall be subject to all the duties, responsibilities, and obligations of the Consolidated Government under the Original Resolution. 9. The Mayor Pro Tem may take any action, or execute and deliver any document, agreement, or other writing, which the Mayor is authorized to execute and deliver pursuant to this Supplemental Resolution. An Assistant or Deputy Clerk of Commission may attest any execution of any document, agreement, or writing by the Mayor or the Mayor Pro Tem, in the same manner as the Clerk of Commission would be authorized to attest any such execution. 9. This Supplemental Resolution shall take effect immediately upon its adoption. 10. Any and all Resolutions or resolutions, or parts of Resolutions or resolutions, if any, in conflict with this Supplemental Resolution are hereby repealed. 11. This Supplemental Resolution supplements and amends a contract with the Bondholders binding the Consolidated Government, and therefore it is proper and appropriate for the Mayor to execute the same on behalf of the Consolidated Government and for the Clerk of Commission to attest the same. PASSED, ADOPTED, SIGNED, APPROVED, AND EFFECTIVE this 17th day of October 2017. AUGUSTA, GEORGIA (SEAL) By: Mayor Attest: Clerk of Commission 38485273.v2 EXHIBIT A PARITY CERTIFICATE [Attached] 38485273.v2 PARITY CERTIFICATE The undersigned, JANICE ALLEN JACKSON, Administrator of Augusta, Georgia (the “Consolidated Government”), hereby certifies as follows in connection with the issuance of the Consolidated Government’s Water and Sewerage Revenue Refunding Bonds, Series 2017, in the original aggregate principal of $___________ (the “Series 2017 Bonds”), being issued pursuant to a Series 2017 Bond Resolution adopted by the Augusta-Richmond County Commission (the “Commission”) on September 5, 2017, and a Supplemental Series 2017 Bond Resolution adopted by the Commission on October 17, 2017 (collectively the “2017 Resolution”; capitalized terms used herein and not otherwise defined have the meanings assigned to them in the 2017 Resolution): 1. Attached hereto are schedules prepared by the Consolidated Government’s financial advisor, Davenport & Company LLC, setting forth the aggregate amount of interest and principal of all Prior Lien Bonds and Senior Bonds falling due during the current Fiscal Year and for each subsequent Fiscal Year to and including the Fiscal Year of the last maturity of any Prior Lien Bonds and Senior Bonds Outstanding (A) with respect to all Prior Lien Bonds and Senior Bonds Outstanding immediately prior to the date of authentication and delivery of the Series 2017 Bonds (consisting of the Refunded Bonds, the Series 2012 Bonds, the Series 2013 Bonds, and the Series 2014 Bonds) and (B) with respect to all Prior Lien Bonds and Senior Bonds to be Outstanding immediately thereafter (consisting of the Series 2012 Bonds, the Series 2013 Bonds, the Series 2014 Bonds, and the Series 2017 Bonds and taking into effect the redemption of the Refunded Bonds). 2. Based on such schedules, the amount set forth for each Fiscal Year pursuant to clause (B) of paragraph 1 above is no greater than the amount set forth for such Fiscal Year pursuant to clause (A) of paragraph 1 above. WITNESS my signature this 17th day of October 2017. JANICE ALLEN JACKSON, Administrator 38485273.v2 STATE OF GEORGIA RICHMOND COUNTY CLERK’S CERTIFICATE I, LENA J. BONNER, Clerk of Commission of Augusta, Georgia, DO HEREBY CERTIFY that the foregoing pages constitute a true and correct copy of the Supplemental Series 2017 Bond Resolution adopted by the Augusta-Richmond County Commission (the “Commission”) at an open public meeting duly called and lawfully assembled at 2:00 p.m., on the 17th day of October 2017, in connection with the issuance and sale of $___________ in original aggregate principal amount of revenue bonds designated “Augusta, Georgia Water and Sewerage Revenue Refunding Bonds, Series 2017,” the original of such Series 2017 Bond Resolution being duly recorded in the Minute Book of the Commission, which Minute Book is in my custody and control. I do hereby further certify that the Mayor, Hardie Davis, Jr., and the following members of the Commission were present at such meeting: William Fennoy Dennis Williams Mary Davis Sammie Sias Andrew Jefferson Ben Hasan Sean Frantom Wayne Guilfoyle Marion Williams Grady Smith and that the following members were absent: and that such resolution was duly adopted by a vote of: Aye ___ Nay ___ WITNESS my hand and the official seal of Augusta, Georgia, this the 17th day of October 2017. (SEAL) Clerk of Commission PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 9, 2017 NEW ISSUE RATINGS: (Book-Entry Only) Moody’s: A1 Standard & Poor’s: A+ See “MISCELLANEOUS – Ratings” herein In the opinion of Butler Snow LLP, Bond Counsel, under existing laws, regulations, rulings and judicial decisions and assuming the accuracy of certain representations and continuing compliance with certain covenants, interest on the Series 2017 Bonds is excludable from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. Interest on the Series 2017 Bonds is exempt from State of Georgia income taxation. The opinion contains greater detail, and is subject to exceptions, as noted in “LEGAL MATTERS – Opinion of Bond Counsel” herein. $92,735,000* AUGUSTA, GEORGIA WATER AND SEWERAGE REVENUE REFUNDING BONDS, SERIES 2017 Dated: Date of Issuance Due: October 1, as shown on inside cover The Water and Sewerage Revenue Refunding Bonds, Series 2017 (the “Series 2017 Bonds”) are being issued by Augusta, Georgia (the “Consolidated Government”) for the purpose of (i) refunding all of the Consolidated Government’s outstanding Water and Sewerage Revenue Refunding Bonds, Series 2007 and (ii) paying the costs of issuance of the Series 2017 Bonds. See “PLAN OF FINANCING” herein. Interest on the Series 2017 Bonds is payable semiannually on April 1 and October 1 of each year, commencing on April 1, 2018. All Series 2017 Bonds bear interest from their date of issuance. See “INTRODUCTION – Description of the Series 2017 Bonds” herein. The Series 2017 Bonds will be issued as fully registered bonds, registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”), to which payments of principal, premium, if any, and interest will be made. Purchasers will acquire beneficial interests in the Series 2017 Bonds in book-entry form only. DTC will remit such payments to its participants who will be responsible for remittance to beneficial owners. See “INTRODUCTION – Description of the Series 2017 Bonds” herein. The Series 2017 Bonds are subject to redemption prior to maturity as described herein. See “THE SERIES 2017 BONDS – Redemption” herein. The Series 2017 Bonds are special limited obligations of the Consolidated Government payable solely from and secured by a pledge of and lien on revenues derived by the Consolidated Government from the ownership and operation of its water and sewer system remaining after the payment of certain expenses of operating, maintaining, and repairing the system. The Series 2017 Bonds will be issued and secured on a parity with the Prior Bonds (as defined herein) and any additional revenue bonds of the Consolidated Government hereafter issued on a parity with the Prior Bonds and the Series 2017 Bonds. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS” herein. The Series 2017 Bonds do not constitute a debt, liability, general or moral obligation, or pledge of the faith and credit or taxing power of the Consolidated Government, the State of Georgia, or any other political subdivision of the State of Georgia. No governmental entity, including the Consolidated Government, the State of Georgia, or any other political subdivision of the State of Georgia, is obligated to levy any tax for the payment of the Series 2017 Bonds. No recourse may be had against the General Fund of the Consolidated Government for the payment of the Series 2017 Bonds. This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to making an informed investment decision. The Series 2017 Bonds are offered when, as, and if issued by the Consolidated Government, subject to prior sale and to withdrawal or modification of the offer without notice, and are subject to the approving opinion of Butler Snow LLP, Atlanta, Georgia, Bond Counsel. Certain legal matters will be passed on for the Consolidated Government by its special counsel, Shepard, Plunkett & Hamilton, LLP, Augusta, Georgia, and by its disclosure counsel, Murray Barnes Finister LLP, Atlanta, Georgia. The Series 2017 Bonds are expected to be available for delivery in book-entry form only through the facilities of DTC in New York, New York on or about ____________, 2017. Dated: _________________, 2017 *Preliminary, subject to change. Th i s P r e l i m i n a r y O f f i c i a l S t a t e m e nt a n d t h e i n f o r m a t i o n c o n t a i n ed h e r e i n a r e s u b j e c t t o c h a n g e , c o m p l e t i o n o r a m e n d m e n t w i t h o u t n o t i c e . T h e S e r i e s 2 0 1 7 B o n d s m a y n o t b e s o l d n o r m a y o f f e r s t o b u y b e ac c e p t e d p r i o r t o t h e t i m e t h e O f f i c i a l S t a t e m e n t i s d e l i v e r e d in f i n a l f o r m . U n d e r n o c i r c u m s ta n c e s s h a l l t h i s P r e l i m i n a r y O ff i c i a l S t a t e m e n t c o n s t i t u t e a n o f f e r t o s e l l o r a s o l i c i t a t i o n o f a n o f f e r t o b u y , n o r sh a l l t h e r e b e a n y s a l e o f t h e S e r i e s 2 0 1 7 B o n d s i n a n y jur i s d i c t i o n i n w h i c h s u c h o f f e r , s o l i c i t a t i o n o r s a l e w o u l d b e u n l a w f u l pr io r t o r e gis t r a t i o n o r qua l i f i c a t i o n u n d e r t h e s ec u r i t i e s l a w s o f s u c h jur i s d i c t i o n . MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS, AND CUSIP NOS. Maturity Principal Interest (October 1)* Amount* Rate Yield CUSIP No.† 2018 $ 10,000 2019 10,000 2020 10,000 2021 8,275,000 2022 12,260,000 2023 7,500,000 2024 7,875,000 2025 8,270,000 2026 8,685,000 2027 9,115,000 2028 9,575,000 2029 10,320,000 2030 10,830,000 *Preliminary, subject to change. † CUSIP® is a registered trademark of the American Bankers Association. CUSIP numbers have been assigned by an independent company not affiliated with the Consolidated Government and are included solely for the convenience of the holders of the Series 2017 Bonds. The Consolidated Government is not responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the Series 2017 Bonds or as indicated above. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Series 2017 Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of the Series 2017 Bonds. AUGUSTA, GEORGIA ELECTED OFFICIALS Augusta-Richmond County Commission Hardie Davis, Jr., Mayor Mary Davis, Mayor Pro-Tem William Fennoy Sean Frantom Wayne Guilfoyle Ben Hasan Andrew Jefferson Sammie Sias Grady Smith Dennis Williams Marion Williams __________________________ APPOINTED OFFICIALS Janice Allen Jackson, Administrator Donna Williams, Finance Director Lena J. Bonner, Clerk of Commission Andrew G. Mackenzie, General Counsel Utilities Department Tom Wiedmeier, P.E., Director Steven J. Little, C.P.A., Assistant Director, Finance and Administration D. Allen Saxon, Jr., Assistant Director, Facility Operations Horace Luke, Assistant Director, Fort Gordon Operations Marie Corbin, Interim Assistant Director, Engineering Kelsey T. Henderson, Assistant Director, Construction and Maintenance __________________________ SPECIAL SERVICES System Auditors Mauldin & Jenkins LLC Macon, Georgia Special Counsel Shepard, Plunkett & Hamilton, LLP Augusta, Georgia Bond Counsel Butler Snow LLP Atlanta, Georgia Disclosure Counsel Murray Barnes Finister LLP Atlanta, Georgia Financial Advisor Davenport & Company LLC Atlanta, Georgia # # # # # # # # # # # # # # # # # # # # # # # 7KLV#SDJH#LQWHQWLRQDOO\#OHIW#EODQN1# i TABLE OF CONTENTS Page INTRODUCTION ......................................................................................................................................................... 1  The Consolidated Government ........................................................................................................................ 1  Purpose of the Series 2017 Bonds ................................................................................................................... 1  The System ...................................................................................................................................................... 1  Security and Sources of Payment for the Series 2017 Bonds .......................................................................... 2  Description of the Series 2017 Bonds ............................................................................................................. 3  Tax Exemption ................................................................................................................................................ 3  Bond Registrar, Paying Agent, Custodian, and Depository ............................................................................ 3  Professionals Involved in the Offering ............................................................................................................ 4  Legal Authority ............................................................................................................................................... 4  Offering and Delivery of the Series 2017 Bonds............................................................................................. 4  Continuing Disclosure ..................................................................................................................................... 4  Other Information ............................................................................................................................................ 5  PLAN OF FINANCING ................................................................................................................................................ 6  Sources and Applications of Funds ................................................................................................................. 6  Refunding Program ......................................................................................................................................... 7  Funding of Reserve Account ........................................................................................................................... 7  THE SERIES 2017 BONDS .......................................................................................................................................... 7  Description ...................................................................................................................................................... 7  Redemption ..................................................................................................................................................... 7  Book-Entry Only System ................................................................................................................................ 8  Legal Authority ............................................................................................................................................. 10  Investments ................................................................................................................................................... 10  SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS .................................................... 10  Pledge of Revenues ....................................................................................................................................... 10  Funds Created By the Bond Resolution and Flow of Funds .......................................................................... 11  Rate Covenant ............................................................................................................................................... 16  Parity and Subordinate Bonds ....................................................................................................................... 17  Limited Obligations ....................................................................................................................................... 17  Remedies ....................................................................................................................................................... 17  THE CONSOLIDATED GOVERNMENT ................................................................................................................. 19  Introduction ................................................................................................................................................... 19  Consolidated Government Administration and Officials .............................................................................. 20  THE SYSTEM ............................................................................................................................................................. 20  Introduction ................................................................................................................................................... 20  Principal Administrative Personnel ............................................................................................................... 21  System Facilities ........................................................................................................................................... 22  Contract Operator of Wastewater Treatment Plants ...................................................................................... 24  Water Sources ............................................................................................................................................... 25  Service Area .................................................................................................................................................. 25  Fort Gordon Municipal Services ................................................................................................................... 26  Demographic Information ............................................................................................................................. 27  Economic Information ................................................................................................................................... 28  Employment Statistics ................................................................................................................................... 31  Customers ...................................................................................................................................................... 32  Rates, Fees, and Charges ............................................................................................................................... 34  Page ii Rate Setting Process ...................................................................................................................................... 37  Billing and Collection ................................................................................................................................... 38  Governmental Approvals and Environmental Regulation ............................................................................. 38  Employees, Employee Relations, and Labor Organizations.......................................................................... 43  SYSTEM FINANCIAL INFORMATION .................................................................................................................. 43  Accounting System and Policies ................................................................................................................... 43  Historical and Pro Forma Capital Structure .................................................................................................. 43  Debt Service Requirements ........................................................................................................................... 46  Five Year Operating History ......................................................................................................................... 47  Management’s Discussion and Analysis of Results of Operations ............................................................... 49  Historical Debt Service Coverage Ratios ...................................................................................................... 50  Operating Budget .......................................................................................................................................... 50  Capital Improvements Program ..................................................................................................................... 51  Employee Benefits ........................................................................................................................................ 52  Insurance Coverage and Governmental Immunity ........................................................................................ 56  LEGAL MATTERS .................................................................................................................................................... 57  Pending Litigation ......................................................................................................................................... 57  Opinion of Bond Counsel .............................................................................................................................. 58  Validation Proceedings.................................................................................................................................. 60  Closing Certificates ....................................................................................................................................... 60  MISCELLANEOUS .................................................................................................................................................... 60  Ratings ........................................................................................................................................................... 60  Sale at Competitive Bidding .......................................................................................................................... 60  Financial Advisor .......................................................................................................................................... 61  Independent Professionals ............................................................................................................................. 61  Additional Information .................................................................................................................................. 61  CERTIFICATION ....................................................................................................................................................... 62  APPENDIX A: AUDITED FINANCIAL STATEMENTS OF THE SYSTEM FOR THE FISCAL YEAR ENDED DECEMBER 31, 2016 APPENDIX B: SUMMARY OF THE BOND RESOLUTION APPENDIX C: FORM OF BOND COUNSEL OPINION APPENDIX D: FORM OF CONTINUING DISCLOSURE AGREEMENT OFFICIAL STATEMENT $92,735,000* AUGUSTA, GEORGIA WATER AND SEWERAGE REVENUE REFUNDING BONDS, SERIES 2017 INTRODUCTION The purpose of this Official Statement, which includes the cover page and the Appendices hereto, is to furnish certain information in connection with the sale by Augusta, Georgia of $92,735,000* in aggregate principal amount of its Water and Sewerage Revenue Refunding Bonds, Series 2017 (the “Series 2017 Bonds”). Definitions of certain terms used in this Official Statement and not otherwise defined herein are set forth in Appendix B to this Official Statement under the heading “SUMMARY OF THE BOND RESOLUTION – Definitions.” This Introduction is not a summary of this Official Statement and is intended only for quick reference. It is only a brief description of and guide to, and is qualified in its entirety by reference to, more complete and detailed information contained in the entire Official Statement, including the cover page and the Appendices, and the documents summarized or described herein. Potential investors should fully review the entire Official Statement. The offering of the Series 2017 Bonds to potential investors is made only by means of the entire Official Statement, including the Appendices hereto. No person is authorized to detach this Introduction from the Official Statement or to otherwise use it without the entire Official Statement, including the Appendices hereto. The Consolidated Government Augusta, Georgia (the “Consolidated Government”) is a political subdivision of the State of Georgia, created on January 1, 1996 pursuant to Acts of the General Assembly of the State of Georgia that authorized the consolidation of the municipal corporation known as “The City Council of Augusta” (the “City”) and the political subdivision known as “Richmond County, Georgia” (the “County”). The Consolidated Government is located in the central eastern portion of the State of Georgia bordering the South Carolina state line, approximately 155 miles east of Atlanta, Georgia and 75 miles southwest of Columbia, South Carolina. For more complete information, see “THE CONSOLIDATED GOVERNMENT” herein. Purpose of the Series 2017 Bonds The proceeds of the Series 2017 Bonds will be used, together with other available funds, for the purpose of (i) refunding all of the Consolidated Government’s outstanding Water and Sewerage Revenue Refunding Bonds, Series 2007, currently outstanding in the aggregate principal amount of $123,755,000 (the “Refunded Bonds”) and (ii) paying the costs of issuance of the Series 2017 Bonds. For more complete information, see “PLAN OF FINANCING” herein. The System The Consolidated Government owns and operates a water supply, treatment, and distribution system and a sanitary sewer treatment and collection system (the “System”). The water system consists of a raw surface water supply with a monthly average allotment of water of 75 million gallons per day (“MGD”), a ground water supply with a monthly average allotment of 18.4 MGD, raw surface water storage capacity of approximately 167 million gallons, nine raw surface water pumps with aggregate raw water pumping capacity of 138 MGD, 22 active wells with aggregate well-water pumping capacity of 21.15 MGD, five water treatment plants with an aggregate rated *Throughout this Preliminary Official Statement, an asterisk indicates that the information is preliminary and subject to change. 2 capacity for treatment of raw water of 95 MGD and an aggregate treated water pumping rated capacity of 78.0 MGD, treated water storage capacity of 52.10 million gallons, and a water distribution network of approximately 1,350 miles of pipelines. The sewer system consists of two wastewater treatment plants with an aggregate treatment capacity of 48.3 MGD and a wastewater collection system of 81 permanent wastewater pumping stations, several small temporary wastewater pumping stations on Fort Gordon and approximately 970 miles of collection sewers. The water system serves an approximately 210 square mile area and has approximately 71,569 water connections. The sewer system serves an approximately 106 square mile area and has approximately 58,754 sewer connections. The System also provides water and sewer services to the U.S. Army Signal Center, U.S. Army Cyber Center of Excellence and Fort Gordon (collectively, “Fort Gordon”), which is located in the geographic territory of the Consolidated Government. For more complete information, see “THE SYSTEM” herein. Security and Sources of Payment for the Series 2017 Bonds The Series 2017 Bonds are special limited obligations of the Consolidated Government payable solely from and secured by a pledge of and lien on all income and revenues derived by the Consolidated Government from the ownership and operation of the System remaining after the payment of certain expenses of operating, maintaining, and repairing the System and certain other expenses. The Consolidated Government had previously issued water and sewer revenue bonds, including the Refunded Bonds (the “Prior Lien Bonds”), under the terms of a bond resolution (the “Prior Lien Resolution”), pursuant to which the Prior Lien Bonds were secured by a first and prior lien on the net revenues of the System. Upon the refunding of the Refunded Bonds, the Prior Lien Resolution will be defeased and will no longer be in force and effect, and the Series 2017 Bonds and the other outstanding Senior Bonds (as defined below) will have a first priority pledge of and lien on income and revenues derived by the Consolidated Government from the operation of the System (excluding grants, loans and other moneys received for capital improvements to the System) remaining after the payment of expenses of operating and maintaining the System (as more particularly defined in Appendix B hereto, the “Pledged Revenues”). The Consolidated Government also has previously issued $138,830,000 in original aggregate principal amount of its Water and Sewerage Revenue Refunding Bonds (Second Resolution), Series 2012 (the “Series 2012 Bonds”), currently outstanding in the aggregate principal amount of $138,830,000, $22,070,000 in original aggregate principal amount of its Water and Sewerage Taxable Revenue Bonds (Second Resolution), Series 2013 (the “Series 2013 Bonds”), currently outstanding in the aggregate principal amount of $18,535,000, and $169,180,000 in original aggregate principal amount of its Water and Sewerage Revenue Refunding and Improvement Bonds (Second Resolution), Series 2014 (the “Series 2014 Bonds” and together with the Series 2012 Bonds and the Series 2013 Bonds, the “Prior Bonds”), currently outstanding in the aggregate principal amount of $166,635,000. The Series 2017 Bonds will be equally and ratably secured on a parity basis with the Prior Bonds and any additional revenue bonds of the Consolidated Government hereafter issued on a parity basis with the Prior Bonds and the Series 2017 Bonds. The Series 2017 Bonds, the Prior Bonds and any additional revenue bonds of the Consolidated Government hereafter issued on a parity basis with the Prior Bonds, and the Series 2017 Bonds are collectively referred to as the “Senior Bonds” in this Official Statement. As described above, the Senior Bonds are payable solely from and secured by a first priority pledge of and lien on Pledged Revenues. The Senior Bonds and any additional revenue bonds of the Consolidated Government hereafter issued with a right to payment expressly junior and subordinate to the Senior Bonds are collectively referred to as the “Bonds” in this Official Statement. The Series 2017 Bonds do not and will not constitute a debt, liability, general or moral obligation, or pledge of the faith and credit or taxing power of the Consolidated Government, the State of Georgia, or any other political subdivision of the State of Georgia. No governmental entity, including the Consolidated Government, the State of Georgia, or any other political subdivision of the State of Georgia, is obligated to levy any tax for the payment of the Series 2017 Bonds. No recourse may be had against the General Fund of the Consolidated Government for the payment of the Series 2017 Bonds. The pledge of and lien on Pledged Revenues securing the Series 2017 Bonds do not create a legal or equitable pledge, charge, lien, or encumbrance upon any of the Consolidated Government’s property or income, receipts, or revenues, except the Pledged Revenues. 3 The Series 2017 Bonds will also be secured by a debt service reserve account to be held in trust for the owners of all of the Senior Bonds, equally and ratably, under the terms of the hereinafter described Bond Resolution. The debt service reserve account will be fully funded upon the issuance of the Series 2017 Bonds in an amount equal to $15,832,619*. For more complete and detailed information, see “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS” herein. Description of the Series 2017 Bonds Redemption. The Series 2017 Bonds maturing on and after October 1, 2028* are subject to optional redemption on October 1, 2027*, in whole or in part, prior to maturity on the dates and on the terms described in this Official Statement. For more complete information, see “THE SERIES 2017 BONDS – Redemption” herein. Denominations. The Series 2017 Bonds are issuable in denominations of $5,000 or any integral multiple thereof. Book-Entry Bonds. Each of the Series 2017 Bonds will be issued as fully registered bonds in the denomination of one bond per aggregate principal amount of the stated maturity thereof, and, when issued, will be registered in the name of Cede & Co., as nominee for The Depository Trust Company (“DTC”), New York, New York, an automated depository for securities and clearing house for securities transactions, which will act as securities depository for the Series 2017 Bonds. Purchasers will not receive certificates representing their ownership interest in the Series 2017 Bonds purchased. Purchases of beneficial interests in the Series 2017 Bonds will be made in book-entry only form (without certificates), in authorized denominations, and, under certain circumstances as more fully described in this Official Statement, such beneficial interests are exchangeable for one or more fully registered bonds of like principal amount and maturity in authorized denominations. For more complete information, see “THE SERIES 2017 BONDS – Book-Entry Only System” herein. Payments. So long as DTC or its nominee, Cede & Co., is the registered owner of the Series 2017 Bonds, payments of the principal of, premium, if any, and interest on the Series 2017 Bonds will be made directly to Cede & Co., which will remit such payments to the DTC participants, which will in turn remit such payments to the beneficial owners of the Series 2017 Bonds. For a more complete description of the Series 2017 Bonds, see “THE SERIES 2017 BONDS” herein. Tax Exemption In the opinion of Bond Counsel, under existing laws, regulations, rulings and judicial decisions and assuming the accuracy of certain representations and continuing compliance with certain covenants, interest on the Series 2017 Bonds is excludable from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. Interest on the Series 2017 Bonds is exempt from State of Georgia income taxation. See Appendix C hereto for the form of the opinion Bond Counsel proposes to deliver in connection with the issuance of the Series 2017 Bonds. For a more complete discussion of such opinion and certain other tax consequences of owning the Series 2017 Bonds, including certain exceptions to the exclusion of the interest on the Series 2017 Bonds from gross income, see “LEGAL MATTERS – Opinion of Bond Counsel” herein. Bond Registrar, Paying Agent, Custodian, and Depository U.S. Bank National Association, Atlanta, Georgia, will act as bond registrar and as paying agent for the Series 2017 Bonds, and continue to act as custodian of the Sinking Fund under the hereinafter described Bond Resolution. South State Bank (as successor to Georgia Bank & Trust), Augusta, Georgia, will continue to act as depository of the Revenue Fund and the Utility General Fund required to be maintained under the hereinafter described Bond Resolution. Bank of America, N.A. will continue to act as depository of the Rebate Fund created under the hereinafter described Bond Resolution. 4 Professionals Involved in the Offering Certain legal matters pertaining to the Consolidated Government and its authorization and issuance of the Series 2017 Bonds are subject to the approving opinion of Butler Snow LLP, Atlanta, Georgia, Bond Counsel. Copies of such opinion will be available at the time of delivery of the Series 2017 Bonds, and a copy of the proposed form of such opinion is attached hereto as Appendix C. Certain legal matters will be passed on for the Consolidated Government by its special counsel, Shepard, Plunkett & Hamilton, LLP, Augusta, Georgia, and by its disclosure counsel, Murray Barnes Finister LLP, Atlanta, Georgia. Davenport & Company LLC, Atlanta, Georgia, has been employed as Financial Advisor to the Consolidated Government in connection with the issuance of the Series 2017 Bonds. The financial statements of the System as of December 31, 2016 and for the year then ended, attached hereto as part of Appendix A, have been audited by Mauldin & Jenkins, LLC, Macon, Georgia, independent certified public accountants, to the extent and for the periods indicated in its report thereon that appears in Appendix A hereto. See “MISCELLANEOUS – Independent Professionals” herein. Legal Authority The Series 2017 Bonds are being issued and secured pursuant to the authority granted by the laws of the State of Georgia and under the provisions of a Master Bond Resolution adopted by the Augusta-Richmond County Commission (the “Commission”) on October 16, 2012, as supplemented by the Parity Bond Resolution adopted by the Commission on June 18, 2013, as supplemented on July 16, 2013, as supplemented by a Series 2014 Bond Resolution adopted by the Commission on August 25, 2014, as supplemented on September 16, 2014, and as further supplemented by a Series 2017 Bond Resolution adopted by the Commission on September 5, 2017, as supplemented on ___________, 2017 (collectively, the “Bond Resolution”). For more complete information, see “THE SERIES 2017 BONDS – Legal Authority” herein. Offering and Delivery of the Series 2017 Bonds The Series 2017 Bonds are offered when, as, and if issued by the Consolidated Government, subject to prior sale and to withdrawal or modification of the offer without notice. The Series 2017 Bonds are expected to be available for delivery in book-entry form only through the facilities of DTC in New York, New York on or about ______________, 2017. Continuing Disclosure The Consolidated Government has covenanted in the Bond Resolution and a Continuing Disclosure Agreement (the “Disclosure Certificate”) for the benefit of the beneficial owners of the Series 2017 Bonds to provide certain financial information and operating data relating to the System (the “Annual Report”) by not later than 210 days after the end of each fiscal year of the Consolidated Government, commencing with fiscal year 2017, and to provide notices of the occurrence of certain enumerated events. The Annual Report will be filed by the Consolidated Government with the Municipal Securities Rulemaking Board (the “MSRB”) in an electronic format as prescribed by the MSRB (which, as of the date hereof, is the Electronic Municipal Market Access (“EMMA”) system of the MSRB). The notices of certain events will be filed by the Consolidated Government with the MSRB in an electronic format as prescribed by the MSRB (which, as of the date hereof, is EMMA). See Appendix D hereto for a form of the Continuing Disclosure Agreement for the specific nature of the information to be contained in the Annual Report or the notices of certain events. These covenants have been made in order to assist the original purchaser of the Series 2017 Bonds in complying with Securities and Exchange Commission Rule 15c2-12(b)(5) (the “Rule”). The Consolidated Government has previously entered into undertakings similar to the Disclosure Certificate in connection with the issuance of other obligations of the Consolidated Government (the “Prior Consolidated Government Undertakings”). The Prior Consolidated Government Undertakings required that the Consolidated Government file (a) its audited financial statements and certain operating and financial data on EMMA and (b) notices of the occurrence of certain enumerated events (“Event Notices”) on EMMA. There have been instances in the previous five fiscal years in which the Consolidated Government has failed to make filings in accordance with the Prior Consolidated Government Undertakings, as described in more detail below. 5 With respect to the Urban Redevelopment Agency of Augusta Taxable Revenue Bonds (Laney-Walker and Bethlehem Project), Series 2010, the annual report for fiscal year 2013 was filed one day late and the annual report for fiscal year 2014 was filed three days late. The Consolidated Government failed to timely file Event Notices that were required to be filed with respect to changes in credit ratings of the Consolidated Government and with respect to changes in credit ratings of Financial Security Assurance Inc. and Assured Guaranty Municipal Corp., which insure certain of the Consolidated Government’s bonds. These rating changes were posted to EMMA on July 29, 2014 and September 12, 2014. The Consolidated Government has retained Digital Assurance Certification, L.L.C. to assist with continuing disclosure compliance matters, and the Consolidated Government plans in the future to comply in all material respects with its continuing disclosure undertakings. Other Information This Official Statement speaks only as of its date, and the information contained herein is subject to change without notice. This Official Statement contains forecasts, projections, and estimates that are based on current expectations but are not intended as representations of fact or guarantees of results. If and when included in this Official Statement, the words “expects,” “forecasts,” “projects,” “intends,” “anticipates,” “estimates,” and analogous expressions are intended to identify forward-looking statements as defined in the Securities Act of 1933, as amended, and any such statements inherently are subject to a variety of risks and uncertainties, which could cause actual results to differ materially from those contemplated in such forward-looking statements. These forward-looking statements speak only as of the date of this Official Statement. The Consolidated Government disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in the Consolidated Government’s expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based. This Official Statement and the Appendices hereto contain brief descriptions of, among other matters, the Consolidated Government, the Series 2017 Bonds, the System, the Bond Resolution, the Disclosure Certificate, and the security and sources of payment for the Series 2017 Bonds. Such descriptions and information do not purport to be comprehensive or definitive. The summaries of various constitutional provisions and statutes, the Bond Resolution, the Disclosure Certificate, and other documents are intended as summaries only and are qualified in their entirety by reference to such documents, and references herein to the Series 2017 Bonds are qualified in their entirety to the forms thereof included in the Bond Resolution. Copies of the Bond Resolution, the Disclosure Certificate, and other documents and information are available, upon request and upon payment to the Consolidated Government of a charge for copying, mailing, and handling, from Steven J. Little, C.P.A., Assistant Director, Finance and Administration, Augusta Utilities Department, 360 Bay Street, Suite 180, Augusta, Georgia 30901, telephone (706) 312-4154. During the period of the offering of the Series 2017 Bonds, copies of such documents are available, upon request and upon payment to the Financial Advisor of a charge for copying, mailing, and handling, from Davenport & Company LLC, 901 East Cary Street, Suite 1100, Richmond, Virginia 23219, telephone (804) 697-2900. The Series 2017 Bonds have not been registered under the Securities Act of 1933, and the Bond Resolution has not been qualified under the Trust Indenture Act of 1939, in reliance on exemptions contained in such Acts. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 2017 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation, or sale. No dealer, broker, salesman, or other person has been authorized by the Consolidated Government to give any information or to make any representations other than those contained in this Official Statement, and, if given or made, such other information or representations should not be relied upon as having been authorized by the Consolidated Government. Except where otherwise indicated, all information contained in this Official Statement has been provided by the Consolidated Government. The information set forth herein has been obtained by the Consolidated Government from sources that are believed to be reliable but is not guaranteed as to accuracy or completeness by the Consolidated Government. The information contained herein is subject to change without 6 notice, and neither the delivery of this Official Statement nor any sale made hereunder shall under any circumstances create an implication that there has been no change in the affairs of the Consolidated Government or the other matters described herein since the date hereof or the earlier dates set forth herein as of which certain information contained herein is given. Neither the United States Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Series 2017 Bonds or reviewed or passed upon the adequacy or accuracy of this Official Statement. Any representation to the contrary may be a criminal offense. The order and placement of information in this Official Statement, including the appendices, are not an indication of relevance, materiality, or relative importance, and this Official Statement, including the appendices, must be read in its entirety. The captions and headings in this Official Statement are for convenience only and in no way define, limit, or describe the scope or intent, or affect the meaning or construction, of any provision or section in this Official Statement. THIS OFFICIAL STATEMENT IS BEING PROVIDED TO PROSPECTIVE PURCHASERS EITHER IN BOUND PRINTED FORM (“ORIGINAL BOUND FORMAT”) OR IN ELECTRONIC FORMAT ON THE FOLLOWING WEBSITE: finpressllc.com. THIS OFFICIAL STATEMENT MAY BE RELIED UPON ONLY IF IT IS PRINTED IN ITS ENTIRETY DIRECTLY FROM SUCH WEBSITE. This Official Statement has been deemed final for purposes of Securities Exchange Act of 1934 Rule 15c2-12, except for Permitted Omissions described in paragraph (b)(1) of Rule 15c2-12. PLAN OF FINANCING Sources and Applications of Funds The sources and applications of funds in connection with the issuance of the Series 2017 Bonds are estimated below. Estimated Sources of Funds: Proceeds of Series 2017 Bonds(1) Funds Held In Sinking Fund No. 1(2) Total Sources of Funds Estimated Applications of Funds: Redeem Refunded Bonds Deposit to Debt Service Reserve Account(3) Costs of Issuance(4) Underwriting Discount(5) Total Applications of Funds (1) After adding net premium of $______________. (2) See “PLAN OF FINANCING – Funding of Reserve Account” herein. (3) This amount, together with $____________ on deposit therein, fully funds the Debt Service Reserve Account in an amount equal to the Debt Service Reserve Requirement. See “PLAN OF FINANCING – Funding of Reserve Account” herein. (4) Includes legal and accounting fees, initial Bond Registrar’s and Paying Agent’s fees, Financial Advisor’s fees, printing costs, validation court costs, and other costs of issuance. (5) _____% of the principal amount of the Series 2017 Bonds. See “MISCELLANEOUS – Sale at Competitive Bidding” herein. 7 Refunding Program The Consolidated Government will use a portion of the proceeds of the sale of the Series 2017 Bonds, together with certain amounts held in Sinking Fund No. 1 under the Prior Lien Resolution, to refund $123,755,000 in aggregate principal amount of the Refunded Bonds, in order to achieve debt service savings. Immediately after giving effect to the refunding and defeasance of the Refunded Bonds, the Consolidated Government will have outstanding $___________ in aggregate principal amount of revenue bonds secured by a first priority pledge of and lien on the Pledged Revenues. The Consolidated Government has determined that refunding the Refunded Bonds will reduce the Consolidated Government’s total debt service payments by approximately $______ million on an aggregate basis and by approximately $_______ million on a present value basis. The Consolidated Government will deposit sufficient moneys in trust into the 2007 Defeasance Account held by U.S. Bank National Association, Atlanta, Georgia, in its capacity as paying agent for the Refunded Bonds, from the proceeds of the sale of the Series 2017 Bonds and from certain amounts held in Sinking Fund No. 1 under the Prior Lien Resolution, to pay the principal of and interest on the Refunded Bonds on their scheduled redemption date of _____________. These amounts will not be available to pay the principal of, premium, if any, or interest on the Series 2017 Bonds, and the owners of the Series 2017 Bonds will have no claim to these amounts. Funding of Reserve Account Upon the refunding of the Refunded Bonds, $___________ of the funds released from the debt service reserve fund held under the Prior Lien Resolution (the “Prior Lien Debt Service Reserve Fund”) will be deposited into the debt service reserve account (the “Debt Service Reserve Account”) held within the Sinking Fund established pursuant to the Bond Resolution to fund the Debt Service Reserve Account at the Debt Service Reserve Requirement. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS – Funds Created By the Bond Resolution and Flow of Funds – Sinking Fund – Debt Service Reserve Account” herein. THE SERIES 2017 BONDS Description The Series 2017 Bonds will be dated as of their date of issuance and will bear interest at the rates set forth on the inside cover page of this Official Statement, payable April 1, 2018, and semiannually thereafter on October 1 and April 1 of each year to the registered owner as shown on the books and records of U.S. Bank National Association, Atlanta, Georgia, as Paying Agent and Bond Registrar (the “Paying Agent” or the “Bond Registrar”), as of the close of business on the 15th day of the calendar months next preceding such October 1 and April 1 (each such date a “Record Date”). Subject to the redemption provisions described below, the Series 2017 Bonds will mature on the dates and in the amounts set forth on the inside cover page of this Official Statement. The principal of and redemption premium, if any, on the Series 2017 Bonds are payable when due to the registered owner upon presentation and surrender at the principal corporate trust office of the Paying Agent. The Series 2017 Bonds are issuable only as fully registered bonds, without coupons, in any authorized denomination. Purchases of beneficial ownership interests in the Series 2017 Bonds will be made in book-entry form and purchasers will not receive certificates representing interests in the Series 2017 Bonds so purchased. If the book-entry system is discontinued, Series 2017 Bonds will be delivered as described in the Bond Resolution, and beneficial owners of the Series 2017 Bonds will become the registered owners of the Series 2017 Bonds. See “THE SERIES 2017 BONDS – Book-Entry Only System” herein. Redemption Optional Redemption The Series 2017 Bonds maturing on and after October 1, 2028* may be redeemed prior to their respective maturities at the option of the Consolidated Government, on or after October 1, 2027*, in whole or in part at any time, in the order of maturities selected by the Consolidated Government (less than all of such Series 2017 Bonds of a single maturity to be selected by lot in such other manner as the Consolidated Government may determine), from 8 any moneys available therefor, at a redemption price equal to the principal amount of the Series 2017 Bonds to be redeemed plus accrued interest to the redemption date, all in the manner provided in the Bond Resolution. Redemption Notices Notice of any redemption of the Series 2017 Bonds, designating the Series 2017 Bonds to be redeemed, will be mailed, postage prepaid, not less than thirty (30) days nor more than sixty (60) days prior to the redemption date to all registered owners of the Series 2017 Bonds to be redeemed (in whole or in part) at addresses which appear upon the bond registration book. Failure to mail, or any defect in, any such notice of redemption of the Series 2017 Bonds will not affect the validity of the proceedings for such redemption or cause the interest to continue to accrue on the principal amount of such Series 2017 Bonds so designated for redemption after the redemption date. Book-Entry Only System DTC will act as securities depository for the Series 2017 Bonds. The Series 2017 Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Series 2017 Bond will be issued for each maturity of the Series 2017 Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation, and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of Series 2017 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2017 Bonds on DTC’s records. The ownership interest of each actual purchaser of each Series 2017 Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2017 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Series 2017 Bonds, except in the event that use of the book-entry system for the Series 2017 Bonds is discontinued. To facilitate subsequent transfers, all Series 2017 Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2017 Bonds with DTC and their registration in the name of Cede & Co., or such other DTC nominee, do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2017 Bonds; DTC’s records reflect only the identity of the Direct 9 Participants to whose accounts such Series 2017 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Series 2017 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2017 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners of Series 2017 Bonds may wish to ascertain that the nominee holding the Series 2017 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of the notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Series 2017 Bonds within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Series 2017 Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Paying Agent as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Series 2017 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal, premium, and interest payments on the Series 2017 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Consolidated Government or the Paying Agent, on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the Consolidated Government, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, premium, and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Consolidated Government or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Series 2017 Bonds at any time by giving reasonable notice to the Consolidated Government and the Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Series 2017 Bond certificates for each maturity are required to be printed and delivered. The Consolidated Government may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, Series 2017 Bond certificates for each maturity will be printed and delivered to DTC. The information in this section concerning DTC and DTC’s book-entry system set forth above has been obtained from sources that the Consolidated Government believes to be reliable, but the Consolidated Government takes no responsibility for the accuracy thereof. SO LONG AS CEDE & CO., AS NOMINEE FOR DTC, IS THE SOLE BONDHOLDER, THE CONSOLIDATED GOVERNMENT SHALL TREAT CEDE & CO. AS THE ONLY BONDHOLDER FOR ALL PURPOSES, INCLUDING RECEIPT OF ALL PRINCIPAL AND PREMIUM OF AND INTEREST ON THE SERIES 2017 BONDS, RECEIPT OF NOTICES, VOTING, AND REQUESTING OR DIRECTING THE CONSOLIDATED GOVERNMENT TO TAKE OR NOT TO TAKE, OR CONSENTING TO, CERTAIN ACTIONS. THE CONSOLIDATED GOVERNMENT HAS NO RESPONSIBILITY OR OBLIGATION TO THE DIRECT OR INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS WITH RESPECT TO (A) THE 10 ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT OR INDIRECT PARTICIPANT; (B) THE PAYMENT BY ANY DIRECT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL AND PREMIUM OF AND INTEREST ON THE SERIES 2017 BONDS; (C) THE DELIVERY OR TIMELINESS OF DELIVERY BY ANY DIRECT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER THAT IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE BOND RESOLUTION TO BE GIVEN TO BONDHOLDERS; OR (D) OTHER ACTION TAKEN BY DTC OR CEDE & CO. AS BONDHOLDER. Beneficial Owners of the Series 2017 Bonds may experience some delay in their receipt of distributions of principal and interest on the Series 2017 Bonds since such distributions will be forwarded by the Paying Agent to DTC and DTC will credit such distributions to the accounts of Direct Participants, which will thereafter credit them to the accounts of Beneficial Owners either directly or indirectly through Indirect Participants. Issuance of the Series 2017 Bonds in book-entry form may reduce the liquidity of the Series 2017 Bonds in the secondary trading market since investors may be unwilling to purchase Series 2017 Bonds for which they cannot obtain physical certificates. In addition, since transactions in the Series 2017 Bonds can be effected only through DTC, Direct Participants, Indirect Participants, and certain banks, the ability of a Beneficial Owner to pledge Series 2017 Bonds to persons or entities that do not participate in the DTC system, or otherwise to take action in respect of such Series 2017 Bonds, may be limited due to lack of a physical certificate. Beneficial Owners will not be recognized by the Paying Agent as registered owners for purposes of the Bond Resolution, and Beneficial Owners will be permitted to exercise the rights of registered owners only indirectly through DTC and the Direct or Indirect Participants. Legal Authority Paragraph I of Section VI of Article IX of the Constitution of the State of Georgia authorizes any political subdivision to issue revenue bonds as provided by general law and provides (1) that the obligation represented by revenue bonds shall be repayable only out of the revenue derived from the project and shall not be deemed to be a debt of the issuing political subdivision and (2) that no issuing political subdivision shall exercise the power of taxation for the purpose of paying any part of the principal or interest of any such revenue bonds. The Series 2017 Bonds are being issued and secured pursuant to the authority granted by Article 3 of Chapter 82 of Title 36 of the Official Code of Georgia Annotated, known as the “Revenue Bond Law” (the “Revenue Bond Law”), and under the provisions of the Bond Resolution. Investments For a description of the provisions governing the investment of amounts held in the Sinking Fund (which includes the Debt Service Reserve Account, the Interest Account, and the Principal Account, which hold amounts to pay debt service on the Series 2017 Bonds), see “SUMMARY OF THE BOND RESOLUTION – Investments” in Appendix B hereto and “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS – Funds Created By the Bond Resolution and Flow of Funds” herein. SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS Pledge of Revenues Under the terms of the Bond Resolution, the Series 2017 Bonds are secured by a pledge of and lien on “Pledged Revenues.” For a complete definition of the term “Pledged Revenues,” see “SUMMARY OF THE BOND RESOLUTION – Definitions” in Appendix B to this Official Statement. The Bond Resolution provides that this pledge (as it may be expanded for additional parity bonds) ranks superior to all other pledges that may hereafter be made of any of the Pledged Revenues, except for pledges of the Pledged Revenues hereafter made by the Consolidated Government in Hedge Agreements (relating to bonds issued under the Bond Resolution) to secure 11 Hedge Payments thereunder (other than termination, indemnity, and expense payments), which may rank on a parity with this pledge as to the related Hedged Bonds. Currently, there are no Hedge Agreements. The lien of this pledge does not secure any obligation of the Consolidated Government other than the Bonds. The principal of, premium, if any, and interest on the Series 2017 Bonds are payable from Pledged Revenues. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS - Funds Created By the Bond Resolution and Flow of Funds – Revenue Fund” herein. The Consolidated Government has covenanted in the Bond Resolution that it will pay and discharge all taxes, assessments, and other governmental charges, if any, lawfully imposed upon the System or any part thereof or upon the Pledged Revenues, as well as any lawful claims for labor, materials, or supplies which if unpaid might become a lien or charge upon the System or the Pledged Revenues or any part thereof or which might impair the security for the Bonds, except when the Consolidated Government in good faith contests its liability to pay the same. See “SUMMARY OF THE BOND RESOLUTION – Satisfaction of Liens” in Appendix B to this Official Statement. The Consolidated Government has also made certain covenants in the Bond Resolution concerning the sale or disposition of the System, insurance on the System, and the books and records relating to the System, which are described under the captions “SUMMARY OF THE BOND RESOLUTION – Sales, Leases, and Encumbrances, – Insurance, and – Financial Statements” in Appendix B to this Official Statement. Funds Created By the Bond Resolution and Flow of Funds Under the terms of the Bond Resolution, the Consolidated Government has established and is maintaining the following funds and accounts, and moneys deposited in such funds and accounts must be held in trust for the purposes set forth in the Bond Resolution: (1) the Revenue Fund, currently held and to be held by South State Bank (as successor to Georgia Bank & Trust), Augusta, Georgia, as depository for the account of the Consolidated Government; (2) the Sinking Fund, currently held and to be held in trust by U.S. Bank National Association, Atlanta, Georgia, as depository for the account of the Consolidated Government, and therein the following five accounts: (a) the Interest Account; (b) the Hedge Payments Account; (c) the Principal Account; (d) the Capitalized Interest Account; and (e) the Debt Service Reserve Account. (3) the Rebate Fund, currently held and to be held by Bank of America, N.A., Augusta, Georgia, as depository for the account of the Consolidated Government; and (4) the Utility General Fund, currently held and to be held by South State Bank (as successor to Georgia Bank & Trust), Augusta, Georgia, as depository for the account of the Consolidated Government. The Bond Resolution also provides for a Construction Fund, under which proceeds of Senior Bonds are deposited that are issued to finance improvements to the System. No portion of the Series 2017 Bonds will be deposited to the Construction Fund. The Consolidated Government has covenanted in the Bond Resolution that it will continue to maintain the Revenue Fund and the Utility General Fund separate and apart from all other funds of the Consolidated Government so long as any Bonds remain outstanding. 12 Revenue Fund The Bond Resolution requires the Consolidated Government to deposit and continue to deposit all Operating Revenues in the Revenue Fund from time to time as and when received. Under the terms of the Bond Resolution, moneys in the Revenue Fund are to be applied by the Consolidated Government from time to time to the following purposes and in the following order of priority: (a) to pay Expenses of Operation and Maintenance, other than PILOT and PILOF payments that will be payable to the Consolidated Government solely from the Utility General Fund, (b) to deposit monthly into the Interest Account the amounts described below, (c) to deposit monthly into the Hedge Payments Account the amounts described below, (d) to deposit monthly into the Principal Account the amounts described below, (e) to deposit monthly into the Rebate Fund the amounts described below, (f) to pay monthly any amounts due to any Financial Facility Issuer securing Senior Bonds all amounts required to be paid to such Financial Facility Issuer as compensation for the Financial Facility securing Senior Bonds and as satisfaction of any other amounts due under the Financial Facility Agreement that are not considered to be subrogated payments of principal and interest on Senior Bonds, including Additional Interest on Senior Bonds, (g) to deposit monthly into the Debt Service Reserve Account and paid monthly to any Reserve Account Credit Facility Provider, on a pro rata basis, the amounts described below, (h) to pay monthly repayments of any draw-down on any Reserve Account Credit Facility (other than repayments that reinstate the Reserve Account Credit Facility) and any interest or fees due the Reserve Account Credit Facility Provider under such Reserve Account Credit Facility, (i) to deposit monthly the amounts required to be deposited into the funds and accounts created by any Series Resolution authorizing the issuance of Subordinate Bonds, as described below, (j) to pay monthly any amounts required to be paid with respect to any Other System Obligations, (k) to deposit monthly into the Utility General Fund all remaining moneys and securities held in the Revenue Fund after all of the other transfers set forth in this paragraph have been made; provided that the Consolidated Government must maintain a working capital reserve in the Revenue Fund to pay the costs of operating, maintaining and repairing the System in such amount as the Administrator of the Consolidated Government and the Director of the Utilities Department of the Consolidated Government deem reasonable and prudent; provided further that the amount of such working capital reserve will be a minimum of the lesser of $2,500,000 or 5% of the Operating Revenues of the System for the immediately preceding Fiscal Year. The gross revenues derived by the Consolidated Government from the ownership and operation of the System may be used only in accordance with the provisions of the Bond Resolution described above and, except as described above, may not be transferred to either the General Fund or any other fund of the Consolidated Government. Sinking Fund Interest Account Under the terms of the Bond Resolution, there must be paid into the Interest Account monthly from moneys in the Revenue Fund, on or before the 25th day of the month, an installment equal to 1/6th of the amount of interest (excluding Additional Interest) falling due and payable on all Outstanding Senior Bonds on the next Interest Payment Date, adjusted to give credit for any other available moneys then in the Interest Account or the Capitalized Interest Account, and further adjusted if necessary to assure the timely accumulation of the required amount in approximately equal installments. To the extent that any of the Senior Bonds bear interest at a Variable Rate, this requirement will be deemed satisfied with respect to such Senior Bonds if the installment paid into the Interest Account in each month is sufficient to accumulate for such Senior Bonds an amount equal to 1/6th of the Projected Interest Payment multiplied by the number of months and fractions of months expired since delivery of such Senior Bonds or the most recent Interest Payment Date. Notwithstanding the foregoing, any Series Resolution that authorizes the issuance of Additional Bonds which pay interest other than semiannually may establish a different method of accumulating money in the Interest Account to pay interest on such Additional Bonds, so long as such method provides for the accumulation, in equal installments of no greater frequency than monthly, of sufficient funds to pay interest due on such Additional Bonds on each Interest Payment Date established for such Additional Bonds. The Consolidated Government must also deposit and continue to deposit all Hedge Receipts under Senior Hedge Agreements in the Interest Account from time to time as and when received. Moneys in the Interest Account will be used solely to pay interest (excluding Additional Interest) on the Senior Bonds when due. 13 Hedge Payments Account Under the terms of the Bond Resolution, on or before each payment date for Hedge Payments under Senior Hedge Agreements, the Consolidated Government must deposit in the Hedge Payments Account from moneys in the Revenue Fund, an amount which, together with any other moneys already on deposit therein and available to make such payment, is not less than such Hedge Payments coming due on such payment date. In addition, the Bond Resolution provides that, on or before the 25th day of each month, the Consolidated Government must deposit in the Hedge Payments Account from moneys in the Revenue Fund, an amount which, together with an equal amount to be deposited in each such month, if any, occurring prior to the next succeeding payment date for Hedge Payments under Senior Hedge Agreements, will not be less than the amount of such Hedge Payments to become due on such next succeeding payment date for such Hedge Payments. No deposit pursuant to this paragraph need be made to the extent that there is a sufficient amount already on deposit in the Hedge Payments Account to pay such Hedge Payments on each such payment date. Moneys in the Hedge Payments Account may be used solely to pay Hedge Payments under Senior Hedge Agreements when due. Principal Account Under the terms of the Bond Resolution, there must be paid into the Principal Account monthly from moneys in the Revenue Fund, on or before the 25th day of the month, an installment equal to 1/12th of the principal amount falling due and payable on all Outstanding Senior Bonds on the next Principal Maturity Date plus whatever additional amounts may be necessary in equal monthly installments to accumulate in the Principal Account the full principal amount falling due in such Fiscal Year. For purposes of this requirement, the amount of principal falling due in any Fiscal Year includes all amounts of principal maturing during the Fiscal Year and all amounts of principal that are subject to mandatory redemption during the Fiscal Year. Notwithstanding the foregoing, any Series Resolution that authorizes the issuance of Additional Bonds which pay principal other than annually may establish a different method of accumulating money in the Principal Account to pay principal on such Additional Bonds, so long as such method provides for the accumulation, in equal installments of no greater frequency than monthly, of sufficient funds to pay principal on such Additional Bonds when due. Moneys in the Principal Account will be used solely for the payment of principal of the Senior Bonds as the same become due and payable at maturity or upon redemption. Capitalized Interest Account No deposit will be made into the Capitalized Interest Account in connection with the issuance of the Series 2017 Bonds. Amounts deposited in the Capitalized Interest Account in connection with Additional Bonds will be applied to the payment of interest on the Senior Bonds and will be transferred to the Interest Account to pay interest on the Senior Bonds or to reimburse any Credit Facility Issuer for amounts drawn on a Credit Facility for such purposes. Such transferred amounts will be limited to amounts necessary to enable the Consolidated Government to make all required deposits into the Interest Account, thereby leaving sufficient Net Operating Revenues to enable the Consolidated Government to make all required deposits to the other funds and accounts established under the Bond Resolution. Debt Service Reserve Account The Debt Service Reserve Account must be maintained at an amount equal to the Debt Service Reserve Requirement (or such lesser amount that is required to be accumulated in the Debt Service Reserve Account in connection with the periodic accumulation to the Debt Service Reserve Requirement upon the failure of the Consolidated Government to provide a substitute Reserve Account Credit Facility in certain events). The Debt Service Reserve Account will be fully funded upon the issuance of the Series 2017 Bonds at the Debt Service Reserve Requirement, in an amount equal to $__________, which amount equals the least of (a) 10% of the original principal amount of the Series 2017 Bonds and the Prior Bonds, (b) 50% of the maximum amount of principal and interest coming due on the Series 2017 Bonds and the Prior Bonds in the then current or any succeeding Fiscal Year (January 1 – December 31), and (c) 125% of the average annual debt service on the Series 2017 Bonds and the Prior Bonds in the then current or any succeeding Fiscal Year. The Bond Resolution provides that there will be paid monthly from the Revenue Fund on a pro rata basis (1) to the Debt Service Reserve Account the amount necessary to restore the amount of cash and securities in the 14 Debt Service Reserve Account to an amount equal to the difference between (a) the Debt Service Reserve Requirement (or such lesser monthly amount that is required to be deposited into the Debt Service Reserve Account upon the failure of the Consolidated Government to provide a substitute Reserve Account Credit Facility in certain events) and (b) the portion of the required balance of the Debt Service Reserve Account satisfied by means of a Reserve Account Credit Facility, and (2) to any Reserve Account Credit Facility Provider the amount necessary to reinstate any Reserve Account Credit Facility which has been drawn down. Whenever for any reason the amount in the Interest Account or the Principal Account is insufficient to pay all interest or principal falling due on the Senior Bonds within the next seven days, the Consolidated Government is required by the terms of the Bond Resolution to make up any deficiency by transfers from the Utility General Fund. Whenever, on the date that such interest or principal is due, there are insufficient moneys in the Interest Account or the Principal Account available to make such payment, the Consolidated Government must, without further instructions, apply so much as may be needed of the moneys in the Debt Service Reserve Account to prevent default in the payment of such interest or principal, with priority to interest payments for the Senior Bonds. Whenever by reason of any such application or otherwise the amount remaining to the credit of the Debt Service Reserve Account is less than the amount then required to be in the Debt Service Reserve Account, such deficiency must be remedied by monthly payments from the Revenue Fund in accordance with the priority described above under the caption “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS – Funds Created By the Bond Resolution and Flow of Funds – Revenue Fund,” to the extent funds are available in the Revenue Fund for such purpose. The Consolidated Government may elect to satisfy in whole or in part the Debt Service Reserve Requirement by means of a Reserve Account Credit Facility, subject to the following requirements: (A) the Reserve Account Credit Facility Provider must have a credit rating issued by a Rating Agency not less than the Rating Agency’s second highest Rating; (B) the Consolidated Government may not secure any obligation to the Reserve Account Credit Facility Provider by a lien equal to or superior to the lien granted to the related series of Senior Bonds; (C) each Reserve Account Credit Facility must have a term of at least one (1) year (or, if less, the remaining term of the related series of Senior Bonds) and must entitle the Consolidated Government to draw upon or demand payment and receive the amount so requested in immediately available funds on the date of such draw or demand; (D) the Reserve Account Credit Facility must permit a drawing by the Consolidated Government for the full stated amount in the event (i) the Reserve Account Credit Facility expires or terminates for any reason prior to the final maturity of the related series of Senior Bonds, and (ii) the Consolidated Government fails to satisfy the Debt Service Reserve Requirement by the deposit to the Debt Service Reserve Account of cash, securities, a substitute Reserve Account Credit Facility, or any combination thereof, on or before the date of such expiration or termination; (E) if the Rating issued by the Rating Agency to the Reserve Account Credit Facility Provider is withdrawn or reduced below the Rating Agency’s second highest Rating, the Consolidated Government must provide a substitute Reserve Account Credit Facility within 60 days after such rating change, and, if no substitute Reserve Account Credit Facility is obtained by such date, must fund the Debt Service Reserve Requirement in not more than 24 equal monthly payments commencing not later than the first day of the month immediately succeeding the date representing the end of such 60 day period; and (F) if the Reserve Account Credit Facility Provider commences any insolvency proceedings or is determined to be insolvent or fails to make payments when due on its obligations, the Consolidated Government must provide a substitute Reserve Account Credit Facility within 60 days thereafter, and, if no substitute Reserve Account Credit Facility is obtained by such date, must fund the Debt Service Reserve Requirement in not more than 24 equal monthly payments commencing not later than the first day of the month immediately succeeding the date representing the end of such 60 day period. If the events described in either clauses (E) or (F) above occur, the Consolidated Government may not relinquish the Reserve Account Credit Facility at issue until after the Debt Service Reserve Requirement is fully satisfied by the provision of cash, securities, or a substitute Reserve Account Credit Facility or any combination thereof. Any amount received from the Reserve Account Credit Facility must be deposited directly into the Interest Account and the Principal Account, and such deposit will constitute the application of amounts in the Debt Service Reserve Account. Repayment of any draw-down on the Reserve Account Credit Facility (other than repayments which reinstate the Reserve Account Credit Facility) and any interest or fees due the Reserve Account Credit Facility Provider under such Reserve Account Credit Facility must be secured by a lien on the Pledged Revenues subordinate to payments into the Sinking Fund and the Rebate Fund and payments to any Credit Facility Issuer securing Senior Bonds. Any such Reserve Account Credit Facility must be pledged to the benefit of the owners of each series of Senior Bonds to which such Reserve Account Credit Facility relates. The Consolidated Government reserved the right in the Bond Resolution, if it deems it necessary in order to acquire such a Reserve Account Credit Facility, to 15 amend the Bond Resolution without the consent of any of the owners of Senior Bonds in order to grant to the Reserve Account Credit Facility Provider such additional rights as it may demand, provided that such amendment may not, in the written opinion of Bond Counsel filed with the Consolidated Government, impair or reduce the security granted to the owners of Senior Bonds or any of them. Rebate Fund Under the terms of the Bond Resolution, there must be paid monthly from the Revenue Fund any amounts required to be paid into the Rebate Fund, as estimated by the Consolidated Government, or as estimated for the Consolidated Government and approved by the Consolidated Government, for purposes of complying with the requirement for rebate to the United States government under Section 148(f) of the Internal Revenue Code of 1986, as amended. Payment may be made in monthly installments and may be adjusted as the Consolidated Government deems necessary to provide the amount which it estimates to be necessary, as revised from time to time, within any Fiscal Year. Subordinate Bonds Under the terms of the Bond Resolution, there will be deposited monthly the amounts required to be deposited into the funds and accounts created by any Series Resolution authorizing the issuance of Subordinate Bonds, for the purpose of paying principal of (whether at maturity or upon mandatory redemption) and interest on Subordinate Bonds, making Hedge Payments under Subordinate Hedge Agreements, and accumulating reserves for such payments. Any money withdrawn from such funds and accounts for use in making such payments must be released from the lien of the Bond Resolution. If at any time the amounts in any account of the Sinking Fund are less than the amounts required by the Bond Resolution, and there are not on deposit in the Utility General Fund available moneys sufficient to cure any such deficiency, then the Consolidated Government must withdraw from the funds and accounts relating to Subordinate Bonds and deposit in such account of the Sinking Fund, as the case may be, the amount necessary (or all the moneys in such funds and accounts, if less than the amount required) to make up such deficiency. Utility General Fund Under the terms of the Bond Resolution, in addition to the monthly deposits to be made to the Utility General Fund from moneys in the Revenue Fund as described above, the Consolidated Government must deposit in the Utility General Fund all termination payments received under any Hedge Agreements. All sums accumulated and retained in the Utility General Fund must be used first to prevent default in the payment of interest on or principal of the Senior Bonds when due and then must be applied by the Consolidated Government from time to time, as and when the Consolidated Government may determine, to the following purposes: (1) to the payment of Expenses of Operation and Maintenance, to the extent moneys are not available for such purpose in the Revenue Fund, including, without limitation, PILOT and PILOF payments; (2) to the restoration of the Interest Account, the Principal Account and the Hedge Payments Account to the respective amounts required at that time to be held therein; (3) to the restoration of the Rebate Fund to the amount required at that time to be held therein; (4) to the payment of any and all amounts which may then be due and owing to any Financial Facility Issuer securing Senior Bonds; (5) to the restoration of the Debt Service Reserve Account (including the reinstatement of any Reserve Account Credit Facility) to the amount required at that time to be held therein; (6) to the payment of any and all amounts that may then be due and owing to any Reserve Account Credit Facility Provider; 16 (7) to prevent default in the payment of interest on or principal of the Subordinate Bonds when due; (8) to the restoration of the funds and accounts relating to Subordinate Bonds to the respective amounts required at that time to be held therein; (9) to the payment of all amounts required to be paid to any Financial Facility Issuer securing Subordinate Bonds as compensation for the Financial Facility Issuer securing Subordinate Bonds and as satisfaction of any other amounts due under the Financial Facility Agreement; (10) to the payment of any and all amounts that may then be due and owing under any Hedge Agreement (including termination payments, fees, expenses, and indemnity payments); (11) to the payment of any and all governmental charges and assessments against the System or any part thereof that may then be due and owing; (12) to the payment of any and all amounts that may then be due and owing under any Other System Obligation; (13) to make acquisitions, betterments, extensions, repairs, or replacements or other capital improvements (including the purchase of equipment) to the System deemed necessary by the Consolidated Government (including payments under contracts with vendors, suppliers, and contractors for the foregoing purposes); and (14) at the option of the Consolidated Government, to the acquisition of Senior Bonds by redemption or by purchase in the open market at a price not exceeding the callable price as provided and in accordance with the terms and conditions of the Bond Resolution, which Senior Bonds may be any of the Senior Bonds, prior to their respective maturities, and when so used for such purposes the moneys must be withdrawn from the Utility General Fund and deposited into the Interest Account and the Principal Account for the Senior Bonds to be so redeemed or purchased. The Consolidated Government is not required to maintain a minimum balance in the Utility General Fund. Construction Fund No deposit will be made into the Construction Fund in connection with the issuance of the Series 2017 Bonds. The Bond Resolution requires the Consolidated Government to establish within the Construction Fund a separate account for each Project. Moneys in the Construction Fund must be applied to the payment of the Costs of the Project, or for the repayment of advances made for that purpose in accordance or substantially in accordance with an engineering report and subject to the provisions and restrictions set forth in the Bond Resolution. The Consolidated Government covenanted in the Bond Resolution that it will not cause or permit to be paid from the Construction Fund any sums except in accordance with such provisions and restrictions; provided, however, that any moneys in the Construction Fund not presently needed for the payment of current obligations during the course of construction may be invested in Permitted Investments maturing not later than (i) the date upon which such moneys will be needed according to a schedule of anticipated payments from the Construction Fund filed with the Consolidated Government by the Independent Consulting Engineer in charge of the Project or, (ii) in the absence of such schedule, 36 months from the date of purchase, in either case upon written direction of the Consolidated Government. Rate Covenant The Consolidated Government has covenanted in the Bond Resolution that it will continuously own, control, operate, and maintain the System in an efficient and economical manner and on a revenue producing basis and will prescribe, fix, maintain, and collect rates, fees, and other charges for the services, facilities, and commodities furnished by the System fully sufficient to: (a) provide for 100% of the Expenses of Operation and Maintenance and for the accumulation in the Revenue Fund of a reasonable reserve therefor to the extent required 17 by the Bond Resolution; and (b) produce Net Operating Revenues in each Fiscal Year that (together with Investment Earnings, other than Investment Earnings on the Construction Fund): (i) will equal at least 110% of the Debt Service Requirement on the Senior Bonds then Outstanding for the year of computation and 100% of the Debt Service Requirement on all Subordinate Bonds then Outstanding for the year of computation; (ii) will enable the Consolidated Government to make all required payments, if any, into the Debt Service Reserve Account and the Rebate Fund and to any Financial Facility Issuer, any Reserve Account Credit Facility Provider, and any Qualified Hedge Provider; (iii) will enable the Consolidated Government to accumulate an amount to be held in the Utility General Fund as required by the Bond Resolution, and such greater amount which in the judgment of the Consolidated Government is adequate to meet the costs of major renewals, replacements, repairs, additions, betterments, and improvements to the System, necessary to keep the same in good operating condition or as is required by any governmental agency having jurisdiction over the System; and (iv) will remedy all deficiencies in required payments into any of the funds and accounts mentioned in the Bond Resolution from prior Fiscal Years. Parity and Subordinate Bonds Upon satisfaction of certain conditions, the Bond Resolution permits the Consolidated Government, for specified purposes, to issue additional revenue bonds without express limit as to principal amount, which will be equally and ratably secured on a parity basis with the Series 2017 Bonds and the Prior Bonds under the Bond Resolution. See “SUMMARY OF THE BOND RESOLUTION – Additional Bonds” in Appendix B hereto. The Consolidated Government may issue additional parity bonds in the future to finance part of the cost of ongoing capital improvements to the System. The issuance of additional parity bonds for such purposes may, for a period of time, dilute the security for the Senior Bonds. The Bond Resolution also allows the Consolidated Government to issue obligations secured by the Pledged Revenues that are junior and subordinate to the Senior Bonds as to lien and right of payment. Under the terms of the Bond Resolution, should revenue bonds or other obligations be issued ranking as to lien on the revenues of the System junior and subordinate to the lien securing the payment of the Senior Bonds, then payments to the Utility General Fund may be suspended and such money will be available to the extent necessary to pay the principal of and interest on such junior lien bonds and to create and maintain a reasonable reserve therefor, and such moneys may be allocated and pledged for that purpose. Limited Obligations The Series 2017 Bonds are special limited obligations of the Consolidated Government payable solely from the Pledged Revenues. The Series 2017 Bonds are not payable from and are not secured by a charge, lien, or encumbrance upon any funds or assets of the Consolidated Government other than the Pledged Revenues and the funds created and held under the Bond Resolution. The Series 2017 Bonds do not and will not constitute a debt or general obligation of the Consolidated Government or a pledge of the faith and credit or taxing power of the Consolidated Government. No governmental entity, including the Consolidated Government, is obligated to levy any tax for the payment of the Series 2017 Bonds. No recourse may be had against the General Fund of the Consolidated Government for the payment of the Series 2017 Bonds. The pledge of and lien on Pledged Revenues securing the Series 2017 Bonds do not create a legal or equitable pledge, charge, lien, or encumbrance upon any of the Consolidated Government’s property or income, receipts, or revenues, except the Pledged Revenues and the amounts on deposit in the funds held under the Bond Resolution. Remedies The Revenue Bond Law provides that the provisions of the Revenue Bond Law and the Bond Resolution constitute a contract between the Consolidated Government and the owners of the Senior Bonds. For a description of the remedies available to owners of the Bonds under the terms of the Bond Resolution upon the occurrence of an 18 Event of Default thereunder, see “SUMMARY OF THE BOND RESOLUTION - Events of Default and Remedies” in Appendix B hereto. In addition to the remedies set forth in the Bond Resolution, the Revenue Bond Law provides that the duties of the Consolidated Government and the officers of the Consolidated Government under the Revenue Bond Law and the Bond Resolution are enforceable by any owner of the Bonds by mandamus or other appropriate action or proceeding at law or in equity. The Revenue Bond Law also provides that in the event the Consolidated Government defaults in the payment of the principal or interest on any of the Bonds after the same becomes due, whether at maturity or upon call for redemption, and such default continues for a period of 30 days, or in the event the Consolidated Government or the officers, agents, or employees of the Consolidated Government fail or refuse to comply with the essential provisions of the Revenue Bond Law or default in any material respect in the Bond Resolution, any holders of the Bonds shall have the right to apply in an appropriate judicial proceeding to the Superior Court of Richmond County or to any court of competent jurisdiction for the appointment of a receiver of the System, whether or not all Bonds have been declared due and payable and whether or not such holder is seeking or has sought to enforce any other right or to exercise any remedy in connection with the Bonds. Upon such application, the Superior Court, if it deems such action necessary for the protection of the bondholders, may appoint and, if the application is made by the holders of at least 25 percent in principal amount of the Bonds then outstanding, shall appoint a receiver of the System. The receiver so appointed under the Revenue Bond Law, directly or by his agents and attorneys, is required under the Revenue Bond Law to forthwith enter into and upon and take possession of the System. If the court so directs, the receiver may exclude the Consolidated Government and the Consolidated Government’s officers, agents, and employees, and all persons claiming under them, wholly from the System. Under the Revenue Bond Law, the receiver will have, hold, use, operate, manage, and control the System, in the name of the Consolidated Government or otherwise, as the receiver may deem best. Under the Revenue Bond Law, the receiver will exercise all the rights and powers of the Consolidated Government with respect to the System as the Consolidated Government itself might do. The receiver will maintain, restore, insure, and keep insured the System and from time to time will make all such necessary or proper repairs, as the receiver may deem expedient. Under the Revenue Bond Law, the receiver will establish, levy, maintain, and collect such fees, tolls, rentals, and other charges in connection with the System, as he deems necessary or proper and reasonable. Under the Revenue Bond Law, the receiver will collect and receive all revenues and will deposit the same in a separate account and apply the revenues so collected and received in such manner as the court shall direct. Notwithstanding the provisions of the Revenue Bond Law described above, the receiver has no power to sell, assign, mortgage, or otherwise dispose of any assets of whatever kind or character belonging to the Consolidated Government and useful for the System. The authority of any such receiver is limited to the operation and maintenance of the System. No court may have jurisdiction to enter any order or decree requiring or permitting the receiver to sell, assign, mortgage, or otherwise dispose of any such assets. The receiver must, in the performance of the powers conferred upon him, act under the direction and supervision of the court making such appointment and will at all times be subject to the orders and decrees of such court and may be removed by such court. Under the terms of the Revenue Bond Law, whenever all that is due upon the Bonds and interest thereon and upon any other notes, bonds, or other obligations and interest thereon having a charge, lien, or encumbrance on the revenues of the System and under any of the terms of the Bond Resolution has been paid or deposited as provided therein and whenever all defaults have been cured and made good and it appears to the court that no default is imminent, the court must direct the receiver to surrender possession of the System to the Consolidated Government. The same right of the holders of the Bonds to secure the appointment of a receiver exists upon any subsequent default as is provided in the Revenue Bond Law. If the Consolidated Government were to default on the Series 2017 Bonds, the realization of value from the pledge of the Pledged Revenues to secure the payment of the Series 2017 Bonds would depend upon the exercise of various remedies specified by the Bond Resolution and Georgia law (including the Revenue Bond Law). These remedies may require judicial actions, which are often subject to discretion and delay and which may be difficult to pursue. The enforceability of rights or remedies with respect to the Series 2017 Bonds may be limited by state and 19 federal laws, rulings, and decisions affecting remedies and by bankruptcy, insolvency, or other laws affecting creditors’ rights or remedies heretofore or hereafter enacted. Section 36-80-5 of the Official Code of Georgia Annotated provides that no political subdivision created under the Constitution or laws of the State of Georgia shall be authorized to file a petition for relief from payment of its debts as they mature or a petition for composition of its debts under any federal statute providing for such relief or composition or otherwise to take advantage of any federal statute providing for the adjustment of debts of political subdivisions and public agencies and instrumentalities. Section 36-80-5 of the Official Code of Georgia Annotated also provides that no chief executive, mayor, board of commissioners, or other governmental officer, governing body, or organization shall be empowered to cause or authorize the filing by or on behalf of any political subdivision created under the Constitution or laws of the State of Georgia of any petition for relief from payment of its debts as they mature or a petition for composition of its debts under any federal statute providing for such relief or composition or otherwise to take advantage of any federal statute providing for the adjustment of debts of political subdivisions and public agencies and instrumentalities. Section 36-80-5 of the Official Code of Georgia Annotated does not constitute a statutory covenant with the owners of any Series 2017 Bonds and may be amended or repealed at any time without the consent of any owners of the Series 2017 Bonds. THE CONSOLIDATED GOVERNMENT Introduction The consolidated government of Augusta-Richmond County is a political subdivision created and existing under the laws of the State of Georgia and presently has as its formal or legal name “Augusta, Georgia.” The Consolidated Government was created on January 1, 1996 pursuant to Acts of the General Assembly of the State of Georgia (collectively the “Consolidation Act”) that authorized the consolidation of the municipal corporation known as “The City Council of Augusta” and the political subdivision known as “Richmond County, Georgia.” The Consolidation Act and the consolidation of the City and the County were separately approved by a majority of the qualified voters of the City and the County at an election held on June 20, 1995. On January 1, 1996, the Consolidated Government became a consolidated city-county government, with territorial limits covering all of what was formerly Richmond County. This geographic area is hereinafter referred to as “Richmond County.” The Cities of Blythe and Hephzibah, small communities with populations of approximately 721 and 4,011, respectively, still hold their own municipal charters within the consolidated territory. The relationship between the Consolidated Government and the Cities of Blythe and Hephzibah is similar to that of counties to municipalities located within the territorial limits of such counties. The Consolidated Government, as a consolidated city-county government, has all of the governmental and corporate powers of both municipal corporations and counties under Georgia law. Under the terms of the Consolidation Act, the Augusta-Richmond County Commission may exercise and is subject to all of the rights, powers, duties, and obligations previously applicable to the governing authorities of the City and the County. Consolidation is intended to result in the removal of duplicate services formerly rendered by the City and County governments. As a result of consolidation, the Consolidated Government provides, under one management, public services throughout its territorial limits, which services would have been provided separately by the City and the County. The City was originally chartered in 1789 by the General Assembly of the State of Georgia, making it Georgia’s second oldest city. As a city, the Consolidated Government would rank as the second largest by population in the State of Georgia. The Consolidated Government is located in the central eastern portion of the State of Georgia on the south bank of the Savannah River, which is the Georgia-South Carolina state boundary, approximately 155 miles east of Atlanta, Georgia and 75 miles southwest of Columbia, South Carolina. Richmond County has a land area of approximately 325 square miles. At its highest point, Richmond County is situated at 520 feet above sea level. Richmond County is located on the Fall Line, which is the natural division of the Piedmont Plateau and the Coastal Plain of Georgia. Its physical features include rolling slopes in the north, transitioning to more level terrain in the south. 20 Consolidated Government Administration and Officials The form of government of the Consolidated Government is the municipal form of government. Under the Consolidation Act, the governing authority of the Consolidated Government is a board of commissioners designated as the Augusta-Richmond County Commission (the “Commission”). The Commission consists of a Mayor and ten commissioners. The members of the Commission serve terms of office of four years and until a successor is elected and qualified. All members of the Commission are full voting members, except for the Mayor, who has the right to vote only to make or break a tie vote on any matter. Under the terms of the Consolidation Act, seven members of the Commission constitute a quorum for the transaction of ordinary business, and an affirmative vote of at least six members is required for the Commission to take action. For the purpose of electing members of the Commission, Richmond County is divided into ten commission districts. Each commissioner is elected by the voters residing within such commissioner’s commission district. Commission district 9 encompasses all of commission districts 1, 2, 4, and 5. Commission district 10 encompasses all of commission districts 3, 6, 7, and 8. No person will be eligible to serve as a commissioner unless he or she: (1) has been a resident of the commission district from which elected for a period of one year immediately prior to the date of the election, (2) continues to reside within the commission district from which elected during his or her term of office, (3) is a registered and qualified elector of Richmond County, and (4) meets the qualification standards required for members of the Georgia House of Representatives. No person who has served two consecutive full four-year terms of office as commissioner will again be eligible to hold office as commissioner until after the expiration of four years from the conclusion of that person’s last term of office as commissioner. The Mayor is the chief executive officer of the Consolidated Government and is elected on a county-wide basis by the voters of the entire county. No person will be eligible to serve as Mayor unless he or she (1) has been a resident of Richmond County for a period of one year immediately prior to the date of the election, (2) continues to reside within Richmond County during his or her term of office, (3) is a registered and qualified elector of Richmond County, and (4) meets the qualification standards required for members of the Georgia House of Representatives. No person who has served two consecutive full four-year terms of office as Mayor will again be eligible to hold office as Mayor until after the expiration of four years from the conclusion of that person’s last term of office as Mayor. Under the Consolidation Act, the Mayor presides at all meetings of the Commission, but has no power to veto ordinances, resolutions, or other actions of the Commission. Information concerning the current Mayor and commissioners is set forth below: Name and Office Held Expiration of Term Principal Occupation Hardie Davis, Jr., Mayor December 31, 2018 Full-Time Mayor William Fennoy, District 1 December 31, 2020 Retired Dennis Williams, District 2 December 31, 2018 Retired Mary Davis, District 3, Mayor Pro Tempore December 31, 2020 School Development Director Sammie Sias, District 4 December 31, 2018 Retired Andrew Jefferson, District 5 December 31, 2020 Retired Ben Hasan, District 6 December 31, 2018 Business Owner Sean Frantom, District 7 December 31, 2020 Nonprofit Development Director Wayne Guilfoyle, District 8 December 31, 2018 Business Owner Marion Williams, District 9 December 31, 2020 Pastor Grady Smith, District 10 December 31, 2018 Business Owner THE SYSTEM Introduction The Revenue Bond Law authorizes the Consolidated Government to acquire and operate for users within and outside its territorial boundaries systems, plants, works, instrumentalities, and properties (i) used or useful in 21 connection with obtaining a water supply and conserving, treating, and disposing of water for public and private uses and (ii) used or useful in connection with collecting, treating, and disposing of sewage and wastewater. The City’s water system was established in 1840 to provide water service to the City. The City’s water system was a surface water system. The City’s sewer system was established in approximately 1850 to provide sewer service to the City. The County’s water system was established in 1949 by a private developer to provide water service to a private development and was conveyed to the County in 1951. The County’s water system was a well water system. The County’s sewer system was established in 1950 to provide sewer service to portions of the unincorporated areas of the County. The consolidation of the governments of the City and the County vested ownership and operation of the System with the Consolidated Government. The System operates as a department of the Consolidated Government known as the Utilities Department. Principal Administrative Personnel The Consolidated Government administers the daily operations of the System through its Utilities Department. The Administrator of the Consolidated Government, who is appointed by the Commission upon recommendation of the Mayor, oversees the management and coordination of the operations and activities of the Utilities Department. The chief managerial officer of the Utilities Department is the Director, who is appointed by the Commission. Janice Allen Jackson has been the Administrator of the Consolidated Government since November 2014. Prior to her appointment as Administrator, Ms. Jackson owned her own consulting business in Charlotte, North Carolina. She previously served as the General Manager for Mecklenburg County, North Carolina, and as the City Manager for Albany, Georgia. She is a graduate of the College of William and Mary and holds a Master’s degree in Public Policy from Duke University. Donna Williams, C.G.F.M., has served as the Director of Finance of the Consolidated Government since November 2007. She has been employed by the County and the Consolidated Government for approximately 38 years and served as the Assistant Director of Finance from 1984 until she assumed the position of Interim Director of Finance on March 1, 2006 and the position of Director of Finance on November 8, 2007. Ms. Williams earned a Certified Governmental Financial Manager certificate in 1997 and received a B.B.A. degree in Accounting from Augusta State University in 1979. Tom Wiedmeier, P.E., has served as the Director of the Utilities Department since December 2009. He previously served in various positions with the City and the Consolidated Government from 1988 through 2000, including four years as Assistant Director of the Utilities Department. From 2000 until he assumed the position of the Director of the Utilities Department, Mr. Wiedmeier was employed as Senior Project Manager for Tetra Tech. Mr. Wiedmeier serves on the State Water Planning Council for the Savannah/Upper Ogeechee River basin and is active in the Georgia Association of Water Professionals. He received a Bachelor of Civil Engineering Degree from the Georgia Institute of Technology in 1984 and is a registered Professional Engineer in the State of Georgia. Steven J. Little, C.P.A., has served as the Assistant Director of Finance and Administration of the Utilities Department since December of 2001. From 2000 to 2001, he was the Assistant to the Chief Financial Officer at the national headquarters for Electrolux Home Products, makers of Frigidaire appliances, formerly located in Augusta, Georgia. Prior to that, he was the Chief Financial Officer for a start-up medical referral company and its sister corporation in Aiken, South Carolina. His previous experience includes over 10 years of public accounting, with an emphasis in auditing local governments, and internal auditing for a private utility company. Mr. Little is a licensed certified public accountant and currently serves as a member of the Finance and Administration Subcommittee for the Utility Management Committee of the Water Environment Federation. He received a B.B.A. degree in Accounting from Iowa State University in 1982. D. Allen Saxon, Jr. has served as the Assistant Director for Facility Operations with responsibility for all wastewater treatment and water production facilities since April 1, 2012. From March 2001 until he assumed his 22 current position, he served as the Assistant Director of Wastewater for the Utilities Department. Mr. Saxon previously served as the Supervisor of Water Pollution for the City for 17 years until September 1994, when he resigned to further his education. He is an active member of the Georgia Association of Water Professionals, the Water Environment Federation and the American Water Works Association. Mr. Saxon earned a B.B.A. degree in 1983 from Augusta College and an M.S. degree in 1996 from Georgia State University. Mr. Saxon is certified as a Class I Wastewater Treatment System Operator by the State of Georgia. Horace Luke has been the Assistant Director of Fort Gordon Operations for the Utilities Department since January 2008. Mr. Luke served as the Manager of Fort Gordon’s Water System and Water Pollution System for 28 years. He is an active member of the Georgia Association of Water Professionals and the American Water Works Association. Mr. Luke is certified by the State of Georgia as a Class I Water Treatment System Operator, Wastewater Water Treatment System Operator, Laboratory Analyst, and Backflow Technician. Marie Corbin, has been the Assistant Director for the Engineering Division of the Utilities Department since August 2017. She has been employed by the Consolidated Government in the Utilities Department for two years. Prior to her employment with the Consolidated Government, Ms. Corbin worked for W. R. Toole Engineers as a Project Manager. Her previous experience includes over 10 years in Utility Designs as a private consultant. Ms. Corbin is an active member of the Georgia Association of Water Professionals and the Georgia Society of Professional Engineers. She received a Bachelor of Science degree in Biosystems Engineering from Clemson University in 2006 and is a Registered Professional Engineer in the States of Georgia and South Carolina. Kelsey T. Henderson, has been the Assistant Director of Construction and Maintenance for the Utilities Department since May 2015. Mr. Henderson has been employed by the Consolidated Government since 2004 by working throughout different divisions of the Utilities Department including Construction and Maintenance, Engineering, and Fort Gordon Operations. He is certified by the State of Georgia with his Wastewater Collections and Water Distribution Licenses. Mr. Henderson is also an active member of the Georgia Association of Water Professionals and the American Water Works Association. System Facilities Water System The System’s primary sources of raw water are the Savannah River and the Augusta Canal, which draws water from and is located parallel to the Savannah River. See “THE SYSTEM – Water Sources” herein. The System has six water intakes located on the Augusta Canal (four primary and two secondary), plus three diesel- engine-driven raw water pumps that can pump from either the canal or the river. The Consolidated Government ordinarily pumps raw water from the System’s primary water intakes, through the System’s raw water pump station located on the Augusta Canal, to the System’s surface water treatment plant located on Highland Avenue. The location of the Highland Avenue water treatment plant allows most of the water treated at that plant to be fed by gravity throughout the System’s distribution network. The Consolidated Government also pumps treated water from the Highland Avenue plant to eight of the System’s elevated storage tanks, from which the treated water is then fed by gravity throughout the System’s water distribution network. The System also pumps raw water from the Savannah River at an electrically-operated pumping station located on Pistol Range Road adjacent to the river. Water from this source is pumped to a storage reservoir at the N. Max Hicks water treatment plant. The Consolidated Government pumps treated water from the N. Max Hicks plant to the System’s elevated and ground storage tanks, from which the treated water is then fed by gravity or pumped throughout the System’s water distribution network. The Consolidated Government also obtains raw water for the System from the Tuscaloosa Formation aquifer. The Consolidated Government taps the aquifer through 22 active wells. The Consolidated Government pumps raw water from these 22 wells to the System’s ground water treatment plants located on Peach Orchard Road, the Highway 56 Loop, and Old Waynesboro Road (known as “Little Spirit Creek Ground Water Treatment Plant”). The Consolidated Government then pumps this treated water to the System’s storage facilities, from which the treated water is then re-pumped throughout the System’s water distribution network. 23 The Consolidated Government owns two raw water pumps located at the System’s water intakes on the Augusta Canal with raw water pumping capacity of 20 million gallons per day (“MGD”) and 30 MGD, respectively. These raw water pumps are powered by water-driven turbines that take advantage of the falling water from the Augusta Canal to the Savannah River, were originally constructed in 1952 and 1975, respectively, and were both improved in 1993 and 1999. One pump is undergoing complete restoration to like-new condition of the turbine and replacement of the pump with a more efficient model. The condition of the second raw water pump is very good. The Consolidated Government owns three standby, diesel engine-driven raw water pumps, with a water intake that can be used in the Augusta Canal or the Savannah River, with one having a raw water pumping capacity of 20 MGD from the Savannah River and 17 MGD from the Augusta Canal and two having a capacity of 24 MGD each from the Savannah River and 22 MGD from the Augusta Canal. The smaller diesel standby auxiliary system was originally constructed in 1975, was improved in 1999, and is in good condition. The two larger diesel standby auxiliary systems were installed in 2009 and are in good condition. The Consolidated Government has raw water storage capacity of approximately 124 million gallons at two raw water storage reservoirs that serve the System’s Highland Avenue water treatment plant and approximately 45 million gallons at one raw water storage reservoir that serves the System’s N. Max Hicks plant. The Consolidated Government’s 22 active wells have an aggregate well-water pumping capacity rated at 21.15 MGD. These wells were originally constructed between 1949 and 1995. The condition of the wells is good. The Consolidated Government owns five water treatment plants which are described below. Rated Capacity for Treatment of Raw Water (MGD) Treated Water Pumping Rated Capacity (MGD) 2016 Production of Date of Water Treatment Treated Water (MGD) Original Dates of Facility Monthly Average Maximum Construction Improvements Highland Avenue 60.0 34.5 21.01 31.69 1932 1949, 1954, 1987, 1994, 2000, 2002, and 2008 Peach Orchard 5.0 10.3 2.49 4.13 1966 1969 and 1996 Highway 56 Loop 10.0 10.3 2.28 6.15 1979 1985, 1992, and 1996 Little Spirit Creek 5.0 7.9 1.82 3.87 2001 None N. Max Hicks 15.0 15.0 5.61 8.51 2005 None Totals 95.0 78.0 33.21 54.35 The condition of the water treatment facilities is good. The Consolidated Government owns 13 ground storage tanks with an aggregate storage capacity for treated water of 20.55 million gallons and 16 elevated storage tanks with an aggregate storage capacity for treated water of 12.35 million gallons. These storage tanks were constructed between 1935 and 2012 and are in good condition. In addition, the Consolidated Government has 19.2 million gallons of clear well water storage capacity at its water treatment plants. The System’s water distribution network consists of approximately 1,350 miles of pipelines, ranging in size from six inches to 24 inches in diameter. Most of the pipelines are made of cast iron or ductile iron. Approximately 20% of the pipelines have been in service for 50 years or more, with the oldest pipelines installed approximately 120 years ago. The general condition of the water distribution network is good. The Consolidated Government maintains standby power systems in the form of diesel-engine powered generators at its water treatment plants, to insure reliability of its water system during periods of power outage. The Consolidated Government also owns 20 buildings, approximately 138 vehicles, and various equipment related to its water system. Sewer System The Consolidated Government’s sewer system consists of a sewage and wastewater treatment and collection system. The sewer system dates from storm water drains constructed in downtown Augusta prior to 1900. The older portion of the sewer system was designed to transport storm water from the downtown area. Over time, sanitary sewage was diverted into the storm sewers, and the City’s downtown storm sewers evolved into a combined 24 storm and sanitary sewer system. Until 1968, the outfall sewers emptied into the Savannah River without treatment. In the 1980s and early 1990s, the City eliminated all then-known combined sewers by constructing trunk mains to separate sanitary sewage from storm water. Due to the continued occurrence of storm water infiltration to the sanitary system during rain events, the Consolidated Government investigated the locations of remaining connections between storm sewers and the sanitary sewer system and has taken measures to address locations where significant amounts of storm water infiltration may occur. Unidentified connections between storm sewers and the sanitary sewer system may remain. The Consolidated Government owns two wastewater treatment plants, which are described below. 2016 Treated Wastewater Wastewater (MGD) Date of Original Dates of Receiving Treatment Plant Average Maximum Construction Improvements Stream James B. Messerly(1) 34.93 64.86(2) 1968 1976, 1984, 1995, 1997, 2001, 2002, and 2010 Butler Creek Spirit Creek(3) 0.42 5.76(2) 1988 1995 Spirit Creek Totals 35.35 70.62 (1) Maximum day pumping capacity for the James B. Messerly Plant is approximately 88.0 MGD. (2) Elevated maximum daily flows result primarily from major infiltration and inflow of storm water into the wastewater collection and conveyance system following significant rainfall. See “THE SYSTEM – Governmental Approvals and Environmental Regulation – Issues Relating to Noncompliance.” The permit limits set forth herein under “THE SYSTEM – Governmental Approvals and Environmental Regulation – Wastewater Treatment” for maximum weekly average flows were exceeded in 2016 due to excessive rainfall during the summer months. As discussed above, the Consolidated Government continues to take measures to address locations where significant amounts of storm water infiltration may occur. (3) This plant is currently off-line and all influent is being pumped to the Messerly plant. See “THE SYSTEM – Governmental Approvals and Environmental Regulation – Issues Relating to Noncompliance.” The condition of the two wastewater treatment plants is good. The Consolidated Government’s wastewater collection and conveyance system consists of eight drainage basins, 81 permanent wastewater pumping stations, several small temporary wastewater pumping stations on Fort Gordon, and approximately 970 miles of collection pipes that transport primarily sanitary sewage. Approximately 80% of the wastewater collection system is drained by gravity, and the remainder requires pumping at least once. The collection and conveyance system uses a combination of eight-inch to 84-inch collection pipes. Most of the collection pipes are made of vitrified clay, but some are made of brick, concrete, and polyvinyl chloride. Approximately 20% of the collection pipes have been in service for 50 years or more, with the oldest collection pipes installed approximately 110 years ago. The collection and conveyance system has standby pumps and a standby power system. The general condition of the collection and conveyance system is good. The Consolidated Government is currently constructing upgrades to interceptor and relief sewers, improvements to reduce infiltration and inflow of storm water into the wastewater collection and conveyance system, and expansions into areas not currently served by the wastewater collection and conveyance system. Contract Operator of Wastewater Treatment Plants The Operations Contract The Consolidated Government and ESG Operations, Inc. (the “Operator”) have entered into an Agreement for Operations, Maintenance and Management Services, dated December 16, 2009, as amended by amendments dated October 4, 2011, January 1, 2012, January 1, 2013, January 1, 2014, June 3, 2014 and January 1, 2017 (collectively the “Operations Contract”), under the terms of which the Operator agreed to operate, maintain, and manage the Consolidated Government’s two wastewater treatment plants and to operate and maintain the Consolidated Government’s industrial pretreatment and sludge disposal programs. The term of the Operations Contract commenced on January 1, 2010 and expires on December 31, 2019. The Consolidated Government may terminate the Operations Contract at any time upon four months’ notice. The 25 Consolidated Government may terminate the Operations Contract for a material breach of the Operations Contract by the other party after giving the other party written notice of the breach and 45 days to correct the breach. The Operations Contract requires the Consolidated Government to pay the Operator a fee for services rendered during an initial period from January 1, 2010 to December 31, 2010 and for each 12-month period thereafter equal to a base fee equaling the actual cost of services performed during such period, plus a management and administrative fee equaling 12% of the base fee. Pursuant to the Operations Contract, the base fee is $5,095,020 and the management and administrative fee equals $611,402 for calendar year 2017. The management and administrative fee will increase proportionately to increases in the base fee during subsequent years. Under the Operations Contract, the term “Cost” means the total of costs for the scope of work defined by the Operations Agreement as determined on an accrual basis in accordance with generally accepted accounting principles, including but not limited to direct labor, labor overhead, chemicals, materials, supplies, utilities, equipment, maintenance, repair, and outside services. The Operator The Operator is a Georgia based corporation organized in 2003 that specializes in the operation, maintenance, and management of water, wastewater, public works, and other utility facilities for private and public sector owners. The Operator provides full contract operation and management services and is responsible for overall system performance. The Operator currently operates more than 75 water and wastewater facilities throughout the southeastern United States and employs over 700. The Operator’s executive offices are located in Macon, Georgia. Water Sources The Consolidated Government is located on the south bank of the Savannah River. The primary sources of raw water for the System are the Savannah River and the Augusta Canal. The Augusta Canal diverts water from the Savannah River, is approximately seven miles long, and runs parallel to the Savannah River. The Augusta Canal was constructed in 1845 and enlarged in 1875 as a means of transportation for cotton barges and to provide water power for textile mills and other industries located in the City. The City began using the Augusta Canal as a source of raw water in 1885. With an average daily flow of 6.1 billion gallons, the Savannah River has the volume and stability to provide an adequate supply of raw water for the Consolidated Government’s water system for the foreseeable future. The Savannah River’s lowest current daily flow is 2.0 billion gallons, which occurs during the summer in dry years. Lake Hartwell, Richard B. Russell Lake, Thurmond Lake, and Stevens Creek Dam are located above the Augusta Canal on the Savannah River. All of these impoundments are controlled by the U.S. Army Corps of Engineers and provide at least minimum flows in the Savannah River for aquatic life and potable water usage by the Consolidated Government. The System also obtains raw water from the Tuscaloosa Formation aquifer through 22 active wells. The Consolidated Government plans to continue to use the Augusta Canal and the Savannah River as its primary sources of raw water for the System and to use the aquifer as a secondary source of raw water for the System. See “THE SYSTEM – Governmental Approvals and Environmental Regulation – Water Withdrawal” for a description of the water withdrawal limits in the Savannah River, Augusta Canal and the Tuscaloosa Formation Aquifer. Service Area The System supplies water to residential, commercial, and industrial customers located within Richmond County and to the U.S. Army Signal Center, U.S. Army Cyber Center of Excellence and Fort Gordon (collectively “Fort Gordon”), which is located in Richmond County. The System supplies water to a geographic area of approximately 210 square miles (which constitutes approximately 88% of the land area of Richmond County exclusive of the area encompassing Fort Gordon). The System provides sewer services to residential, commercial, and industrial customers located within Richmond County and to Fort Gordon. The System provides sewer services 26 to a geographic area of approximately 106 square miles (which constitutes approximately 44% of the land area of Richmond County exclusive of Fort Gordon). The System also provides water and sewer services to Fort Gordon, which encompasses a geographic area of approximately 69 square miles. The Consolidated Government has the non-exclusive right to provide water and sewer service within Richmond County. The water and sewer systems of the City of Hephzibah provide water and sewer service within those jurisdictions in Richmond County. The City of Blythe provides water service but not sewer service within that city. The water and sewer system of the City of Hephzibah and the water system of the City of Blythe compete to a limited extent with the System in the unincorporated areas of Richmond County adjacent to those cities. Fort Gordon Municipal Services In 2005, the United States Congress, pursuant to the federal National Defense Authorization Act, authorized the Secretary of the United States Army (the “Army”) to carry out a pilot program at not more than two Army installations in the United States to procure one or more identified municipal services from neighboring local governments for the purpose of evaluating the efficacy of procuring such services rather than providing them directly. In 2006, the Secretary of the Army selected Fort Gordon as one of the installations to participate in the program with the Consolidated Government to procure water and sewer services. The Army and the Consolidated Government currently participate in the program through contracts entered into by the parties under which the Consolidated Government (1) has assumed the ownership, operation, maintenance, upgrade, renewal, and replacement of the water distribution and wastewater collection facilities at Fort Gordon (the “Fort Gordon Facilities”) and (2) provides potable water and wastewater treatment services to Fort Gordon. The Fort Gordon Facilities consist primarily of approximately 112 miles of water distribution lines, two 1.25-million gallon elevated storage tanks, approximately 88 miles of wastewater collection lines, and 41 wastewater pump stations. The Consolidated Government began providing potable water to Fort Gordon on March 1, 2008. The Consolidated Government began receiving wastewater from Fort Gordon for treatment at the System’s wastewater treatment facilities on October 1, 2011. The Consolidated Government purchased, operates, and maintains the Fort Gordon Facilities pursuant to a contract with the Army (the “Fort Gordon Facilities Contract”), dated September 28, 2007, as amended July 15, 2010 and September 30, 2016. The Fort Gordon Facilities Contract is for a 50-year term that expires in 2057. Pursuant to the Fort Gordon Facilities Contract, the Consolidated Government (1) purchased the Fort Gordon Facilities for approximately $20 million on an installment purchase basis over 10 years bearing interest at 4.75% (the “Fort Gordon Note”), (2) receives fixed monthly payments of $262,793 ($3,153,516 annually) for operation and maintenance services, (3) receives fixed monthly payments of $311,356 ($3,736,272 annually) for scheduled renewal and replacement of the Fort Gordon Facilities, and (4) receives reimbursement for initial capital upgrades to the Fort Gordon Facilities undertaken by the Consolidated Government. The fixed monthly payments are subject to adjustment based on the consumer price index, beginning October 1, 2017. The fixed monthly payments and reimbursements for initial capital upgrades from the Army are expected to offset in an equal amount the expenses incurred by the Consolidated Government associated with providing services to the Army under the contract, including expenses associated with amortizing the Fort Gordon Note. The Consolidated Government provides water and wastewater treatment services to Fort Gordon pursuant to a contract with the Army (the “Fort Gordon Commodities Contract”), dated September 27, 2012 (which replaces a prior contract dated September 29, 2006). Pursuant to the Fort Gordon Commodities Contract, the Consolidated Government has agreed to furnish and the Army has agreed to purchase potable water and wastewater treatment services from October 1, 2012 through September 30, 2022. The Fort Gordon Commodities Contract provides a commodity charge for water service at a rate of $2.15 per thousand gallons and for wastewater treatment service at a rate of $2.56 per thousand gallons for the period from October 1, 2017 through September 30, 2018, increasing at 4% per year thereafter. The Fort Gordon Commodities Contract provides that the estimated annual usage during the term of the contract will be 950 million gallons of water provided to Fort Gordon and 650 million gallons of wastewater carried off of Fort Gordon; however, there can be no assurance that annual usage will equal or exceed these estimates. 27 Demographic Information The following information is provided to give prospective investors an overview of the general demographics existing within Richmond County. These statistics have been compiled from sources believed to be reliable but are not to be relied upon as a representation or guarantee of the Consolidated Government or of any other party. Population. Set forth below is the population of Richmond County for the census years 1980 through 2010 and an estimate for calendar year 2016 (the most recent information available). Year Population 1980 181,629 1990 189,719 2000 199,775 2010 200,549 2016 201,647 Source: United States Census Bureau, 1970, 1980, 1990, 2000 and 2010 Census and 2016 Population Estimates. Population By Age; Median Age. The following table presents estimated population by age for Richmond County for calendar year 2015, the most recent information available. The estimated median age of the County for the calendar year 2015 (the most recent information available) was 33.3 years. Under 20 20 to 44 45 to 64 65 Years Years Years Years and Over 27.1% 36.1% 24.5% 12.3% Source: United States Census Bureau, American Community Survey, 5-Year Estimates Program, 2011-2015. Population by Race. The following table presents the estimated population by race for Richmond County for calendar year 2015, the most recent information available. Black or African American Indian and Alaska Native Hawaiian and Other Pacific Two or More Hispanic or White(1) American(1) Native(1) Asian(1) Islander(1) Other(1) Races Latino(2) 39.1 54.8% 0.3% 1.7% 0.2% 1.2% 2.7% 4.5% (1) Includes persons reporting only one race. (2) Hispanics may be of any race, so also are included in applicable race categories. Source: U.S. Census Bureau, American Community Survey, 5-Year Estimates Program, 2011-2015. [Remainder of Page Intentionally Left Blank] 28 Level of Education. The following table presents the estimated level of education of the population 25 years and over for Richmond County for the year 2016, the most recent information available. Less than 9th grade 4.7% 9th to 12th grade, no diploma 11.2 High school graduate (including equivalency) 31.1 Some college, no degree 22.4 Associate degree 8.5 Bachelor’s degree 13.6 Graduate or Professional degree 8.5 100.0% Percent high school graduate or higher 84.1% Percent bachelor’s degree or higher 22.1 Source: U.S. Census Bureau, 2016 American Community Survey 1-Year Estimates. Economic Information The following information is provided to give prospective investors an overview of the general economic condition in Richmond County. These statistics have not been adjusted to reflect economic trends and are not to be relied upon as a representation or guarantee of the Consolidated Government or of any other party. Personal Income. The following table reflects the total personal income (in thousands) for Richmond County, the State of Georgia and the United States for the calendar years 2011 through 2015 (the most recent information available for the County) and for the calendar year 2016 for the State of Georgia and the United States. Richmond Year County State United States 2011 $6,484,127 $359,778,107 $13,233,436,000 2012 6,340,095 365,480,928 13,904,485,000 2013 6,368,140 371,155,912 14,068,960,000 2014 6,584,839 394,706,562 14,811,388,000 2015 6,864,036 418,382,680 15,547,661,000 2016 N/A 434,677,178 15,912,777,000 Source: United States Department of Commerce, Bureau of Economic Analysis. Per Capita Personal Income. The following table reflects the per capita personal income for Richmond County, the State of Georgia and the United States for the calendar years 2011 through 2015 (the most recent information available for the County). Richmond Year County State United States 2011 $32,338 $36,666 $42,453 2012 31,410 36,852 44,267 2013 31,658 37,147 44,462 2014 32,736 38,835 46,414 2015 34,015 40,306 48,112 Source: United States Department of Commerce, Bureau of Economic Analysis. 29 Median and Mean Income. The following table contains an estimate of the median and mean household incomes in Richmond County, the United States and the State of Georgia for the year 2016, the most recent information available. United States Georgia Richmond County Median Income $57,617 $53,559 $41,419 Mean Income 81,346 75,363 54,092 Source: U.S. Census Bureau, 2016 American Community Survey 1-Year Estimates. Poverty Levels. The following table contains an estimate of the percentage of all people that were living below the poverty level in Richmond County, the United States and the State of Georgia for the year 2016, the most recent information available. Richmond United States Georgia County 14.0% 16.0% 25.2% Source: U.S. Census Bureau, 2016 American Community Survey 1-Year Estimates. Income Distribution. The following table contains an estimate of the household income distributions for households in Richmond County for the year 2016, the most recent information available. Income Percent of Population Less than $10,000 11.3% $10,000 to $14,999 7.8 $15,000 to $24,999 11.8 $25,000 to $34,999 11.3 $35,000 to $49,999 17.1 $50,000 to $74,999 17.4 $75,000 to $99,999 10.2 $100,000 to $149,999 8.8 $150,000 to $199,999 2.3 $200,000 or more 1.9 100.0% Source: United States Census Bureau, 2016 American Community Survey 1-Year Estimates. Median Home Values. The following table contains the median home value of owner occupied housing for Richmond County, the State and the United States for census years 1980 through 2000 and estimate for the year 2016, the most recent information available. Year Richmond County State of Georgia United States 1980 $ 32,800 $ 36,900 $ 47,200 1990 58,300 71,300 79,100 2000 76,800 111,200 119,600 2016 101,600 166,800 205,000 Source: U.S. Census Bureau, 1980, 1990 and 2000 U.S. Census for the years 1980, 1990 and 2000; U.S. Census Bureau, 2016 American Community Survey, 1-Year Estimates for the year 2016. 30 Building Permits. Set forth below are the number and the estimated total value of new construction building permits issued by Richmond County, broken down by commercial/industrial and residential permits, for the last five years. Permit value is based upon estimates provided by each permit applicant and no representation is made as to the accuracy of such estimates. Summary of Richmond County Building Permits Commercial/ Residential(2) Industrial/Other(1) Single Family Multi-Family Year Permits Value Permits Value Units Value 2016 104 $118,198,095 322 $49,494,424 276 $18,480,107 2015 71 101,157,357 423 79,610,899 298 8,821,291 2014 56 66,197,476 354 68,179,666 376 11,220,376 2013 102 150,844,923 385 94,892,156 23 15,568,843 2012 63 97,306,839 375 65,908,783 225 11,156,023 2011 446 180,773,110 122 21,578,022 78 4,743,521 Sources: (1) Augusta License and Inspection Department. Numbers for the cities of Hephzibah and Blythe are not included. (2) U.S. Department of Commerce, Bureau of the Census, Manufacturing and Construction Division. Numbers for the cities of Hephzibah and Blythe are not included. Category of Land Use. Set forth below are the percentages of land use for various purposes within Richmond County, computed based upon the assessed value shown on Richmond County’s consolidation and evaluation tax digest sheets for the various categories for ad valorem property tax purposes. Category of Land Use Year Residential Agricultural Commercial Industrial Other(1) 2016 45.93% 0.77% 38.86% 10.68% 3.76% 2015 49.43 0.83 35.22 11.00 3.52 2014 49.70 0.77 34.77 11.08 3.68 2013 49.87 0.79 35.19 10.66 3.49 2012 49.81 0.80 35.51 10.23 3.65 (1) Includes historical, preferential, conservation use, utility, and miscellaneous. Source: State of Georgia Department of Revenue, Property Tax Division. Banking Deposits. The following table contains the total banking deposits (in millions) for all FDIC- insured institutions in Richmond County for the last five fiscal years ended June 30 (the most current information available). Year Deposits 2012 $3,129 2013 3,164 2014 3,252 2015 3,424 2016 3,527 Source: Federal Depository Insurance Corporation. According to the State of Georgia Department of Banking and Finance, as of June 30, 2016, Richmond County had 12 financial institutions with a total of 41 branch offices. 31 Employment Statistics Largest Employers. Set forth below are the ten largest employers, other than the Consolidated Government, located in Richmond County, their industries, and their approximate number of employees. There can be no assurance that any employer listed below will continue to be located in Richmond County or will continue employment at the level stated. No independent investigation has been made of, and no representation can be made as to, the stability or financial condition of the companies listed below. Largest Employers in Richmond County Employer Industry Employees U.S. Army Cyber Center of Excellence, U.S. Army Signal Center & Fort Gordon(1) Military 25,264(2) Augusta University Higher Education 4,656 Richmond County School System Education 4,418 NSA Augusta Government 4,000 University Hospital Hospital 3,200 Augusta University Medical Center Hospital 3,054 VA Medical Center Medical Services 2,082 East Central Regional Hospital Hospital 1,488 Textron Specialized Vehicles Inc. Golf Cart Manufacturer 1,277 Doctors Hospital Hospital 1,210 (1) Commonly referred to as “Fort Gordon,” this military installation encompasses 55,597 acres including portions of Richmond, Columbia, McDuffie, and Jefferson Counties. (2) Includes military and civilian employees. Source: Augusta Economic Development Authority. In addition to the employers listed above, the Savannah River Site, which is a nuclear reservation owned and operated by the U.S. Department of Energy, is a major regional employer with approximately 11,419 employees. The Savannah River Site occupies approximately 310 square miles adjacent to the Savannah River in south-central South Carolina and is approximately 25 miles southeast of Richmond County Labor Statistics. Set forth below are labor statistics for Richmond County for the past five years, with comparative data for the State of Georgia. 2012 2013 2014 2015 2016 Employment 79,050 78,205 77,346 78,032 80,116 Unemployment 9,400 8,555 7,366 6,223 5,740 Total Labor Force 88,450 86,760 84,712 84,255 85,856 County Unemployment Rate 10.6% 9.9% 8.7% 7.4% 6.7% State Unemployment Rate 9.2% 8.2% 7.1% 6.0% 5.4% Source: State of Georgia Department of Labor (updated August 2017). According to the State of Georgia Department of Labor, the preliminary August 2017 unemployment rate for Richmond County was 6.0 percent, compared to 4.8 percent for the State of Georgia. 32 Industry Mix. The following table shows the percentage of the 2016 payroll distribution in Richmond County for each major sector of the local economy. Industry Percentage of 2016 Monthly Payroll Distribution Construction 3.5% Manufacturing 7.3 Utilities 0.2 Wholesale Trade 2.6 Retail Trade 10.6 Transportation and Warehousing 2.2 Information 1.7 Finance and Insurance 1.7 Real Estate and Rental and Leasing 0.9 Professional, Scientific, and Technical Services 4.0 Management of Companies and Enterprises 0.3 Administrative, Support, Waste Management, and Remediation Services 8.8 Educational Services 0.7 Health Care and Social Assistance 17.1 Arts, Entertainment, and Recreation 1.7 Accommodation and Food Services 10.3 Other Services (Except Public Administration) 2.9 Federal Government 7.2 State Government 9.1 Local Government 7.2 Total 100.00% Source: Georgia Department of Labor, Labor Market Analysis. Customers Water System Set forth below is information concerning the demand for water from the System for its past five fiscal years and for the six-month periods ended June 30, 2016 and 2017. Water Demand Years Ended December 31 Six-Month Periods Ended June 30 2012 2013 2014 2015 2016 2016 2017 Average Daily (MGD) 37.30 36.00 36.42 34.84 36.24 34.93 34.90 Maximum Daily (MGD) 56.04 53.07 54.86 55.92 49.58 49.58 47.11 [Remainder of Page Intentionally Left Blank] 33 Set forth below is the number of active connections to the water system by customer class as of the dates shown. Number of Water Connections As of December 31 As of Customer Class 2012 2013 2014 2015 2016 June 30, 2017 Residential 62,841 63,108 63,530 63,598 63,910 64,194 Commercial and Industrial(1) 7,178 7,222 7,265 7,305 7,353 7,375 Total 70,019 70,330 70,795 70,903 71,263 71,569 (1) Includes apartment complexes, which are served by a single connection. Set forth below is information concerning the ten largest water customers of the System for the year ended December 31, 2016. No independent investigation has been made of, and consequently no representation can be made as to, the stability or financial condition of any of the customers listed below or that such customers will continue to maintain their status as major customers of the System. Ten Largest Water Customers Customer Gallons Metered(1) Total Billing Percentage of Total Water Revenues 1. Fort Gordon Muni Services(2) 737,633 $1,415,928 3.40% 2. Augusta University(3) 231,247 813,521 1.95 3. FPL Food LLC 188,257 588,274 1.41 4. Huron Tech Corp 183,793 572,813 1.38 5. Thermal Ceramics 166,323 531,728 1.28 6. Solvay Specialty Polymers USA LLC 154,767 493,255 1.18 7. Monsanto Dairy 151,916 478,399 1.15 8. Augusta Select Tissue LLC 147,685 461,510 1.11 9. EKA Chemicals Inc. 122,318 380,628 0.91 10. VA Medical Center 102,765 343,347 0.82 Total 2,186,704 $6,079,403 14.59% (1) In thousands. (2) Fort Gordon Muni Services is the customer name for the Army. (3) Includes Augusta University and Augusta University Medical Center. Sewer System Set forth below is information concerning the demand for sewer service from the System for its past five fiscal years and for the six-month periods ended June 30, 2016 and 2017. Treated Wastewater Flow Years Ended December 31 Six-Month Periods Ended June 30 2012 2013 2014 2015 2016 2016 2017 Average Daily (MGD) 33.40 41.33 37.83 36.41 35.13 37.78 35.86 Maximum Daily (MGD) 68.35 86.77(1) 74.88 84.17(1) 64.86 64.86 81.17(1) (1) Wastewater flow spiked in 2013, 2015 and 2017 due to abnormally rainy summers. See “THE SYSTEM – Governmental Approvals and Environmental Regulations – Issues Relating to Noncompliance” herein. 34 Set forth below is the number of active connections to the sewer system by customer class as of the dates shown. Number of Sewer Connections As of December 31 As of Customer Class 2012 2013 2014 2015 2016 June 30, 2017 Residential 50,655 51,096 51,559 51,938 52,419 52,703 Commercial and Industrial(1) 5,986 5,999 6,009 6,030 6,038 6,051 Total 56,641 57,095 57,568 57,968 58,457 58,754 (1) Includes apartment complexes, which are served by a single connection. Set forth below is information concerning the ten largest sewer customers of the System for the year ended December 31, 2016. No independent investigation has been made of, and consequently no representation can be made as to, the stability or financial condition of any of the customers listed below or that such customers will continue to maintain their status as major customers of the System. Ten Largest Sewer Customers Gallons Total Percentage of Customer Metered(1) Billing(2) Total Sewer Revenues 1. Fort Gordon Muni Services(3) 450,454 $2,065,050 5.86% 2. FPL Food LLC 188,257 1,038,752 2.95 3. Augusta University(4) 207,710 867,543 2.46 4. Elanco Augusta Technology 138,463 802,882 2.28 5. Starbucks Coffee & Manufacturing 47,643 746,066 2.12 6. Augusta Select Tissue LLC 127,764 691,035 1.96 7. Solvay Specialty Polymers 104,987 684,603 1.94 8. Huntsman Corporation(5) 76,505 522,193 1.48 9. EKA Chemicals Inc. 122,318 439,534 1.25 10. VA Medical Center 102,996 404,327 1.15 Total 1,567,097 $8,261,985 23.45% (1) In thousands. (2) Based upon water consumption plus additional sewer surcharges. (3) Fort Gordon Muni Services is the customer name for the Department of Army. (4) Includes Augusta University and Augusta University Medical Center. (5) This business is now operated by Venator Materials PLC, a subsidiary of Huntsman Corporation. Rates, Fees, and Charges Monthly residential service charges for water and sewer services generally consist of a monthly demand charge regardless of the size of the customer’s water meter plus a volume charge applied to the monthly water consumption. Monthly commercial service charges for water and sewer services generally consist of a monthly demand charge based upon the size of a customer’s water meter plus a volume charge applied to the monthly water consumption. In addition, connection fees varying by water meter size are charged to new customers connecting to the System. The water and sewer rates to all customers within each class of service are uniform. Other than water service provided to public parks, fire hydrants, and fire sprinklers, the Consolidated Government does not provide any free water or sewer service. 35 The Consolidated Government has adjusted its water and sewer rate schedules on April 1 of each year since April 1, 2007. A summary of the residential water and sewer service rate schedules in effect since April 1, 2007 is set forth below. Monthly Residential Water Service Rates(1) Effective Period 3,000 or Less More Than 3,000 April 1, 2010 to March 31, 2011 $19.34 $13.42 plus $1.84 per thousand for first 3,000, plus $2.07 per thousand over 3,000 April 1, 2011 to March 31, 2012 $19.92 $13.82 plus $1.90 per thousand for first 3,000, plus $2.13 per thousand over 3,000 April 1, 2012 to March 31, 2013 $20.52 $14.23 plus $1.96 per thousand for first 3,000, plus $2.19 per thousand over 3,000 April 1, 2013 to March 31, 2014 $21.14 $14.66 plus $2.02 per thousand for first 3,000, plus $2.26 per thousand over 3,000 April 1, 2014 to March 31, 2015 $21.77 $21.34 plus $2.33 per thousand over 3,000 April 1, 2015 to March 31, 2016 $22.42 $21.97 plus $2.14 per thousand over 3,000 April 1, 2016 to March 31, 2017 $23.09 $16.01 plus $2.20 per thousand for first 3,000, plus $2.47 per thousand over 3,000 April 1, 2017 to present $23.09 $16.49 plus $ 2.27 per thousand for first 3,000, plus $ 2.54 per thousand over 3,000 (1) Measured in gallons. [Remainder of Page Intentionally Left Blank] 36 Monthly Residential Sewer Service Rates (Based on Water Consumption(1) Effective Period 3,000 or Less More Than 3,000 April 1, 2010 to March 31, 2011 $17.39 $24.39 plus $2.24 per thousand April 1, 2011 to March 31, 2012 $17.91 $25.12 plus $2.31 per thousand April 1, 2012 to March 31, 2013 $18.45 $25.87 plus $2.38 per thousand April 1, 2013 to March 31, 2014 $19.01 $26.65 plus $2.46 per thousand April 1, 2014 to March 31, 2015 $19.58 $27.45 plus $2.53 per thousand April 1, 2015 to March 31, 2016 $20.17 $28.27 plus $2.61 per thousand April 1, 2016 to March 31, 2017 $20.77 $29.11 plus $2.68 per thousand April 1, 2017 to present $20.77 $29.98 plus $2.76 per thousand (1) For all periods shown, the Consolidated Government used a winter billing method for calculating monthly residential sewer service rates. Under this method, rates for each 12-month period from April 1 to March 31 of the following year are fixed based on average monthly gallons consumed by the customer during the prior November, December, and January. The Consolidated Government charges commercial customers the monthly minimum charges set forth in the table below plus $2.89 for the first 3,000 gallons of water used and $3.21 per each additional thousand gallons of water used for water service each month and the monthly minimum charges set forth in the table below plus $3.49 per thousand gallons of water used for sewer service each month. Monthly Minimum Charges on Commercial Meters (for Period Beginning April 1, 2017) Minimum Charge Meter Size Water Sewer 5/8” and 3/4” $ 17.89 $ 31.59 1” 25.36 45.13 1-1/4” and 1-1/2” 41.99 75.42 2” 60.35 108.97 3” 100.94 183.44 4” 146.21 265.74 6” 246.60 449.17 8” 357.68 652.07 10” 477.72 871.65 12” 619.94 1,103.91 The Consolidated Government also charges commercial sewer customers a surcharge for disposal of certain types of high strength wastewater. The Consolidated Government imposes a surcharge of $0.44 per pound for biological oxygen demand and suspended solids in excess of 200 parts per million. The Consolidated Government currently charges the Army, pursuant to the Fort Gordon Commodities Contract, a rate of $2.15 per thousand gallons for water service and a rate of $2.56 per thousand gallons for sewer service at Fort Gordon. For more information, see “THE SYSTEM – Fort Gordon Municipal Services” herein. 37 Set forth below are the water connection fees presently in effect for the Consolidated Government. Water Connection Fees Meter Size Tap Fee(1) Tap Fee (3) 5/8” and 3/4” $ 499 N/A 1” 541 N/A 1-1/4” and 1-1/2” 681 N/A 2” 1,219 $1,854 3” 1,978 (2) 2,428 4” 2,550 (2) 3,366 6” 2,331 (2) 3,921 8” 5,765 (2) N/A (1) For Turbine Meter. (2) Plus installation costs. The tap fee includes only the cost of the meter and strainer (and excludes the additional cost of valves and pipes). (3) For Compound Meter. The Consolidated Government presently charges a sewer connection fee of $350 plus installation costs for a six-inch tap. Set forth below is a comparison of average monthly residential water and sewer bills of customers of the System and customers of other water and sewer systems surrounding the Consolidated Government. Utility Monthly Residential Water and Sewer Bill for Rates in Effect on June 30, 2017(1) The System(2) $ 82.75 Columbia County, Georgia 58.55 North Augusta, South Carolina(3) 48.40 North Augusta, South Carolina(4) 73.93 Aiken, South Carolina(3) 51.82 Aiken, South Carolina(4) 103.64 (1) Based upon monthly water consumption of 7,000 gallons. (2) Assumes the water and sewer service rates that became effective on April 1, 2017 were in effect. (3) Inside the city customers. (4) Outside the city customers. Rate Setting Process Under Georgia law, the Consolidated Government has the exclusive authority to establish rates and charges for water and sewer service supplied by the System. The rates charged by the Consolidated Government for water and sewer service supplied by the System are not subject to review or approval by any federal or state regulatory body. The Commission establishes the rates, which are subject to change at any time, as the Commission deems advisable. On August 15, 2000, the Commission adopted an ordinance whereby the water and sewer rates of the System are to be adjusted as established in each annual budget of the Consolidated Government or in connection with financing capital improvements to the System. The staff of the System makes periodic reviews of the rate structure to determine if modifications are needed. A Cost of Service Rate Study being performed by Galardi Rothstein Group, Chicago, Illinois, is underway that will provide for rate restructuring and should be completed before new rates are applied in April of 2018. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS – Rate Covenant” herein for a description of the Consolidated Government’s agreements concerning the rates, fees, and charges for the services, facilities, and commodities to be furnished by the System. No statutory procedures are required as a condition precedent to a change in rates. 38 Billing and Collection The Consolidated Government presently uses a cycle billing method, consisting of twelve cycles, for System service. The cycles are relatively evenly distributed throughout each month. Normally, 26 to 30 days are allowed between each meter reading for each cycle, and bills are due on the 4th, 5th, 14th, 16th, 20th, 22nd, 25th or 29th day of each month. The Consolidated Government presently prepares a monthly, combined water and sewer bill for each customer of the System. A 10% penalty is added to the bill if payment is not made by 15 days after the due date. If the delinquent amount is not paid by 15 days after the due date for the next succeeding bill, water and sewer service is discontinued and a $25 delinquent fee is charged. To restore service, the customer must pay all overdue amounts, penalties, and delinquent fees in full. The Consolidated Government collected in excess of 95% of its total billings for the System during its past five fiscal years. The Consolidated Government’s present policy is to write off, as uncollectible, overdue accounts of the System that are more than 6 months old and to turn these accounts over to a private collection agency for collection. Upon application for service, the Consolidated Government requires a $25 non-refundable service fee from new customers of the System. Governmental Approvals and Environmental Regulation Water Withdrawal The Georgia Water Quality Control Act authorizes the State of Georgia Department of Natural Resources, Environmental Protection Division (“EPD” or “Georgia EPD”), to regulate the withdrawal of water from lakes, streams, and aquifers in Georgia. The Consolidated Government holds permits for withdrawal of raw water in the following amounts from the following sources: Permitted Withdrawal (MGD) 2016 Actual Withdrawal (MGD) Raw Water Source Monthly Average Daily Maximum Monthly Average Daily Maximum Savannah River/Augusta Canal (Surface Water)(1) 45.0 50.0 27.92 44.20 Tuscaloosa Formation Aquifer (Groundwater)(2) 18.4 None 7.23 14.50 Savannah River (Surface Water) 15.0 21.0 6.87 11.83 Totals 78.4 42.02 70.53 (1) The existing permit for water withdrawal from the Savannah River/Augusta Canal provides on its face an expiration date of October 31, 2010, and the Consolidated Government has filed an application with EPD for the renewal of the permit. EPD has not yet issued the new permit, and in accordance with Georgia law, the existing permit will not expire until the application for the new permit has been finally determined by EPD. EPD issued a letter to the Consolidated Government on September 27, 2012 confirming that the existing permit has been extended. (2) Also subject to a withdrawal limit of 18.4 annual average MGD. The 2016 annual average withdrawal was 7.23 MGD. Permit authorizes withdrawal from 21 wells. The Consolidated Government has 22 active wells but does not withdraw water from all of them simultaneously. Thus, at no time is the Consolidated Government withdrawing from all 22 wells. FERC License for Augusta Canal The Federal Power Act and its amendments provide that the Federal Energy Regulatory Commission (“FERC”) has licensing jurisdiction over the construction, operation, and maintenance of dams, water conduits, reservoirs, or other works utilizing streams or other bodies of water subject to federal jurisdiction for the purpose of generating hydro-electric power. Since 1885, the City, succeeded by the Consolidated Government, has used water diverted from the Savannah River into the Augusta Canal as its primary source of raw water and, since 1898, to 39 generate hydro-mechanical power from the falling water in the Canal to power its raw water intake pump station located on the Canal. There are currently three hydroelectric facilities operated by the Augusta Canal Authority, two of which are owned by the Authority, powered by water from the Canal. Each of the three hydro-electric facilities are individually licensed to operate by FERC. The Consolidated Government believes that FERC does not have licensing jurisdiction over the use of the Augusta Canal by the Consolidated Government for water supply needs or to generate hydro-mechanical power to power its raw water intake pump station. In 1929, the City was granted a license that expired in 1979 to use the Augusta Canal for hydro-electric power generation. Discussions with FERC regarding relicensing of the Augusta Canal began in 1976 prior to expiration of the license. In 1983, the City’s application for relicensing was accepted by FERC. Late in the consultation phase of the application review, the Fish and Wildlife Service of the United States Department of the Interior took the position that the City needed to undertake an “instream flow incremental methodology” (“IFIM”) study to determine the effects that the diversion of water to the Augusta Canal to generate hydro-electric power may have on fish habitats in the Savannah River. The City disagreed with the scope of the requested study, and consequently the City’s relicensing application was dismissed by FERC in January of 1994. A new application for a preliminary permit to license was filed with FERC by the Consolidated Government on June 12, 1996 in competition with an application for permit to license filed by Fall Line Hydro Company, Inc. The Consolidated Government was given municipal preference and was issued a preliminary permit to license on September 27, 1996. The purpose of a preliminary permit is to maintain priority of application for a license during the term of the permit while the permittee conducts studies to address the feasibility of the proposed project. In further pursuit of the final FERC license, the Consolidated Government contracted with EDAW, Inc., an environmental consulting firm, to perform an IFIM fish study to assess the effect on the fish habitats, and with Dr. Gene Eidson to perform the required endangered species study. An August 19, 1996 letter from the Fish and Wildlife Service to the Consolidated Government expressed opposition to any “additional water withdrawals from the Augusta Canal for new [power] generation capacity.” In letters dated November 24, 1999 and June 1, 2000 from the Fish and Wildlife Service to FERC, the Fish and Wildlife Service expressed its desire that the Consolidated Government address the “major resource problems” associated with licensing, including (1) provision of adequate flows for fish habitat in the area of the Savannah River bypassed by the Canal, (2) upstream and downstream passage of migratory fish, and (3) cumulative entrainment and mortality of fish which enter the Canal. These communications were unusual in their aspect of being issued prior to the submittal of the IFIM study results. The Fish and Wildlife Service also recommended that FERC integrate the relicensing of the Consolidated Government’s facilities with the licenses for the three hydro-electric facilities located on the Canal so that common licensing issues relating to all of these projects could be addressed on a coordinated basis. In addition, the National Marine Fisheries Service of the National Oceanic and Atmospheric Administration of the United States Department of Commerce intervened in the licensing proceedings and has taken the same position as the Fish and Wildlife Service. Because the preliminary permit expired prior to completion of the IFIM study, the Consolidated Government applied for and was issued another preliminary permit to license on February 4, 2000, which was effective for a period of three years. During this period, the Consolidated Government completed all studies addressing the concerns expressed by the Fish and Wildlife Service, including the IFIM study. The Consolidated Government submitted its application for relicensing, including the IFIM study results, to FERC in January of 2003, and it submitted a revision to its application in June of 2003. In its application, the Consolidated Government did not propose to develop new hydro-electric generation facilities or to produce electric power. Instead, the Consolidated Government has proposed that FERC grant a license to the Consolidated Government for facilities consisting of the existing Augusta Diversion Dam on the Savannah River, the existing Augusta Diversion Dam impoundment, and the existing Augusta Canal. FERC accepted the Consolidated Government’s application for relicensing in February of 2004 and completed an environmental assessment. The Fish and Wildlife Service, the National Marine Fisheries Service, and the state agencies with jurisdiction have agreed on a letter of intent that addresses a number of disputed issues, including the amount of flow permitted in the Augusta Canal versus the bypassed area of the Savannah River and the timing and need for fish ways in the bypassed area. All parties have been negotiating the terms of a settlement agreement to be submitted to FERC for approval and incorporation into a FERC license. The Consolidated Government expects the relicensing process to take another one to three years. 40 The Consolidated Government expects that FERC will ultimately grant the license to the Consolidated Government; however, the Consolidated Government cannot predict when the license will be issued or what restrictions FERC might seek to place on the Consolidated Government’s use of the existing Augusta Diversion Dam on the Savannah River, the existing Augusta Diversion Dam impoundment, and the existing Augusta Canal. The license, when issued, might contain terms that would negatively impact amount of flow permitted in the Augusta Canal which would require curtailment of power generation at one or more of the hydroelectric facilities. Funds are programmed in the capital improvement plan to finance (1) rehabilitation of the Augusta Diversion Dam, and (2) design and construction of a fish way at the Augusta Diversion Dam that the Consolidated Government will undertake in connection with the relicensing process. Design of the fish way is substantially complete, however, rehabilitation of the dam and construction of the fish way will be undertaken once the license is finalized to ensure the improvements meet license requirements. Water Treatment EPD also regulates water treatment systems in Georgia. EPD has issued to the Consolidated Government operating permits for the treatment of water in the following amounts at the following water treatment facilities: Permitted Treatment Capacity (MGD) 2016 Actual Treatment Flow (MGD) Water Treatment Facility Monthly Average Maximum Monthly Average Maximum N. Max Hicks 15.0 15.0 5.61 8.51 Highland Avenue 60.0 60.0 21.01 31.69 Peach Orchard, Highway 56 Loop and Little Spirit Creek (1) 18.4 None 6.59 14.65 Totals 93.4 33.21 54.85 (1) Permitted treatment capacity at these facilities is limited on a combined basis to the permitted withdrawal amount from the Tuscaloosa Formation aquifer. See “THE SYSTEM - Governmental Approvals and Environmental Regulation -- Water Withdrawal” herein. Wastewater Treatment The Consolidated Government’s wastewater operations are subject to the regulatory requirements imposed by the federal Water Pollution Control Act, as amended (the “Clean Water Act”), and the Georgia Water Quality Control Act. The regulatory requirements are administered by the federal Environmental Protection Agency (“EPA”) and EPD. EPD has issued to the Consolidated Government operating permits for the treatment of wastewater in the following amounts at the following wastewater treatment plants: Permitted Limit on Flow (MGD) 2016 Treatment Flow (MGD) Plant Monthly Average Weekly Average Monthly Average Weekly Average(1) James B. Messerly 46.10 57.60 34.93 54.80 Spirit Creek 2.24 2.80 0.42 3.29 Totals 48.34 60.40 35.35 58.09 (1) Represents the maximum weekly average experienced in 2016. As discussed under “THE SYSTEM – Governmental Approvals and Environmental Regulation – Issues Related to Noncompliance” abnormally high amounts of rainfall during 2016 resulted in flows, on a few occasions, exceeding capacity at Spirit Creek. State and federal regulations applicable to the Consolidated Government’s wastewater operations deal with, among other issues, the quality of effluent that may be discharged from the Consolidated Government’s wastewater treatment plants, the disposal of sludge generated by the wastewater treatment plants, and the nature of waste material (particularly industrial waste) discharged into the collection system. To comply with federal regulations 41 concerning the industrial discharge of waste materials into the sewer system, the Consolidated Government must administer and enforce industrial pretreatment limitation standards upon users of the sewer system. The City had an industrial waste program in effect since 1983. At that time, the County adopted an ordinance identical to the City ordinance which designated the City as the control authority for industrial pretreatment. As a condition of having received federal EPA grant funds under the Clean Water Act for planning, design, and construction of various wastewater projects, the Consolidated Government is subject to additional regulatory requirements. Among the grant-related requirements are guidelines that must be followed concerning planning methodologies, design criteria, construction activities, and the operation, maintenance, and financing of facilities. National Pollutant Discharge Elimination System (“NPDES”) Permits Under the Clean Water Act, an NPDES permit is required for discharges of pollutants to surface water. Therefore, to comply with federally mandated effluent quality and disposal criteria, the Consolidated Government must operate its wastewater treatment plants according to discharge limitations and reporting requirements set forth in NPDES permits. The Consolidated Government is required to maintain separate NPDES permits for the Messerly and Spirit Creek wastewater treatment plants allowing discharges to Butler Creek and Spirit Creek, respectively. The NPDES permit for the Spirit Creek NPDES permit provides on its face an expiration date of October 14, 2004, and the NPDES permit for the Messerly wastewater treatment plant provides on its face an expiration date of June 14, 2006. EPD issued letters on September 10, 2004 and June 2, 2006 stating that EPD has a practice of issuing renewals of NPDES permits in groups by river basin, and that EPD would delay issuing renewal permits for the Spirit Creek and Messerly facilities, respectively, until it issues the NPDES permit renewals for other discharges within the Savannah River Basin. The letters further state that the permits are administratively extended beyond their stated expiration dates until the new permits can be issued. EPD has begun renewing permits in the Savannah River Basin and the Consolidated Government has submitted applications for renewal of the NPDES permits for both the Messerly and Spirit Creek wastewater treatment plants. These applications are currently under review by EPD. In addition to the NPDES permits discussed above for the two wastewater treatment plants, the Consolidated Government is covered under a general NPDES permit issued by EPD for the discharge of filter backwash and settling basin drawdown water to waters of the State of Georgia. Coverage under this permit allows the Consolidated Government to discharge filter backwash and settling basin drawdown water from the Highland Avenue water treatment plant to Oates Creek, a tributary of Butler Creek. The Consolidated Government is also covered under a general NPDES permit issued by EPD for the discharge of storm water associated with industrial activities to waters of the State of Georgia. Coverage under this permit allows the Consolidated Government to discharge storm water associated with industrial activities from the Messerly and Spirit Creek wastewater treatment plants to waters of the State of Georgia. Finally, the Consolidated Government holds an NPDES permit for discharges from its storm sewer system to waters of the State of Georgia. Impact of Savannah Harbor TMDL on NPDES Permits Under the Clean Water Act, each state, including the State of Georgia, is required to adopt, periodically review, and revise water quality standards, which are subject to EPA review and approval. In addition to setting water quality standards, states must also assess the quality of water and identify those waters for which the standards are not being met. If a water segment is not meeting standards, it is considered “impaired” and must be addressed through a total maximum daily load (“TMDL”). A TMDL essentially defines the maximum amount of man-made and natural pollution that a water segment can assimilate and still attain standards. The TMDL then takes this pollution cap and allocates it to individual sources of pollution through a wasteload allocation. Once a TMDL has been established, NPDES permits must contain limits that are consistent with the wasteload allocation in the TMDL. In 2006, EPA promulgated a final TMDL for dissolved oxygen in the Savannah Harbor, Chatham and Effingham Counties, Georgia (“Savannah Harbor TMDL”). The wasteload allocation in the Savannah Harbor TMDL applied to regulated wastewater and storm water discharges to the Savannah Harbor, as well as regulated dischargers located upstream of the Savannah Harbor in the Augusta, Georgia area, including the Consolidated 42 Government. The Savannah Harbor TMDL assigned a wasteload allocation of “0 lbs/day” of oxygen-demanding substances from regulated dischargers. Incorporation of this wasteload allocation into the Consolidated Government’s NPDES permits for discharges to Butler Creek and Spirit Creek would require the Consolidated Government to implement potentially costly capital improvements. In 2007, the Consolidated Government, along with several other regulated dischargers in the Augusta, Georgia area, filed a Complaint for Declaratory and Injunctive Relief against EPA in the United States District Court, Southern District, Augusta Division. The Complaint challenged the Savannah Harbor TMDL on numerous technical and legal grounds. EPD subsequently revised its criteria for Dissolved Oxygen and the revised criteria were approved by U.S. EPA in 2010. EPD, SC DHEC, and U.S. EPA Region IV, along with Savannah River/Harbor Discharge Group, began working together in 2012 to develop an alternative restoration plan to meet the new Dissolved Oxygen criteria. The document “Subcategory 5R Documentation For Point Source Dissolved Oxygen Impaired Water in the Savannah River Basin, Georgia and South Carolina” was developed in 2015. EPA has subsequently withdrawn the TMDL and is addressing the water quality concerns in the Savannah Harbor through a restoration plan based on the 2015 document in lieu of a TMDL. This plan is the basis for NPDES permit renewals in the basin. Other Approvals EPD has the authority to review and approve the plans and specifications for improvements and extensions to the System. As plans and specifications are finalized, the Consolidated Government will submit them to EPD for approval. EPD has delegated review authority to the Consolidated Government for water systems for subdivisions, apartment complexes and shopping centers, for sewer systems up to 36” for gravity sewers and up to 700 GPM for pump stations. Issues Relating to Noncompliance Except as discussed below, the Consolidated Government is currently in substantial compliance with all of its environmental permits and all environmental requirements applicable to the System. In June 2011, the Consolidated Government entered into a consent order to resolve alleged violations of the Georgia Water Quality Control Act arising from discharges in excess of permit effluent limitations and spills of untreated sewage. The alleged noncompliance events were the result of problems with the Consolidated Government’s wastewater collection system. Pursuant to the consent order, the Consolidated Government paid a fine of $45,402; all conditions of the order were met. From August 2013 through January 2017, there were numerous spills from the sanitary sewer collection system and two major outfall spills at the Spirit Creek wastewater treatment plant, which were reported by the Consolidated Government to Georgia EPD. The Consolidated Government also reported three permit violations at the Spirit Creek wastewater treatment plant. In addition, in January 2017, Georgia EPD received a citizen complaint regarding illegal discharges of wastewater by a vacuum truck into Rocky Creek. On April 10, 2017, Georgia EPD issued a proposed consent order which required certain studies and actions resulting from these studies; the proposed consent order also proposed a fine of $83,300. The Consolidated Government has requested modification of the requirements of the order to more directly address the issues contributing to the sanitary sewer overflows. The projects that will be addressed in the consent order are already budgeted in the capital improvement plan and are underway. The Consolidated Government has also proposed a Supplemental Environmental Project in lieu of the proposed fine. Upon execution of the consent order the 2011 consent order will terminate. The Spirit Creek wastewater treatment plant’s NPDES permit contains a condition requiring an 85% reduction in incoming oxygen demanding substances and total suspended solids via treatment. Excessive infiltration of groundwater into the System’s wastewater collection and conveyance system introduces highly diluted influent into the Spirit Creek wastewater treatment plant. At times this dilute influent prevents the Spirit Creek wastewater treatment plant from meeting the percent reduction of oxygen demand requirement in its NPDES permit. The Spirit Creek plant is currently off-line, and all influent to the plant is pumped to the J.B. Messerly wastewater treatment plant. Discussions have begun with Georgia EPD concerning permanently closing the Spirit Creek plant and moving some or all of its wasteload allocation to the J.B. Messerly plant. 43 Employees, Employee Relations, and Labor Organizations The Consolidated Government had 2,842 full-time equivalent employees in all departments of government as of June 30, 2017. No employees of the Consolidated Government are represented by labor organizations or are covered by collective bargaining agreements, and the Consolidated Government is not aware of any union organizing efforts at the present time. The Administrator of the Consolidated Government believes that employee relations are good. The System’s plant operators and maintenance and repair personnel are required to be certified by the State of Georgia. The Consolidated Government has a continuing education program to ensure that System personnel are qualified and able to meet the State of Georgia’s certification requirements. SYSTEM FINANCIAL INFORMATION Accounting System and Policies The Consolidated Government maintains all of its funds and accounts relating to the System separate from other Consolidated Government funds. The accounting practices and policies of the Consolidated Government relating to the System conform to generally accepted accounting principles as applied to governments. The System is accounted for as an Enterprise Fund of the Consolidated Government. Enterprise Funds are used to account for operations (i) that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is that the cost (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges, or (ii) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and change in net assets is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The System is accounted for using the accrual basis of accounting. Its revenues are recognized when earned, and its expenses are recognized when incurred. Note 1 of the audited financial statements of the System included as part of Appendix A contains a detailed discussion of the Consolidated Government’s significant accounting policies relating to the System. Historical and Pro Forma Capital Structure Set forth below is an historical, comparative summary of the capital structure of the System as of the end of its past five fiscal years and as of June 30, 2017. The information in the following table has been extracted from audited financial statements of the System for the years ended December 31, 2012 to 2016 and from unaudited interim financial statements of the System for the six-month period ended June 30, 2017. Although the information for the past five fiscal years was taken from audited financial statements, no representation is made that the information is comparable from year to year, or that the information as shown taken by itself presents fairly the capital structure of the System as of the end of the years shown. The unaudited interim amounts reflected below were prepared by management of the System, and, in the opinion of staff of the System, include all adjustments necessary for a fair statement of the liabilities and net position of the System at June 30, 2017, all of which adjustments are of a normal recurring nature. The unaudited interim amounts are not necessarily indicative of the amounts that will be outstanding as of the end of the full fiscal year. For more complete information, reference is made to the financial statements from which this information was extracted, copies of which are available from the Consolidated Government upon request. [Remainder of Page Intentionally Left Blank] 44 Historical Capital Structure of the System Amount Outstanding as of December 31 Amount Outstanding as of 2012 2013 2014 2015 2016 June 30, 2017 Liabilities (UNAUDITED) Current Liabilities Accounts and other payables $ 2,772,204 $ 2,120,873 $ 4,304,308 $ 2,980,866 $ 4,056,622 $ 518,377 Accrued interest 5,401,530 5,776,204 5,435,901 5,321,705 5,181,990 5,181,989 Due to other funds(1) 4,716,566 21,984,820 1,366,851 15,434,745 13,466,856 427,768(4) Accrued salaries 315,490 392,501 424,967 537,285 580,310 580,310 Compensated absences 643,146 674,786 681,626 716,007 761,280 761,280 Notes payable – current 3,193,632 3,391,714 3,546,719 3,518,783 3,486,993 2,307,479 Capital leases payable - current 895,502 912,146 859,523 952,925 1,153,659 1,153,659 Total current liabilities 17,938,070 35,253,044 16,619,895 29,462,316 28,687,710 10,930,862 Current Liabilities Payable From Restricted Assets Revenue bonds payable – current 7,920,000 9,185,000 10,430,000 10,900,000 11,410,000 11,410,000 Total current liabilities payable from restricted assets 7,920,000 9,185,000 10,430,000 10,900,000 11,410,000 11,410,000 Long-Term Liabilities Advance from other funds 106,762 350,901 471,851 234,077 410,235 410,235 Revenue bonds payable 479,515,289 491,263,495 497,651,913 485,161,674 472,198,041 472,009,851 Notes payable(2) 28,004,278 24,612,564 21,065,845 17,547,062 14,060,069 13,558,557 Capital leases payable(3) 3,516,540 3,114,061 2,254,537 1,809,769 752,028 170,664 Net pension liability — — — 4,271,120 4,642,836 4,642,836 Total long-term liabilities 511,142,869 519,341,021 521,444,146 509,023,702 492,063,209 490,792,143 Total Liabilities 537,000,939 563,779,065 548,494,041 549,386,018 532,160,919 513,133,005 Deferred Inflows of Resources Deferred charge on refunding — — 4,856,641 4,637,916 4,419,191 4,419,191 Pension assumption changes — — — 195,363 160,738 160,738 Pension investment return — — — 147,292 — — Pension experience differences — — — 61,823 — — Total deferred inflows of resources — — 4,856,641 5,042,394 4,579,929 4,579,929 Net Position Net investment in capital assets 122,224,161 104,395,227 81,583,094 82,852,658 84,452,867 71,979,613 Restricted for capital outlay 10,284,449 25,020,053 63,818,534 62,501,984 60,237,585 45,642,547 Restricted for debt service 25,065,145 29,308,790 7,910,009 8,054,563 13,119,259 18,843,565 Unrestricted net position 38,236,397 32,273,811 31,211,453 20,491,477 14,043,418 29,831,970 Total Net Position 195,810,152 190,997,881 184,523,090 173,900,682 171,853,129 166,297,695 Total Liabilities and Net Position $732,811,091 $754,776,946 $733,017,131 $723,286,700 $704,014,048 $684,010,629 Ratio of Long-Term Liabilities to Total Net Position 274.25% 271.91% 282.59% 292.71% 286.33% 295.13% Long-Term Liabilities as a Percentage of Total Capitalization 69.75% 68.81% 71.14% 70.38% 69.89% 71.75% (1) Represents amounts owed to the Consolidated Government’s General Fund for System expenditures paid from the General Fund. System expenditures are always paid from the General Fund and the System regularly reimburses the General Fund each month for System expenses incurred in the prior month. However, the amount shown for December 31, 2013, represents $19.5 million of operating expenses and $2 million of restricted capital expenditures not reimbursed to the General Fund by such date, the amount shown for December 31, 2015 represents $6.5 million of operating expenditures and $8.6 million of restricted capital expenditures not reimbursed to the General Fund by such date and the amount shown for December 31, 2016 represents $15.2 million of restricted capital expenditures not reimbursed to the General Fund by such date. These unreimbursed amounts are included in the System’s cash balances of $29.2 million at December 31, 2013, $20.1 million (operating) and $89.3 million (restricted) at December 31, 2015, and $85.4 million (restricted) at December 31, 2016, resulting in significantly higher than normal balances. The System has recently implemented a practice of reimbursing restricted cash expenditures quarterly. (2) Presently consists of (i) three notes payable to the Georgia Environmental Finance Authority (the “GEFA Notes”) to finance improvements to the System and (ii) the Fort Gordon Note. The notes are general obligations of the Consolidated Government to which its full faith and credit and taxing power are pledged. Although the Consolidated Government intends to repay the notes from revenues of the System, the notes are not secured by any lien on the revenues of the System. (3) Consists mainly of two capital lease obligations for Sewer Vac Trucks and two capital lease obligations on diesel generators (collectively the “Capital Leases”). Although the Consolidated Government intends to repay the Capital Leases from revenues of the System, the Capital Leases are not secured by any lien on the revenues of the System. (4) As of June 30, 2017, Due to Other Funds is shown net of cash held for reimbursement to the General Fund. See footnote (1). 45 Set forth below is the pro forma capital structure of the System as of June 30, 2017, determined by the application of pro forma adjustments to the actual amounts outstanding as of June 30, 2017, which assume that the Series 2017 Bonds were issued on June 30, 2017 and that the Refunded Bonds were refunded and defeased on June 30, 2017. Pro Forma Capital Structure of the System Amount Outstanding as of June 30, 2017 Liabilities (UNAUDITED) Current Liabilities Accounts payable and accrued liabilities $ 7,041,956 Due to other funds 427,768 Current maturity on long-term debt 3,461,138 Total current liabilities 10,930,862 Current Liabilities to be Paid From Restricted Assets Current portion of revenue bonds 11,410,000 Total current liabilities to be paid from restricted assets 11,410,000 Long-Term Liabilities Revenue bonds payable $418,520,000* Capital leases payable 170,664 Advance from other funds 410,235 Net pension liability 4,642,836 Notes payable 13,558,557 Total long-term liabilities $437,302,292* Total Liabilities $459,643,154* Net Position Invested in capital assets net of related debt $71,979,613 Restricted for capital outlay(1) 29,781,490 Restricted for debt service 18,843,565 Unrestricted net position 29,831,970 Total Net Position 150,436,638* Total Liabilities and Net Position $610,079,792* Ratio of Long-Term Liabilities to Total Net Position 290.69%* Long-Term Liabilities as a Percentage of Total Capitalization 75.34%* (1) In connection with the refunding of the Refunded Bonds (constituting all of the Outstanding Prior Lien Bonds), all moneys will be released from the Prior Lien Debt Service Reserve Fund and applied to the refunding of the Refunded Bonds and deposited into the Debt Service Reserve Account to fund the Debt Service Reserve Requirement for the Senior Bonds. See “PLAN OF FINANCING – Refunding Program and – System Projects.” The Consolidated Government has no present plans to incur additional debt secured by revenues of the System in the next five years. See “SYSTEM FINANCIAL INFORMATION – Capital Improvements Program” herein. There has never been a default in payment of the principal of or interest on any revenue bonds of the Consolidated Government, the City, or the County secured by revenues of the System. 46 Debt Service Requirements Following are the principal and interest payment requirements with respect to the Series 2017 Bonds, the Series 2014 Bonds, the Series 2013 Bonds and the Series 2012 Bonds for the years shown below. For purposes of calculating the principal payable in any year, the relevant maturity or mandatory redemption amount is used. The debt service requirements set forth below do not include debt service payable on obligations not secured by a lien on the revenues of the System, which consist of the GEFA Notes, the Fort Gordon Note, and the Capital Leases. Series 2012 Bonds Series 2013 Bonds Series 2014 Bonds Series 2017 Bonds Year Total Debt Total Debt Total Debt Total Debt Combined Total Ending Service Service Service Service Debt Service October 1 Principal Requirements Principal Requirements Principal Requirements Principal Interest Requirements Requirements 2018 $ 4,155,000 $ 9,550,225.00 $ 950,000 $ 1,728,647.50 $ 915,000 $ 8,255,387.50 2019 — 5,187,475.00 970,000 1,720,147.50 950,000 8,253,787.50 2020 — 5,187,475.00 995,000 1,716,047.50 990,000 8,255,787.50 2021 — 5,187,475.00 1,025,000 1,716,197.50 1,030,000 8,256,187.50 2022 — 5,187,475.00 1,065,000 1,722,885.00 1,070,000 8,254,987.50 2023 5,365,000 10,552,475.00 1,110,000 1,730,610.00 1,115,000 8,257,187.50 2024 5,640,000 10,559,225.00 1,145,000 1,723,430.00 1,155,000 8,252,587.50 2025 5,920,000 10,557,225.00 1,190,000 1,722,630.00 1,190,000 8,252,937.50 2026 6,210,000 10,551,225.00 1,245,000 1,728,245.00 1,230,000 8,257,237.50 2027 6,525,000 10,555,725.00 1,300,000 1,729,710.00 1,265,000 8,255,337.50 2028 6,850,000 10,554,475.00 1,355,000 1,726,210.00 1,300,000 8,252,387.50 2029 7,125,000 10,555,475.00 1,150,000 1,457,525.00 1,340,000 8,253,387.50 2030 7,410,000 10,555,475.00 1,230,000 1,481,750.00 1,385,000 8,256,512.50 2031 19,320,000 22,243,175.00 980,000 1,170,250.00 — 6,826,500.00 2032 20,095,000 22,245,375.00 1,025,000 1,166,250.00 — 6,826,500.00 2033 — 1,547,525.00 1,800,000 1,890,000.00 18,915,000 25,741,500.00 2034 — 1,547,525.00 — — 19,770,000 25,745,325.00 2035 — 1,547,525.00 — — 20,660,000 25,745,675.00 2036 — 1,547,525.00 — — 21,590,000 25,745,975.00 2037 — 1,547,525.00 — — 22,555,000 25,739,425.00 2038 — 1,547,525.00 — — 23,575,000 25,744,450.00 2039 — 1,547,525.00 — — 24,635,000 25,743,575.00 2040 14,000,000 15,547,525.00 — — — — 2041 14,500,000 15,557,525.00 — — — — 2042 15,715,000 16,265,025.00 — — — — $138,830,000 $230,920,787.50 $18,535,000 $26,130,535.00 $166,635,000 $301,172,637.50 47 Five Year Operating History Set forth below is an historical, comparative summary of the revenues and expenses of the System for its past five fiscal years and for the six-month periods ended June 30, 2016 and 2017. The information in the following table has been extracted from audited financial statements of the System for the years ended December 31, 2012 to 2016 and from unaudited interim financial statements of the System for the six-month periods ended June 30, 2016 and 2017. Although the information for the past five fiscal years was taken from audited financial statements, no representation is made that the information is comparable from year to year, or that the information as shown taken by itself presents fairly the results of operations of the System for the periods shown. The interim amounts set forth below have been prepared by the staff of the System without audit and, in the opinion of staff of the System, include all adjustments necessary for a fair statement of the operating results of the System for such interim periods, all of which adjustments are of a normal recurring nature. The interim amounts reflected below are not necessarily indicative of the financial results that will be achieved for the full fiscal year. For more complete information, reference is made to the financial statements from which this information was extracted, copies of which are available from the Consolidated Government upon request. [Remainder of Page Intentionally Left Blank] 48 Summary of System Revenues and Expenses Years Ended December 31 Six-Month Periods Ended June 30 (UNAUDITED) 2012 2013 2014 2015 2016 2016 2017 Operating Revenues: Water and sewerage sales $ 70,343,327 $ 68,801,255 $74,183,165 $75,085,759 $76,853,185 $35,378,101 $35,736,076 Industrial sewer charges 2,814,461 2,868,332 2,604,553 2,233,308 2,117,210 1,049,665 1,280,748 Water and sewerage service fees 3,754,784 3,777,923 4,458,665 3,971,822 3,653,729 1,598,427 2,180,528 Department of the Army revenue(1) 25,231,577 11,866,227 7,790,760 8,163,317 8,430,831 3,917,794 3,453,901 Other 351,763 327,089 389,581 537,939 912,852 382,175 380,515 Total operating revenues 102,495,912 87,640,826 89,426,724 89,992,145 91,967,807 42,326,162 43,031,768 Operating Expenses: Personnel services 13,458,826 14,405,875 14,880,856 15,594,482 16,197,196 8,102,704 8,114,552 Depreciation 27,091,020 27,950,200 28,698,609 29,061,782 28,964,019 14,482,010 14,800,100 Other operating expenses 3,940,964 4,190,605 4,885,963 7,013,563 6,995,829 2,118,189 2,796,303 Materials and supplies 9,244,716 8,848,680 8,756,724 7,306,752 11,005,314 5,049,667 4,222,875 Professional services 5,476,542 6,662,165 7,157,507 6,817,518 6,537,004 3,277,389 3,343,563 General allocation 1,383,690 1,383,690 1,405,830 1,411,750 1,432,600 716,300 741,825 Risk management 473,117 557,760 626,477 544,828 497,060 298,575 306,745 Vehicle cost allocation 799,083 769,383 724,251 711,078 784,301 470,576 477,262 Payment in lieu of taxes 1,103,800 1,079,010 1,867,890 2,795,510 2,731,530 1,365,765 1,355,255 Payment in lieu of franchise fees 2,659,010 2,656,320 2,660,780 4,279,770 3,832,890 1,916,445 2,029,640 Total operating expenses 65,630,768 68,503,688 71,664,887 75,537,033 78,977,743 37,797,620 38,188,120 Net Operating Income 36,865,144 19,137,138 17,761,837 14,455,112 12,990,064 4,528,542 4,843,648 Non-Operating Revenues (Expenses): Interest revenue(2) 216,669 134,153 87,850 74,878 40,194 14,775 81,622 Interest and fiscal charges(3) (23,727,104) (22,945,071) (22,241,483) (20,564,572) (19,735,315) (11,045,758) (10,678,107) Bond issuance costs (1,267,330) (1,178,002) (1,633,859) (404,602) (376,378) 188,189 188,189 Gain (loss) on sale of assets 50,853 39,511 90,284 17,882 33,882 20,548 9,214 Net non-operating revenues (expenses) (24,726,912) (23,949,409) (23,697,208) (20,876,414) (20,037,617) (10,822,246) (10,399,082) Loss before transfers 12,138,232 (4,812,271) (5,935,371) (6,421,302) (7,047,553) (6,293,704) (5,555,434) Transfers in from other funds — — — — 5,000,000(5) — — Transfers out to other funds (40,620) — (539,420) (41,280) — — — Total transfers (40,620) — (539,420) (41,280) 5,000,000 — — Change in Net Position 12,097,612 (4,812,271) (6,474,791) (6,462,582) (2,047,553) (6,293,704) (5,555,434) Total Net Position, Beginning of Year 183,712,540 195,810,152 190,997,881 180,363,264 173,900,682 173,900,682 171,853,129 Prior Period Adjustment(4) — — (4,159,826) — — — — Total Net Position, End of Year $195,810,152 $190,997,881 $180,363,264 $173,900,682 $171,853,129 $167,606,978 $166,297,695 (1) Represents payments made by the Army to the Consolidated Government pursuant to the Fort Gordon Facilities Contract. For more information, see “THE SYSTEM – Fort Gordon Municipal Services” herein. These revenues offset an equal amount of expenses associated with providing services to the Army under the Fort Gordon Facilities Contract, including expense associated with amortizing the Fort Gordon Note. See Note 8 of the audited financial statements of the System included as a part of Appendix A to this Official Statement for further information concerning the Army revenue. (2) Interest income for fiscal years 2012 through 2016 and for the six-month periods ended June 30, 2016 and 2017 includes investment earnings on the construction fund held under the Prior Lien Resolution in the following amounts: fiscal year 2012 – $30,803, fiscal year 2013 – $23,496, fiscal year 2014 – $28,293, fiscal year 2015 – $22,474, fiscal year 2016 – $13,698, six-month period ended June 30, 2016 – $7,067, and six-month period ended June 30, 2017 – $29,319. (3) Interest and fiscal charges for fiscal years 2012 through 2016 and for the six-month periods ended June 30, 2016 and 2017 includes interest expense and fiscal charges on revenue bonds in the following amounts: fiscal year 2012 – $22,281,920, fiscal year 2013 – $21,616,716, fiscal year 2014 – $23,235,965, fiscal year 2015 – $21,196,010, fiscal year 2016 – $20,746,560, six-month period ended June 30, 2016 – $10,373,280, and six-month period ended June 30, 2017 – $10,118,280. (4) The Prior Period Adjustment reflects a change in accounting principle due to the implementation of GASB Statement No. 68 and No. 71. See Note 9 to the audited financial statements of the System included as a part of Appendix A to this Official Statement for additional information. See also “Employee Benefits - Accounting Changes Impacting Defined Benefit Pension Plan and OPEB Reporting” herein. (5) Represents transfer of special purpose sales tax proceeds for purchase of building from the System. 49 Management’s Discussion and Analysis of Results of Operations System operating revenues exclusive of Department of Army revenue from the Fort Gordon Facilities Contract increased from approximately $77.3 million in fiscal year 2012 to approximately $83.5 million in fiscal year 2016, an increase of approximately 8.0%, with the largest increase occurring between fiscal year 2013 and fiscal year 2014, in the amount of approximately $5.9 million, or 7.8%. The increase in operating revenues was due primarily to implementation of annual 3% increases to water and sewer service rates. In fiscal year 2012, the Consolidated Government completed projects for the Army and were reimbursed approximately $18.2 million, which resulted in a one-time positive impact on revenues. Revenues received from the Department of Army offset an equal amount of expenses associated with providing services to the Army under the Fort Gordon Facilities Contract, including expense associated with amortizing the Fort Gordon Note. System operating expenses increased from approximately $65.6 million in fiscal year 2012 to approximately $79 million in fiscal year 2016, an increase of approximately 20.4%. The increase in operating expenses was due primarily to increases in personnel services, other operating expenses, materials and supplies, and costs associated with providing water and sewer services to Fort Gordon. System operating revenues exclusive of Department of Army revenue from the Fort Gordon Facilities Contract increased from approximately $38.4 million for the six-month period ended June 30, 2016 to $39.6 million for the six-month period ended June 30, 2017, an increase of 3.1%. This increase was due to a scheduled 3% increase in water and sewer rates. System operating expenses increased from approximately $37.8 million for the six-month period ended June 30, 2016 to approximately $38.2 million for the six-month period ended June 30, 2017, an increase of 1.1%. The increase in operating expenses was due primarily to increases in other operating expenses and depreciation, which was offset in part by a decline in material and supplies expense. The number of customers of the System has modestly increased since December 31, 2012. The System’s customer base consists of a diversified mixture of large industries, commercial establishments, institutional establishments, and residential accounts, as well as the Army pursuant to its municipal services relationship with the Consolidated Government for provision of water and sewer services at Fort Gordon. From December 31, 2012 to June 30, 2017, water and sewer connections increased by approximately 4% and 1.5%, respectively. Demographic data supplied by the U.S. Department of Commerce, Bureau of the Census, indicates that the population of Richmond County increased only an estimated 0.5% from 2010 to 2016 (approximately 1,100 people). Despite this flat population growth for Richmond County as a whole, previously undeveloped areas of Richmond County, with limited services, have experienced population growth, resulting in the modest customer growth for the System over the last five years. [Remainder of Page Intentionally Left Blank] 50 Historical Debt Service Coverage Ratios Set forth below is the System’s historical ratios of Net Revenues Available for Debt Service to Debt Service on Revenue Bonds secured by revenues of the System, for the past five fiscal years and for the six-month periods ended June 30, 2016 and 2017. Historical Debt Service Coverage Ratios Years Ended December 31 Six-Month Periods Ended June 30 2012 2013 2014 2015 2016 2016 2017 Historical Net Revenues Available for Debt Service(1) $67,915,073 $50,972,836 $51,138,957 $50,662,460 $48,578,881 $22,321,018 $23,090,160 Historical Debt Service on Revenue Bonds(2) 29,458,066 29,536,716 31,789,513 31,626,010 31,646,560 15,823,280(3)15,823,280(3) Historical Debt Service Coverage Ratio 2.31x 1.73x 1.61x 1.60x 1.53x 1.41x 1.46x (1) Change in net position of the System plus (i) interest on revenue bonds, (ii) depreciation and amortization, (iii) payments in lieu of taxes and payments in lieu of franchise fees and (iv) transfers out to other funds, and minus interest income earned on the Construction Fund held under the Bond Resolution and transfers in from other funds. (2) Excludes (i) debt service on the GEFA Notes, the Fort Gordon Note, and the Capital Leases, since these obligations are not secured by revenues of the System. (3) 6/12th of Historical Debt Service on Revenue Bonds. Operating Budget The Consolidated Government is not legally required to adopt a budget for the System. The staff of the System, however, prepares an annual operating budget for the System for management control purposes. The staff of the System uses the accrual basis of accounting in its annual operating budget for the System, which is consistent with the basis of accounting used in the System’s financial statements. Set forth below is a summary of the System’s budget for the year ending December 31, 2017. This budget is based upon certain assumptions and estimates of the staff of the System regarding future events, transactions, and circumstances. Realization of the results projected in this budget will depend upon implementation by management of the System of policies and procedures consistent with the assumptions. There can be no assurance that actual events will correspond with such assumptions, that uncontrollable factors will not affect such assumptions, or that the projected results will be achieved. Accordingly, the actual results achieved could materially vary from those projected in the budget set forth below. [Remainder of Page Intentionally Left Blank] 51 System Budget for Year Ending December 31, 2017 Operating Revenues: Charges for service and sales $ 95,788,730 Total operating revenues 95,788,730 Operating Expenses: Personnel services 18,079,640 Other operating expenses and supplies 29,281,270 Payment in lieu of taxes (PILOT) 2,710,520 Payment in lieu of franchise fees (PILOF) 4,059,280 Depreciation 30,488,210 Total operating expenses 84,618,920 Operating Income 11,698,810 Non-Operating Revenues (Expenses): Interest income 48,000 Interest expense (20,767,320) Total non-operating revenues (expenses) (20,719,320) Change in Net Assets (9,020,510) Total Net Assets, Beginning of Year 171,853,129 Total Net Assets, End of Year $162,832,619 The System budget for the fiscal year ending December 31, 2017 includes factors that will result in actual fiscal year 2017 expenses and future expenses being less than fiscal year 2017 budgeted amounts. Personnel costs for the System are always budgeted assuming all positions are filled for the entire year, but historically actual costs have been 5% below budget. The personnel services budget in fiscal year 2017 is approximately $1.9 million more than fiscal year 2016 actual expenses while the fiscal year 2017 employment outlook has not changed significantly and no raises were budgeted. $1.5 million of the operating budget increase relates to depreciation, a non-cash expense. As of June 30, 2017, total operating expenses, excluding depreciation, are $23.4 million (unaudited), approximately 13.7% below budget on an annualized basis. Capital Improvements Program The following table summarizes the estimated value of capital improvements made to the System in each year for the past five fiscal years and the funding sources for such capital improvements. Funding Sources Fiscal Total Value of Debt Proceeds and Year Capital Improvements System Revenues Investment Earnings 2012 $43,560,320 $40,554,705 $ 3,005,615 2013 14,230,415 7,234,795 6,995,620 2014 15,666,246 5,316,763 10,349,483 2015 24,497,020 2,954,283 21,542,737 2016 20,156,950 2,919,131 17,237,819 The staff of the System has developed a multi-year capital improvements program and a plan to finance the program that relies on proceeds of previously issued revenue bonds and investment earnings on such proceeds together with System operating revenues, including revenues derived from the Fort Gordon Facilities Contract and the Fort Gordon Commodities Contract, and debt service savings achieved through the issuance of the Series 2017 Bonds. The capital improvements program allows the staff of the System to plan, on a long-term basis, for future System capital needs. Each year the capital improvements program is updated. 52 The following table summarizes the System’s capital improvements program for fiscal years 2017 through 2022. 2017 2018 2019 2020 2021 2022 Total Type of Capital Expenditure Water System $ 11,670,726 $ 5,602,422 $ 1,641,307 $ 5,000,000 $ 5,897,524 $ 3,185,000 $ 32,996,979 Sewer System 10,098,257 15,603,965 12,293,978 7,616,667 4,466,667 4,529,263 54,608,797 System-Wide Improvements 6,231,521 3,247,471 2,311,192 3,355,359 3,551,815 3,547,230 22,244,588 Total Costs $28,000,504 $24,453,858 $16,246,477 $15,972,026 $13,916,006 $11,261,493 $109,850,364 Type of Funding Source System Operating Revenues and Reserves(1) $ 3,438,605 $24,453,858 $16,246,477 $15,972,026 $13,916,006 $11,261,493 $ 85,288,465 Series 2012 Bonds 3,874,008 — — — — — 3,874,008 Series 2014 Bonds 20,687,891 — — — — — 20,687,891 Total Funding Sources $28,000,504 $24,453,858 $16,246,477 $15,972,026 $13,916,006 $11,261,493 $109,850,364 (1) Includes net operating revenues from water and sewer sales as well as amounts derived from the Fort Gordon Facilities Contract and reserved for capital expenditures. The staff of the System, as part of its regular planning process, anticipates additional capital expenditures beyond planned projects for routine, miscellaneous renewal and replacement. These costs are included in the estimates above which are expected to be funded by System revenues in the amount of approximately $3,000,000 million per year for fiscal years 2017 through 2022. Employee Benefits General The Consolidated Government presently maintains one agent multiple-employer (the “GMEBS Plan”), and six single-employer defined-benefit pension plans (the “General Retirement Plan,” the “1945 Plan,” the “General Pension Plan,” the “Policemen’s Pension Plan,” the “Firemen’s Pension Plan,” and the “City Employees’ Pension Plan”), described below, covering certain employees of the Consolidated Government, including System employees. The Consolidated Government also presently maintains a defined-contribution plan and a deferred compensation plan, each described below, covering certain employees of the Consolidated Government, including certain System employees, and provides certain other employee and post-employment benefits, which are described below, to certain employees of the Consolidated Government, including certain System employees. Accounting Changes Impacting Defined Benefit Pension Plan and OPEB Reporting In June 2012, the Governmental Accounting Standards Board (“GASB”) issued new accounting and financial reporting standards for pension plans provided through state and local retirement systems, including the 1945 Plan, the General Retirement Plan, and the GMEBS Plan, and their sponsoring employers, which includes the Consolidated Government. GASB Statement 67 requires the Consolidated Government, beginning in its fiscal year ended December 31, 2015, to disclose its net pension liability by calculating the difference between its total pension liability (the present value of projected benefit payments to employees based on their past service) and its fiduciary net position (market value of net plan assets) and to present more extensive note disclosures and supplementary information. GASB Statement 68, as amended in November 2013 by GASB Statement 71 (collectively “Statement 68”), required the Consolidated Government, including the System, beginning in its fiscal year ended December 31, 2015, to record a liability and expense on the financial statements of the Consolidated Government and the System in an amount equal to its proportionate share of the net pension liability and expense of the Pension Plan. The Consolidated Government, including the System, adopted Statement 68 for the basic financial statements of the Consolidated Government and the System beginning in its fiscal year ended December 31, 2015. 53 Beginning with the fiscal year ending December 31, 2018, the Consolidated Government, including the System, will be required to adopt GASB Statement No. 75 (“Statement 75”), Accounting and Financial Reporting for Postemployment Benefits other than Pensions. Statement 75 addresses accounting and financial reporting for such postemployment benefits other than pensions (“OPEB”) that are provided to employees of state and local government employers, like the Consolidated Government. Statement 75 will require that that governments report a liability on the face of their financial statements for the OPEB that is provided and will more comprehensively and comparably measure the annual costs of pension benefits and provides methodologies required to make such calculations. Currently, OPEB liabilities are reported in the notes to the audited financial statements and are not reported in the audited financial statements. The assumptions required under Statement 75 to make such calculations will differ from the current actuarial assumptions used to calculate such liabilities that are reported in the notes to the audit; however, at this time, no assessment of the impact of Statement 75 has been made by the Consolidated Government. Pension Plans The GMEBS Plan is administered through the Georgia Municipal Employees Benefit System (“GMEBS”), an agent multiple-employer public employee retirement system that acts as a common investment and administrative agent for cities in the State of Georgia. Effective January 1, 2008, the Consolidated Government revised the plan provisions governing the GMEBS and transferred all participants in the single-employer defined-benefit pension plan known as the “1977 Plan,” which covered certain former County employees, into the GMEBS Plan. In addition, the Consolidated Government offered all participants in its defined-contribution plan described below the option to transfer their contributions from that plan to the revised GMEBS Plan. All but 290 of the participants in the defined-contribution plan elected to transfer their contributions to the GMEBS Plan. The General Retirement Plan, the General Pension Plan, the Policemen’s Pension Plan, the Firemen’s Pension Plan, and the City Employee’s Pension Plan cover former City employees. The 1945 Plan covers certain former County employees. The funding methods and determination of benefits payable for the defined-benefit plans in general provide that pension funds are to be accumulated from employee contributions, employer contributions, and income from the investment of accumulated funds. Former City policemen and firemen hired before 1945 are covered under the General Pension Plan. Former City policemen hired between 1945 and 1949 are covered under the Policemen’s Pension Plan. Former City firemen hired between 1945 and 1949 are covered under the Firemen’s Pension Plan. Other former City employees hired between 1945 and 1949 are covered by the City Employees’ Pension Plan. Former City employees hired after March 1, 1949 and before March 1, 1987, whose age did not exceed 35 at the time of their employment, are covered by the General Retirement Plan. Former City employees hired on or after March 1, 1987 and before consolidation of the City and County governments are covered by the GMEBS Plan. Former County employees hired prior to October 1, 1975 are covered by the 1945 Plan. Former County employees not covered by the 1945 Plan, whose age did not exceed 60 at the time of their employment, were covered by the 1977 Plan until January 1, 2008 and are now covered by the GMEBS Plan. Consolidated Government employees who are not covered by another plan are covered by the defined-contribution plan described below. All of the Consolidated Government’s pension plans, except for the GMEBS Plan, are closed to new employees. [Remainder of Page Intentionally Left Blank] 54 Set forth below is selected information about the Consolidated Government’s defined-benefit pension plans. Contributions to Defined-Benefit Pension Plans Years Ended December 31, 2012 2013 2014 2015 2016 1945 Plan Employee Contributions $ 6,569 $ 6,617 $ 6,661 $ 6,611 $ 7,121 Employer Contributions 291,502 299,605 299,600 290,565 242,708 General Retirement Plan Employee Contributions $ 219,125 $ 202,735 $ 185,458 $ 145,707 127,008 Employer Contributions 2,826,791 1,924,332 2,256,722 2,256,722 2,381,619 GMEBS Plan(1) Employee Contributions $3,052,262 $3,022,920 $3,377,580 $3,730,816 3,861,596 Employer Contributions 5,082,322 5,170,685 5,297,640 5,662,856 5,375,663 (1) The 1977 Plan was terminated effective January 1, 2008 when all participants in the 1977 Plan were transferred to the GMEBS Plan. Net Pension Liability of Defined-Benefit Pension Plans Actuarial Valuation Date Total Pension Liability Plan Fiduciary Net Position Net Pension Liability Plan Fiduciary Net Position as a Percentage of Total Pension Liability Covered Employee Payroll Plan Fiduciary Net Position as a Percentage of Total Pension Liability 1945 Plan 12/31/14 $8,450,281 $6,665,981 $1,784,300 78.9% $132,346 1,348.2% 12/31/15 8,204,147 6,185,751 2,018,397 75.4 132,431 1,524.1 12/31/16 7,162,067 5,983,513 1,223,557 82.9 142,642 857.78 General Retirement Plan 12/31/14 $89,962,757 $71,328,822 $19,652,418 78.4% $2,906,852 676.1% 12/31/15 90,180,914 67,508,179 22,672,735 74.9 2,173,529 1,043.13 12/31/16 84,930,908 66,255,933 18,674,975 78.0 1,614,364 1,156.8 GMEBS Plan(1) 7/1/15 $139,456,536 $118,381,210 $21,075,326 84.9% $93,424,736 24.1% 7/1/16 150,150,708 121,623,343 28,527,365 81.0 87,533,530 30.5 (1) The 1977 Plan was terminated effective January 1, 2008 when all participants in the 1977 Plan were transferred to the GMEBS Plan. [Remainder of Page Intentionally Left Blank] 55 Membership in Defined-Benefit Pension Plans Retirees and Beneficiaries Receiving Benefits Terminated Plan Members Entitled to But Not Yet Receiving Benefits Active Plan Members 1945 Plan(1) 21 0 2 General Retirement Plan(1) 197 7 46 GMEBS Plan(2) 542 101 2,316 (1) As of December 31, 2016 actuarial valuation date. (2) As of July 1, 2016 actuarial valuation date. The Consolidated Government is required by Georgia law to have an actuarial valuation of its defined-benefit pension plans done once every two years. The Consolidated Government met the minimum funding levels prescribed by state law through January 1, 2016. The Consolidated Government has an actuarial valuation of the GMEBS Plan done every year and an actuarial valuation of the 1945 Plan and the General Retirement Plan done at least once every two years. The actuarial report prepared by The Segal Group, Inc. (“Segal”), dated September 14, 2017, presents the results of the July 1, 2017 actuarial valuation of the GMEBS Plan. The actuarial reports prepared by the CBIZ Benefits & Insurance Services, Inc. (“CBIZ”), dated June 22, 2017, present the results of the December 31, 2016 actuarial valuations of the General Retirement Plan and the 1945 Plan. For more complete information, reference is made to these actuarial reports, copies of which are available from the Consolidated Government upon request. Note 5 of the audited financial statements included as a part of Appendix A to this Official Statement contains a detailed description of the Consolidated Government’s defined-benefit pension plans covering employees of the Consolidated Government, including employees of the System. This description includes the principal actuarial assumptions used by Segal in preparing the actuarial valuation of the GMEBS Plan as of July 1, 2016, and used by CBIZ in preparing the actuarial valuations of the 1945 Plan and the General Retirement Plan as of December 31, 2016. Defined Contribution Plan The Consolidated Government maintains a single employer, defined-contribution plan created in accordance with Internal Revenue Code Section 401(a) for certain of its full-time employees. In a defined-contribution plan, benefits depend solely on amounts contributed to the plan plus investment earnings. The Consolidated Government has no liability under this plan except for contributions established and made each year. Employees are eligible to participate in the plan after one month of employment. Participants in the plan are required to contribute 4% of their salary, and the Consolidated Government is required to contribute 2% of the participant’s salary to the plan. The Consolidated Government’s contributions for each employee are fully vested after five years of continuous employment. The plan is administered by Nationwide Life Insurance. As of December 31, 2016, there were approximately 222 participants in the plan. For the year ended December 31, 2016, participants in the plan contributed approximately $255,453 and the Consolidated Government contributed approximately $127,728. The plan is currently closed to new participants. Deferred Compensation Plan The Consolidated Government also offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457(b). The plan is available to all employees and permits them to defer income taxation of a portion of their salary to future years. Participation in the plan is optional. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency, but employees do not incur a penalty for early withdrawal. All of the contributions into the plan come from employee contributions. In accordance with Internal Revenue Code Section 457, plan assets are held in trust for the exclusive benefit of plan participants. Accordingly, the assets and liabilities of the trust are not reflected in the City’s financial statements. 56 Other Employee Benefits Consolidated Government employees accrue vacation and sick leave in different amounts, depending upon the period of time the Consolidated Government has employed them. The maximum amount of vacation leave that employees may accumulate is 43 days. The Consolidated Government pays accrued vacation leave upon termination of employment and has reflected a liability for accumulated vacation pay in its financial statements. The maximum amount of sick leave that Consolidated Government employees (other than firefighters) may accumulate is 132 days. The Consolidated Government, however, does not pay accrued sick leave upon termination of employment and has not reflected accumulated sick leave as a liability in the Consolidated Government’s financial statements. Other Post-Retirement Benefits In addition to pension benefits, the Consolidated Government provides certain medical and death benefits for eligible retired employees of the Consolidated Government and their spouses. The Consolidated Government’s employees who are also participants in one of the retirement plans are eligible for these post-employment retirement benefits if they reach normal retirement age or are totally disabled while employed by the Consolidated Government. The cost of these benefits is recognized as expenditures as claims and premiums are paid. For the year ended December 31, 2016, the Consolidated Government contributed $4,014,820 to post-employment retirement benefits costs. The Consolidated Government currently funds and intends to continue to fund these benefits on a pay-as-you-go basis. No trust fund has been established for future funding of these benefits. As of January 1, 2016, the most recent date for which an actuarial valuation is available, the actuarial accrued liability for benefits was $103,599,420 and the actuarial value of assets was $-0-, resulting in an unfunded actuarial accrued liability of $103,599,420. As of the December 31, 2016 actuarial valuation, there were 611 retirees and spouses of retires receiving these post-employment retirement benefits. See Note 6 of the audited financial statements of the System included as a part of Appendix A to this Official Statement for further information concerning the Consolidated Government’s post-retirement benefits. Insurance Coverage and Governmental Immunity Under Georgia law, the defense of sovereign immunity is available to the Consolidated Government, except for actions for the breach of written contracts and actions for the recovery of damage for any claim for which liability insurance protection has been provided, but only to the extent of the liability insurance provided. The Consolidated Government, however, may be unable to rely upon the defense of sovereign immunity and may be subject to liability in the event of suits alleging causes of action founded upon various federal laws, such as suits filed pursuant to 42 U.S.C. § 1983 alleging the deprivation of federal constitutional or statutory rights of an individual and suits alleging anti-competitive practices and violations of the federal antitrust laws by the Consolidated Government in the exercise of its delegated powers. The Consolidated Government carries liability insurance for the types of claims and in amounts that are customary for similar entities for those categories of claims that are not subject to the defense of sovereign immunity. The Consolidated Government also carries property and casualty damage insurance on buildings and other physical assets. [Remainder of Page Intentionally Left Blank] 57 Present insurance coverage for the Consolidated Government (excluding coverage relating to its airports) is summarized below: Type Amount in Force Building and Contents(1) $764,744,627 Employee Blanket Bond 100,000 Public Official Bond for each Commissioner 10,000 Limits of Liability Type Each Occurrence Aggregate Public Officials’ Liability(2)$ 2,000,000 None Pollution Legal Liability 10,000,000 $10,000,000 Directors and Officers Liability(3)1,000,000 1,000,000 Automobile Liability(4) 1,000,000 None (1) Includes boiler and machinery and valuable papers. Deductible of $50,000 applies. (2) Self-insured retention of $250,000 applies. (3) Self-insured retention of $10,000 applies. (4) Includes pilot and fleet coverage, combined single limit (bodily injury and property damage). The Consolidated Government maintains four Risk Management Funds to account for and finance its self- insured risks of loss. The Risk Management Funds are maintained to provide general liability insurance, workers’ compensation coverage, and unemployment coverage for the Consolidated Government. As of December 31, 2016, the fund balances of the Risk Management Fund totaled $1,126,186 (including $0 invested in capital assets). In addition, as of December 31, 2016, the Consolidated Government designated $3,400,000 of its unreserved fund balance in its General Fund for risk management. The Consolidated Government is also self-insured for its workers’ compensation coverage through a self-insurance program that is administered under contracts with third party administrators. A summary of the Consolidated Government’s self-insured retention and excess liability insurance coverage is set forth below: Excess Liability Insurance Self-Insured Retention Limits of Liability Type Each Occurrence Aggregate Each Occurrence Aggregate Workers’ Compensation $1,000,000 None $1,000,000 None The Consolidated Government requires payment and performance surety bonds and builders’ risk insurance of all contractors and subcontractors involved in construction related to the Consolidated Government’s facilities. The Consolidated Government requires the surety bonds to be issued by surety firms listed on the U.S. Treasury- approved list and the builders’ risk insurance to be in the amount of the contract sums. LEGAL MATTERS Pending Litigation The Consolidated Government, like other similar bodies, is subject to a variety of suits and proceedings arising in the ordinary conduct of the affairs of the System. The Consolidated Government, after reviewing the current status of all pending and threatened litigation relating to the System with its counsel, Shepard, Plunkett & Hamilton, LLP, believes that, while the outcome of litigation cannot be predicted, the final settlement of all lawsuits that have been filed and of any actions or claims pending or threatened against the Consolidated Government 58 relating to the System or its officials in such capacity are adequately covered by insurance or self-insurance reserves maintained by the Consolidated Government or will not have a material adverse effect upon the financial position or results of operations of the System. There is no litigation now pending or, to the knowledge of the Consolidated Government, threatened against the Consolidated Government which restrains or enjoins the issuance or delivery of the Series 2017 Bonds, the pledge of the Pledged Revenues to secure the Series 2017 Bonds, or the use of the proceeds of the Series 2017 Bonds or which questions or contests the validity of the Series 2017 Bonds or the proceedings and authority under which they are to be issued and secured. There is no litigation now pending or, to the knowledge of the Consolidated Government, threatened against the Consolidated Government that contests or questions the creation, organization, or existence of the Consolidated Government or the title of the present members or other officials of the Consolidated Government to their respective offices. Opinion of Bond Counsel In General Legal matters incident to the authorization, validity, and issuance of the Series 2017 Bonds are subject to the unqualified approving opinion of Butler Snow LLP, Atlanta, Georgia, Bond Counsel, whose opinion will be available at the time of delivery of the Series 2017 Bonds. It is anticipated that the approving opinion will be in substantially the form attached to this Official Statement as Appendix C. In the opinion of Bond Counsel, under existing laws, regulations, rulings, and judicial decisions, interest on the Series 2017 Bonds is excludable from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. The opinion described in the preceding sentence assumes the accuracy of certain representations and compliance by the Consolidated Government with covenants designed to satisfy the requirements of the Internal Revenue Code of 1986, as amended (the “Code”), that must be met subsequent to the issuance of the Series 2017 Bonds. Failure to comply with such requirements could cause interest on the Series 2017 Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2017 Bonds. The Consolidated Government has covenanted to comply with such requirements. Bond Counsel has expressed no opinion regarding other federal tax consequences arising with respect to the Series 2017 Bonds. Notwithstanding Bond Counsel’s opinion that interest on the Series 2017 Bonds is not a specific preference item for purposes of the federal alternative minimum tax, such interest will be included in adjusted current earnings of certain corporations, and such corporations are required to include in the calculation of alternative minimum taxable income 75% of the excess of such corporations’ adjusted current earnings over their alternative minimum taxable income (determined without regard to such adjustment and prior to reduction for certain net operating losses). The accrual or receipt of interest on the Series 2017 Bonds may otherwise affect the federal income tax liability of the owners of the Series 2017 Bonds. The extent of these other tax consequences will depend upon such owner’s particular tax status and other items of income or deduction. Bond Counsel has expressed no opinion regarding any such consequences. Purchasers of the Series 2017 Bonds, particularly purchasers that are corporations (including S corporations and foreign corporations operating branches in the United States), property or casualty insurance companies, banks, thrifts or other financial institutions, certain recipients of social security or railroad retirement benefits, taxpayers otherwise entitled to claim the earned income credit, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, should consult their tax advisors as to the tax consequences of purchasing or owning the Series 2017 Bonds. In the further opinion of Bond Counsel, the interest on the Series 2017 Bonds is exempt from State of Georgia income taxation. Bond Counsel has not opined as to whether interest on the Series 2017 Bonds is subject to state or local income taxation in jurisdictions other than Georgia; interest on the Series 2017 Bonds may or may not be subject to state or local income taxation in jurisdictions other than Georgia under applicable state or local laws. Each purchaser of the Series 2017 Bonds should consult its own tax advisor regarding the tax-exempt status of the interest on the Series 2017 Bonds in a particular state or local jurisdiction other than Georgia. 59 Backup Withholding As a result of the enactment of the Tax Increase Prevention and Reconciliation Act of 2005, interest on tax- exempt obligations such as the Series 2017 Bonds is subject to information reporting in a manner similar to interest paid on taxable obligations. Backup withholding may be imposed on payments made after March 31, 2007 to any bondholder who fails to provide certain required information including an accurate taxpayer identification number to any person required to collect such information pursuant to Section 6049 of the Code. The new reporting requirement does not in and of itself affect or alter the excludability of interest on the Series 2017 Bonds from gross income for federal income tax purposes or any other federal tax consequence of purchasing, holding or selling tax- exempt obligations. Changes in Federal and State Tax Law From time to time, there are legislative proposals in the U.S. Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to above or adversely affect the market value of the Series 2017 Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether if enacted it would apply to bonds issued prior to enactment. In addition, regulatory actions are from time to time announced or proposed and litigation is threatened or commenced that, if implemented or concluded in a particular manner, could adversely affect the market value of the Series 2017 Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the Series 2017 Bonds or the market value thereof would be impacted thereby. Purchasers of the Series 2017 Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the Series 2017 Bonds and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending legislation, regulatory initiatives or litigation. Original Issue Discount The Series 2017 Bonds maturing October 1, 20__ through October 1, 20__, inclusive (collectively, the “Discount Bonds”), are being sold at an original issue discount. The difference between the initial public offering prices of such Discount Bonds and their stated amounts to be paid at maturity constitutes original issue discount treated in the same manner for federal income tax purposes as interest, as described above. The amount of original issue discount that is treated as having accrued with respect to such Discount Bond is added to the cost basis of the owner in determining, for federal income tax purposes, gain or loss upon disposition of such Discount Bond (including its sale, redemption or payment at maturity). Amounts received upon disposition of such Discount Bond that are attributable to accrued original issue discount will be treated as tax-exempt interest, rather than as taxable gain, for federal income tax purposes. Original issue discount is treated as compounding semiannually, at a rate determined by reference to the yield to maturity of each individual Discount Bond, on days that are determined by reference to the maturity date of such Discount Bond. The amount treated as original issue discount on such Discount Bond for a particular semiannual accrual period is equal to the product of (i) the yield to maturity for such Discount Bond (determined by compounding at the close of each accrual period) and (ii) the amount that would have been the tax basis of such Discount Bond at the beginning of the particular accrual period if held by the original purchaser, less the amount of any interest payable for such Discount Bond during the accrual period. The tax basis is determined by adding to the initial public offering price on such Discount Bond the sum of the amounts that have been treated as original issue discount for such purposes during all prior periods. If such Discount Bond is sold between semiannual compounding dates, original issue discount that would have accrued for that semiannual compounding period for federal income tax purposes is to be apportioned in equal amounts among the days in such compounding period. Owners of Discount Bonds should consult their tax advisors with respect to the determination and treatment of original issue discount accrued as of any date and with respect to the state and local tax consequences of owning a Discount Bond. 60 Original Issue Premium The Series 2017 Bonds maturing October 1, 20__ through October 1, 20__, inclusive (collectively, the “Premium Bonds”), are being sold at a premium. An amount equal to the excess of the issue price of a Premium Bond over its stated redemption price at maturity constitutes premium on such Premium Bond. An initial purchaser of a Premium Bond must amortize any premium over such Premium Bond’s term using constant yield principles, based on the purchaser’s yield to maturity (or, in the case of Premium Bonds callable prior to their maturity, by amortizing the premium to the call date, based on the purchaser’s yield to the call date and giving effect to any call premium)(1). As premium is amortized, the amount of the amortization offsets a corresponding amount of interest for the period and the purchaser’s basis in such Premium Bond is reduced by a corresponding amount resulting in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes upon a sale or disposition of such Premium Bond prior to its maturity. Even though the purchaser’s basis may be reduced, no federal income tax deduction is allowed. Purchasers of the Premium Bonds should consult with their tax advisors with respect to the determination and treatment of premium for federal income tax purposes and with respect to the state and local tax consequences of owning a Premium Bond. Validation Proceedings The State of Georgia has instituted proceedings in the Superior Court of Richmond County, Georgia to validate the Series 2017 Bonds and the security therefor. The State of Georgia is the plaintiff in the proceeding, and the Consolidated Government is the defendant. A final judgment confirming and validating the Series 2017 Bonds and the security therefor will be received prior to the issuance and delivery of the Series 2017 Bonds. Under Georgia law, the judgment of validation will be forever conclusive against the Consolidated Government upon the validity of the Series 2017 Bonds and the security therefor. Closing Certificates At closing of the sale of the Series 2017 Bonds, the Consolidated Government will deliver to the purchasers a certificate (a) that no litigation is pending or threatened against it that would have a material effect on the issuance or validity of the Series 2017 Bonds or the security for the Series 2017 Bonds or, except as disclosed in this Official Statement, on the financial condition of the System, and (b) that the information contained in this Official Statement does not contain any misstatement of a material fact and does not omit to state any material fact necessary to make the statements herein contained, in light of the circumstances under which they were made, not misleading. MISCELLANEOUS Ratings Moody’s Investors Service, Inc. and S&P Global Ratings, a division of Standard & Poor’s Financial Services LLC have assigned ratings of “A1” and “A+,” respectively, to the Series 2017 Bonds. The ratings reflect only the respective views of the rating agencies, and any desired explanation of the significance of each rating should be obtained from the rating agency furnishing such rating, at the following addresses: Moody’s Investors Service, Inc., 7 World Trade Center, 250 Greenwich Street, New York, New York 10007, and S& P Global Ratings, 55 Water Street, New York, New York 10041. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies, and assumptions of its own. There is no assurance that either or both of such ratings will remain unchanged for any given period of time or that they will not be revised downward or withdrawn entirely by the rating agency furnishing the same, if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of such ratings, or either of them, may have an adverse effect on the liquidity and market price of the Series 2017 Bonds. Sale at Competitive Bidding The Series 2017 Bonds were offered by the Consolidated Government at competitive bidding on October __, 2017 in accordance with the Official Notice of Sale. The interest rates shown on the inside cover page of this Official Statement are the interest rates to the Consolidated Government resulting from the award of the 61 Series 2017 Bonds at a competitive bidding. The prices shown on the inside cover page of this Official Statement were furnished by ____________________________, the successful bidder for the Series 2017 Bonds. All other information concerning the nature and terms of any re-offering should be obtained from the successful bidder for the Series 2017 Bonds and not from the Consolidated Government. Financial Advisor The Consolidated Government has employed Davenport & Company LLC, Atlanta, Georgia, as its Financial Advisor in connection with the issuance of the Series 2017 Bonds. Independent Professionals The financial statements of the System as of December 31, 2016 and 2015 and for the years then ended, attached hereto as part of Appendix A, have been audited by Mauldin & Jenkins, LLC, Macon, Georgia, independent certified public accountants, to the extent and for the periods indicated in their report thereon, which appears in Appendix A. Such financial statements have been included herein in reliance upon the report of Mauldin & Jenkins, LLC. The Consolidated Government has retained Galardi Rothstein Group, Chicago, Illinois, as its Registered Municipal Advisor to develop several reports and studies relating to the System and certain financial matters. Additional Information Use of the words “shall,” “must,” or “will” in this Official Statement in summaries of documents or laws to describe future events or continuing obligations is not intended as a representation that such event will occur or obligation will be fulfilled but only that the document or law contemplates or requires such event to occur or obligation to be fulfilled. Any statements made in this Official Statement involving estimates or matters of opinion, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates or matters of opinion will be realized. Neither this Official Statement nor any statement that may have been made orally or in writing is to be construed as a contract with the owners of the Series 2017 Bonds. [Remainder of Page Intentionally Left Blank] 62 CERTIFICATION The execution and delivery of this Official Statement, and its distribution and use, have been duly authorized and approved by the Consolidated Government. AUGUSTA, GEORGIA By: Mayor, Augusta-Richmond County Commission APPENDIX A AUDITED FINANCIAL STATEMENTS OF THE SYSTEM FOR THE FISCAL YEAR ENDED DECEMBER 31, 2016 # # # # # # # # # # # # # # # # # # # # # # # 7KLV#SDJH#LQWHQWLRQDOO\#OHIW#EODQN1# AUGUSTA, GEORGIA UTILITIES AUGUSTA, GEORGIA FINANCIAL REPORT FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 AUGUSTA, GEORGIA UTILITIES AUGUSTA, GEORGIA FINANCIAL REPORT FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 TABLE OF CONTENTS Page INDEPENDENT AUDITOR’S REPORT .................................................................................................................. 1 - 3 FINANCIAL STATEMENTS Statements of Net Position ........................................................................................................................ 4 and 5 Statements of Revenues, Expenses and Changes in Net Position ................................................................. 6 Statements of Cash Flows ......................................................................................................................... 7 and 8 Notes to Financial Statements ..................................................................................................................... 9 - 44 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Funding Progress – Other Post-Employment Benefit Plan ...................................................... 45 Schedule of Changes in the Government’s Net Pension Liability and Related Ratios – 1945 Plan ................................................................................................................... 46 Schedule of Changes in the Government’s Net Pension Liability and Related Ratios – General Retirement Plan .......................................................................................... 47 Schedule of Changes in the Government’s Net Pension Liability and Related Ratios – Georgia Municipal Employees Benefit System Plan ............................................. 48 Schedule of Government Contributions – 1945 Plan ..................................................................................... 49 Schedule of Government Contributions – General Retirement Plan ............................................................ 50 Schedule of Government Contributions – Georgia Municipal Employees Benefit System Plan ............... 51 Schedule of Pension Investment Returns – 1945 Plan ................................................................................... 52 Schedule of Pension Investment Returns – General Retirement Plan ......................................................... 53 STATISTICAL SECTION (UNAUDITED) Statistical Section ........................................................................................................................................ 54 - 61 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards .............................................. 62 and 63 300 MULBERRY STREET, SUITE 300 • POST OFFICE BOX 1877 • MACON, GEORGIA 31202-1877 • 478-464-8000 • FAX 478-464-8051 • www.mjcpa.com MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITOR’S REPORT To the Utilities Department, Augusta-Richmond County Commission Augusta, Georgia Report on the Financial Statements We have audited the accompanying basic financial statements of Augusta, Georgia Utilities (the “Utilities”), an enterprise fund of Augusta, Georgia, as of and for the years ended December 31, 2016 and 2015, and the related notes to the financial statements, as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Governmental Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 2 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Augusta, Georgia Utilities, an enterprise fund of Augusta, Georgia, as of December 31, 2016 and 2015, and the changes in financial position and cash flows thereof for the years then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matters As discussed in Note 1, the financial statements present only the Utilities enterprise fund of Augusta, Georgia and do not purport to, and do not, present fairly the financial position of Augusta, Georgia as of December 31, 2016 and 2015, the changes in its financial position or its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. As discussed in Note 5, the Utilities enterprise fund of Augusta, Georgia implemented Governmental Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB No. 27, as well as Statement No. 71, Pension Transitions for Contributions Made Subsequent to the Measurement Date –an amendment of GASB No. 68, as of January 1, 2015. These standards significantly changed the accounting for the Government’s net pension liability and related disclosures. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Schedules of Changes in the Government’s Net Pension Liability and Related Ratios and Schedules of Government Contributions (on pages 46 through 51) be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. 3 Other Information Our audit was conducted for the purpose of forming an opinion on the basic financial statements of Augusta, Georgia Utilities. The statistical section listed in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. The statistical section has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 29, 2017, on our consideration of Augusta, Georgia Utilities’ internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Airport’s internal control over financial reporting and compliance. Macon, Georgia June 29, 2017 4 AUGUSTA, GEORGIA UTILITIES AUGUSTA, GEORGIA STATEMENTS OF NET POSITION DECEMBER 31, 2016 AND 2015 ASSETS 2016 2015 CURRENT ASSETS Cash and cash equivalents $11,040,710 $20,076,107 Customer accounts receivable 21,815,273 19,541,469 Prepaid expenses - 295,742 Inventory 2,333,761 2,438,252 Total current assets 35,189,744 42,351,570 RESTRICTED CASH AND CASH EQUIVALENTS Sinking fund - all funds 25,863,264 25,862,309 Construction fund - all funds 59,539,943 63,466,577 Total restricted assets 85,403,207 89,328,886 CAPITAL ASSETS Capital assets not being depreciated 42,164,169 35,840,844 Capital assets, net of accumulated depreciation 529,795,756 544,151,971 Total capital assets 571,959,925 579,992,815 OTHER ASSETS Prepaid bond interest 9,655,507 10,300,159 Prepaid bond insurance 1,487,137 1,566,564 Total other assets 11,142,644 11,866,723 Total assets 703,695,520 723,539,994 DEFERRED OUTFLOWS OF RESOURCES Deferred charge on refunding 3,507,369 3,977,717 Pension contributions subsequent to measurement date 353,081 811,383 Pension investment return 1,033,484 - Pension experience differences 4,523 - Total deferred outflows of resources 4,898,457 4,789,100 LIABILITIES CURRENT LIABILITIES, PAYABLE FROM CURRENT ASSETS Accounts and other payables 4,056,622 2,980,866 Accrued interest 5,181,990 5,321,705 Due to other funds of the Government 13,466,856 15,434,745 Accrued salaries 580,310 537,285 Compensated absences 761,280 716,007 Notes payable - current 3,486,993 3,518,783 Capital leases payable - current 1,153,659 952,925 Total current liabilities payable from current assets 28,687,710 29,462,316 CURRENT LIABILITIES PAYABLE FROM RESTRICTED ASSETS Revenue bonds payable - current 11,410,000 10,900,000 Total current liabilities payable from restricted assets 11,410,000 10,900,000 (Continued) 5 AUGUSTA, GEORGIA UTILITIES AUGUSTA, GEORGIA STATEMENTS OF NET POSITION DECEMBER 31, 2016 AND 2015 2016 2015 LONG-TERM LIABILITIES Advance from other funds of the Government $410,235 $234,077 Revenue bonds payable 472,198,041 485,161,674 Notes payable 14,060,069 17,547,062 Capital leases payable 752,028 1,809,769 Net pension liability 4,642,836 4,271,120 Total long-term liabilities 492,063,209 509,023,702 Total liabilities 532,160,919 549,386,018 DEFERRED INFLOWS OF RESOURCES Deferred charge on refunding 4,419,191 4,637,916 Pension assumption changes 160,738 195,363 Pension investment return - 147,292 Pension experience differences - 61,823 Total deferred inflows of resources 4,579,929 5,042,394 NET POSITION Net investment in capital assets 84,452,867 82,852,658 Restricted for capital outlay 60,237,585 62,501,984 Restricted for debt service 13,119,259 8,054,563 Unrestricted net position 14,043,418 20,491,477 Total net position $171,853,129 $173,900,682 See Notes to Financial Statements. 6 AUGUSTA, GEORGIA UTILITIES AUGUSTA, GEORGIA STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 2016 2015 Operating revenues Water and sewerage sales $76,853,185 $75,085,759 Industrial sewer charges 2,117,210 2,233,308 Water and sewerage service fees 3,653,729 3,971,822 Department of the Army revenue 8,430,831 8,163,317 Other 912,852 537,939 Total operating revenues 91,967,807 89,992,145 Operating expenses Personnel services 16,197,196 15,594,482 Depreciation 28,964,019 29,061,782 Other operating expenses 6,995,829 7,013,563 Materials and supplies 15,968,197 9,387,930 Professional services 1,574,121 4,736,340 General allocation 1,432,600 1,411,750 Risk management 497,060 544,828 Vehicle cost allocation 784,301 711,078 Payment in lieu of taxes 2,731,530 2,795,510 Payment in lieu of franchise fees 3,832,890 4,279,770 Total operating expenses 78,977,743 75,537,033 Net operating income 12,990,064 14,455,112 Non-operating revenues (expenses) Interest revenue 40,194 74,878 Interest and fiscal charges (19,735,315)(20,564,572) Bond issuance costs (376,378)(404,602) Gain on sale of capital assets 33,882 17,882 Net non-operating revenues (expenses)(20,037,617) (20,876,414) Loss before transfers (7,047,553) (6,421,302) Transfers Transfers in from other funds of the Government 5,000,000 - Transfers out to other funds of the Government - (41,280) Total transfers 5,000,000 (41,280) Change in net position (2,047,553) (6,462,582) Total net position, beginning of year, as restated 173,900,682 180,363,264 Total net position, end of year $171,853,129 $173,900,682 See Notes to Financial Statements. 7 AUGUSTA, GEORGIA UTILITIES AUGUSTA, GEORGIA STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 2016 2015 CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers and users $85,660,564 $98,297,133 Payments to suppliers (32,290,410) (32,126,396) Payments to employees (16,610,757) (15,743,394) Net cash provided by operating activities 36,759,397 50,427,343 CASH FLOWS FROM NON-CAPITAL AND RELATED FINANCING ACTIVITIES Transfers in/out 5,000,000 (41,280) Net cash provided by (used in) non-capital and related financing activities 5,000,000 (41,280) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from sale of capital assets 1,927,157 17,882 Acquisition and construction of capital assets (22,824,404) (27,370,082) Principal payments on bonds (10,900,000) (10,430,000) Principal payments on notes and lease payable (2,253,428) (2,462,317) Proceeds from issuance of capital leases 119,347 694,457 Interest paid (20,829,339) (21,655,467) Net cash used in capital and related financing activities (54,760,667) (61,205,527) CASH FLOWS FROM INVESTING ACTIVITIES Liquidation of investments - 2,015,357 Interest received 40,194 78,125 Net cash provided by investing activities 40,194 2,093,482 Decrease in cash and cash equivalents (12,961,076) (8,725,982) Cash and cash equivalents, beginning of year 109,404,993 118,130,975 Cash and cash equivalents, end of year $96,443,917 $109,404,993 Classified as: Cash and cash equivalents $11,040,710 $20,076,107 Restricted assets: Cash and cash equivalents 85,403,207 89,328,886 $96,443,917 $109,404,993 (Continued) 8 AUGUSTA, GEORGIA UTILITIES AUGUSTA, GEORGIA STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 2016 2015 CASH FLOWS FROM OPERATING ACTIVITIES Net operating income $12,990,064 $14,455,112 Adjustments to reconcile net operating income to net cash provided by operating activities: Depreciation 28,964,019 29,061,782 Department of Defense payment used to reduce note payable (2,241,709) (2,130,225) Changes in assets and liabilities: Increase in accounts receivable and other receivables (2,273,804) (3,394,907) Decrease in inventories 104,491 165,164 (Increase) decrease in prepaids 295,742 (87,349) Increase in deferred outflows of resources-pension (579,705) (811,383) Increase (decrease) in accounts payable 1,075,756 (1,323,442) Increase in accrued expenses 43,025 112,318 Increase (decrease) in due to other funds (1,791,731) 13,830,120 Increase in compensated absences 45,273 34,381 Increase (decrease) in deferred inflows or resources-pension (243,740) 404,478 Increase in net pension liability 371,716 111,294 Net cash provided by operating activities $36,759,397 $50,427,343 NONCASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal payments on notes payable $2,241,709 $1,804,470 Interest paid 214,271 325,755 $2,455,980 $2,130,225 See Notes to Financial Statements. AUGUSTA, GEORGIA, UTILITIES AUGUSTA, GEORGIA NOTES TO FINANCIAL STATEMENTS 9 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Augusta, Georgia Utilities (the “Utilities”) is a provider of water and sewer services located in Augusta, Georgia. The Utilities grants credit to residential, business, and industrial customers, substantially all of whom are located in the Central Savannah River Area. The Utilities accounts for its financial position and results of operations in accordance with accounting principles generally accepted in the United States of America (U.S.GAAP) applicable to governmental units. The following is a summary of the significant accounting policies: A. Reporting Entity The Utilities is an enterprise fund of Augusta, Georgia (the “Government”). These financial statements present only an enterprise fund and are not intended to present fairly the financial position and results of operations of Augusta, Georgia in conformity with accounting principles generally accepted in the United States of America. The Utilities is an integral part of the Government’s financial reporting entity, and its results are included in the financial report of the Government, which should be read in conjunction with these financial statements. B. Measurement Focus, Basis of Accounting, and Basis of Presentation The accounting and reporting policies of the Utilities conform to accounting principles generally accepted in the United States of America. The financial statements are prepared on the accrual basis of accounting, whereby revenues are recognized as earned and expenses are recognized as incurred. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the Utilities are charges for goods and services provided. Operating expenses of the Utilities include the cost of these goods and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the Utilities’ policy to use restricted resources first, then unrestricted resources as they are needed. C. Cash and Cash Equivalents Cash and cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less meet this definition. NOTES TO FINANCIAL STATEMENTS 10 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Investments Investments are reported at fair value. Fair value is determined as follows: short-term investments are reported at cost, which approximates fair value; securities traded on national exchanges are valued at current prices or current prices of similar securities; securities for which an established market does not exist are reported at estimated fair value using selling prices for similar investments for which there is an active market. E. Accounts Receivable Accounts receivable includes billed but uncollected amounts and unbilled receivables based upon a prorated amount of subsequent monthly billings. Allowances for doubtful accounts are maintained based on historical trends. F. Inventories Inventories are stated at lower of cost (first in, first out) or market, and are accounted for using the consumption method. G. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. Prepaid items are accounted for using the consumption method. H. Restricted Assets Certain assets are classified as restricted assets on the statements of net position because their use is limited by applicable debt covenants. I. Capital Assets Capital assets are recorded at cost when purchased. Depreciation is provided using the straight- line method over the estimated useful lives of the respective assets. Maintenance and repairs are charged to expense as incurred and major renewals and betterments are capitalized. Minimum capitalization costs are $5,000 for all categories of capital assets. When items of capital assets are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is recognized. Major outlays for capital assets and major improvements are capitalized as projects are constructed. Interest incurred during the construction period of capital assets is included as part of the capitalized value of the assets constructed. Interest in the amount of $743,074 was capitalized during the year ended December 31, 2016. NOTES TO FINANCIAL STATEMENTS 11 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) I. Capital Assets (Continued) The estimated lives used in determining depreciation are as follows: Years Water and sewer systems 10-40 Buildings and other improvements 10-30 Vehicles 3-5 Machinery and equipment 5-10 Office furniture and fixtures 5-10 Capital leases 3 Other capital items 3-12 The value of water and sewerage systems installed by various subdivision developers and deeded to Utilities at no cost prior to 1970 was recorded based on an appraisal by an engineering firm. Such donated assets are recorded at estimated fair market values effective at the date of said appraisals. J. Long-Term Obligations Long-term debt and other long-term obligations are reported as liabilities in the applicable statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed in the period incurred. K. Compensated Absences The vacation policy of the Utilities provides for the accumulation of up to 30 days earned vacation leave with such leave being fully vested when earned. An expense and a liability for compensated absences and the salary-related payments are recorded as leave is earned. The Utilities has assumed a first-in, first-out method of using accumulated compensated time. The portion of that time that is estimated to be used in the next fiscal year has been designated as a current liability in the financial statements. No accrual has been established for accumulated sick leave of employees since it is the Utilities’ policy to record the cost of sick leave only when it is used. NOTES TO FINANCIAL STATEMENTS 12 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) L. Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense) until then. Other than the items related to the changes in the net pension liability as discussed below, the Utilities had one item that qualified for reporting in this category, which is the deferred charge on refunding. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded debt or the refunding debt. In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of fund balance that applies to future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. Other than the items related to the changes in the net pension liability as discussed below, the Utilities had one item that qualified for reporting in this category, which is the deferred charge on refunding. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded debt or the refunding debt. The Utilities also has deferred inflows and outflows related to the recording of changes in its net pension liability. Certain changes in the net pension liability are recognized as pension expense over time instead of all being recognized in the year of occurrence. Experience gains or losses result from periodic studies by the Utilities’ actuary which adjust the net pension liability for actual experience for certain trend information that was previously assumed, for example the assumed dates of retirement of plan members. These experience gains or losses are recorded as deferred outflows of resources or deferred inflows of resources and are amortized into pension expense over the expected remaining lives of plan members. Changes in the actuarial assumptions which adjust the net pension liability are also recorded as deferred inflows of resources and are amortized into pension expense over the expected remaining service lives of plan members. The difference between projected investment return on pension investment and actual return on those investments is also deferred and amortized against pension expense over a five year period. Additionally, any contributions made by the Utilities to the pension plan before year end but subsequent to the measurement date of the Utilities’ net pension liability are reported as deferred outflows of resources. NOTES TO FINANCIAL STATEMENTS 13 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) M. Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Plan and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by the Plan. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Investment are reported at fair value. N. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 2. DEPOSITS AND INVESTMENTS Total deposits as of December 31, 2016 and December 31, 2015, are summarized as follows: As reported in the Statement of Net Position:December 31, 2016 December 31, 2015 Cash and cash equivalents $11,040,710 $20,076,107 Restricted cash and cash equivalents 85,403,207 89,328,886 $96,443,917 $109,404,993 Cash deposited with financial institutions $96,443,917 $109,404,993 $96,443,917 $109,404,993 NOTES TO FINANCIAL STATEMENTS 14 NOTE 2. DEPOSITS AND INVESTMENTS (CONTINUED) Credit Risk. State statutes authorize the Utilities to invest in obligations of the State of Georgia or other states; obligations issued by the U.S. government; obligations fully insured or guaranteed by the U.S. government or by a government agency of the United States; obligations of any corporation of the U.S. government; prime bankers’ acceptances; the local government investment pool established by state law; repurchase agreements; and obligations of other political subdivisions of the State of Georgia. Interest Rate Risk. The Utilities’ investment policy states that the Utilities will structure its portfolio to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities prior to their maturity. The policy also emphasizes the purchase of shorter term or more liquid investments. The policy does not place formal limits on investment maturities. Custodial Credit Risk – Deposits. The Utilities does not have a formal custodial credit risk policy. Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. State statutes require all deposits and investments (other than federal or state government instruments) to be collateralized by depository insurance, obligations of the U.S. government, or bonds of public authorities, counties, or municipalities. As of December 31, 2016 and 2015, the Utilities did not have any balances exposed to custodial credit risk as uninsured and uncollateralized as defined by GASB pronouncements. Custodial Credit Risk – Investments. Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty, the Utilities will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. State statutes require all investments (other than federal or state government instruments) to be collateralized by depository insurance, obligations of the U.S. government, or bonds of public authorities, counties, or municipalities. NOTES TO FINANCIAL STATEMENTS 15 NOTE 3. CAPITAL ASSETS Capital asset activity for the year ended December 31, 2016, is as follows: Ending Balance Capital assets, not being depreciated: Land $11,576,579 $19,812 $- $- $11,596,391 Construction in progress 24,264,265 12,398,611 (4,799,885) (1,295,213) 30,567,778 Total 35,840,844 12,418,423 (4,799,885) (1,295,213) 42,164,169 Capital assets, being depreciated: Buildings 47,294,487 3,931,691 - - 51,226,178 Vehicles 7,036,401 467,972 - (90,217) 7,414,156 Machinery and equipment 18,099,407 665,848 - (85,900) 18,679,355 Furniture and fixtures 694,111 - - - 694,111 Other capital 7,161,672 23,371 - - 7,185,043 Water and sewerage systems 813,490,451 4,719,037 4,799,885 - 823,009,373 Contributed water and sewerage systems 10,563,423 - - - 10,563,423 Total 904,339,952 9,807,919 4,799,885 (176,117) 918,771,639 Less accumulated depreciation for: Buildings (36,631,696) (1,329,490) - - (37,961,186) Vehicles (6,699,749) (216,647) - 90,217 (6,826,179) Machinery and equipment (14,321,462) (1,452,418) - 85,900 (15,687,980) Furniture and fixtures (694,110) - - - (694,110) Other capital (6,712,154) (190,577) - - (6,902,731) Water and sewerage systems (286,133,712) (25,607,715) - - (311,741,427) Contributed water and sewerage systems (8,995,098) (167,172) - - (9,162,270) Total (360,187,981) (28,964,019) - 176,117 (388,975,883) Total capital assets, being depreciated, net 544,151,971 (19,156,100) 4,799,885 - 529,795,756 Total capital assets, net $579,992,815 $(6,737,677) $- $(1,295,213) $571,959,925 DisposalsBalance Beginning Additions Transfers NOTES TO FINANCIAL STATEMENTS 16 NOTE 3. CAPITAL ASSETS (CONTINUED) Capital asset activity for the year ended December 31, 2015, is as follows: Ending Balance Capital assets, not being depreciated: Land $11,352,442 $187,500 $36,637 $- $11,576,579 Construction in progress 18,649,118 10,635,598 (5,020,451) - 24,264,265 Total 30,001,560 10,823,098 (4,983,814) - 35,840,844 Capital assets, being depreciated: Buildings 45,158,525 1,157,827 978,135 - 47,294,487 Vehicles 6,945,888 163,821 - (73,308) 7,036,401 Machinery and equipment 17,107,686 998,786 - (7,065) 18,099,407 Furniture and fixtures 694,111 - - - 694,111 Other capital 6,810,748 350,924 - - 7,161,672 Water and sewerage systems 795,609,146 13,875,626 4,005,679 - 813,490,451 Contributed water and sewerage systems 10,563,423 - - - 10,563,423 Total 882,889,527 16,546,984 4,983,814 (80,373) 904,339,952 Less accumulated depreciation for: Buildings (35,209,987) (1,421,709) - - (36,631,696) Vehicles (6,451,735) (321,322) - 73,308 (6,699,749) Machinery and equipment (12,957,611) (1,370,916) - 7,065 (14,321,462) Furniture and fixtures (605,558) (88,552) - - (694,110) Other capital (6,592,650) (119,504) - - (6,712,154) Water and sewerage systems (260,561,095) (25,572,617) - - (286,133,712) Contributed water and sewerage systems (8,827,936) (167,162) - - (8,995,098) Total (331,206,572) (29,061,782) - 80,373 (360,187,981) Total capital assets, being depreciated, net 551,682,955 (12,514,798) 4,983,814 - 544,151,971 Total capital assets, net $581,684,515 $(1,691,700) $- $- $579,992,815 Additions Transfers Disposals Beginning Balance NOTES TO FINANCIAL STATEMENTS 17 NOTE 4. LONG-TERM DEBT The following is a summary of long-term debt activity for the year ended December 31, 2016: Beginning Ending Due Within Balance Additions Reductions Balance One Year Revenue bonds $470,064,999 $- $(10,900,000) $459,164,999 $11,410,000 Add deferred amounts Unamortized discounts (762,058) - 45,328 (716,730) - Unamortized premiums 26,758,733 - (1,598,961) 25,159,772 - Total bonds payable 496,061,674 - (12,453,633) 483,608,041 11,410,000 Notes payable 21,065,845 - (3,518,783) 17,547,062 3,486,993 Capital leases 2,762,694 119,347 (976,354) 1,905,687 1,153,659 Net pension liability 4,271,120 725,080 (353,364) 4,642,836 - Compensated absences 716,007 700,410 (655,137) 761,280 761,280 Total long-term liabilities $524,877,340 $1,544,837 $(17,957,271) $508,464,906 $16,811,932 The following is a summary of long-term debt activity for the year ended December 31, 2015: Beginning Ending Due Within Balance Additions Reductions Balance One Year Revenue bonds $480,494,999 $- $(10,430,000) $470,064,999 $10,900,000 Add deferred amounts Unamortized discounts (805,303) - 43,245 (762,058) - Unamortized premiums 28,392,217 - (1,633,484) 26,758,733 - Total bonds payable 508,081,913 - (12,020,239) 496,061,674 10,900,000 Notes payable 24,612,564 - (3,546,719) 21,065,845 3,518,783 Capital leases 3,114,060 694,456 (1,045,822) 2,762,694 952,925 Net pension liability 4,563,425 3,098,786 (3,391,091) 4,271,120 - Compensated absences 681,626 697,325 (662,944) 716,007 716,007 Total long-term liabilities $541,053,588 $4,490,567 $(20,666,815) $524,877,340 $16,087,715 NOTES TO FINANCIAL STATEMENTS 18 NOTE 4. LONG-TERM DEBT (CONTINUED) Revenue Bonds The Government issues bonds to provide funds for various projects. The revenue bonds outstanding are as follows: Balance at Balance at Interest December 31,December 31, Rate 2016 2015 Water and Sewer, Series 2007 4.00% to 5.00%$133,379,999 $142,549,999 Water and Sewer, Series 2012 3.00% to 5.00%138,830,000 138,830,000 Water and Sewer, Series 2013 0.70% to 4.85%19,440,000 20,325,000 Water and Sewer, Series 2014 3.00% to 4.50%167,515,000 168,360,000 459,164,999 470,064,999 Less: Unamortized discounts (716,730) (762,058) Add: Unamortized premium 25,159,772 26,758,733 $483,608,041 $496,061,674 During the year ended December 31, 2007, the Government issued $177,010,000 in Series 2007 Water and Sewerage Revenue Bonds. A portion of the proceeds from the sale of these bonds was used to refund all of the former Series 1996 and 1997 Water and Sewerage Revenue Bonds in the amount of $56,875,000. The remaining portion of the bond proceeds of $120,135,000 was used to advance refund a portion of the Series 2000 and 2002 Water and Sewerage Revenue Bonds. The current refunding resulted in a difference between the reacquisition price and the net carrying amount of the 1996 and 1997 Bonds of approximately $4,300,000. This difference, reported in the accompanying financial statements as a deferred outflow of resources, is being charged to operations through the year 2030 using the effective-interest method. The refunding decreased the total debt service payments over the next 21 years by approximately $5,600,000 and produced an economic gain of approximately $3,700,000. NOTES TO FINANCIAL STATEMENTS 19 NOTE 4. LONG-TERM DEBT (CONTINUED) Revenue Bonds (Continued) The advance refunding of the 2000 and 2002 Bonds resulted in a difference between the reacquisition price and the net carrying amount of the old debt of approximately $3,200,000. This difference, reported in the accompanying financial statements as a deferred outflow of resources, is being charged to interest expense through the year 2030 using the effective-interest method. The refunding decreased the total debt service payments over the next 23 years by approximately $7,200,000 and produced an economic gain of approximately $4,600,000. Proceeds of approximately $126,793,000 from the defeased issues were used to purchase U.S. Government Securities. Those securities were deposited in an irrevocable trust fund with an escrow agency to provide for all future debt service payments on the above mentioned bonds. The bonds are due in annual installments of $2,060,000 to $12,260,000 plus interest at 4.0% to 5.0% through October 2030. During the year ended December 31, 2012, the Government issued $138,830,000 in Series 2012 Water and Sewerage Revenue Refunding and Improvement Bonds for the purposes of (1) refunding all of the Series 2002 Water and Sewerage Revenue Bonds, (2) financing the costs of making additions, extensions, and improvements to the water and sewer system, (3) funding a debt service reserve account for the 2012 Series Bonds, and (4) financing the costs of issuing the 2012 Series Bonds. The advance refunding of the 2002 series resulted in a difference between the reacquisition price and the net carrying amount of the old debt of approximately $600,000. The difference, reported in the accompanying financial statements as a deferred outflow of resources, is being charged to increase expenses through the year 2033 using the effective-interest method. The refunding decreased the total debt service payments over the next 11 years by approximately $78 million and produced an economic gain of approximately $40 million. The bonds are due in annual installments of $4,155,000 to $20,095,000 plus interest at 3.0% to 5.0% through October 2042. During the year ended December 31, 2013, the Government issued $22,070,000 in Series 2013 Water and Sewerage Revenue Bonds for the purposes of (1) funding, in part, the debt service reserve account for the Prior Lien Bonds, (2) funding a debt service reserve for the Series 2013 Bonds and (3) paying the costs of issuance of the Series 2013 Bonds. Principal payments are due in annual installments commencing on October 1, 2014 through 2033. Interest payments are due in semi-annual installments on each April 1 and October 1 at varying rates between 0.7% and 4.85%. NOTES TO FINANCIAL STATEMENTS 20 NOTE 4. LONG-TERM DEBT (CONTINUED) Revenue Bonds (Continued) During the year ended December 31, 2014, the Government issued $169,180,000 in Series 2014 Water and Sewerage Revenue Refunding and Improvement Bonds for the purposes of (1) refunding all of the Government’s outstanding Water and Sewerage Revenue Bonds, Series 2004, (2) financing the costs of making additions, extensions, and improvements to the Government’s water and sewer system, (3) funding a debt service reserve for the Series 2014 Bonds, and (4) paying the costs of the issuance of the 2014 Bonds. The advance refunding of the 2004 series resulted in a difference between the reacquisition price and the net carrying amount of the old debt of approximately $4.9 million. The difference, reported in the accompanying financial statements as a deferred inflow of resources, is being charged to decrease expenses through the year 2039 using the effective-interest method. The refunding decreased the total debt service payments over the next 11 years by approximately $66.3 million and produced an economic gain of approximately $33.1 million. Principal payments are due in annual installments of $820,000 to $24,635,000 commencing on October 1, 2015 through 2039. Interest payments are due in semi-annual installments on each April 1 and October 1 at varying rates between 3.00% and 4.50%. Annual debt service requirements to maturity for the revenue bonds as of December 31, 2016, are as follows: Principal Interest Total Year ending December 31, 2017 11,410,000$ 20,236,560$ 31,646,560$ 2018 11,945,000 19,702,010 31,647,010 2019 12,515,000 19,132,910 31,647,910 2020 13,110,000 18,536,060 31,646,060 2021 13,735,000 17,910,360 31,645,360 2022 - 2026 79,240,000 78,989,863 158,229,863 2027 - 2031 98,374,999 58,466,145 156,841,144 2032 - 2036 103,855,000 37,441,700 141,296,700 2037 - 2041 99,265,000 13,710,075 112,975,075 2042 15,715,000 550,025 16,265,025 459,164,999$ 284,675,708$ 743,840,707$ NOTES TO FINANCIAL STATEMENTS 21 NOTE 4. LONG-TERM DEBT (CONTINUED) Notes Payable The Utilities has incurred debt to the U.S. Army – Fort Gordon Garrison Command for the purchase of the water and sewer system and to the Georgia Environmental Finance Authority for improvements to the water and sewer system. These notes are as follows: Original Interest Due December 31,December 31, Purpose Amount Rate Date 2016 2015 Fort Gordon asset purchase 19,196,880$ 5.11%2018 2,967,829$ 5,209,539$ Water and sewer improvements 5,143,272 4.00%2016 - 186,533 Water and sewer improvements 6,553,217 4.00%2019 1,237,813 1,655,377 Water and sewer improvements 8,040,345 3.00%2031 6,314,146 6,654,267 Water and sewer improvements 8,250,814 3.00%2033 7,027,274 7,360,129 17,547,062 21,065,845 (3,486,993) (3,518,783) 14,060,069$ 17,547,062$ Less current maturities Notes payable debt service requirements to maturity are as follows as of December 31, 2016: Principal Interest Total Year ending December 31, 2017 3,486,993$ 530,760$ 4,017,753$ 2018 1,775,501 403,718 2,179,219 2019 1,087,401 354,980 1,442,381 2020 758,665 325,540 1,084,205 2021 781,740 302,464 1,084,204 2022 - 2026 4,280,160 1,140,862 5,421,022 2027 - 2031 4,747,832 450,234 5,198,066 2032 - 2033 628,770 11,853 640,623 17,547,062$ 3,520,411$ 21,067,473$ NOTES TO FINANCIAL STATEMENTS 22 NOTE 4. LONG-TERM DEBT (CONTINUED) Capital Leases The Government has entered into lease agreements as lessee for financing the acquisition of various equipment. The lease agreements qualify as capital leases for accounting purposes (titles transfer at the end of the lease terms) and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inceptions. The following is an analysis of leased assets under capital leases: December 31,December 31, 2016 2015 Equipment $8,941,673 $8,822,326 Less: Accumulated depreciation (7,403,683)(6,426,219) $1,537,990 $2,396,107 The above includes current year depreciation expense of leased assets under capital lease of $977,464. The following is a schedule of future minimum lease payments together with the present value of net minimum lease payments as of December 31, 2016: Fiscal year ending December 31, 2017 1,205,708$ 2018 510,616 2019 237,979 2020 23,979 Total minimum lease payments 1,978,282 Less amount representing interest (72,595) Present value of future minimum lease payments 1,905,687$ NOTES TO FINANCIAL STATEMENTS 23 NOTE 5. PENSION PLANS The below disclosures and corresponding Required Supplementary Information related to the 1945, General Retirement, and Georgia Municipal Employees Benefit System Plans are representative of the Utilities portion of the respective Augusta, Georgia plan, as the Utilities is only a fund of Augusta, Georgia and does not have a separate retirement plan for Utilities employees. All amounts reported below are an allocation of the total balances included in Augusta, Georgia’s financial statements. 1945 Plan Plan Description Plan administration. The 1945 Plan (the “1945 Plan”), a single-employer defined benefit pension plan, was available to all former Richmond County employees hired prior to October 1, 1975 that met the Plan’s age and length of service requirements. The Pension and Audit Committee makes recommendations for changes to the 1945 Plan to the Augusta-Richmond County Commission which has the authority to amend the 1945 Plan document. The committee is comprised of the Augusta–Richmond County Commission Mayor, Mayor Pro-Tem, the Chairman of the Augusta- Richmond County Commission Finance Committee, the Government’s Administrator, and the Government’s Finance Director. The Plan was created by resolution of the Richmond County Board of Commissioners in March 1945. In February 2001, the Augusta-Richmond County Commission, as successor to the Richmond County Board of Commissioners, approved the restatement of the 1945 Plan effective January 1, 1997. This is a closed retirement plan (new employees may not participate in the Plan). The 1945 Plan does not issue a stand-alone financial statement report. Plan membership. At December 31, 2016, pension plan membership consisted of the following: Active participants 2 Retirees and beneficiaries 21 23 Benefits provided. Participants in the Plan who retired at or after age 60 are entitled to a monthly benefit equal to 2% of average earnings multiplied by years of service. The Plan provides death and disability benefits. These benefit provisions and all other requirements including amendments are established by Government ordinance. The Plan also provides for reduced benefits if the participant elects to retire after attaining age 50 and completing 15 years of service. NOTES TO FINANCIAL STATEMENTS 24 NOTE 5. PENSION PLANS (CONTINUED) 1945 Plan (Continued) Plan Description (Continued) Contributions. Employees are required to make contributions to the 1945 Plan equal to 5% of earnings. The Government is required to contribute the remaining amounts necessary to fund the 1945 Plan. The contribution amount is determined using actuarial methods and assumptions approved by the trustees and must satisfy the minimum contribution requirement contained in the State of Georgia statutes. Administrative costs of the 1945 Plan are financed through investment income. If a participant terminates employment prior to completion of 10 years of credited service, the participant receives a lump-sum amount equal to his total contributions to the 1945 Plan, with 5% interest computed from January 1, 1997. After completion of at least 10 years of credited service, the participant receives a monthly benefit deferred to his normal retirement date, equal to the benefit computed as for normal retirement multiplied by the percentage based on completed years of credited service, as follows: 50% after 10 years, increasing 10% each year to 100% after 15 years of credited service. For the year ended December 31, 2016, the active member contribution rate was 5.0 percent of annual pay, and the Government's contribution rate was 170.2 percent of annual payroll. Net Pension Liability of the Utilities Effective January 1, 2015, the Utilities implemented the provisions of GASB Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27, which significantly changed the Utilities’ accounting for pension amounts. The information disclosed below is presented in accordance with this new standard. The Government’s net pension liability was measured as of December 31, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. Actuarial assumptions. The total pension liability in the December 31, 2016 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 2.0% Salary increases 3.0% on average, including inflation Investment rate of return 7.25 %, net of pension plan investment expense Mortality rates were based on the RP-2000 Healthy Annuitant Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale AA. NOTES TO FINANCIAL STATEMENTS 25 NOTE 5. PENSION PLANS (CONTINUED) 1945 Plan (Continued) Net Pension Liability of the Utilities (Continued) All actuarial assumptions were reviewed prior to the preparation of the December 31, 2016 valuation. As a very significant portion of the actuarial liability is attributable to inactive lives, the two assumptions (investment return and mortality table) that have the most significant impact on the liabilities were revised to reflect the actuary’s anticipated future experience of the plan. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of December 31, 2016 are: Equity Securities – 6% and Fixed Income Securities – 2.5%. Discount rate. The discount rate used to measure the total pension liability was 7.25 percent. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that Government contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all future benefit payments of current plan members. Therefore, the long- term expected rate of return on pension plan investments was applied to all projected benefit payments to determine the total pension liability. NOTES TO FINANCIAL STATEMENTS 26 NOTE 5. PENSION PLANS (CONTINUED) 1945 Plan (Continued) Net Pension Liability of the Utilities (Continued) Changes in the Net Pension Liability of the Government. The changes in the components of the net pension liability of the Government for the year ended December 31, 2016, were as follows: Balances at 12/31/15 $ 762,986 $ 575,275 $ 187,711 Changes for the year: Service cost - - - Interest 56,269 - 56,269 Difference between expected and actual experience (37,220)- (37,220) Contributions—employer - 23,270 (23,270) Contributions—employee - 683 (683) Net investment income - 24,986 (24,986) Benefit payments, including refunds of employee contributions (72,642) (72,642)- Other (46,316)- (46,316) Net changes (99,909) (23,703) (76,206) Balances at 12/31/16 $ 663,077 $ 551,572 $ 111,505 The Plan's fiduciary net position as a percentage of the total pension liability 83.2% Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (a)(b)(a) - (b) The required schedule of changes in the Utilities’ net pension liability and related ratios immediately following the notes to the financial statements presents multiyear trend information about whether the value of plan assets is increasing or decreasing over time relative to the total pension liability. NOTES TO FINANCIAL STATEMENTS 27 NOTE 5. PENSION PLANS (CONTINUED) 1945 Plan (Continued) Net Pension Liability of the Utilities (Continued) Sensitivity of the net pension liability to changes in the discount rate. The following table presents the net pension liability of the Utilities, calculated using the discount rate of 7.25%, as well as what the Utilities’ net pension liability would be if it were calculated using a discount rate that is 1- percentage-point lower (6.25%) or 1-percentage-point higher (8.25%) than the current rate: $164,550 $111,505 $75,555 Current 1% Decrease Discount Rate 1% Increase (6.5%)(7.5%)(8.5%) Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect a long-term perspective. Calculations are based on the substantive plan in effect as of December 31, 2016 and the current sharing pattern of costs between employer and employee. Pension Expense and Deferred Outflows of Resources Related to Pensions For the year ended December 31, 2016, the Utilities recognized pension expense of ($57,009). At December 31, 2016, the Utilities reported the net difference between projected and actual earnings on pension plan investments in the amount of $41,529 as a deferred outflow of resources, which will be recognized in pension expense as follows: Year ended December 31: 2017 $12,722 2018 12,722 2019 12,722 2020 3,359 Total $41,525 NOTES TO FINANCIAL STATEMENTS 28 NOTE 5. PENSION PLANS (CONTINUED) General Retirement Plan Plan Description Plan administration. The General Retirement Plan (the “Plan”), a single-employer defined benefit pension plan, was available to all former City of Augusta employees hired after March 1, 1949 and before March 1, 1987, whose age did not exceed 35 years at the time of their employment and are not participants of the 1977 Plan are covered under the General Retirement Plan. The Pension and Audit Committee makes recommendations for changes to the Plan to the Augusta-Richmond County Commission which has the authority to amend the Plan document. The committee is comprised of the Augusta–Richmond County Commission Mayor, Mayor Pro-Tem, the Chairman of the Augusta-Richmond County Commission Finance Committee, the Government’s Administrator, and the Government’s Finance Director. The Plan was created by an Act of the General Assembly of Georgia (Senate Bill No. 130) on March 1, 1949. In February 2001, the Augusta-Richmond County Commission, as successor to the Richmond County Board of Commissioners, approved the restatement of the 1945 Plan effective January 1, 1997. This is a closed retirement plan (new employees may not participate in the Plan). The 1945 Plan does not issue a stand-alone financial statement report. Plan membership. At December 31, 2016, pension plan membership consisted of the following: Active participants 31 Retirees and beneficiaries 203 Vested terminated 7 241 Benefits provided. Pension benefits vest after an employee is 45 years of age and has 15 years of full-time employment. An employee may retire at age 60 with 25 years of service and receive annual pension benefits equal to 2% of the employee’s average salary earned during the last three years of employment, multiplied by the number of full-time years of employment. The Plan provides death and disability benefits. These benefit provisions and all other requirements including amendments are established by Government ordinance. All full-time employees hired before July 1, 1980 must contribute 8% of gross earnings and employees hired after July 1, 1980 must contribute 5% of gross earnings to the Plan, with the Government contributing remaining amounts sufficient to provide future pensions. NOTES TO FINANCIAL STATEMENTS 29 NOTE 5. PENSION PLANS (CONTINUED) General Retirement Plan (Continued) Plan Description (Continued) Contributions. Employer contributions for 2016 are determined as part of the January 1, 2016 actuarial valuation using the frozen entry age cost method. The contribution amount is determined using actuarial methods and assumptions approved by the trustees and must satisfy the minimum contribution requirement contained in the State of Georgia statutes. Administrative costs of the General Retirement Plan are financed through investment income. The unfunded accrued liability is composed of pieces that are amortized over various periods to comply with Georgia law as a level percentage of payroll. When the actuarial value of assets exceeds 150% of the present value of accrued benefits, the Official Code of Georgia Annotated states that there is no minimum required contribution. The significant actuarial assumptions used to compute pension contribution requirements are the same as those used to determine the standard measure of the pension obligation. For the year ended December 31, 2016, the active member contribution rate was 7.9 percent of annual pay, and the Government’s contribution rate was 147.5 percent of annual payroll. Net Pension Liability of the Utilities Effective January 1, 2015, the Utilities implemented the provisions of GASB Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27, which significantly changed the Utilities’ accounting for pension amounts. The information disclosed below is presented in accordance with this new standard. The Utilities’ net pension liability was measured as of December 31, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. Actuarial assumptions. The total pension liability in the December 31, 2016 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 2.0% Salary increases 3.0% on average, including inflation Investment rate of return 7.25 %, net of pension plan investment expense NOTES TO FINANCIAL STATEMENTS 30 NOTE 5. PENSION PLANS (CONTINUED) General Retirement Plan (Continued) Net Pension Liability of the Utilities (Continued) Mortality rates were based on the RP-2000 Healthy Annuitant Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale AA. All actuarial assumptions were reviewed prior to the preparation of the December 31, 2016 valuation. As a very significant portion of the actuarial liability is attributable to inactive lives, the two assumptions (investment return and mortality table) that have the most significant impact on the liabilities were revised to reflect the actuary’s anticipated future experience of the plan. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of December 31, 2016 are: Equity Securities – 6% and Fixed Income Securities – 2.5%. Discount rate. The discount rate used to measure the total pension liability was 7.25 percent. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that Utilities contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all future benefit payments of current plan members. Therefore, the long- term expected rate of return on pension plan investments was applied to all projected benefit payments to determine the total pension liability. NOTES TO FINANCIAL STATEMENTS 31 NOTE 5. PENSION PLANS (CONTINUED) General Retirement Plan (Continued) Net Pension Liability of the Utilities (Continued) Changes in the Net Pension Liability of the Utilities. The changes in the components of the net pension liability of the Utilities for the year ended December 31, 2016, were as follows: Balances at 12/31/15 $ 8,386,825 $ 6,278,261 $ 2,108,564 Changes for the year: Service cost 20,501 - 20,501 Interest 624,302 - 624,302 Difference between expected and actual experience 37,619 - 37,619 Contributions—employer - 228,338 (228,338) Contributions—employee - 12,177 (12,177) Net investment income - 283,581 (283,581) Benefit payments, including refunds of employee contributions (644,155) (644,155) - Administrative expense (420,075) - (420,075) Net changes (381,808) (120,059) (261,749) Balances at 12/31/16 $ 8,005,017 $ 6,158,202 $ 1,846,815 The Plan's fiduciary net position as a percentage of the total pension liability 76.9% Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (a)(b)(a) - (b) The required schedule of changes in the Utilities’ net pension liability and related ratios immediately following the notes to the financial statements presents multiyear trend information about whether the value of plan assets is increasing or decreasing over time relative to the total pension liability. NOTES TO FINANCIAL STATEMENTS 32 NOTE 5. PENSION PLANS (CONTINUED) General Retirement (Continued) Net Pension Liability of the Utilities (Continued) Sensitivity of the net pension liability to changes in the discount rate. The following table presents the net pension liability of the utilities, calculated using the discount rate of 7.25%, as well as what the Utilities’ net pension liability would be if it were calculated using a discount rate that is 1- percentage-point lower (6.25%) or 1-percentage-point higher (8.25%) than the current rate: $2,548,067 $1,846,815 $1,138,683 Current 1% Decrease Discount Rate 1% Increase (6.5%)(7.5%)(8.5%) Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect a long-term perspective. Calculations are based on the substantive plan in effect as of December 31, 2016 and the current sharing pattern of costs between employer and employee. Pension Expense and Deferred Outflows of Resources Related to Pensions For the year ended December 31, 2016, the Utilities recognized pension expense of ($201,022). At December 31, 2016, the Government reported the net difference between projected and actual earnings on pension plan investments in the amount of $431,841 as a deferred outflow of resources, which will be recognized in pension expense as follows: Year ended December 31: 2017 $132,071 2018 132,071 2019 132,071 2020 35,628 Total $431,841 NOTES TO FINANCIAL STATEMENTS 33 NOTE 5. PENSION PLANS (CONTINUED) Georgia Municipal Employees Benefit System Plan Plan Description Employees from the City of Augusta hired after March 1, 1987 and before consolidation on December 31, 1996, and who were not participants in any other employer-sponsored retirement plan, and Augusta Canal Authority employees are covered under the Georgia Municipal Employees Benefit System (GMEBS), a multiple-employer defined benefit pension plan. The GMEBS Plan provides pension benefits, deferred allowances, and death and disability benefits. In 2008 this plan was reopened to participants of the 1998 Defined Contribution Plan who opted to convert to the GMEBS Plan. Participation in this plan is mandatory for all new employees. These benefit provisions and all other requirements including amendments are established by Government ordinance. A participant may retire after reaching the age of 65 if the participant is not classified as public safety personnel; participating public safety personnel may retire at age 65 or age 55 with 25 years of total credited service, whichever is earlier. Early retirement may be taken at age 55 with 10 years of credited service. Benefits vest after 10 years of service. Employees who retire at or after age 55 with 10 or more years of service are entitled to pension payments for the remainder of their lives equal to 1 ¼% of their final five-year average salary times the number of years of which they were employed as a participant in the GMEBS. The final five-year average salary is the average salary of the employee during the final five years of full-time employment. Pension provisions include deferred allowances, whereby an employee may terminate his or her employment with the Government after accumulating 10 years of service but before reaching the age of 55. If the employee does not withdraw his or her accumulated contributions, the employee is entitled to all pension benefits upon reaching the age of 55. Employees must contribute 4% of their gross earnings to the Plan. In addition, the Government must provide annual contributions sufficient to satisfy the actuarially determined contribution requirements as amended by GMEBS. The GMEBS Retirement Fund issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to Georgia Municipal Employees Benefit System, 201 Pryor Street, SW, Atlanta, Georgia 30303. Plan membership. At July 1, 2016, the date of the most recent actuarial valuation, there were 2,959 participants as follows: Active participants 2,316 Retirees and beneficiaries 542 Vested terminated 101 2,959 NOTES TO FINANCIAL STATEMENTS 34 NOTE 5. PENSION PLANS (CONTINUED) Georgia Municipal Employees Benefit System Plan (Continued) Plan Description (Continued) Contributions. The Plan is subject to minimum funding standards of the Georgia Public Retirement Systems Standards law. The Board of Trustees of GMEBS has adopted a recommended actuarial funding policy for the plan which meets state minimum requirements and will accumulate sufficient funds to provide the benefits under the plan. The funding policy for the Plan, as adopted by the Commission, is to contribute an amount equal to or greater than the actuarially recommended contribution rate. This rate is based on the estimated amount necessary to finance the costs of benefits earned by plan members during the year, with an additional amount to finance any unfunded accrued liability. The Government is required to contribute the difference between the actuarially determined rate and the contribution rate of plan members, as determined by the Commission. For the year ended December 31, 2016, the active member contribution rate was 4.1 percent of annual pay and the Government's contribution rate was 5.7 percent of annual payroll. Utility contributions to the Plan were $459,253 for the year ended December 31, 2016. Net Pension Liability of the Utilities The Utilities’ net pension liability was measured as of March 31, 2016. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation as July 1, 2016 with update procedures performed by the actuary to roll forward to the total pension liability measured as of March 31, 2016. Actuarial assumptions. The total pension liability in the January 1, 2015 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 3.25% Salary increases 3.25%, plus service based merit increases Investment rate of return 7.75 %, net of pension plan investment expense, including inflation Mortality rates for were based on the RP-2000 Combined Healthy Mortality Table with sex-distinct rates, set forward two years for males and one year for females. The actuarial assumptions used in the July 1, 2016 valuation were based on the results of an actuarial experience study for the period January 1, 2010–June 30, 2014. NOTES TO FINANCIAL STATEMENTS 35 NOTE 5. PENSION PLANS (CONTINUED) Georgia Municipal Employees Benefit System Plan (Continued) Net Pension Liability of the Utilities (Continued) Cost of living adjustments were assumed to be 3.25% although the Plan allowance for annual cost of living adjustment is variable, as established by the Commission, in an amount not to exceed 3.25%. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of March 31, 2016, are summarized in the following table: International equity 20%7.45% Domestic equity 45%6.75% Real estate 10%4.55% Global Fixed Income 5%3.30% Domestic Fixed income 20%1.75% Cash - % Total 100% * Rates shown are net of the 3.25% assumed rate of inflation. Long-term expected real Asset Class Target Allocation rate of return* Discount rate. The discount rate used to measure the total pension liability was 7.75%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that Government contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all of the projected benefit payments to determine the total pension liability. NOTES TO FINANCIAL STATEMENTS 36 NOTE 5. PENSION PLANS (CONTINUED) Georgia Municipal Employees Benefit System Plan (Continued) Net Pension Liability of the Utilities (Continued) Changes in the Net Pension Liability of the Utilities. The changes in the components of the net pension liability of the Utilities for the year ended December 31, 2016, were as follows: Balances at 12/31/15 $12,988,368 $11,018,315 $ 1,970,053 Changes for the year: Service cost 540,202 - 540,202 Interest 1,013,170 - 1,013,170 Difference between expected and - - actual experience 66,416 - 66,416 Contributions—employer - 515,392 (515,392) Contributions—employee - 370,231 (370,231) Net investment income - 45,004 (45,004) Benefit payments, including refunds - - of employee contributions (594,484) (594,484) - Other - - - Administrative expense - (25,302) 25,302 Net changes 1,025,304 310,841 714,463 Balances at 12/31/16 $ 14,013,672 $ 11,329,156 $ 2,684,516 The Plan's fiduciary net position as a percentage of the total pension liability 80.8% Plan Fiduciary Net Pension Liability Net Position Liability Total Pension (a)(b)(a) - (b) The required schedule of changes in the Utilities’ net pension liability and related ratios immediately following the notes to the financial statements presents multiyear trend information about whether the value of plan assets is increasing or decreasing over time relative to the total pension liability. NOTES TO FINANCIAL STATEMENTS 37 NOTE 5. PENSION PLANS (CONTINUED) Georgia Municipal Employees Benefit System Plan (Continued) Net Pension Liability of the Utilities (Continued) Sensitivity of the net pension liability to changes in the discount rate. The following presents the net pension liability of the Utilities, calculated using the discount rate of 7.75 percent, as well as what the Utilities’ net pension liability would be if it were calculated using a discount rate that is 1- percentage-point lower (6.75 percent) or 1-percentage-point higher (8.75 percent) than the current rate: $4,572,476 $2,684,516 $1,239,600 Current 1% Decrease Discount Rate 1% Increase (6.75%)(7.75%)(8.75%) Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect a long-term perspective. Calculations are based on the substantive plan in effect as of March 31, 2016 and the current sharing pattern of costs between employer and employee. NOTES TO FINANCIAL STATEMENTS 38 NOTE 5. PENSION PLANS (CONTINUED) Georgia Municipal Employees Benefit System Plan (Continued) Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended December 31, 2016, the Utilities recognized pension expense of $401,636. At December 31, 2016, the Utilities reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Difference between expected and actual experience $4,523 $- Changes in assumptions - (160,738) Net difference between projected and actual earnings on pension plan investments 560,114 - Government contributions subsequent to the measurement date 353,081 - Total $917,719 $(160,738) Resources Resources Deferred Deferred Outflows of Inflows of Utilities contributions subsequent to the measurement date of $353,081 are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ending December 31, 2017. Other amounts reported as deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended December 31: 2017 $87,982 2018 87,982 2019 87,982 2020 125,849 2021 14,105 Total $403,900 NOTES TO FINANCIAL STATEMENTS 39 NOTE 5. PENSION PLANS (CONTINUED) Policemen’s Pension Plan and the City Employees’ Pension Plan These Plans covered former City of Augusta employees. Policemen and firemen hired before 1945 are covered under the General Pension Plan. Policemen hired between 1945 and 1949 are covered under the Policemen’s Pension Plan. Firemen hired between 1945 and 1949 are covered under the Firemen’s Pension Plan. Other former City of Augusta employees hired between 1945 and 1949 are covered by the City Employees’ Pension Plan. Pension benefits are being paid under these Plans to retired employees and beneficiaries. These are closed retirement plans (new employees may not participate in the plans). During the year ended December 31, 2016, the Firemen’s Pension Plan has one participant with Government contributions of $23,523; and the City Employees’ Pension Plan has four participants with Government contributions of $172,871. These plans do not issue stand-alone financial statement reports. Retirement Savings Plan (the “1998 Plan”) All full-time employees with more than one month of service and Canal Authority employees were eligible to participate in the Retirement Savings Plan. The 1998 Plan is a defined contribution plan under Section 401(a) of the Internal Revenue Code, and is administered by Nationwide Life Insurance, PPA support. The Plan was organized and may be amended by a majority vote of the full-body of the governing board, the Augusta-Richmond County Commission. Employees contribute four percent (4%) of their salary, and the Government contributes two percent (2%) of the employee’s salary. Contribution requirements may be amended by a majority vote of the full-body of the governing board, the Augusta-Richmond County Commission. At December 31, 2016, there were 222 plan participants. Participants are considered fully vested in the Government’s contributions after completing five (5) years of service. For the year ended December 31, 2016, the employees’ contributions were $255,453, and the Government’s contributions were $127,728. This is a closed retirement plan (new employees may not participate in the Plan). NOTES TO FINANCIAL STATEMENTS 40 NOTE 6. OTHER POST-EMPLOYMENT BENEFITS Plan Description The Government maintains the Augusta-Richmond County Other Post-Employment Benefit Plan (the “OPEB Plan”), a single employer post-employment defined benefit plan. The OPEB plan provides medical and death benefits to eligible retirees and their spouses. Separate publicly available financial statements are not issued for the OPEB Plan. Funding Policy The Government intends to continue to fund the OPEB Plan on a pay-as-you-go basis. The OPEB Plan is fully funded by the Government and plan members are not required to contribute. Contribution requirements may be amended by a majority vote of the full-body of the Augusta- Richmond County Commission. Participant Data At December 31, 2016, the date of the most recent actuarial valuation, there were 2,123 participants as follows: Active employees 1,512 Retired participants receiving benefits 611 Total membership 2,123 Annual OPEB Cost and Net OPEB Obligation The Government contributed $4,014,820 to the OPEB Plan for the year ended December 31, 2016. The Government’s annual other post-retirement benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. NOTES TO FINANCIAL STATEMENTS 41 NOTE 6. OTHER POST-EMPLOYMENT BENEFITS (CONTINUED) Annual OPEB Cost and Net OPEB Obligation (Continued) The Government’s annual pension cost and net OPEB obligation for the OPEB Plan for the current year are as follows: December 31, 2016 Annual required employer contribution $8,804,271 Interest on net OPEB obligation 2,327,879 Adjustment to annual required contribution (2,912,200) Annual OPEB cost 8,219,950 Employer contributions made or accrued 4,014,820 Increase in net OPEB obligation 4,205,130 Net OPEB obligation beginning of year 42,325,079 Net OPEB obligation end of year $46,530,209 Trend Information Fiscal Year Percentage of Ending APC Contributed Obligation 12/31/2016 $8,219,950 48.8 % $46,530,209 12/31/2015 7,820,420 47.6 42,325,079 12/31/2014 7,530,194 41.5 38,229,228 12/31/2013 7,530,193 39.3 33,973,493 12/31/2012 7,593,837 31.9 29,568,318 Annual OPEB Net OPEB Cost (APC) As of January 1, 2016, the most recent valuation date, the funded status of the OPEB Plan is as follows: Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Actuarial Value of Liability (AAL)AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL)Ratio Payroll Payroll Date (a)(b)(b-a)(a/b)(c)(b-a)/c) 1/1/2016 $- $103,599,420 $103,599,420 - %$N/A N/A NOTES TO FINANCIAL STATEMENTS 42 NOTE 6. OTHER POST-EMPLOYMENT BENEFITS (CONTINUED) The required schedule of funding progress immediately following the notes to the financial statements presents multiyear trend information about whether the actuarial value of plan net assets is increasing or decreasing over time relative to the actuarial accrued liability. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect long-term perspective. Calculations are based on the substantive plan in effect as of January 1, 2016 and on the pattern of sharing costs between the employer and plan members to that point. Actuarial Assumptions The assumptions used in the January 1, 2015 actuarial valuation are as follows: Valuation date January 1, 2015 Actuarial cost method Projected Unit Credit Amortization method Level Percent of Pay (open) Amortization period 30 years Asset valuation method Market Value Actuarial assumptions: Discount rate 5.50% Annual health care cost trend rate 8.00%initially, reduced by decrements to an ultimate rate of 5.00% after three years NOTE 7. RISK MANAGEMENT The Government, including the Utilities, is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters. The Government purchases commercial insurance to cover employee life, health, property and liability, and disability insurance programs, each of which cover the Utilities. There were no significant reductions of insurance coverage compared to the prior year. Settled claims in the past three years have not exceeded the coverages. The Government records an estimated liability for indemnity workers’ compensation claims against the Government; however, this liability is not allocated to enterprise funds. Claims liabilities are based on estimates of the ultimate cost of reported claims (including future claim adjustment expenses). Claims liabilities include specific, incremental claim adjustment expenses and allocated loss adjustment expenses. Because all workers' compensation claims are expected to be settled within one year, the related unpaid claims liability is not discounted and the entire liability is classified as current. Activity is accounted for in the General Fund of the Government. NOTES TO FINANCIAL STATEMENTS 43 NOTE 8. DEPARTMENT OF THE ARMY REVENUE In September 2007, the Utilities entered into a contract with the Department of Defense (DOD) for the privatization of the water and wastewater system for the Army base located at Fort Gordon, Georgia. The contract term is for fifty (50) years with a renewal option. The contract provides for selling the existing infrastructure assets to the Utilities, paying for renewal and replacement of infrastructure, reimbursing the cost of any new assets added to the water and wastewater system, and paying the Utilities to operate and maintain the water and wastewater system. Payments from the DOD to the Utilities are provided for in different ways for each provision of the contract. Sale of existing infrastructure assets to Utilities and payment for operations and maintenance – The amortized cost of the initial purchase of the infrastructure is passed along to the DOD as an allowable part of the cost to operate and maintain the water and wastewater system. As a result, the payment for purchase of the existing infrastructure is considered an offset resulting in a non- cash transaction. The liability for the purchase of the assets is recorded as a note payable to the Department of the Army. A monthly entry is recorded to reflect the amortization of the scheduled note payable payment including interest and an equal amount of revenue representing operation and maintenance of the system. In addition, depreciation expense is recorded equal to the principal balance and interest expense on the note payable. The total amount of these expenses is expected to equal the total amount of the related revenue over the life of the contract. For the years ended December 31, 2016 and 2015, $2,455,980 and $2,455,980, respectively, was recorded as Department of the Army revenue and was used to reduce the outstanding balance on the Department of the Army note payable. Payment for renewal and replacement of infrastructure – Payments for renewal and replacement of the water and wastewater system were calculated based on an estimated schedule of asset replacement with inflation over the fifty (50) year term of the contract. This estimated cost was then amortized on a present value basis to a monthly amount. This amount, along with the estimated monthly payment for operations and maintenance agreed upon at the contract signing date, is billed monthly to the DOD and remains constant for the first two (2) years of the contract. After the first two (2) years of the contract and every three (3) years thereafter, the monthly amount of either of these payments may be renegotiated within contractually specified limits. For the years ended December 31, 2016 and 2015, the Utilities recognized $5,128,257 and $5,208,041, respectively, of revenue for these payments as Department of the Army revenue. Reimburse the cost of any new assets added to the system – Any new assets required for the infrastructure of Fort Gordon are approved by the DOD, contracted by Utilities and reimbursed in full at the completion of the project by DOD. For the years ended December 31, 2016 and 2015, reimbursements for such projects totaled $1,493,630 and $499,296, respectively, and payments were recorded as Department of the Army revenue. NOTES TO FINANCIAL STATEMENTS 44 NOTE 9. CHANGE IN ACCOUNTING PRINCIPLE The Utilities has implemented Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27, as well as Statement No. 71, Pension Transitions for Contributions Made Subsequent to the Measurement Date – an amendment of GASB No. 68, through which accounting for pension plans and the related disclosure requirements were modified. Due to the financial statements comparative nature, a restatement to the January 1, 2014 beginning net position was required to recognize this change in accounting principle. The Utilities concluded that it was not practical to implement GASB Statement No. 68 and GASB Statement No. 71, as of January 1, 2014, due to the fact that they were unable to obtain the necessary information. The cumulative effect of the implementation for both Statements will be shown as a restatement to the beginning balance as of January 1, 2015. The effect of this implementation is discussed in Note 5. Beginning net position, January 1, 2015, as previously reported $184,523,090 (4,159,826) Beginning net position, January 1, 2015 $180,363,264 Change in accounting principle implementation of GASB Statement No. 68 and No. 71 AUGUSTA, GEORGIA UTILITIES AUGUSTA, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION 45 OTHER POST-EMPLOYMENT BENEFIT PLAN SCHEDULE OF FUNDING PROGRESS Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Actuarial Value of Liability (AAL)AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL)Ratio Payroll Payroll Date (a)(b)(b-a)(a/b)(c)(b-a)/c) 1/1/2016 $- $103,599,420 $103,599,420 - %$N/A N/A 1/1/2015 - 98,256,111 98,256,111 - N/A N/A 1/1/2013 - 95,489,631 95,489,631 - N/A N/A 1/1/2012 - 95,489,631 95,489,631 - N/A N/A The assumptions used in the preparation of the above schedule is disclosed in Note 6 to the financial statements. 46 Total pension liability Service cost $ - $59,927 $285 Interest on total pension liability 56,269 (61,063) 64,345 Difference between expected and actual experience (37,220) - - Benefit payments, including refunds of employee contributions (72,642) (73,566) (82,785) Other (46,316) 51,812 - Net change in total pension liability (99,909) (22,890) (18,155) Total pension liability - beginning 762,986 785,876 804,031 Total pension liability - ending (a)$663,077 $762,986 $785,876 Plan fiduciary net position Contributions - employer $23,270 $27,023 $27,863 Contributions - employee 683 615 619 Net investment income 24,986 1,268 48,474 Benefit payments, including refunds of member contributions (72,642) (73,566) (80,441) Net change in plan fiduciary net position (23,703) (44,661) (3,485) Plan fiduciary net position - beginning 575,275 619,936 623,422 Plan fiduciary net position - ending (b)$551,572 $575,275 $619,936 Utilities' net pension liability - ending (a) - (b)$111,505 $187,711 $165,940 Plan fiduciary net position as a percentage of the total pension liability 83.2%75.4%78.9% Covered-employee payroll $13,676 $12,316 $12,308 Net pension liability as a percentage of covered-employee payroll 815.3%1524.1%1348.2% Notes to the Schedule: The schedule will present 10 years of information once it is accumulated. FOR THE YEAR ENDED DECEMBER 31, 2015 20142016 SCHEDULE OF CHANGES IN THE UTILITIES' NET PENSION LIABILITY AND RELATED RATIOS 1945 PLAN AUGUSTA, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION AUGUST, GEORGIA UTILITIES 47 Total pension liability Service cost $20,501 $19,698 $18,239 Interest on total pension liability 624,302 652,200 670,782 Difference between expected and actual experience 37,619 (928,851) - Benefit payments, including refunds of employee contributions (644,155) (617,522) - Benefit payments, including refunds of employee contributions (420,075) 800,044 (594,302) Net change in total pension liability (381,808) (74,430) 94,719 Total pension liability - beginning 8,386,825 8,461,255 8,366,536 Total pension liability - ending (a)$8,005,017 $8,386,825 $8,461,255 Plan fiduciary net position Contributions - employer $228,338 $209,875 $209,875 Contributions - employee 12,177 13,551 17,248 Net investment income 283,581 38,776 440,604 Benefit payments, including refunds of member contributions (644,155) (617,522) (571,445) Net change in plan fiduciary net position (120,059) (355,320) 96,282 Plan fiduciary net position - beginning 6,278,261 6,633,580 6,537,299 Plan fiduciary net position - ending (b)$6,158,202 $6,278,261 $6,633,580 Utilities' net pension liability - ending (a) - (b)$1,846,815 $2,108,564 $1,827,675 Plan fiduciary net position as a percentage of the total pension liability 76.9%74.9%78.4% Covered-employee payroll $154,777 $202,138 $270,337 Net pension liability as a percentage of covered-employee payroll 1193.2%1043.1%676.1% Notes to the Schedule: The schedule will present 10 years of information once it is accumulated. FOR THE YEAR ENDED DECEMBER 31, 2015 20142016 SCHEDULE OF CHANGES IN THE UTILITIES' NET PENSION LIABILITY AND RELATED RATIOS GENERAL RETIREMENT PLAN AUGUSTA, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION AUGUST, GEORGIA UTILITIES 48 Total pension liability Service cost $540,202 $587,496 Interest on total pension liability 1,013,170 932,266 Differences between expected and actual experience 66,416 (71,499) Changes of assumptions - (236,967) Benefit payments, including refunds of employee contributions (594,484) (504,348) Net change in total pension liability 1,025,304 706,950 Total pension liability - beginning 12,988,368 12,281,418 Total pension liability - ending (a)$14,013,672 $12,988,368 Plan fiduciary net position Contributions - employer $515,392 $531,246 Contributions - employee 370,231 348,069 Net investment income 45,004 953,628 Benefit payments, including refunds of member contributions (594,484) (504,348) Administrative expenses (25,302) (20,783) Net change in plan fiduciary net position 310,841 1,307,813 Plan fiduciary net position - beginning 11,018,315 9,710,502 Plan fiduciary net position - ending (b)$11,329,156 $11,018,315 Utilities' net pension liability - ending (a) - (b)$2,684,516 $1,970,053 Plan fiduciary net position as a percentage of the total pension liability 80.8%84.8% Covered-employee payroll $8,957,103 $8,141,331 Net pension liability as a percentage of covered-employee payroll 30.0%24.2% Notes to the Schedule: The schedule will present 10 years of information once it is accumulated. FOR THE YEAR ENDED DECEMBER 31, 2016 2015 GEORGIA MUNICIPAL EMPLOYEES BENEFIT SYSTEM PLAN SCHEDULE OF CHANGES IN THE UTILITIES' NET PENSION LIABILITY AND RELATED RATIOS AUGUST, GEORGIA UTILITIES AUGUSTA, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION 49 Actuarially determined contribution $23,270 $27,023 $299,600 Contributions in relation to the actuarially determined contribution 23,270 27,023 27,863 Contribution deficiency (excess)$- $- $271,737 Covered employee payroll $13,676 $12,316 $12,308 Contributions as a percentage of covered-employee payroll 170.15%219.41%226.38% Notes to the Schedule: (1) Actuarial Assumptions Valuation Date December 31, 2016 Cost Method Entry Age Normal Actuarial Asset Valuation Method Smoothed market value, 5 year smoothing period Assumed Rate of Return on Investments 7.25% Projected Salary Increases 3.00% Cost-of-living Adjustment 2.00% Amortization Method Closed level dollar for unfunded liability Remaining Amortization Period None remaining (2) The schedule will present 10 years of information once it is accumulated. FOR THE YEAR ENDED DECEMBER 31, AUGUSTA, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION AUGUSTA, GEORGIA UTILITIES SCHEDULE OF GOVERNMENT CONTRIBUTIONS 1945 PLAN 2016 2015 2014 50 Actuarially determined contribution $228,338 $209,875 $209,875 Contributions in relation to the actuarially determined contribution 228,338 209,875 209,875 Contribution deficiency (excess)$- $- $- Covered employee payroll $154,777 $202,138 $270,337 Contributions as a percentage of covered-employee payroll 147.53%103.83%77.63% Notes to the Schedule: (1) Actuarial Assumptions Valuation Date December 31, 2016 Cost Method Entry Age Normal Actuarial Asset Valuation Method Smoothed market value, 5 year smoothing period Assumed Rate of Return on Investments 7.25% Projected Salary Increases 3.00% Cost-of-living Adjustment 2.00% Amortization Method Closed level dollar for unfunded liability Remaining Amortization Period None remaining (2) The schedule will present 10 years of information once it is accumulated. REQUIRED SUPPLEMENTARY INFORMATION AUGUSTA, GEORGIA AUGUSTA, GEORGIA UTILITIES SCHEDULE OF GOVERNMENT CONTRIBUTIONS GENERAL RETIREMENT PLAN 2016 2015 2014 FOR THE YEAR ENDED DECEMBER 31, 51 Actuarially determined contribution $442,711 $425,267 Contributions in relation to the actuarially determined contribution 515,392 531,246 Contribution deficiency (excess)$(72,681) $(105,979) Covered employee payroll $8,957,103 $8,141,331 Contributions as a percentage of covered-employee payroll 5.75%6.53% Notes to the Schedule: (1) Actuarial Assumptions Valuation Date July 1, 2016 Cost Method Projected Unit Credit Actuarial Asset Valuation Method Sum of actuarial value at beginning of year and the cash flow during the year plus the assumed investment return, adjusted by 10% of the amount that the value exceeds or is less than the market value at end of year. The actuarial value is adjusted to be within 20% of market value. Assumed Rate of Return on Investments 7.75% Projected Salary Increases 3.25% plus service based merit increases Cost-of-living Adjustment 1.50% - 3.25% Amortization Method Closed level dollar for unfunded liability Remaining Amortization Period 10 years (2) The schedule will present 10 years of information once it is accumulated. AUGUSTA, GEORGIA UTILITIES AUGUSTA, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION GEORGIA MUNICIPAL EMPLOYEES BENEFIT SYSTEM PLAN SCHEDULE OF GOVERNMENT CONTRIBUTIONS FOR THE YEAR ENDED DECEMBER 31, 2016 2015 52 2016 2015 2014 Annual money-weighted rate of return, net of investment expenses 7.1%-1.8%7.0% Notes to the Schedule: The schedule will present 10 years of information once it is accumulated. SCHEDULE OF PENSION INVESTMENT RETURNSFOR THE YEAR ENDED DECEMBER 31, AUGUSTA, GEORGIA UTILITIES AUGUSTA, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION 1945 PLAN 53 2016 2015 2014 Annual money-weighted rate of return, net of investment expenses 6.2%-1.2%8.2% Notes to the Schedule: The schedule will present 10 years of information once it is accumulated. SCHEDULE OF PENSION INVESTMENT RETURNSFOR THE YEAR ENDED DECEMBER 31, AUGUSTA, GEORGIA UTILITIES REQUIRED SUPPLEMENTARY INFORMATION GENERAL RETIREMENT PLAN AUGUSTA, GEORGIA AUGUSTA, GEORGIA UTILITIES AUGUSTA, GEORGIA STATISTICAL SECTION FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 54 Water and Sewer Revenue Bond Operating Disclosure Augusta, Georgia has covenanted in the Bond Resolution and Continuing Disclosure Certificate for the benefit of the beneficial owners of the Series 2007, the Series 2012, the Series 2013, and the Series 2014 Revenue Bonds to provide certain financial information and operating data relating to the Augusta, Georgia Utilities System, hereafter referred to as the “System”. In addition to the financial statements of the System, including a narrative explanation describing the impact of any changes in generally accepted accounting principles, the Disclosure Certificate requires the Government’s Annual Report to contain or incorporate by reference the following information for the fiscal year regarding the following categories of financial information and operating data of the System. Average and Maximum Daily Water Demand Set forth below is information concerning the demand for water from the System for its past five years. Water Demand Year Ended December 31, 2016 2015 2014 2013 2012 Average Daily (MGD)36.24 34.84 36.42 36.00 37.30 Maximum Daily (MGD)49.58 55.92 54.86 53.07 56.04 Number of Water Connections As of December 31, 2016 2015 2014 2013 2012 Residential 63,910 63,598 63,530 63,108 63,370 Commercial and industrial 7,353 7,305 7,265 7,222 7,896 Total 71,263 70,903 70,795 70,330 71,266 Residential customers include apartment complexes, which are served by a single connection. AUGUSTA, GEORGIA UTILITIES AUGUSTA, GEORGIA STATISTICAL SECTION FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 55 Ten Largest Water Customers Set forth below is information concerning the 10 largest water customers of the System for the years ended December 31, 2016 and 2015. No independent investigation has been made of, and consequently no representation can be made as to, the stability or financial condition of any of the customers listed below or that such customers will continue to maintain their status as major customers of the System. Year Ended December 31, 2016 Gallons Percentage Metered Total of Total (In Thousands)Billing Water Revenues Fort Gordon Muni Services 737,633 $1,415,928 3.40 % Augusta University 231,247 813,521 1.95 FPL Food LLC 188,257 588,274 1.41 Huron Tech Corp 183,793 572,813 1.38 Thermal Ceramics 166,323 531,728 1.28 Solvay Specialty Polymers USA LLC 154,767 493,255 1.18 Monsanto Dairy 151,916 478,399 1.15 Augusta Select Tissue LLC 147,685 461,510 1.11 EKA Chemicals Inc 122,318 380,628 0.91 V A Medical Center 102,765 343,347 0.82 2,186,704 $6,079,403 Year Ended December 31, 2015 Gallons Percentage Metered Total of Total (In Thousands)Billing Water Revenues Fort Gordon Muni Services 682,382 $1,269,914 3.19 % Georgia Regents University 239,717 818,862 2.06 Augusta Select Tissue LLC 189,633 574,082 1.44 Huron Tech Corp 171,048 517,490 1.30 Thermal Ceramics 165,843 514,385 1.29 FPL Food LLC 162,601 493,274 1.24 Solvay Specialty Polymers USA LLC 148,577 460,613 1.16 Nutra Sweet 140,979 427,005 1.07 Monsanto Dairy 118,893 366,212 0.92 EKA Chemicals Inc 115,933 350,549 0.88 2,135,606 $5,792,386 Augusta, Georgia Utilities contracted with Columbia County, Georgia to sell treated water under pressure to Columbia County, Georgia on a wholesale basis. This contract expired on December 31, 2003. For the years ended December 31, 2016 and 2015, no water was sold to Columbia County. The full balance of banked water remains outstanding at December 31, 2016. AUGUSTA, GEORGIA UTILITIES AUGUSTA, GEORGIA STATISTICAL SECTION FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 56 Average and Maximum Daily Treated Wastewater Flow Set forth below is information concerning the demand for sewer service from the System for its past five years. Treated Wastewater Flow Year Ended December 31, 2016 2015 2014 2013 2012 Average Daily (MGD)35.13 36.41 37.83 41.33 33.40 Maxium Daily (MGD)64.86 84.17 74.88 86.77 68.35 Number of Sewer Connections As of December 31, 2016 2015 2014 2013 2012 Residential 52,419 51,938 51,559 51,096 51,713 Commercial and industrial 6,038 6,030 6,009 5,999 6,149 Total 58,457 57,968 57,568 57,095 57,862 Residential customers include apartment complexes, which are served by a single connection. Ten Largest Sewer Customers Set forth below is information concerning the 10 largest sewer customers of the System for the years ended December 31, 2016 and 2015. No independent investigation has been made of, and consequently no representation can be made as to, the stability or financial condition of any of the customers listed below or that such customers will continue to maintain their status as major customers of the System. Year Ended December 31, 2016 Gallons Percentage Metered Total of Total (In Thousands)Billing Sewer Revenues Fort Gordon Muni Services 450,454 $2,065,050 5.86 % FPL Food 188,257 1,038,752 2.95 Augusta University 207,710 867,543 2.46 Elanco Augusta Technology 138,463 802,882 2.28 Starbucks Coffee & Manufacturing 47,643 746,066 2.12 Augusta Select Tissue LLC 127,764 691,035 1.96 Solvay Specialty Polymers 104,987 684,603 1.94 Huntsman 76,505 522,193 1.48 EKA Chemicals Inc 122,318 439,534 1.25 V A Medical Center 102,996 404,327 1.15 1,567,097 $8,261,985 AUGUSTA, GEORGIA UTILITIES AUGUSTA, GEORGIA STATISTICAL SECTION FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 57 Ten Largest Sewer Customers (Continued) Year Ended December 31, 2015 Gallons Percentage Metered Total of Total (In Thousands)Billing Sewer Revenues Fort Gordon Muni Services 423,686 $1,882,088 5.34 % Nutra Sweet 162,601 1,413,764 4.01 Augusta Select Tissue LLC 116,375 865,118 2.45 Georgia Regents University 204,516 864,372 2.45 FPL Food 169,436 801,545 2.27 Elanco Augusta Technology 116,555 748,315 2.12 EKA Chemicals 98,757 517,502 1.47 Kendall Company 115,933 468,073 1.33 VA Medical Center 93,441 361,860 1.03 Solvay Specialty Polymers 85,172 308,967 0.88 1,586,472 $8,231,604 Total billings are based upon water consumption for monthly sewer billings plus additional industrial sewer surcharges. Total sewer revenues utilized to calculate the percentage billed include sewer charges and industrial sewer charges. Rates, Fees and Charges Monthly service charges for water and sewer services generally consist of a monthly demand charge based upon the size of a customer’s water meter plus a volume charge applied to the monthly water consumption. In addition, connection fees varying by water meter size are charged to new customers connecting to the System. The water and sewer rates to all customers within each class of service are uniform. Other than water service provided to public parks, fire hydrants, and fire sprinklers, Augusta, Georgia Utilities does not provide any free water or sewer service. Under Georgia law, Augusta, Georgia has the exclusive authority to establish rates and charges for water and sewer service supplied by the System. The rates charged for water and sewer service supplied by the System are not subject to review or approval by any federal or state regulatory body. The Augusta-Richmond County Commission establishes the rates, which are subject to change at any time as the Augusta-Richmond County Commission deems advisable. AUGUSTA, GEORGIA UTILITIES AUGUSTA, GEORGIA STATISTICAL SECTION FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 58 Rates, Fees and Charges (Continued) Augusta, Georgia established a uniform water and sewer rate schedule for the System effective April 1, 1996, which it adjusted effective September 3, 1996. On February 23, 1998, Augusta, Georgia approved a policy to adjust rates annually in accordance with the Consumer Price Index for the previous fiscal period effective April 1, 1998, with an adjustment made on April 1 of each succeeding year. On August 15, 2000, Augusta, Georgia approved a policy to provide for water and sewer rates established in the adoption of the annual System budget or by resolution in conjunction with financing for water and sewer improvements, with an adjustment made on April 1 of each succeeding year. The following rates were effective April 1, 2016. For residential customers using 3,000 gallons or less of water each month, Utilities charges $23.09 for water service each month and $20.77 for sewer service each month. For residential customers using more than 3,000 gallons of water each month, Utilities charges $16.01 plus $2.20 per thousand gallons of water used for the first 3,000 gallons and $2.47 per thousand gallons of water used for gallons over 3,000 for water service each month. For residential customers using more than 3,000 gallons of water each month, Utilities charges $29.11 plus $2.68 per thousand gallons of water used for sewer service each month. Augusta, Georgia charges commercial customers the monthly demand charges set forth in the table below plus $2.81 per thousand gallons of water used for the first 3,000 gallons and $3.12 per thousand gallons of water used over 3,000 gallons for water service each month. Commercial customers are charged the monthly demand charges set forth in the table below plus $3.39 per thousand gallons of water used for sewer service each month. Monthly Minimum Charges on Commercial Meters Minimum Charge Meter Size Water Sewer 5/8" & 3/4"$17.37 $30.67 1"24.62 43.82 1-1/4" & 1-1/2"40.77 73.22 2"58.59 105.80 3"98.00 178.10 4"141.95 258.00 6"239.42 436.09 8"347.26 633.08 10"463.81 846.26 12"601.88 1,071.75 AUGUSTA, GEORGIA UTILITIES AUGUSTA, GEORGIA STATISTICAL SECTION FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 59 Rates, Fees and Charges (Continued) Utilities also charge commercial sewer a surcharge for disposal of certain types of high strength wastewater. Utilities imposes a surcharge of $0.43 per pound for biological oxygen and suspended solids parts per million. Set forth below are the water and sewer connection fees presently in effect for Utilities. Water Connection Fees Meter Size Tap Fee 5/8" & 3/4"$499.00 1"541.00 1-1/4" & 1-1/2"681.00 2"1,219.00 3"893.00 (plus installation costs) 4"1,302.00 (plus installation costs) 6"2,331.00 (plus installation costs) 8"3,445.00 (plus installation costs) Sewer Connection Fee Meter Size Tap Fee 6" Tap $350.00 (plus installation costs) Historical Debt Service Coverage Ratios Set forth below is the System’s historical ratios of Net Revenues Available for Debt Service to Debt Service on Revenue Bonds secured by revenues of the System, for the past five years. Historical Debt Service Coverage Ratios For the year ended December 31, 2016 2015 2014 2013 2012 Historical net revenues available for debt service $42,060,510 $43,221,283 $46,594,392 $47,237,508 $64,152,263 Historical debt service on revenue bonds 31,646,560 31,626,010 31,789,513 29,536,716 29,458,066 Historical debt service coverage ratio 1.33 1.37 1.47 1.60 2.18 Historical net revenues available for debt service consist of net income of the Utilities less intergovernmental (sales tax) revenue and bond funds interest income, plus interest on debt, depreciation and amortization, extraordinary loss, and net operating transfers out. AUGUSTA, GEORGIA UTILITIES AUGUSTA, GEORGIA STATISTICAL SECTION FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 60 Historical Debt Service Coverage Ratios (Continued) Historical debt service on revenue bonds excludes debt service on notes payable to the Georgia Environmental Facilities Authority, since the notes are not secured by revenues of the System. Capital Improvements Program The following table summarizes the estimated value of capital improvements made to the System in each year for the past five years and the funding sources for such capital improvements. Total Value of System Debt Proceeds and Sales Year Ended Capital Improvements Revenues Investment Earnings Tax 2016 $20,156,950 $2,919,131 $17,237,819 $- 2015 $24,497,020 $2,954,283 21,542,737 - 2014 15,666,246 5,316,763 10,349,483 - 2013 14,230,415 7,234,795 6,995,620 - 2012 43,560,320 40,554,705 3,005,615 - Insurance Coverage Augusta, Georgia carries liability insurance for the System or is self-insured for the types of claims and in amounts that are customary for similar enterprises. Augusta, Georgia also carries property and casualty damage insurance on buildings and other physical assets related to the System. Present insurance coverage for Augusta, Georgia is summarized below: Type Amount in Force Buildings and contents $764,744,627 Employee blanket bond 100,000 Public official bond for each Commissioner 10,000 Limits of Liability Type Each Occurrence Aggregate Public official's liability $2,000,000 None AUGUSTA, GEORGIA UTILITIES AUGUSTA, GEORGIA STATISTICAL SECTION FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 61 Insurance Coverage (Continued) Augusta, Georgia maintains Risk Management Funds to account for and finance its risks of loss. The Risk Management Funds are maintained to provide general liability insurance, unemployment coverage, and employee health benefits coverage for Augusta, Georgia. As of December 31, 2016, the net position of the Risk Management Funds totaled approximately $1.1 million. Augusta, Georgia is also self-insured for its workers’ compensation coverage through a self-insurance program that is administered under contracts with third party administrators. The activity for the workers’ compensation insurance is accounted for in the General Fund. Augusta, Georgia assigned approximately $3.4 million of its unassigned fund balance in its General Fund for risk management. For a detailed description of Augusta, Georgia’s self-insurance programs relating to the System, see Note 7 to the audited financial statements of the System. A summary of Augusta, Georgia’s self-insured retention and excess liability insurance coverage is set forth below: Employer Excess Liability Insurance Self-Insured Retention Limits of Liability Type Each Occurrence Aggregate Each Occurrence Aggregate Workers' compensation $1,000,000 None $1,000,000 None Augusta, Georgia requires payment and performance surety bonds and builders’ risk insurance of all contractors and subcontractors involved in construction related to the System. Augusta, Georgia requires the surety bonds to be issued by surety firms listed on the U.S. Treasury-approved list and the builders’ risk insurance to be in the amount of the contract sums. 300 MULBERRY STREET, SUITE 300 • POST OFFICE BOX 1877 • MACON, GEORGIA 31202-1877 • 478-464-8000 • FAX 478-464-8051 • www.mjcpa.com MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Utilities Department, Augusta-Richmond County Commission Augusta, Georgia We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Augusta, Georgia Utilities (the “Utilities”), an enterprise fund of Augusta, Georgia, as of and for the years ended December 31, 2016 and 2015, and the related notes to the financial statements, which collectively comprise the Utilities basic financial statements, and have issued our report thereon dated June 29, 2017. Our report also includes a reference to the changes in accounting principles resulting from the implementation of Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB No. 27, as well as Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date – an amendment of GASB No. 68. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Utilities’ internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Utilities’ internal control. Accordingly, we do not express an opinion on the effectiveness of the Utilities’ internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. 63 Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Utilities’ financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. . Macon, Georgia June 29, 2017 # # # # # # # # # # # # # # # # # # # # # # # 7KLV#SDJH#LQWHQWLRQDOO\#OHIW#EODQN1# APPENDIX B SUMMARY OF THE BOND RESOLUTION # # # # # # # # # # # # # # # # # # # # # # # 7KLV#SDJH#LQWHQWLRQDOO\#OHIW#EODQN1# B-1 SUMMARY OF THE BOND RESOLUTION The following is a general summary of the Bond Resolution pursuant to which the Series 2017 Bonds will be issued. The summary hereinafter set forth does not purport to be complete or definitive, and for further information, reference is made to the Bond Resolution, copies of which are available from the Consolidated Government upon request. The following summary is qualified in its entirety by express reference to such document. Definitions The following is a summary of certain of the defined terms used in and certain provisions of the Bond Resolution. Reference is made to the Bond Resolution for the full definition of all terms and for the definition of capitalized terms used herein but not otherwise defined herein. “Accreted Value” means, with respect to each Compound Interest Bond, the principal amount of such Compound Interest Bond, plus, on the date of calculation, the interest accrued thereon to such date compounded at the interest rate thereof on each compounding date contained in such Compound Interest Bond, and, with respect to any calculation on a date other than a compounding date, the Accreted Value means the Accreted Value as of the preceding compounding date plus interest on such amount from such compounding date to the date of calculation at a rate equal to the interest rate on such Compound Interest Bond. “Additional Bonds” means any revenue bonds of the Consolidated Government ranking on parity with the Prior Bonds and the Series 2017 Bonds that may hereafter be issued pursuant to the Master Resolution. “Additional Interest” means, for any period during which any Pledged Bonds are owned by a Liquidity Facility Issuer pursuant to a Liquidity Facility or Liquidity Facility Agreement, the amount of interest accrued on such Pledged Bonds at the Pledged Bond Rate less the amount of interest that would have accrued during such period on an equal principal amount of Bonds at the Bond Rate. “Balloon Bonds” means any series of Bonds 25% or more of the original principal amount of which (a) is due in any 12-month period or (b) may, at the option of the Bondholders, be required to be redeemed, prepaid, purchased directly or indirectly by the Consolidated Government, or otherwise paid in any 12-month period; provided that, in calculating the principal amount of such Bonds due or required to be redeemed, prepaid, purchased, or otherwise paid in any 12-month period, such principal amount shall be reduced to the extent that all or any portion of such amount is required to be redeemed or amortized prior to such 12-month period. “Balloon Date” means any Principal Maturity Date or Put Date on which more than 25% of the original principal amount of related Balloon Bonds mature or are subject to mandatory redemption or could, at the option of the Bondholders, be required to be redeemed, prepaid, purchased directly or indirectly by the Consolidated Government, or otherwise paid. “Beneficial Owner” means the owner of a beneficial interest in the Bonds registered in Book-Entry Form. “Bond Counsel” means any firm of nationally recognized bond counsel experienced in matters relating to tax-exempt financing appointed by the Consolidated Government. “Bond Rate” means the rate of interest per annum payable on specified Bonds other than Pledged Bonds. “Bond Register” means the registration books maintained and to be maintained by the Bond Registrar. “Bond Registrar” means the commercial bank designated by the Consolidated Government with respect to any series of Bonds. Such Bond Registrar shall perform the duties required of Bond Registrar set forth in the Bond Resolution. U.S. Bank National Association is designated as Bond Registrar for the Series 2017 Bonds. “Bond Resolution” means the Master Resolution as it may from time to time be modified, supplemented, or amended by Supplemental Resolutions. B-2 “Bondholder” means the registered owner of one or more Bonds. “Bonds” means any revenue bonds authorized by and authenticated and delivered by the Consolidated Government pursuant to the Bond Resolution, including the Prior Bonds, the Series 2017 Bonds, any Additional Bonds, and Subordinate Bonds. “Book-Entry Form” or “Book-Entry System” means, with respect to the Bonds, a form or system, as applicable, under which (a) the ownership of beneficial interests in Bonds and bond service charges may be transferred only through book-entry and (b) physical Bonds in fully registered form are registered only in the name of a Securities Depository or its nominee as holder, with physical Bonds in the custody of a Securities Depository. “Capitalized Interest Account” means the Capitalized Interest Account within the Sinking Fund established in the Bond Resolution. “Code” means the Internal Revenue Code of 1986, as amended and any regulations promulgated thereunder. “Commitment,” when used with respect to Balloon Bonds, means a binding written commitment from a financial institution, surety, or insurance company to refinance such Bonds on or prior to any Balloon Date thereof, including without limitation any Liquidity Facility for such Bonds. “Compound Interest Bonds” means Bonds that bear interest which is calculated based on periodic compounding, payable only at maturity or earlier redemption. “Consolidated Government” means Augusta, Georgia, a political subdivision of the State, existing as such pursuant to the Constitution, statutes and laws of the State. “Construction Fund” means the Augusta, Georgia Water and Sewerage Construction Fund created in the Bond Resolution. “Construction Fund Depository” means any commercial bank or banks designated by the Consolidated Government to serve as depository with respect to the Construction Fund or any account established therein, and any successor depository of such fund or account hereafter designated by the Consolidated Government in a Supplemental Resolution. “Costs,” with respect to any Project, means the total cost, paid or incurred, to study, plan, design, finance, acquire, construct, reconstruct, install, or otherwise develop the Project and shall include, but shall not be limited to, the following costs and expenses relating to such Project and the reimbursement to the Consolidated Government for any such items previously paid by the Consolidated Government: (a) the cost of all lands, real or personal properties, rights, easements, and franchises acquired; (b) the cost of all machinery and equipment, financing charges, and interest prior to and during construction and for six months after completion of construction; (c) the cost of the acquisition, construction, reconstruction, or installation of any Project; (d) the cost of engineering, architectural, development, and supervisory services, fiscal agents’ and legal expenses, plans and specifications, and other expenses necessary or incident to determining the feasibility or practicability of any Projects, administrative expenses, and such other expenses as may be necessary or incident to any financing by Bonds; (e) the cost of placing any Project in operation; (f) the cost of condemnation of property necessary for such construction and operation; B-3 (g) the costs of issuing any Bonds to finance any Project or to refund any Bonds; and (h) any other costs that may be incident to any Project. “Credit Facility” means any letter of credit, insurance policy, guaranty, surety bond, or similar obligation, arrangement, or instrument issued by a bank, insurance company, or other financial institution that is used by the Consolidated Government to enhance the Consolidated Government’s credit by assuring owners of any of the Bonds that principal of and interest on such Bonds will be paid promptly when due. The term Credit Facility shall not include a Reserve Account Credit Facility. “Credit Facility Agreement” means an agreement between the Consolidated Government and a Credit Facility Issuer pursuant to which the Credit Facility Issuer issues a Credit Facility and may include the promissory note or other instrument evidencing the Consolidated Government’s obligations to a Credit Facility Issuer pursuant to a Credit Facility Agreement. The term Credit Facility Agreement shall not include a Reserve Account Credit Facility. “Credit Facility Issuer” means any issuer of a Credit Facility then in effect for all or part of the Bonds. The term Credit Facility Issuer shall not include any Reserve Account Credit Facility Provider. Whenever in the Bond Resolution the consent of the Credit Facility Issuer is required, such consent shall only be required from the Credit Facility Issuer whose Credit Facility is issued with respect to the Bonds for which the consent is required. “Current Interest Bonds” means those Bonds that bear interest payable on a periodic basis and that are not Compound Interest Bonds. “Debt Service Account” means the Debt Service Account created within the Sinking Fund. “Debt Service Requirement” means the total principal and interest coming due, whether at maturity or upon mandatory redemption, in any specified period. For purposes of calculating the Debt Service Requirement, the following assumptions shall be used: (a) If any Bonds Outstanding or proposed to be issued shall bear interest at a Variable Rate, the interest coming due in any specified future period shall be determined as if the Variable Rate in effect at all times during such future period equaled (1) the average of the actual Variable Rates that were in effect (weighted according to the length of the period during which each such Variable Rate was in effect) for the most recent twelve-month period immediately preceding the date of calculation for which such information is available (or shorter period if such information is not available for a twelve-month period), or (2) if no such Bonds are then Outstanding, the thirty year Revenue Bond Index most recently published in The Bond Buyer or if the Revenue Bond Index is no longer available, the current average annual long-term fixed rate of interest on securities of similar quality and having a similar maturity date as certified by a Financial Advisor. (b) If any Compound Interest Bonds are Outstanding or proposed to be issued, the total principal and interest coming due in any specified period shall be determined, with respect to such Compound Interest Bonds, by Series Resolution of the Consolidated Government authorizing such Compound Interest Bonds. (c) With respect to any Bonds secured by a Financial Facility, Debt Service Requirement shall include (i) any commission or commitment fee obligations with respect to such Financial Facility, (ii) the outstanding amount of any Reimbursement Obligation owed to the relevant Financial Facility Issuer and interest thereon, (iii) any Additional Interest owed on Pledged Bonds to a Liquidity Facility Issuer, and (iv) any remarketing agent fees. (d) With respect to any Hedged Bonds, the interest on such Hedged Bonds during any Hedge Period and for so long as the provider of the related Hedge Agreement has not defaulted on its payment obligations thereunder shall be calculated by adding (x) the amount of interest payable by the Consolidated Government on such Hedged Bonds pursuant to their terms and (y) the amount of Hedge Payments payable by the Consolidated Government under the related Hedge Agreement and subtracting (z) the amount of Hedge Receipts payable by the provider of the related Hedge Agreement at the rate specified in the related Hedge Agreement; provided, B-4 however, that to the extent that the provider of any Hedge Agreement is in default thereunder, the amount of interest payable by the Consolidated Government on the related Hedged Bonds shall be the interest calculated as if such Hedge Agreement had not been executed. In determining the amount of Hedge Payments or Hedge Receipts that are not fixed throughout the Hedge Period (i.e., which are variable), payable or receivable for any future period, such Hedge Payments or Hedge Receipts for any period of calculation (the “Determination Period”) shall be computed by assuming that the variables comprising the calculation (e.g., indices) applicable to the Determination Period are equal to the average of the actual variables that were in effect (weighted according to the length of the period during which each such variable was in effect) for the most recent twelve-month period immediately preceding the date of calculation for which such information is available (or shorter period if such information is not available for a twelve-month period). (e) For the purpose of calculating the Debt Service Requirement on Balloon Bonds (1) which are subject to a Commitment or (2) which do not have a Balloon Date within 12 months from the date of calculation, such Bonds shall be assumed to be amortized in substantially equal annual amounts to be paid for principal and interest over an assumed amortization period of 25 years at an assumed interest rate (which shall be the thirty year Revenue Bond Index most recently published in The Bond Buyer or if the Revenue Bond Index is no longer available, the interest rate certified by a Financial Advisor to be the interest rate at which the Consolidated Government could reasonably expect to borrow the same amount by issuing Bonds with the same priority of lien as such Balloon Bonds and with a 25-year term); provided, however, that if the maturity of such Bonds (taking into account the term of any Commitment) is in excess of 25 years from the date of issuance, then such Bonds shall be assumed to be amortized in substantially equal annual amounts to be paid for principal and interest over an assumed amortization period of years equal to the number of years from the date of issuance of such Bonds to maturity (including the Commitment) and at the interest rate applicable to such Bonds. (f) For the purpose of calculating the Debt Service Requirement on Balloon Bonds (1) which are not subject to a Commitment and (2) which have a Balloon Date within 12 months from the date of calculation, the principal payable on such Bonds on the Balloon Date shall be calculated as if paid on the Balloon Date. (g) The principal of and interest on Bonds and Hedge Payments shall be excluded from the determination of Debt Service Requirement to the extent that the same were or are expected to be paid with amounts on deposit on the date of calculation (or Bond proceeds to be deposited on the date of issuance of proposed Bonds) in the Construction Fund, the Sinking Fund, or a similar fund for Subordinate Bonds. (h) With respect to any Federal Credit Payment Bonds, the interest on such Federal Credit Payment Bonds for so long as the Federal government continues to pay the Federal Credit Payments to the Consolidated Government shall be calculated by subtracting the amount of Federal Credit Payments paid or payable by the Federal government with respect to such Federal Credit Payment Bonds from the amount of interest payable by the Consolidated Government on such Federal Credit Payment Bonds pursuant to their terms. “Debt Service Reserve Account” means the Debt Service Reserve Account within the Sinking Fund established in the Bond Resolution. “Debt Service Reserve Requirement” means as of any date of calculation, an amount equal to the least of (a) 10% of the original principal amount of Senior Bonds, (b) 50% of the maximum annual Debt Service Requirement on Senior Bonds payable in any Fiscal Year or (c) 125% of the average annual Debt Service Requirement on Senior Bonds payable in the then current or any succeeding Fiscal Year. “Depository” means, with respect to the Construction Fund or any account established therein, the Construction Fund Depository, and, with respect to each other fund established under the Bond Resolution, the depository of such fund, and any successor depository of such fund hereafter designated by the Consolidated Government in a Supplemental Resolution. “DTC” means The Depository Trust Company, New York, New York, or its nominee, or its successors and assigns, or any other depository performing similar functions under the Bond Resolution. B-5 “Event of Default” means any of the events defined as such in the Bond Resolution and described herein under “- Events of Default and Remedies.” “Expenses of Operation and Maintenance” means all expenses reasonably incurred in connection with the operation and maintenance of the System, including salaries, wages, the cost of materials and supplies, rentals of leased property, if any, management fees, payments to others for the purchase of water, if any, and for the treatment and disposal of sewerage, the cost of audits, Paying Agent’s and Bond Registrar’s fees, payment of premiums for insurance required by the Bond Resolution and other insurance that the Consolidated Government deems prudent to carry on the System and its operations and personnel, and, generally, all expenses, exclusive of interest on the Bonds and depreciation or amortization, that under accounting principles generally accepted for municipal utility purposes are properly allocable to operation and maintenance; however, only such expenses as are reasonably and properly necessary or desirable for the proper operation and maintenance of the System shall be included. “Expenses of Operation and Maintenance” also includes the Consolidated Government’s obligations under any contract with any other political subdivision or public agency or authority of one or more political subdivisions pursuant to which the Consolidated Government undertakes to make payments measured by the expenses of operating and maintaining any facility that constitutes part of the System and that is owned or operated in part by the Consolidated Government and in part by others. “Federal Credit Payment Bonds” means any Bonds for which the Consolidated Government shall be entitled to receive Federal Credit Payments. “Federal Credit Payments” means any periodic direct federal credit payments required to be paid by the Federal government to the Consolidated Government relating to any series of Bonds in an amount equal to a percentage of the interest payments on such Bonds if the Consolidated Government irrevocably elected in a Supplemental Resolution authorizing the issuance of such Bonds to include such direct federal credit payments in the definition of “Operating Revenues” herein. “Financial Advisor” means an investment banking or financial advisory firm, commercial bank, or any other Person who or which is appointed by the Consolidated Government for the purpose of passing on questions relating to the availability and terms of specified types of Bonds and is actively engaged in and, in the good faith opinion of the Consolidated Government, has a favorable reputation for skill and experience in underwriting or providing financial advisory services in respect of similar types of securities. “Financial Facility” means a Credit Facility or a Liquidity Facility. “Financial Facility Agreement” means a Credit Facility Agreement or a Liquidity Facility Agreement. “Financial Facility Issuer” means a Credit Facility Issuer or a Liquidity Facility Issuer. “Fiscal Year” means the 12-month period used by the Consolidated Government for its general accounting purposes, as it may be changed from time to time and which shall initially be the period beginning on January 1 of each calendar year and ending December 31 of the same calendar year. “Fitch” means Fitch, Inc., doing business as Fitch Ratings, or, if such limited partnership is dissolved or liquidated or otherwise ceases to perform securities rating services, such other nationally recognized securities rating agency as may be designated in writing by the Consolidated Government. The notice address of Fitch shall be One State Street Plaza, New York, New York 10004. “Forecast Period” means a period of five consecutive Fiscal Years commencing with the Fiscal Year after the later of (a) the Fiscal Year in which any proposed Additional Bonds are to be issued or (b) the Fiscal Year in which any Project to be financed with the proceeds of any proposed Additional Bonds is expected to be completed. “Government Loans” means loans to the Consolidated Government by the government of the United States or the State, or by any department, authority, or agency of either, for the purpose of acquiring, constructing, reconstructing, improving, bettering, or extending any part of the System. B-6 “Government Obligations” means (a) obligations of the United States and of its agencies and instrumentalities, (b) obligations fully insured or guaranteed by the United States government or United States government agency or (c) obligations of any corporation of the United States government (including any obligations described in (a), (b) or (c) issued or held in book-entry form on the books of the Department of the Treasury of the United States of America). “Hedge Agreement” means, without limitation, (a) any contract known as or referred to or which performs the function of an interest rate swap agreement, currency swap agreement, forward payment conversion agreement, or futures contract; (b) any contract providing for payments based on levels of, or changes or differences in, interest rates, currency exchange rates, or stock or other indices; (c) any contract to exchange cash flows or payments or series of payments; (d) any type of contract called, or designed to perform the function of, interest rate floors, collars, or caps, options, puts, or calls, to hedge or minimize any type of financial risk, including, without limitation, payment, currency, rate, or other financial risk; and (e) any other type of contract or arrangement that the Consolidated Government determines is to be used, or is intended to be used, to manage or reduce the cost of any Bonds, to convert any element of any Bonds from one form to another, to maximize or increase investment return, to minimize investment return risk, or to protect against any type of financial risk or uncertainty. “Hedge Payments” means amounts payable by the Consolidated Government pursuant to any Hedge Agreement, other than termination payments, fees, expenses, and indemnity payments. “Hedge Payments Account” means the Hedge Payments Account within the Sinking Fund established in the Bond Resolution. “Hedge Period” means the period during which a Hedge Agreement is in effect. “Hedge Receipts” means amounts payable by any provider of a Hedge Agreement pursuant to such Hedge Agreement, other than termination payments, fees, expenses, and indemnity payments. “Hedged Bonds” means any Bonds for which the Consolidated Government shall have entered into a related Hedge Agreement. “Independent Certified Public Accountant” means a certified public accountant, or a firm of certified public accountants, who or which is “independent” as that term is defined in Rule 101 and related interpretations of the Code of Professional Ethics of the American Institute of Certified Public Accountants, of recognized standing, who or which does not devote his or its full time to the Consolidated Government (but who or which may be regularly retained by the Consolidated Government). “Independent Consulting Engineer” means a firm of engineers or utility consultants experienced in the planning and management of water and sewer systems and having a nationally recognized reputation for such work. “Interest Payment Date” means (a) with respect to the Series 2017 Bonds, each April 1 and October 1, commencing April 1, 2018 and (b) with respect to other series of Bonds, the interest payment date specified in the Supplemental Resolution authorizing such Bonds. “Investment Earnings” means all interest received on and profits derived from investments made with Pledged Revenues or any moneys in the funds and accounts established under Article V. “Liquidity Facility” means any letter of credit, standby bond purchase agreement, line of credit, revolving credit agreement, or similar obligation, arrangement, or instrument issued by a bank, insurance company, or other financial institution that is used by the Consolidated Government to perform one or more of the following tasks: (a) providing liquidity for the owners of Bonds through undertaking to cause Bonds to be bought from the owners thereof when submitted pursuant to an arrangement prescribed by a Series Resolution; or (b) remarketing any Bonds so submitted to the Liquidity Facility Issuer (whether or not the same Liquidity Facility Issuer is remarketing the Bonds). B-7 “Liquidity Facility Agreement” means an agreement between the Consolidated Government and a Liquidity Facility Issuer pursuant to which the Liquidity Facility Issuer issues a Liquidity Facility and may include the promissory note or other instrument evidencing the Consolidated Government’s obligations to a Liquidity Facility Issuer pursuant to a Liquidity Facility Agreement. “Liquidity Facility Issuer” means any issuer of a Liquidity Facility then in effect for all or part of the Bonds. “Master Resolution” means the Master Bond Resolution duly and validly adopted by the Consolidated Government on October 16, 2012, authorizing the issuance and delivery of the Series 2012 Bonds. “Moody’s” means Moody’s Investors Service, Inc. or, if such corporation is dissolved or liquidated or otherwise ceases to perform securities rating services, such other nationally recognized securities rating agency as may be designated in writing by the Consolidated Government. The notice address of Moody’s shall be 7 World Trade Center, 250 Greenwich Street, New York, New York 10007. “Net Operating Revenues” means Operating Revenues after provision for payment of all Expenses of Operation and Maintenance and excluding Federal Credit Payments and including any PILOT payments and PILOF payments. “Operating Revenues” means all income and revenue of any nature derived from the operation of the System, including monthly water and sewerage billings, service charges, other charges for water and sewerage service and the availability thereof (other than any special assessment proceeds), connection or tap fees (whether accounted for as revenues or as contributed capital), local, state, or federal grants or other moneys received for the payment of Expenses of Operation and Maintenance and any Federal Credit Payments, but excluding local, state, or federal grants, loans, capital improvement contract payments, or other moneys received for capital improvements to the System and excluding Investment Earnings. “Other System Obligations” means obligations of any kind, including but not limited to, Government Loans, revenue bonds, capital leases, installment purchase agreements, or notes (but excluding Bonds and related obligations to Financial Facility Issuers, Reserve Account Credit Facility Providers and Qualified Hedge Providers), incurred or issued by the Consolidated Government to finance or refinance the cost of acquiring, constructing, reconstructing, improving, bettering, or extending any part of the System or for any other purpose with respect to the System. “Outstanding” means, when used in reference to the Bonds, all Bonds that have been duly authenticated and delivered under the Bond Resolution, with the exception of (a) Bonds in lieu of which other Bonds have been issued under agreement to replace lost, mutilated, stolen, or destroyed obligations, (b) Bonds surrendered by the owners in exchange for other Bonds and (c) Bonds for the payment of which provision has been made in accordance with the Bond Resolution as described in “- Defeasance” herein. In determining the amount of Compound Interest Bonds Outstanding under the Bond Resolution, the Accreted Value of such Compound Interest Bonds at the time of determination shall be used. “Participants” means those financial institutions for which the Securities Depository effects book-entry transfers and pledges of securities deposited with the Securities Depository in the Book-Entry System, as such listing exists at the time of such reference. “Paying Agent” means the commercial bank or banks appointed by the Consolidated Government to serve as paying agent in accordance with the terms of the Bond Resolution for any series of Bonds. U.S. Bank National Association is designated as Paying Agent for the Series 2017 Bonds. “Permitted Investments” means and includes any of the following securities, if and to the extent the same are at the time legal for investment of Consolidated Government funds: (a) the local government investment pool created in Chapter 83 of Title 36 of the Official Code of Georgia Annotated, as amended; B-8 (b) bonds or obligations of the Consolidated Government, or bonds or obligations of the State of Georgia, or of other counties, municipal corporations, and political subdivisions of the State of Georgia; (c) bonds or other obligations of the United States or of subsidiary corporations of the United States government which are fully guaranteed by such government; (d) obligations of and obligations guaranteed by agencies or instrumentalities of the United States government, including those issued by the Federal Land Bank, Federal Home Loan Bank, Federal Intermediate Credit Bank, Bank for Cooperatives and any other such agency or instrumentality now or hereafter in existence; provided, however, that all such obligations shall have a current credit rating from a nationally recognized rating service of at least one of the three highest rating categories available and have a nationally recognized market; (e) bonds or other obligations issued by any public housing agency or municipal corporation in the United States, which such bonds or obligations are fully secured as to the payment of both principal and interest by a pledge of annual contributions under an annual contributions contract or contracts with the United States government, or project notes issued by any public housing agency, urban renewal agency, or municipal corporation in the United States which are fully secured as to payment of both principal and interest by a requisition, loan, or payment agreement with the United States government; (f) certificates of deposit of national or state banks located within the State of Georgia which have deposits insured by the Federal Deposit Insurance Corporation and certificates of deposit of federal savings and loan associations and state building and loan or savings and loan associations located within the State of Georgia which have deposits insured by the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation or the Georgia Credit Union Deposit Insurance Corporation, including the certificates of deposit of any bank, savings and loan association, or building and loan association acting as depository, custodian, or trustee for any proceeds of any bonds. The portion of such certificates of deposit in excess of the amount insured by the Federal Deposit Insurance Corporation, the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation or the Georgia Credit Union Deposit Insurance Corporation, if any, shall be secured by deposit, with the Federal Reserve Bank of Atlanta, Georgia, or with any national or state bank or federal savings and loan association or state building and loan or savings and loan association located within the State of Georgia or with a trust office located within the State of Georgia, of one or more of the following securities in an aggregate principal amount equal at least to the amount of such excess: direct and general obligations of the State of Georgia or other states or of any county or municipal corporation in the State of Georgia, obligations of the United States or subsidiary corporations referred to in paragraph (c) above, obligations of the agencies and instrumentalities of the United States government referred to in paragraph (d) above, or bonds, obligations, or project notes of public housing agencies, urban renewal agencies, or municipalities referred to in paragraph (e) above; (g) securities of or other interests in any no-load, open-end management type investment company or investment trust registered under the Investment Company Act of 1940, as from time to time amended, or any common trust fund maintained by any bank or trust company which holds such proceeds as trustee or by an affiliate thereof so long as: (i) the portfolio of such investment company or investment trust or common trust fund is limited to the obligations referred to in paragraph (c) and (d) above and repurchase agreements fully collateralized by any such obligations; (ii) such investment company or investment trust or common trust fund takes delivery of such collateral either directly or through an authorized custodian; (iii) such investment company or investment trust or common trust fund is managed so as to maintain its shares at a constant net asset value; and B-9 (iv) securities of or other interests in such investment company or investment trust or common trust fund are purchased and redeemed only through the use of national or state banks having corporate trust powers and located within the State of Georgia; and (h) interest-bearing time deposits, repurchase agreements, reverse repurchase agreements, rate guarantee agreements, or other similar banking arrangements with a bank or trust company having capital and surplus aggregating at least $50 million or with any government bond dealer reporting to, trading with, and recognized as a primary dealer by the Federal Reserve Bank of New York having capital aggregating at least $50 million or with any corporation which is subject to registration with the Board of Governors of the Federal Reserve System pursuant to the requirements of the Bank Holding Company Act of 1956, provided that each such interest- bearing time deposit, repurchase agreement, reverse repurchase agreement, rate guarantee agreement or other similar banking arrangement shall permit the moneys so placed to be available for use at the time provided with respect to the investment or reinvestment of such moneys; and (i) any other investments authorized by the laws of the State of Georgia from time to time. “Person” means any natural person, firm, association, corporation, limited liability company, partnership, joint stock company, joint venture, trust, unincorporated organization or firm, or a government or any agency or political subdivision thereof or other public body. “PILOF” means payments in lieu of franchise fees paid from Operating Revenues to the Consolidated Government intended to approximate franchise fees paid by other utility companies providing services within the Consolidated Government and calculated as a percentage of metered revenue of the System. “PILOT” means payments in lieu of taxes paid from Operating Revenues to the Consolidated Government intended to approximate the ad valorem property taxes that would be payable on the net depreciated value of above- ground System structures if such assets were subject to ad valorem property tax. “Pledged Bond” means any Bond purchased and held by a Liquidity Facility Issuer pursuant to a Liquidity Facility Agreement. A Bond shall be deemed a Pledged Bond only for the actual period during which such Bond is owned by a Liquidity Facility Issuer pursuant to a Liquidity Facility Agreement. “Pledged Bond Rate” means the rate of interest payable on Pledged Bonds, as may be provided in a Liquidity Facility or Liquidity Facility Agreement. “Pledged Revenues” means Operating Revenues, after provision for payment of all Expenses of Operations and Maintenance, Investment Earnings, and all moneys paid or required to be paid into, and all moneys and securities on deposit from time to time in, the funds and accounts specified in the Bond Resolution; provided that Pledged Revenues shall also include Hedge Receipts and exclude any amounts required in the Bond Resolution to be set aside pending, or used for, rebate to the United States government pursuant to Section 148(f) of the Code, including, but not limited to, amounts in the Rebate Fund. The term “principal” means the principal amount of any Bond and includes the Accreted Value of any Compound Interest Bonds. All references to principal shall be construed as if they were also references to Accreted Value with respect to Compound Interest Bonds. “Principal Maturity Date” means each date on which principal is to become due on any Bonds, by maturity or mandatory sinking fund redemption, as established in the Series Resolution for such Bonds. “Prior Bonds” means, collectively, the Series 2012 Bonds, the Series 2013 Bonds, and the Series 2014 Bonds. “Project” means the acquisition, construction, reconstruction, improvement, betterment, extension, or equipping of the System, in whole or in part, with the proceeds of any Bonds. B-10 “Put Date” means any date on which a Bondholder may elect to have Balloon Bonds redeemed, prepaid, purchased directly or indirectly by the Consolidated Government, or otherwise paid. “Qualified Hedge Provider” means an entity whose senior unsecured long term obligations, financial program rating, counterparty rating, or claims paying ability, or whose payment obligations under the related Hedge Agreement are absolutely and unconditionally guaranteed by an entity whose senior unsecured long term obligations, financial program rating, counterparty rating, or claims paying ability, are rated either (i) at least as high as the middle range of the third highest rating category of each Rating Agency, but in no event lower than any Rating on the related Hedged Bonds at the time of execution of the Hedge Agreement, or (ii) in any such lower Rating that each Rating Agency indicates in writing to the Consolidated Government will not, by itself, result in a reduction or withdrawal of its Rating on the related Hedged Bonds that is in effect prior to entering into the Hedge Agreement. An entity’s status as a “Qualified Hedge Provider” is determined only at the time the Consolidated Government enters into a Hedge Agreement with such entity and cannot be redetermined with respect to that Hedge Agreement. “Rating” means a rating in one of the categories by a Rating Agency, disregarding pluses, minuses, and numerical gradations. “Rating Agencies” or “Rating Agency” means Fitch, Moody’s, or Standard & Poor’s or any successors thereto and any other nationally recognized credit rating agency then maintaining a rating on any Bonds at the request of the Consolidated Government. If at any time a particular Rating Agency does not have a rating outstanding with respect to the relevant Bonds, then a reference to Rating Agency or Rating Agencies shall not include such Rating Agency. “Rebate Fund” means the Augusta, Georgia Water and Sewerage System Rebate Fund established in the Bond Resolution. “Reimbursement Obligation” means the obligation of the Consolidated Government to directly reimburse any Financial Facility Issuer for amounts paid by such Financial Facility Issuer under a Financial Facility, whether or not such obligation to so reimburse is evidenced by a promissory note or other similar instrument. “Reserve Account Credit Facility” means the letter of credit, insurance policy, line of credit, or surety bond, together with any substitute or replacement therefor, if any, complying with the provisions of the Bond Resolution, thereby fulfilling all or a portion of the Debt Service Reserve Requirement. “Reserve Account Credit Facility Provider” means any provider of a Reserve Account Credit Facility. “Revenue Bond Law” means the Revenue Bond Law (O.C.G.A. Section 36-82-60 et seq.), as amended from time to time. “Revenue Fund” means the Augusta, Georgia Water and Sewerage System Revenue Fund described in the Bond Resolution. “Securities Depository” means any securities depository that is a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to provisions of Section 17A of the Securities Exchange Act of 1934, operating and maintaining, with its Participants or otherwise, a Book-Entry System to record ownership of beneficial interest in bonds and bond service charges, and to effect transfers of bonds in Book-Entry Form, and means, initially, DTC. “Senior Bonds” means the Prior Bonds, the Series 2017 Bonds, and any Additional Bonds. “Senior Hedge Agreements” means Hedge Agreements relating to Hedged Bonds that are Senior Bonds. “Series Resolution” means a bond resolution or bond resolutions of the Consolidated Government (which may be supplemented by one or more bond resolution(s)) to be adopted prior to and authorizing the issuance and delivery of any series of Bonds. The Master Resolution shall constitute the Series Resolution for the Series 2012 Bonds, as B-11 well as the Master Resolution for Additional Bonds and Subordinate Bonds. Such a bond resolution as supplemented shall establish the date or dates of the pertinent series of Bonds, the schedule of maturities of such Bonds, whether any such Bonds will be Compound Interest Bonds, the name of the purchaser(s) of such series of Bonds, the purchase price thereof, the rate or rates of interest to be borne thereby, whether fixed or variable, the interest payment dates for such Bonds, the terms and conditions, if any, under which such Bonds may be made subject to redemption (mandatory or optional) prior to maturity, the form of such Bonds, and such other details as the Consolidated Government may determine. “Series 2012 Bonds” means the Augusta, Georgia Water and Sewerage Revenue Refunding and Improvement Bonds (Second Resolution), Series 2012, issued pursuant to the Bond Resolution. “Series 2013 Bonds” means the Augusta, Georgia Water and Sewerage Taxable Revenue Bonds (Second Resolution), Series 2013, issued pursuant to the Bond Resolution. “Series 2014 Bonds” means the Augusta, Georgia Water and Sewerage Revenue Refunding and Improvement Bonds (Second Resolution), Series 2017, issued pursuant to the Bond Resolution. “Series 2017 Bonds” means the Augusta, Georgia Water and Sewerage Revenue Refunding Bonds, Series 2017, authorized to be issued pursuant to the Bond Resolution. “Sinking Fund” means the Augusta, Georgia Water and Sewerage System Sinking Fund described in the Bond Resolution in which are held the Debt Service Account and the Debt Service Reserve Account. “Standard and Poor’s” or “S&P” means S&P Global Ratings, a division of Standard & Poor’s Financial Services LLC, or, if such corporation is dissolved or liquidated or otherwise ceases to perform securities rating services, such other nationally recognized securities rating agency as may be designated in writing by the Consolidated Government. The notice address of Standard & Poor’s shall be 55 Water Street, New York, New York 10041. “State” means the State of Georgia. “Subordinate Bonds” means Bonds issued with a right to payment from the Pledged Revenues and secured by a lien on the Pledged Revenues expressly junior and subordinate to the Senior Bonds. “Subordinate Hedge Agreements” means Hedge Agreements relating to Hedged Bonds that are Subordinate Bonds. “Supplemental Resolution” means (a) any Series Resolution and (b) any modification, amendment, or supplement to the Master Resolution other than a Series Resolution. “System” means the water and sewerage system of the Consolidated Government, as it now exists and as it may be hereafter added to, extended, improved, and equipped, either from the proceeds of the Bonds or from any other sources at any time hereafter, including, without limitation, (a) all wells, pumping stations, purification and treatment plants, and other sources of supply of water and all pipes, mains, and other parts of the facilities for the distribution of water and disposal and treatment of sewerage and all equipment and property used in connection therewith and (b) all other facilities or property of any nature or description, real or personal, tangible or intangible, now or hereafter owned or used by the Consolidated Government in the supply, treatment, disposal and distribution of water and sewerage, including solid waste facilities relating to sludge disposal, or held by the Consolidated Government to obtain future sources of raw water. The Consolidated Government may own a partial interest in any water and sewerage facility, the remaining interest in which may be owned by or on behalf of a political subdivision of the State or any agency or authority thereof. In case of such ownership, the rights and interests possessed by the Consolidated Government in such facility shall be included as part of the System. “Tax-Exempt Bonds” means any Bonds the interest on which has been determined, in an unqualified opinion of Bond Counsel, to be excludable from the gross income of the owners thereof for federal income tax purposes. B-12 “Utility General Fund” means the Augusta, Georgia Water and Sewerage System Utility General Fund described in the Bond Resolution. “Variable Rate” means as to any Bonds, any portion of such Bonds the interest rate on which is not established at the time of original execution or issuance at a fixed or constant rate. Pledge of Revenues Under the terms of the Bond Resolution, all Pledged Revenues are pledged to the prompt payment of the principal of, premium, if any, and interest on the Bonds. Such moneys and securities will immediately be subject to the lien of this pledge for the benefit of the Bondholders without any physical delivery thereof or further act, and the lien of this pledge will be valid and binding against the Consolidated Government and against all other persons having claims against the Consolidated Government, whether such claims have arisen in tort, contract, or otherwise, and regardless of whether such persons have notice of the lien of this pledge. Under the terms of the Bond Resolution, this pledge will rank superior to all other pledges that may hereafter be made of any of the Pledged Revenues, except for pledges of the Pledged Revenues hereafter made by the Consolidated Government in the Hedge Agreements to secure Hedge Payments, which may rank on a parity with this pledge as to the related Hedged Bonds. The lien of the pledge made in the Bond Resolution does not secure any obligation of the Consolidated Government other than the Bonds. Investments Moneys in the funds and accounts established under the Bond Resolution must be invested and reinvested in Permitted Investments bearing interest at the highest rates reasonably available (except to the extent that a restricted yield is required or advisable under Section 148 of the Code). Subject to the first sentence, moneys in the Revenue Fund may be invested by the Consolidated Government in Permitted Investments maturing not later than the date or dates on which such moneys is required for the purposes intended. Moneys in the Interest Account and the Capitalized Interest Account may be invested by the Consolidated Government in Permitted Investments maturing or redeemable at the option of the holder prior to the next Interest Payment Date, but whenever prior to any Interest Payment Date the aggregate of the available moneys in such accounts exceeds the amount necessary to pay interest falling due on such Interest Payment Date, such excess may be invested in Permitted Investments maturing or redeemable at the option of the holder prior to the next following Interest Payment Date. Moneys in the Principal Account may be invested by the Consolidated Government in Permitted Investments maturing or redeemable at the option of the holder prior to the next Principal Maturity Date, but whenever prior to any Principal Maturity Date the aggregate of the available moneys in such account exceeds the amount necessary to pay principal falling due on such Principal Maturity Date, such excess may be invested in Permitted Investments maturing or redeemable at the option of the holder prior to the next following Principal Maturity Date. Moneys in the Hedge Payments Account may be invested by the Consolidated Government in Permitted Investments maturing or redeemable at the option of the holder prior to the next due date of related Hedge Payments, but whenever prior to any due date of related Hedge Payments the aggregate of the available moneys in such account exceeds the amount necessary to pay related Hedge Payments falling due on such date, such excess may be invested in Permitted Investments maturing or redeemable at the option of the holder prior to the next following due date of related Hedge Payments. Moneys in the Debt Service Reserve Account must be invested by the Consolidated Government in Permitted Investments that mature or are redeemable at the option of the holder within 5 years from date of purchase. Subject to the foregoing first sentence under this heading, moneys in the Utility General Fund may be invested by the Consolidated Government in Permitted Investments. Whenever any moneys in the Debt Service Reserve Account or the Utility General Fund invested as above provided are needed for the payment of currently maturing principal of or interest on the Senior Bonds, the Consolidated Government must cause such investments to be liquidated at current market prices, to produce the amount required, without further instructions, and must cause the proceeds of such liquidation to be applied to the payment of such principal and interest. Investment Earnings in each fund and account (except for those established pursuant to the provisions of the Bond Resolution described herein under the caption “SUMMARY OF THE BOND RESOLUTION - Defeasance” in this Appendix C) will be allocated as follows: B-13 (a) Investment Earnings from the investment of moneys of each account held in the Sinking Fund (except for the Debt Service Reserve Accounts) will be retained in the account of the Sinking Fund to which such investments relate; (b) Investment Earnings from the investment of moneys of each account held in the Construction Fund will be retained in the account of the Construction Fund to which such investments relate; (c) Investment Earnings from the investment of moneys in each Debt Service Reserve Account will be retained in such Debt Service Reserve Account at all times the balance is less than the related Debt Service Reserve Requirement; thereafter and at all times the balance of each Debt Service Reserve Account is equal to or greater than the related Debt Service Reserve Requirement, such Investment Earnings will be deposited in the Interest Account; (d) Investment Earnings from the investment of moneys in the Rebate Fund will be retained in the Rebate Fund; (e) Investment Earnings from the investment of moneys in the Utility General Fund will be retained in the Utility General Fund; and (f) Investment Earnings from the investment of moneys in the Revenue Fund will be retained in the Revenue Fund. The Series Resolution authorizing the issuance of any Subordinate Bonds will specify any maturity limitations and allocations of Investment Earnings on investments of moneys in the funds and accounts relating to such Subordinate Bonds. Moneys in each of such funds will be accounted for as a separate and special fund apart from all other Consolidated Government funds, provided that investments of moneys therein may be made in a pool of investments together with other moneys of the Consolidated Government so long as sufficient Permitted Investments in such pool, not allocated to other investments of contractually or legally limited duration, are available to meet the requirements of the foregoing provisions. Additional Bonds The Bond Resolution provides that all Senior Bonds must have complete parity of lien on the Pledged Revenues despite the fact that any of the Senior Bonds may be delivered at an earlier date than any other of the Senior Bonds. Under the terms of the Bond Resolution, the Consolidated Government may issue Additional Bonds in accordance with the Bond Resolution, and the Consolidated Government may issue no other obligations of any kind or nature payable from or enjoying a lien on the Pledged Revenues or any part thereof having priority over or (except as permitted in the Bond Resolution) on a parity with the Prior Bonds and the Series 2017 Bonds. Under the terms of the Bond Resolution, any or all of the Senior Bonds may be refunded at maturity, upon redemption in accordance with their terms, or with the consent of the owners of the Senior Bonds, and the refunding Bonds so issued will constitute Additional Bonds, if: (a) The Consolidated Government executes a certificate: (i) setting forth the aggregate amount of interest and principal of all Senior Bonds falling due during the then current Fiscal Year and for each subsequent Fiscal Year to and including the Fiscal Year of the last maturity of any Senior Bonds then Outstanding (A) with respect to all Senior Bonds Outstanding immediately prior to the date of authentication and delivery of such refunding Bonds and (B) with respect to all Senior Bonds to be Outstanding immediately thereafter; and (ii) demonstrating that the amount set forth for each Fiscal Year pursuant to (i)(y) above is no greater than the amount set forth for such Fiscal Year pursuant to (i)(A) above. B-14 (b) As an alternative to, and in lieu of, satisfying the requirements described in clause (a) above, all Outstanding Senior Bonds are being refunded under arrangements that immediately result in making provision for the payment of the refunded Senior Bonds. (c) The requirements described in clauses (d) and (f) below are met with respect to such refunding Bonds. Bonds (including refunding Bonds that do not meet the requirements described above) may also be issued on a parity with the Prior Bonds and the Series 2017 Bonds pursuant to a Series Resolution, and the Bonds so issued will constitute Additional Bonds, if all of the following conditions are satisfied: (a) Except in the case of Additional Bonds issued for refunding purposes as described above, there must have been procured and filed with the Consolidated Government either: (i) a report by an Independent Certified Public Accountant to the effect that the historical Net Operating Revenues and Investment Earnings (excluding Investment Earnings, if any, on the Construction Fund) for a period of 12 consecutive months of the most recent 24 consecutive months prior to the issuance of the proposed Additional Bonds were equal to at least 125% of the maximum annual Debt Service Requirement on all Senior Bonds that will be Outstanding immediately after the issuance of the proposed Additional Bonds, in the then current or any succeeding Fiscal Year, or (ii) (A) a report by an Independent Certified Public Accountant to the effect that the historical Net Operating Revenues and Investment Earnings (excluding Investment Earnings, if any, on the Construction Fund) for a period of 12 consecutive months of the most recent 24 consecutive months prior to the issuance of the proposed Additional Bonds were equal to at least 125% of the historical Debt Service Requirement on all Senior Bonds that were Outstanding during such 12-month period, and (B) a report by an Independent Consulting Engineer to the effect that (A) the forecasted Net Operating Revenues and Investment Earnings (excluding Investment Earnings, if any, on the Construction Fund) for the period beginning on the expected date of issuance of the proposed Additional Bonds and ending on the date of commencement of the Forecast Period are expected to equal at least 100% of the Debt Service Requirement during such period on all Senior Bonds that will be Outstanding immediately after the issuance of the proposed Additional Bonds, after taking into account amounts deposited into the Capitalized Interest Account, and (B) the forecasted Net Operating Revenues and Investment Earnings (excluding Investment Earnings, if any, on the Construction Fund) for each Fiscal Year in the Forecast Period are expected to equal at least 125% of the maximum annual Debt Service Requirement on all Senior Bonds that will be Outstanding immediately after the issuance of the proposed Additional Bonds, in the then current or any succeeding Fiscal Year. The reports by the Independent Certified Public Accountant that are described above may contain pro forma adjustments to historical Net Operating Revenues equal to 100% of the increased annual amount attributable to any revision in the schedule of rates, fees, and charges for the services, facilities, and commodities furnished by the System, imposed prior to the date of delivery of the proposed Additional Bonds and not fully reflected in the historical Net Operating Revenues actually received during such 12-month period. Such pro forma adjustments must be based upon a report of an Independent Consulting Engineer as to the amount of Operating Revenues that would have been received during such 12-month period had the new rate schedule been in effect throughout such 12- month period. The report by the Independent Consulting Engineer that is required as described above may not take into consideration any rate schedule to be imposed in the future, unless such rate schedule has been adopted by resolution of the Commission. Such rate schedule adopted by resolution may contain, however, future effective dates. (b) The Consolidated Government must have received, at or before issuance of the Additional Bonds, a report from an Independent Certified Public Accountant to the effect that the payments required to be made into B-15 each account of the Sinking Fund have been made and the balance in each account of the Sinking Fund is not less than the balance required by the Bond Resolution as of the date of issuance of the proposed Additional Bonds. (c) The Series Resolution authorizing the proposed Additional Bonds must require the proceeds of such proposed Additional Bonds to be used solely to make capital improvements to the System, to fund interest on the proposed Additional Bonds, to acquire existing or proposed water utilities, to refund other obligations issued for such purposes (whether or not such refunding Bonds satisfy the requirements described above), to fund debt service reserve funds for Bonds and to pay expenses incidental thereto and to the issuance of the proposed Additional Bonds. (d) If any Additional Bonds would bear interest at a Variable Rate, the Series Resolution under which such Additional Bonds are issued must provide a maximum rate of interest per annum which such Additional Bonds may bear. (e) The Administrator of the Consolidated Government and the Director of the Utilities Department of the Consolidated Government must have certified, by written certificate dated as of the date of issuance of the Additional Bonds, that the Consolidated Government is in compliance with all requirements of the Bond Resolution. (f) The Consolidated Government must have received an opinion of Bond Counsel, dated as of the date of issuance of the Additional Bonds, to the effect that the Series Resolution and any related Supplemental Resolution authorizing the issuance of Additional Bonds have been duly adopted by the Consolidated Government. Subordinate Bonds Under the terms of the Bond Resolution, Bonds may also be issued on a subordinate basis with the Senior Bonds pursuant to a Series Resolution, payable from moneys that would otherwise be deposited in the Utility General Fund, and the Bonds so issued will constitute Subordinate Bonds, if all of the following conditions are satisfied: (a) The Series Resolution authorizing the Subordinate Bonds must provide that such Subordinate Bonds will be junior and subordinate in lien and right of payment to all Senior Bonds Outstanding at any time. (b) The Series Resolution authorizing the Subordinate Bonds must establish funds and accounts for the moneys that would otherwise be deposited in the Utility General Fund, to be used to pay debt service on the Subordinate Bonds, to pay Hedge Payments under Subordinate Hedge Agreements, and to provide reserves therefor. (c) The requirements of clauses (c), (d), and (f) described herein under the caption “SUMMARY OF THE BOND RESOLUTION - Additional Bonds” in this Appendix C are met with respect to such Subordinate Bonds (as if such Bonds constituted Additional Bonds). In the event of any insolvency or bankruptcy proceedings, and any receivership, liquidation, reorganization, or other similar proceedings in connection therewith, relative to the Consolidated Government or to its creditors, as such, or to its property, and in the event of any proceedings for voluntary liquidation, dissolution, or other winding up of the Consolidated Government, whether or not involving insolvency or bankruptcy, the owners of all Senior Bonds then Outstanding and related Qualified Hedge Providers will be entitled to receive payment in full of all principal and interest due on all such Senior Bonds in accordance with the provisions of the Bond Resolution and related Hedge Payments in accordance with the provisions of the Senior Hedge Agreements before the owners of the Subordinate Bonds or Qualified Hedge Providers are entitled to receive any payment from the Pledged Revenues or the amounts held in the funds and accounts created under the Bond Resolution on account of principal of, premium, if any, or interest on the Subordinate Bonds or Hedge Payments under Subordinate Hedge Agreements. B-16 In the event that any of the Subordinate Bonds are declared due and payable before their expressed maturities because of the occurrence of an event of default (under circumstances when the provisions of the immediately preceding paragraph relating to insolvency are not applicable), the owners of all Senior Bonds Outstanding and related Qualified Hedge Providers at the time such Subordinate Bonds so become due and payable because of the occurrence of such an event of default will be entitled to receive payment in full of all principal and interest on all such Senior Bonds and all Hedge Payments under related Senior Hedge Agreements before the owners of the Subordinate Bonds or related Qualified Hedge Providers are entitled to receive any accelerated payment from the Pledged Revenues or the amounts held in the funds and accounts created under the Bond Resolution of principal of, premium, if any, or interest on the Subordinate Bonds or Hedge Payments under Subordinate Hedge Agreements. If any Event of Default has occurred and is continuing (under circumstances when the provisions of the second preceding paragraph under this heading relating to insolvency are not applicable), the owners of all Senior Bonds then Outstanding and related Qualified Hedge Providers will be entitled to receive payment in full of all principal and interest then due on all such Senior Bonds and Hedge Payments under related Senior Hedge Agreements before the owners of the Subordinate Bonds or related Qualified Hedge Providers are entitled to receive any payment from the Pledged Revenues or the amounts held in the funds and accounts created under the Bond Resolution of principal of, premium, if any, or interest on the Subordinate Bonds or Hedge Payments under Subordinate Hedge Agreements. No owner of Senior Bonds or any related Qualified Hedge Provider will be prejudiced in its right to enforce subordination of the Subordinate Bonds and Subordinate Hedge Agreements by any act or failure to act on the part of the Consolidated Government. The obligations of the Consolidated Government to pay to the owners of the Subordinate Bonds the principal of, premium, if any, and interest thereon in accordance with their terms and to pay to related Qualified Hedge Providers Hedge Payments in accordance with the terms of the Subordinate Hedge Agreements is unconditional and absolute. Nothing in the Bond Resolution prevents the owners of the Subordinate Bonds or related Qualified Hedge Providers from exercising all remedies otherwise permitted by applicable law or under the Bond Resolution or the Subordinate Hedge Agreements upon default thereunder, subject to the rights contained in the Bond Resolution of the owners of Senior Bonds and related Qualified Hedge Providers to receive cash, property, or securities otherwise payable or deliverable to the owners of the Subordinate Bonds and related Qualified Hedge Providers, and any Series Resolution authorizing Subordinate Bonds may provide that, insofar as a trustee or paying agent for the Subordinate Bonds is concerned, the provisions described above will not prevent the application by such trustee or paying agent of any moneys deposited with such trustee or paying agent for the purpose of the payment of or on account of the principal of, premium, if any, and interest on such Subordinate Bonds and Hedge Payments under Subordinate Hedge Agreements if such trustee or paying agent did not have knowledge at the time of such application that such payment was prohibited by the provisions described above. Any series of Subordinate Bonds and related Subordinate Hedge Agreements may have such rank or priority with respect to any other series of Subordinate Bonds and related Subordinate Hedge Agreements as may be provided in the Series Resolution authorizing such series of Subordinate Bonds and may contain such other provisions as are not in conflict with the provisions of the Bond Resolution. By proceedings authorizing Subordinate Bonds, the Consolidated Government may provide for the accession of such Subordinate Bonds and related Subordinate Hedge Agreements to the status of complete parity with the Senior Bonds and related Senior Hedge Agreements if, as of the date of accession, the conditions of clauses (a)(i) and (f) described herein under the caption “SUMMARY OF THE BOND RESOLUTION - Additional Bonds” in this Appendix C are satisfied, on a basis that includes all Outstanding Senior Bonds and such Subordinate Bonds, and if on the date of accession: (a) the Debt Service Reserve Account contains an amount equal to the Debt Service Reserve Requirement; and (b) the Interest Account, the Principal Account, and the Hedge Payments Account contain the amounts that would have been required to be accumulated therein on the date of accession if the Subordinate Bonds had originally been issued as Additional Bonds. B-17 Financial Facilities and Hedge Agreements In connection with the issuance of any Bonds under the Bond Resolution, the Consolidated Government may obtain or cause to be obtained one or more Financial Facilities providing for payment of all or a portion of the principal of, premium, if any, or interest due or to become due on such Bonds, providing for the purchase of such Bonds by the Financial Facility Issuer, or providing funds for the purchase of such Bonds by the Consolidated Government. In connection therewith the Consolidated Government will enter into Financial Facility Agreements with such Financial Facility Issuers providing for, among other things, (i) the payment of fees and expenses to such Financial Facility Issuers for the issuance of such Financial Facilities; (ii) the terms and conditions of such Financial Facilities and the Bonds affected thereby; and (iii) the security, if any, to be provided for the issuance of such Financial Facilities. The Consolidated Government may secure any Financial Facility by an agreement providing for the purchase of the Bonds secured thereby with such adjustments to the rate of interest, method of determining interest, maturity, or redemption provisions as are specified by the Consolidated Government in the applicable Series Resolution. The Consolidated Government may in a Financial Facility Agreement agree to directly reimburse such Financial Facility Issuer for amounts paid under the terms of such Financial Facility, together with interest thereon; provided, however, that no Reimbursement Obligation may be created for purposes of the Bond Resolution until amounts are paid under such Financial Facility. Any such Reimbursement Obligation will be deemed to be a part of the Bonds to which the Financial Facility relates that gave rise to such Reimbursement Obligation, and references to principal and interest payments with respect to such Bonds must include principal and interest (except for Additional Interest and principal amortization requirements with respect to the Reimbursement Obligation that are more accelerated than the amortization requirements for the related Bonds, without acceleration) due on the Reimbursement Obligation incurred as a result of payment of such Bonds with the Financial Facility. All other amounts payable under the Financial Facility Agreement (including any Additional Interest and principal amortization requirements with respect to the Reimbursement Obligation that are more accelerated than the amortization requirements for the related Bonds, without acceleration) will be fully subordinate to the payment of debt service on the related class of Bonds. Any such Financial Facility will be for the benefit of and secure such Bonds or portion thereof as specified in the applicable Series Resolution. In connection with the issuance of any Bonds or at any time thereafter so long as such Bonds remain Outstanding, the Consolidated Government may enter into Hedge Agreements with Qualified Hedge Providers, and no other providers, with respect to any Bonds. The Consolidated Government will authorize the execution, delivery, and performance of each Hedge Agreement in a Supplemental Resolution, in which it will designate the related Hedged Bonds. The Consolidated Government’s obligation to pay Hedge Payments may be secured by a pledge of, and lien on, the Pledged Revenues on a parity with the lien created by the provisions of the Bond Resolution described herein under the caption “SUMMARY OF THE BOND RESOLUTION - Pledged Revenues” in this Appendix C to secure the related Hedged Bonds, or may be subordinated in lien and right of payment to the payment of the Bonds, as determined by the Consolidated Government. Operation and Maintenance of the System The Consolidated Government covenanted in the Bond Resolution that it will enforce reasonable rules and regulations governing the System and the operation thereof, that all compensation, salaries, fees, and wages paid by it in connection with the operation, maintenance, and repair of the System will be reasonable, and that no more persons will be employed by it than are necessary, that it will operate the System in an efficient and economical manner and will at all times maintain the System in good repair and in sound operating condition, that it will make all necessary repairs, renewals, and replacements to the System, and that it will comply with all valid acts, rules, regulations, orders, and directions of any legislative, executive, administrative, or judicial body applicable to the System and the Consolidated Government’s operation thereof. Insurance With respect to the System, the Consolidated Government agreed in the Bond Resolution to carry adequate public liability, fidelity, and property insurance, such as is maintained by similar utilities as the System, including but not limited to the following: (a) comprehensive general liability insurance on an occurrence or claims made basis; and B-18 (b) the following properties must at all times be insured to the full insurable value thereof with a responsible insurance company or companies, authorized and qualified under the laws of the State to assume the risks thereof against loss or damage from the following causes: (i) all buildings and all machinery and equipment therein against loss or damage by fire, lightning, tornado, winds, and explosions; and (ii) all other property against loss or damage by fire or lightning if the same is not fireproof, and against loss or damage from other causes customarily insured against by similar utilities of like size; and (c) fidelity bonds or policies covering all agents, employees, and officials of the Consolidated Government whose duties involve the receipt, custody, investment, or disbursement of Operating Revenues, Investment Earnings, Hedge Receipts, or other Pledged Revenues, including proceeds from the sale of Bonds, in an amount not less than the greatest amount reasonably anticipated to be within the custody or control of such officer, agent, or employee at one time. The Consolidated Government agreed in the Bond Resolution to indemnify itself against the usual hazards incident to the construction of any Project, and without in any way limiting the generality of the above, agreed to: (a) require each construction contractor and each subcontractor to furnish a bond, or bonds, of such type and in amounts adequate to assure the faithful performance of their contracts and the payment of all bills and claims for labor and material arising by virtue of such contracts; and (b) require each construction contractor or the subcontractor to maintain at all times until the completion and acceptance of the Project adequate compensation insurance for all of their employees and adequate public liability and property damage insurance for the full and complete protection of the Consolidated Government from any and all claims of every kind and character which may arise by virtue of the operations under their contracts, whether such operations be by themselves or by anyone directly or indirectly for them, or under their control. All such policies must be for the benefit of and made payable to the Consolidated Government and must be on deposit with the Consolidated Government; provided, however, the Consolidated Government may elect to be a self- insurer with respect to any risks for which insurance is required under the Bond Resolution. The cost of such insurance may be paid as an Expense of Operation and Maintenance. All moneys received for losses under any such insurance policies, except public liability policies, are pledged by the Consolidated Government under the Bond Resolution as security for the Bonds until and unless such proceeds are paid out in making good the loss or damage in respect of which such proceeds are received, either by repairing the property damaged or replacing the property destroyed or by depositing the same in the Utility General Fund. Adequate provision for making good such loss and damage must be made within 120 days from the date of the loss. Insurance proceeds not used in making such provision must be deposited in the Utility General Fund on the expiration of such 120-day period. Such insurance proceeds must be payable to the Consolidated Government by appropriate clause to be attached to or inserted in the policies. Sales, Leases, and Encumbrances Except as expressly permitted in the Bond Resolution, the Consolidated Government irrevocably covenanted, bound, and obligated itself in the Bond Resolution not to sell, lease, encumber, or in any manner dispose of the System as a whole or in part until all of the Bonds and all interest thereon are paid in full or provision for payment has been made. The Consolidated Government reserved the right in the Bond Resolution to sell, lease, or otherwise dispose of any of the property comprising a part of the System in the following manner, if any one of the following conditions exists: (a) such property is not necessary for the operation of the System; (b) such property is not useful in the operation of the System; (c) such property is not profitable in the operation of the System; or (d) the disposition of such property will be advantageous to the System and will not adversely affect the security for the Bondholders. All proceeds of any such sale must be deposited in the Utility General Fund. The Consolidated Government reserves the right to sell or transfer any portion of the System to any political subdivision or authority or agency of one or more political subdivisions of the State, provided that there must be first filed with the Consolidated Government: (a) an opinion of Bond Counsel to the effect that such sale will not adversely affect the extent to which interest on any Tax-Exempt Bonds is excluded from gross income for federal B-19 income tax purposes; and (b) an opinion of an Independent Consulting Engineer expressing the view that such sale will not result in any diminution of Pledged Revenues to the extent that in any future Fiscal Year the Pledged Revenues will be less than 125% of the maximum annual Debt Service Requirement on all Senior Bonds to be Outstanding after such sale, in the then current or any succeeding Fiscal Year. In reaching this conclusion, the Independent Consulting Engineer must take into consideration such factors as the Independent Consulting Engineer may deem significant, including (a) anticipated diminution of Operating Revenues, (b) anticipated increase or decrease in Expenses of Operation and Maintenance attributable to the sale, and (c) reduction in the annual Debt Service Requirement attributable to the application of the sale proceeds to the provision for payment of Bonds theretofore Outstanding. Such sale may include a partial interest in a water or sewer facility owned or to be owned in whole or in part by the Consolidated Government. All proceeds of any such sale will be deposited in the Utility General Fund. The Consolidated Government reserves the right to transfer the System as a whole to any political subdivision or authority or agency of one or more political subdivisions of the State to which may be delegated the legal authority to own and operate the System, or any portion thereof, on behalf of the public, and which undertakes in writing, filed with the Consolidated Government, the Consolidated Government’s obligations under the Bond Resolution, provided that there must be first filed with the Consolidated Government: (a) an opinion of Bond Counsel to the effect that such sale will not adversely affect the extent to which interest on any Tax-Exempt Bonds is excludable from gross income for federal income tax purposes; and (b) an opinion of an Independent Consulting Engineer expressing the view that such transfer will not result in any diminution of Pledged Revenues to the extent that in any future Fiscal Year the Pledged Revenues will be less than 125% of the maximum annual Debt Service Requirement on all Senior Bonds to be Outstanding after such sale, in the then current or any succeeding Fiscal Year. In reaching this conclusion, the Independent Consulting Engineer must take into consideration such factors as the Independent Consulting Engineer may deem significant, including any rate schedule to be imposed by the transferee political subdivision, authority, or agency. Financial Statements The Consolidated Government agreed in the Bond Resolution, after the close of each Fiscal Year, to cause the books, records, and accounts of the System to be properly audited by an Independent Certified Public Accountant and to require such Independent Certified Public Accountant to complete its report within 180 days after the close of the Fiscal Year. The audit report must cover, but need not be limited to, a balance sheet, an income statement, a cash flow statement, and any other statement required by law or accounting convention, and a report by such Independent Certified Public Accountant disclosing any material financial default on the part of the Consolidated Government in the performance of any covenant in the Bond Resolution. A copy of such annual audit report must be made available to any Bondholder, Financial Facility Issuer, Qualified Hedge Provider, or Reserve Account Credit Facility Provider on request. Satisfaction of Liens The Consolidated Government agreed in the Bond Resolution to duly pay and discharge or cause to be paid and discharged all taxes, assessments, and other governmental charges, if any, lawfully imposed upon the System or any part thereof or upon the Pledged Revenues, as well as any lawful claims for labor, materials, or supplies that if unpaid might by law become a lien or charge upon the System or the Pledged Revenues or any part thereof or that might impair the security of the Bonds, except when the Consolidated Government in good faith contests its liability to pay the same. Compulsory Sewer Connections The Consolidated Government has agreed, to the extent permitted by law, and to the extent not prevented by physical impediments, to require every owner of each lot and parcel of land in the jurisdiction which is served by the Consolidated Government and which abuts upon any street or public way containing a sewage line forming a part of the System and upon which lot a building must subsequently be constructed for residential, commercial, or industrial use, to connect such building to such sewage line and to refrain from using any other method for the disposal of sewage. B-20 Enforcement of Charges and Connections The Consolidated Government has agreed to compel the prompt payment of rates, fees, and charges imposed for service rendered on every lot or parcel connected with the System, and to that end will vigorously enforce all of the provisions of any resolution or ordinance of the Consolidated Government having to do with water and sewer connections and with water and sewer charges, and all of the rights and remedies permitted the Consolidated Government under law. The Consolidated Government has expressly covenanted and agreed that such charges will be enforced and promptly collected to the full extent permitted by law, including the requirement for the making of reasonable deposits by customers of the System to the extent required by the Consolidated Government and the securing of injunctions against the disposition of sewage or industrial waste into the System by any premises delinquent in the payment of such charges. Events of Default and Remedies The Bond Resolution defines an “Event of Default” to mean the occurrence of any one or more of the following: (a) failure to pay the principal or redemption price of any Senior Bond when the same becomes due and payable, either at maturity or by proceedings for redemption or otherwise; or (b) failure to pay any installment of interest on any Senior Bond when and as such installment of interest becomes due and payable; or (c) default is made by the Consolidated Government in the performance of any obligation in respect to the Debt Service Reserve Account for the Senior Bonds and such default continues for 30 days thereafter; or (d) the Consolidated Government (i) admits in writing its inability to pay its debts generally as they become due, (ii) files a petition in bankruptcy or takes advantage of any insolvency act, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a receiver of itself or of the whole or any substantial part of its property, or (v) is adjudicated as bankrupt; or (e) a court of competent jurisdiction enters an order, judgment, or decree appointing a receiver of the System or any of the funds or accounts established in the Bond Resolution, or of the whole or any substantial part of the Consolidated Government’s property, or approving a petition seeking reorganization of the Consolidated Government under the federal bankruptcy laws or any other applicable law or statute of the United States of America or the State, and such order, judgment, or decree is not vacated or set aside or stayed within 60 days from the date of the entry thereof; or (f) under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction assumes custody or control of any of the funds or accounts established in the Bond Resolution, or of the Consolidated Government or of the whole or any substantial part of the Consolidated Government’s property, and such custody or control is not terminated or stayed within 60 days from the date of assumption of such custody or control; or (g) the Consolidated Government fails to perform any of the other covenants, conditions, agreements, and provisions contained in the Senior Bonds or in the Bond Resolution on the part of the Consolidated Government to be performed (other than with respect to its continuing disclosure obligations), and such failure continues for 90 days after written notice specifying such failure and requiring it to be remedied has been given to the Consolidated Government by the owners of not less than, or a Credit Facility Issuer securing not less than, 25% in aggregate principal amount of the Senior Bonds; provided, however, if the failure stated in such notice can be corrected, but not within such 90 day period, the Consolidated Government will have 180 days after such written notice to cure such default if corrective action is instituted by the Consolidated Government within such 90 day period and diligently pursued until the failure is corrected; or (h) an Event of Default under any Series Resolution relating to Senior Bonds occurs; or B-21 (i) failure by any Liquidity Facility Issuer to pay the purchase price of Senior Bonds under any Liquidity Facility then in effect; or (j) delivery to the Consolidated Government by a Credit Facility Issuer of written notice stating that an “Event of Default” has occurred under any Credit Facility Agreement relating to the Senior Bonds; or (k) delivery to the Consolidated Government by a Qualified Hedge Provider of written notice stating that an “Even of Default” has occurred under any Senior Hedge Agreement. Upon the happening and continuance of any Event of Default specified in clauses (a) or (b) above, then and in every such case, the principal of all Senior Bonds then Outstanding becomes due and payable immediately, together with the interest accrued thereon to the date of such acceleration, at the place of payment provided therein, and interest on the Senior Bonds ceases to accrue after the date of such acceleration, anything in the Bond Resolution or in the Senior Bonds to the contrary notwithstanding. Upon the happening and continuance of any Event of Default described above (except in clauses (a), (b), (i), (j) and (k)), then and in every such case, upon the written declaration of the owners of more than 50% in aggregate principal amount of all Senior Bonds then Outstanding or upon the written demand of a Credit Facility Issuer securing more than 50% in aggregate principal amount of the Senior Bonds then Outstanding, the principal of all Senior Bonds then Outstanding will become due and payable immediately, together with the interest accrued thereon to the date of such acceleration, at the place of payment provided therein, and interest on the Senior Bonds will cease to accrue after the date of such acceleration, anything in the Bond Resolution or in the Senior Bonds to the contrary notwithstanding. Upon any declaration of acceleration under the Bond Resolution, the Consolidated Government must immediately draw under the applicable Credit Facility to the extent permitted by the terms thereof that amount which, together with other amounts on deposit under the Bond Resolution, will be sufficient to pay the principal of and accrued interest on the related Senior Bonds so accelerated. The above provisions, however, are subject to the condition that if, after the principal of the Senior Bonds has been so accelerated, all arrears of interest upon such Bonds, and interest on overdue installments of interest at the rate on such Bonds has been paid by the Consolidated Government, the principal of such Bonds that has matured (except the principal of any Bonds not then due by their terms except as described above) has been paid, and the Consolidated Government has also performed all other things in respect to which it may have been in default under the Bond Resolution, and the Credit Facility Issuer must have reinstated the Credit Facility in the full amount available to be drawn thereunder by written notice to the Consolidated Government, then, in every such case, the owners of more than 50% in aggregate principal amount of all Senior Bonds then Outstanding by written notice to the Consolidated Government, may waive such default and its consequences and such waiver will be binding upon the Consolidated Government and upon all owners of the Bonds; but no such waiver will extend to or affect any subsequent default or impair any right or remedy consequent thereon. Notwithstanding the foregoing, as long as the applicable Credit Facility Issuer does not then continue to dishonor draws under the Credit Facility, no Event of Default with respect to the related Senior Bonds may be waived without the express written consent of such Credit Facility Issuer. Upon the happening and continuance of any Event of Default, any owner of Senior Bonds then Outstanding affected by the Event of Default or a duly authorized agent for such owner may proceed to protect and enforce its rights and the rights of the owners of Senior Bonds by such of the following remedies as it may deem most effectual to protect and enforce such rights: (a) by mandamus or other suit, action, or proceeding at law or in equity, enforce all rights of the owners of Senior Bonds, including the right to require the appointment of a receiver for the System or to exercise any other right or remedy provided by the Revenue Bond Law and to require the Consolidated Government to perform any other covenant or agreement contained in the Bond Resolution and to perform its duties under the Revenue Bond Law; (b) by bringing suit upon the Senior Bonds; B-22 (c) by action or suit in equity, require the Consolidated Government to account as if it were the trustee of an express trust for the owners of the Senior Bonds; (d) by action or suit in equity, enjoin any acts or things that may be unlawful or in violation of the rights of the owners of the Senior Bonds; or (e) by pursuing any other available remedy at law or in equity or by statute. In the enforcement of any remedy under the Bond Resolution, owners of Senior Bonds will be entitled to sue for, enforce payment on, and receive any and all amounts then or during any default becoming, and at any time remaining, due from the Consolidated Government for principal, redemption premium, interest, or otherwise, under any provision of the Bond Resolution or of the Senior Bonds, and unpaid, with interest on overdue payments at the rate or rates of interest specified in such Senior Bonds, together with any and all costs and expenses of collection and of all proceedings under the Bond Resolution and under such Senior Bonds, without prejudice to any other right or remedy of the owners of Senior Bonds, and to recover and enforce a judgment or decree against the Consolidated Government for any portion of such amounts remaining unpaid, with interest, costs, and expenses, and to collect from any moneys available for such purpose, in any manner provided by law, the moneys adjudged or decreed to be payable. If an Event of Default occurs and is not remedied, the Consolidated Government or a receiver appointed for the purpose will apply all Pledged Revenues as follows and in the following order of priority: (a) Expenses of Receiver and Paying Agent and Bond Registrar - to the payment of the reasonable and proper charges, expenses, and liabilities of the receiver and the Paying Agent and Bond Registrar under the Bond Resolution; (b) Expenses of Operation and Maintenance and Renewals and Replacements - to the payment of all reasonable and necessary Expenses of Operation and Maintenance and major renewals and replacements to the System; (c) Principal or Redemption Price, Interest and Hedge Payments - to the payment of the interest and principal or redemption price then due on the Senior Bonds and Hedge Payments then due under Senior Hedge Agreements, as follows: (i) Unless the principal of all the Senior Bonds has become due and payable, all such moneys will be applied as follows: first: To the payment to the persons entitled thereto of all installments of interest then due on the Senior Bonds, in the order of the maturity of such installments (with interest on defaulted installments of interest at the rate or rates borne by the Senior Bonds with respect to which such interest is due, but only to the extent permitted by law), and, if the amount available is not sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or preference. As to any Compound Interest Bond that is a Senior Bond, such interest will accrue on the Accreted Value of such Bond and be set aside on a daily basis until the next compounding date for such Bonds, whereupon it will be paid to the owner of such Bond as interest on a defaulted obligation and only the unpaid portion of such interest (if any) will be treated as principal of such Bond. second: to the payment of the Hedge Payments due under any Senior Hedge Agreements pursuant to their terms. third: to the payment to the persons entitled thereto of the unpaid principal of any of the Senior Bonds that will have become due at maturity or upon mandatory redemption prior to maturity (other than Senior Bonds called for redemption for the payment of which moneys are held under the Bond Resolution), in the order of their due dates, with interest upon such Senior Bonds from the respective B-23 dates upon which they became due, and, if the amount available is not sufficient to pay in full Senior Bonds due on any particular date, together with such interest, then to the payment first of such interest, ratably according to the amount of such interest due on such date, and then to the payment of such principal, ratably according to the amount of such principal due on such date, to the persons entitled thereto without any discrimination or preference. The Accreted Value of a Compound Interest Bond that is a Senior Bond (except for interest that has been paid under paragraph first) will be treated as principal for purposes of this paragraph third. fourth: to the payment of the redemption premium on and the principal of any Senior Bonds called for optional redemption pursuant to their terms. (ii) If the principal of all the Senior Bonds has become due and payable, all such moneys must be applied to the payment of the principal and interest then due and unpaid upon the Senior Bonds, with interest thereon as aforesaid, and due and unpaid Hedge Payments under Senior Hedge Agreements, without preference or priority of principal over interest or Hedge Payments or of interest over principal or Hedge Payments, or of Hedge Payments over principal or interest, or of any installment of interest over any other installment of interest, or of any Senior Bond over any other Senior Bonds, or of any such Hedge Payment over any other such Hedge Payment, ratably, according to the amounts due respectively for principal, interest, and Hedge Payments, to the persons entitled thereto without any discrimination or preference. Rights of Credit Facility Issuer Notwithstanding any other provision of the Bond Resolution, in the event that the Consolidated Government draws under a Credit Facility any amount for the payment of principal of or interest on any Bonds, then upon such payment the Credit Facility Issuer will succeed to and become subrogated to the rights of the recipients of such payments and such principal or interest will be deemed to continue to be unpaid and Outstanding for all purposes and will continue to be fully secured by the Bond Resolution until the Credit Facility Issuer, as successor and subrogee, has been paid all amounts owing in respect of such subrogated payments of principal and interest. Such rights will be limited and evidenced by having the Consolidated Government note the Credit Facility Issuer’s rights as successor and subrogee on its records, and the Consolidated Government must, upon request, deliver to the Credit Facility Issuer (a) in the case of interest on the Bonds, an acknowledgment of the Credit Facility Issuer’s ownership of interest to be paid on the Bonds specifying the amount of interest owed, the period represented by such interest, and the numbers of the Bonds on which such interest is owed and (b) in the case of principal of the Bonds, either the Bonds themselves duly assigned to the Credit Facility Issuer or new Bonds registered in the name of the Credit Facility Issuer or in such other name as the Credit Facility Issuer specifies. Whenever moneys become available for the payment of any interest then overdue, the Credit Facility Issuer will be treated as to interest owed to it as successor and subrogee as if it had been the Bondholder of the Bonds on which such interest is payable on any special record date therefor. Defeasance Bonds for the payment or redemption of which sufficient moneys or sufficient Government Obligations have been deposited with the Paying Agent or the Depository of the Sinking Fund (whether upon or prior to the maturity or the redemption date of such Bonds) will be deemed to be paid and no longer Outstanding under the Bond Resolution; provided, however, that if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption must have been duly given as provided in the Bond Resolution or firm and irrevocable arrangements must have been made for the giving of such notice. Government Obligations will be considered sufficient for purposes of this paragraph only: (a) if such Government Obligations are not callable by the issuer of the Government Obligations prior to their stated maturity and (b) if such Government Obligations fall due and bear interest in such amounts and at such times as will assure sufficient cash (whether or not such Government Obligations are redeemed by the Consolidated Government pursuant to any right of redemption) to pay currently maturing interest and to pay principal and redemption premiums, if any, when due on the Bonds without rendering the interest on any Tax- Exempt Bonds includable in gross income of any owner thereof for federal income tax purposes. B-24 Supplemental Resolutions The Consolidated Government, from time to time and at any time, subject to the conditions and restrictions in the Bond Resolution, may adopt one or more Supplemental Resolutions which thereafter will form a part of the Bond Resolution, for any one or more or all of the following purposes: (a) to add to the covenants and agreements of the Consolidated Government in the Bond Resolution other covenants and agreements thereafter to be observed or to surrender, restrict, or limit any right or power reserved in the Bond Resolution to or conferred upon the Consolidated Government (including but not limited to the right to issue Additional Bonds); (b) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting, or supplementing any defective provision contained in the Bond Resolution, or in regard to matters or questions arising under the Bond Resolution, as the Consolidated Government may deem necessary or desirable and not inconsistent with the Bond Resolution; (c) to grant to or confer any additional rights, remedies, powers, or authorities that may be lawfully granted to or conferred upon the owners of the Bonds; (d) to subject to the lien and pledge of the Bond Resolution additional revenues, receipts, properties, or other collateral; (e) to evidence the appointment of successors to any Depositories, Paying Agent(s), or Bond Registrar(s); (f) to modify, amend, or supplement the Bond Resolution in such manner as to permit the qualification of the Bond Resolution under the Trust Indenture Act of 1939 or any federal statute hereinafter in effect, and similarly to add to the Bond Resolution such other terms, conditions, and provisions as may be permitted or required by such Trust Indenture Act of 1939 or any similar federal statute; (g) to make any modification or amendment of the Bond Resolution required in order to make any Bonds eligible for acceptance by DTC or any similar holding institution or to permit the issuance of any Bonds or interests therein in Book-Entry Form; (h) to modify any of the provisions of the Bond Resolution in any respect if such modification does not become effective until after the Bonds Outstanding immediately prior to the effective date of such Supplemental Resolution cease to be Outstanding and if any Bonds issued contemporaneously with or after the effective date of such Supplemental Resolution contain a specific reference to the modifications contained in such subsequent proceedings; (i) subject to the provisions of the Bond Resolution, to modify the provisions of the Bond Resolution with respect to the disposition of any moneys remaining in the Construction Fund upon the completion of any Project; (j) to modify the Bond Resolution to permit the qualification of any Bonds for offer or sale under the securities laws of any state in the United States of America; (k) to modify the Bond Resolution to provide for the issuance of Additional Bonds or Subordinate Bonds, and such modification may deal with any subjects and make any provisions that the Consolidated Government deems necessary or desirable for that purpose; (l) to make such modifications in the provisions of the Bond Resolution as may be deemed necessary by the Consolidated Government to accommodate the issuance of Bonds that (i) are Compound Interest Bonds (including, but not limited to, provisions for determining the Debt Service Requirement for such Compound Interest Bonds and for treatment of Accreted Value in making such determination) or (ii) bear interest at a Variable Rate; and B-25 (m) to modify any of the provisions of the Bond Resolution in any respect (other than a modification of the type described in the Bond Resolution requiring the unanimous written consent of the Bondholders); provided that for (i) any Outstanding Bonds which are assigned a Rating and which are not secured by a Credit Facility providing for the payment of the full amount of principal and interest to be paid thereon, each Rating Agency has given written notification to the Consolidated Government that such modification will not cause the then applicable Rating on any Bonds to be reduced or withdrawn, and (ii) any Outstanding Bonds which are secured by Credit Facilities providing for the payment of the full amount of the principal and interest to be paid thereon, each Credit Facility Issuer has consented in writing to such modification. Any Supplemental Resolution described above may be adopted by the Consolidated Government without the consent of or notice to the owners of any of the Bonds at the time Outstanding. Supplemental Resolutions Requiring Consent of Bondholders In addition to the Supplemental Resolutions described above, with the consent of the owners of not less than a majority in aggregate principal amount of the Outstanding Bonds of each class (senior and subordinate), voting separately by class, the Consolidated Government may from time to time and at any time adopt a Supplemental Resolution for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Bond Resolution or of any Supplemental Resolution; provided, however, that no such Supplemental Resolution may: (a) extend the maturity date or due date of any mandatory sinking fund redemption with respect to any Bond Outstanding under the Bond Resolution; (b) reduce or extend the time for payment of principal of, redemption premium, or interest on any Bond Outstanding under the Bond Resolution; (c) reduce any premium payable upon the redemption of any Bond under the Bond Resolution or advance the date upon which any Bond may first be called for redemption prior to its stated maturity date; (d) give to any Senior Bond or Senior Bonds (or related Senior Hedge Agreements) a preference over any other Senior Bond or Senior Bonds (or related Senior Hedge Agreements); (e) permit the creation of any lien or any other encumbrance on the Pledged Revenues having a lien equal to or prior to the lien created under the Bond Resolution for the Senior Bonds; (f) reduce the percentage of owners of either class of Bonds required to approve any such Supplemental Resolution; or (g) deprive the owners of the Bonds of the right to payment of the Bonds or from the Pledged Revenues, without, in each case, the consent of the owners of all the Bonds then Outstanding. No amendment may be made as described above that affects the rights or duties of any Financial Facility Issuer securing any of the Bonds or any Qualified Hedge Provider under any Hedge Agreement without its written consent. Notwithstanding any provision of the Bond Resolution to the contrary, upon the issuance of a Credit Facility to secure any Bonds and for the period in which such Credit Facility is outstanding, the Credit Facility Issuer may have the consent rights of the owners of the Bonds that are secured by such Credit Facility pertaining to some or all of the amendments or modifications of the Bond Resolution, to the extent provided in the applicable Series Resolution. Notwithstanding the foregoing, if a Credit Facility Issuer is granted the consent rights of the owners of any Bonds in a Series Resolution and refuses to exercise such consent rights, either affirmatively or negatively, then the registered owners of the Bonds secured by the related Credit Facility may exercise such consent rights. # # # # # # # # # # # # # # # # # # # # # # # 7KLV#SDJH#LQWHQWLRQDOO\#OHIW#EODQN1# APPENDIX C FORM OF BOND COUNSEL OPINION # # # # # # # # # # # # # # # # # # # # # # # 7KLV#SDJH#LQWHQWLRQDOO\#OHIW#EODQN1# [FORM OF OPINION OF BOND COUNSEL] __________, 2017 Augusta, Georgia Augusta, Georgia Re: $___________ Augusta, Georgia Water and Sewerage Revenue Refunding Bonds, Series 2017 Ladies and Gentlemen: We have acted as Bond Counsel in connection with the issuance and delivery on this date by Augusta, Georgia (the “Consolidated Government”) of $___________ in original aggregate principal amount of revenue bonds designated “Augusta, Georgia Water and Sewerage Revenue Refunding Bonds, Series 2017,” dated the date hereof (the “Bonds”). We have examined the law and such certified proceedings and other papers authorizing and relating to the Bonds as we deem necessary to render this opinion, including the following: 1. An Act of the General Assembly of the State of Georgia known as the “Revenue Bond Law,” codified as Article 3 of Chapter 82 of Title 36 of the Official Code of Georgia Annotated (the “Revenue Bond Law”). 2. Certified copies of a Master Bond Resolution adopted by the Augusta-Richmond County Commission (the “Commission”) on October 16, 2012, as ratified, reaffirmed, supplemented, and amended by a Parity Bond Resolution adopted by the Commission on June 18, 2013, a Supplemental Bond Resolution adopted by the Commission on July 16, 2013, a Series 2014 Bond Resolution adopted by the Commission on August 25, 2014, a Supplemental Series 2014 Bond Resolution adopted by the Commission on September 16, 2014, a Series 2017 Bond Resolution adopted by the Commission on September 5, 2017, and a Supplemental Series 2017 Bond Resolution adopted by the Commission on __________, 2017 (collectively the “Bond Resolution”). 3. Certified transcript of the validation proceedings in the Superior Court of Richmond County, Georgia, resulting in a final judgment entered on __________, 2017, validating and confirming the Bonds and the security therefor. 4. A fully executed counterpart of the No Arbitrage and Tax Certificate of the Consolidated Government (the “Tax Certificate”), dated the date hereof. The Bonds are being issued under and pursuant to the Revenue Bond Law and the Bond Resolution for the purpose of refunding $123,755,000 in aggregate principal amount of the Consolidated Government’s Water and Sewerage Revenue Refunding Bonds, Series 2007, maturing October 1, 2018 and thereafter. C-1 Augusta, Georgia ___________, 2017 Page 2 As to questions of fact material to our opinion, we have relied upon the following items, without undertaking to verify any of them by independent investigation: (a) certified proceedings and other certifications of public officials furnished to us, (b) certifications furnished to us by or on behalf of the Consolidated Government (including certifications made in the Tax Certificate), and (c) representations of the Consolidated Government contained in such proceedings and in documents delivered in connection with the issuance of the Bonds. In our capacity as Bond Counsel, we have not been engaged or undertaken to review the accuracy, completeness, or sufficiency of the Official Statement or any other offering material relating to the Bonds (except to the extent, if any, stated in the Official Statement), and we express no opinion relating thereto (excepting only the matters set forth as our opinion in the Official Statement). Based upon the foregoing and subject to the qualifications that follow, it is our opinion, as of the date hereof and under existing law, that: (1) The Consolidated Government was duly created and is validly existing as a political subdivision under the laws of the State of Georgia and has all requisite power and authority (i) to adopt and perform its obligations under the Bond Resolution and (ii) to issue, sell, and deliver the Bonds and use the proceeds thereof for the purposes and upon the terms and conditions set forth in the Bond Resolution. (2) The Bond Resolution has been duly adopted by the Consolidated Government and constitutes the legal, valid, and binding obligation of the Consolidated Government enforceable upon the Consolidated Government. (3) Pursuant to the Revenue Bond Law, the Bond Resolution creates a valid and enforceable lien on the funds pledged by the Bond Resolution to secure the Bonds, on a parity with any other Senior Bonds (as defined in the Bond Resolution) issued or to be issued by the Consolidated Government under the Bond Resolution and certain obligations of the Consolidated Government under Senior Hedge Agreements (as defined in the Bond Resolution). (4) The Bonds have been duly authorized, executed, issued, and delivered by the Consolidated Government and are the legal, valid, and binding special or limited obligations of the Consolidated Government, payable solely from the amounts pledged under the Bond Resolution. (5) Interest on the Bonds is excludable from gross income under federal income tax laws pursuant to Section 103 of the Internal Revenue Code of 1986, as amended to the date hereof (the “Code”), and interest on the Bonds is excludable from alternative minimum taxable income as defined in Section 55(b)(2) of the Code, except that such interest is required to be included in calculating the adjusted current earnings adjustment applicable to corporations for purposes of computing the federal alternative minimum taxable income of corporations. The opinion set forth in the preceding sentence is subject to the condition that the Consolidated Government comply with all C-2 Augusta, Georgia ___________, 2017 Page 3 requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The Consolidated Government has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. We express no opinion regarding any other federal tax consequences arising with respect to the Bonds. (6) The interest on the Bonds is exempt from State of Georgia income taxation. The rights of the owners of the Bonds and the enforceability of the Bonds and the Bond Resolution (i) may be limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting the enforcement of creditors’ rights, (ii) may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), and (iii) may also be subject to the exercise of judicial discretion in appropriate cases. This opinion is limited to the matters expressly set forth above, and no opinion is implied or may be inferred beyond the matters so stated. We expressly disclaim any duty to update this opinion in the future for any changes of fact or law that may affect any of the opinions expressed herein. Very truly yours, BUTLER SNOW LLP C-3 # # # # # # # # # # # # # # # # # # # # # # # 7KLV#SDJH#LQWHQWLRQDOO\#OHIW#EODQN1# APPENDIX D FORM OF CONTINUING DISCLOSURE AGREEMENT # # # # # # # # # # # # # # # # # # # # # # # 7KLV#SDJH#LQWHQWLRQDOO\#OHIW#EODQN1# CONTINUING DISCLOSURE AGREEMENT This Continuing Disclosure Agreement (this “Disclosure Agreement”) is executed and delivered by Augusta, Georgia (the “Consolidated Government”) a political subdivision of the State of Georgia, and Digital Assurance Certification, L.L.C. (“DAC”) in connection with the issuance by the Consolidated Government of $____________ in aggregate principal amount of its Water and Sewerage Revenue Refunding Bonds, Series 2017 (the “Series 2017 Bonds”). The Series 2017 Bonds are being issued pursuant to a bond resolution adopted by the Consolidated Government on October 16, 2012, as supplemented on June 18, 2013 and as supplemented on July 16, 2013, as supplemented by a Series 2014 Bond Resolution adopted by the Commission on August 25, 2014, as supplemented on September 16, 2014, and as further supplemented by a Series 2017 Bond Resolution adopted by the Commission on September 5, 2017, as supplemented on ___________, 2017 (as supplemented, the “Resolution”). The Consolidated Government hereby covenants and agrees as follows: Section 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Consolidated Government for the benefit of the Beneficial Owners (as herein defined) of the Series 2017 Bonds and in order to assist the Participating Underwriter (as herein defined) in complying with the Rule (as herein defined). Section 2. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized terms used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: “Annual Report” shall mean any Annual Report provided by the Consolidated Government pursuant to the Rule and this Disclosure Agreement. “Beneficial Owners” shall mean any person who (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series 2017 Bonds (including persons holding Series 2017 Bonds through nominees, depositories or other intermediaries) or (b) is treated as the owner of any Series 2017 Bonds for federal income tax purposes. “Consolidated Government” shall mean Augusta, Georgia, a political subdivision of the State of Georgia and its successors and assigns. “Dissemination Agent” shall mean any Dissemination Agent designated in writing by the Consolidated Government and which has filed with the Consolidated Government a written acceptance of such designation, and initially shall mean DAC. “EMMA” shall mean MSRB’s Electronic Municipal Market Access system. “Fiscal Year” shall mean any period of 12 consecutive months adopted by the Consolidated Government as its fiscal year for financial reporting purposes and shall initially D-1 mean the period beginning on January 1 of each calendar year and ending December 31 of the same calendar year. “Listed Events” shall mean any of the events listed in Section 5(a) of this Disclosure Agreement. “MSRB” shall mean the Municipal Securities Rulemaking Board, or any successor thereto. “Official Statement” shall mean the Official Statement of the Consolidated Government relating to the Series 2017 Bonds. “Participating Underwriter” shall mean the original purchaser of the Series 2017 Bonds who is required to comply with the Rule in connection with the offering of the Series 2017 Bonds. “Rule” shall mean Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. “State” shall mean the State of Georgia. “System” shall mean the water and sewerage system owned and operated by the Consolidated Government. Section 3. Provision of Annual Reports. (a) The Consolidated Government shall, or shall cause the Dissemination Agent (if any) to, not later than 210 days after the end of the Consolidated Government’s Fiscal Year (the “Reporting Date”), beginning for the Fiscal Year ending December 31, 2017, provide to the MSRB in an electronic format as prescribed by the MSRB (which, as of the date hereof, is EMMA) an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. Not later than 15 business days prior to the Reporting Date, the Consolidated Government shall provide the Annual Report to the Dissemination Agent (if any). In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Agreement; provided that the audited financial statements of the System may be submitted separately from the balance of the Annual Report (i.e., in the event that the audited financial statements have not been completed by the Reporting Date). In such event, the audited financial statements will be submitted promptly upon their availability. In the event that the audited financial statements are not available at the time of the Reporting Date and will be submitted at a later date, the Consolidated Government shall indicate in the Annual Report the date on which the audited financial statements of the System will be submitted. The audited financial statements of the System, when available, will be provided to the MSRB in an electronic format as prescribed by the MSRB (which, as of the date hereof, is EMMA). D-2 (b) The Consolidated Government or the Dissemination Agent (if any) shall also: (i) determine each year prior to the Reporting Date the appropriate electronic format prescribed by the MSRB for filing with the MSRB, the proper form of such filing and the proper location for such filing (which, as of the date hereof, is EMMA); (ii) if the Annual Report is not distributed/filed (or the audited financial statements which were to be separately submitted) by the date required in subsection (a), send a notice to the MSRB in an electronic format prescribed by the MSRB (which as of the date hereof is EMMA) in substantially the form attached hereto as Exhibit A; and (iii) if the Dissemination Agent is other than the Consolidated Government, file a report with the Consolidated Government certifying that the Annual Report has been provided pursuant to this Disclosure Agreement and the date provided. Section 4. Content of Annual Reports. The Consolidated Government’s Annual Report for each Fiscal Year shall contain or incorporate by reference the following: (a) The System’s financial statements for the preceding Fiscal Year, which are to be prepared in accordance with generally accepted accounting principles, as in effect from time to time and which shall be accompanied by an opinion letter, if available at the time of the submission of the Annual Report to the MSRB pursuant to Section 3(a) hereof, resulting from an audit conducted by an independent certified public accountant or firm of independent certified public accountants in conformity with generally accepted auditing standards. (b) If generally accepted accounting principles changed from the previous Fiscal Year and if such changes are material to the Consolidated Government, a narrative description (as required by Section 8 of this Disclosure Agreement) of the impact of the changes on the Consolidated Government. (c) A statement indicating that the Fiscal Year of the Consolidated Government has not changed, or, if the Fiscal Year has changed, a statement indicating the Consolidated Government’s new Fiscal Year. (d) To the extent not included in items provided pursuant to subsections (a) or (b) above, information for the preceding Fiscal Year regarding the following categories of financial information and operating data contained in the Official Statement: (i) average and maximum daily (in million gallons per day) water demand of the System, (ii) number of water connections by customer class of the System, (iii) ten largest water customers of the System, (iv) average and maximum daily (in million gallons per day) treated wastewater flow of the System, (v) number of sewer connections by customer class of the System, (vi) ten largest sewer customers of the System, (vii) rates, fees, and D-3 charges of the System, (viii) historical debt service coverage ratio of the System, (ix) total costs of capital improvements and funding sources of the System and (x) the insurance coverage of the Consolidated Government, including the System. Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the Consolidated Government or related public entities, which have been submitted to the MSRB or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from the MSRB in an electronic format prescribed by the MSRB (which, as of the date hereof, is EMMA). The Consolidated Government shall clearly identify each such other document so incorporated by reference. Section 5. Reporting of Significant Events. (a) Within ten (10) business days of the occurrence of one of the following Listed Events, the Consolidated Government or the Dissemination Agent (if any) shall file a notice of such occurrence with the MSRB in an electronic format prescribed by the MSRB (which, as of the date hereof, is EMMA). (i) Principal and interest payment delinquencies. (ii) Non-payment related defaults, if material. (iii) Unscheduled draws on debt service reserves reflecting financial difficulties. (iv) Unscheduled draws on credit enhancements reflecting financial difficulties. (v) Substitution of credit or liquidity providers, or their failure to perform. (vi) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, or a Notice of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Series 2017 Bonds, or other events affecting the tax status of the Series 2017 Bonds. (vii) Modification to rights of Beneficial Owners, if material. (viii) Bond calls, if material, and tender offers. (ix) Defeasances. (x) Release, substitution or sale of property securing repayment of the Series 2017 Bonds, if material. (xi) Rating changes. D-4 (xii) Bankruptcy, insolvency, receivership, or a similar proceeding by the Consolidated Government. (xiii) Consummation of a merger, consolidation, acquisition involving the Consolidated Government, or sale of all or substantially all of the assets of the Consolidated Government, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material. (xiii) Appointment of an additional or a successor trustee, or the change in name of a trustee, if material. (b) For the purposes of the event identified in subsection (a)(xii), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the Consolidated Government in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Consolidated Government, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Consolidated Government. (c) The content of any notice of the occurrence of a listed event under subsection (a) above shall be determined by the Consolidated Government and shall be in substantially the form attached hereto as Exhibit B. Section 6. Termination of Reporting Obligation. The Consolidated Government’s obligations under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Series 2017 Bonds. If the Consolidated Government’s obligations are assumed in full by some other entity, such person shall be responsible for compliance with this Disclosure Agreement in the same manner as if it were the Consolidated Government and the Consolidated Government shall have no further responsibility hereunder. The Consolidated Government will provide notice of such termination to the MSRB in an electronic format prescribed by the MSRB (which, as of the date hereof, is EMMA). Section 7. Dissemination Agent. The Consolidated Government may, from time to time, appoint a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and the Consolidated Government may, from time to time, discharge the Dissemination Agent, with or without appointing a successor Dissemination Agent. Section 8. Amendment. This Disclosure Agreement may not be amended unless independent counsel experienced in securities law matters has rendered an opinion to the D-5 Consolidated Government to the effect that the amendment does not violate the provisions of the Rule. In the event that this Disclosure Agreement is amended or any provision of this Disclosure Agreement is waived, the first Annual Report containing any amended, or omitting any waived, operating data or financial information shall explain, in narrative form, the reasons for the amendment or waiver and the impact of the change in the type of operating data or financial information being provided in the Annual Report. If the amendment or waiver relates to the accounting principles to be followed in preparing financial statements, the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and impact of the change in the accounting principles on the presentation of the financial information. To the extent reasonably feasible, the comparison must also be qualitative. A notice of the change in the accounting principles shall be filed with the MSRB in an electronic format as prescribed by the MSRB (which, as of the date hereof, is EMMA) on or before the effective date of any such amendment or waiver. Section 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Consolidated Government from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is required by this Disclosure Agreement. If the Consolidated Government chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the Consolidated Government shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. Section 10. Default. In the event of a failure of the Consolidated Government to comply with any provision of this Disclosure Agreement, any Beneficial Owner from time to time of the Series 2017 Bonds may initiate an action against the Consolidated Government to compel performance. A default under this Disclosure Agreement shall not be deemed a “default” or an “event of default” under the Resolution, and the sole remedy under this Disclosure Agreement in the event of any failure of the Consolidated Government to comply with this Disclosure Agreement shall be an action to compel performance. Section 11. Duties, Immunities and Liabilities of Dissemination Agent. The Consolidated Government may, from time to time, appoint a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and the Consolidated Government may, from time to time, discharge the Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement. The Dissemination Agent may consult with counsel (who may, but need not, be counsel for any party hereto), and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or D-6 suffered by it hereunder in good faith and in accordance with the opinion of such counsel. The obligations of the Consolidated Government under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Series 2017 Bonds. The Consolidated Government has engaged DAC as the initial Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement. The Dissemination Agent shall have no duty or obligation to review or verify any information, disclosures or notices provided to it by the Consolidated Government and shall not be deemed to be acting in any fiduciary capacity for the Consolidated Government, the holders of the Series 2017 Bonds or any other party. Section 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Consolidated Government, the Participating Underwriter, and Beneficial Owners from time to time of the Series 2017 Bonds, and shall create no rights in any other person or entity. Section 13. Intermediaries; Expenses. The Dissemination Agent is hereby authorized to employ intermediaries to carry out its obligations hereunder. The Dissemination Agent shall be reimbursed for all such expenses and any other reasonable expense incurred hereunder (including, but not limited to, attorney’s fees). Section 14. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 15. Governing Law. This Disclosure Agreement shall be governed by and construed in accordance with the laws of the State of Georgia. Section 16. Severability. In case any one or more of the provisions of this Disclosure Agreement shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Disclosure Agreement, but this Disclosure Agreement shall be construed and enforced as if such illegal or invalid provision had not been contained herein. D-7 (Continuing Disclosure Agreement) Date: ______________, 2017. AUGUSTA, GEORGIA By: Mayor D-8 (Continuing Disclosure Agreement) DIGITAL ASSURANCE CERTIFICATION, L.L.C. By: Title: D-9 EXHIBIT A NOTICE TO MSRB OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: Augusta, Georgia Name of Bond Issue: $___________ Augusta, Georgia Water and Sewerage Revenue Refunding Bonds, Series 2017 CUSIP Numbers1 _________________ Date of Issuance: ______________, 2017 NOTICE IS HEREBY GIVEN that Augusta, Georgia (the “Consolidated Government”) has not provided an Annual Report due with respect to the above-named Bonds as required by its Continuing Disclosure Agreement, dated ______________, 2017. The Consolidated Government anticipates that the Annual Report will be filed by ________________________. This notice is based on the best information available at the time of dissemination. Any questions regarding this notice should be directed to __________________. Dated: AUGUSTA, GEORGIA Name: Title:_____________________________ 1No representation is made as to the correctness of the CUSIP number(s) either as printed on the Bonds or as contained herein, and reliance may only be placed on other bond identification contained herein. D-10 EXHIBIT B NOTICE TO EMMA OF [INSERT THE LISTED EVENT] Relating to $___________ AUGUSTA, GEORGIA WATER AND SEWERAGE REVENUE REFUNDING BONDS SERIES 2017 CUSIP NUMBERS2 Notice is hereby given that [insert the Listed Event] has occurred with respect to the above-captioned bonds (the “Bonds”). [Describe circumstances leading up to the event, action being taken and anticipated impact.] This notice is based on the best information available at the time of dissemination and is not guaranteed as to accuracy or completeness. Any questions regarding this notice should be directed to [insert instructions for presenting securities, if applicable]. [Notice of the Listed Events described in Section 5(a)(ix) shall include the following: Augusta, Georgia (the “Consolidated Government”) has reserved the right to redeem such refunded or defeased bonds prior to their stated maturity date in accordance with the optional redemption provisions of said defeased bonds. OR The Consolidated Government has covenanted not to exercise any optional redemption provisions under the resolution pursuant to which the Bonds were issued; however, the sinking fund provision will survive the defeasance. AND 2No representation is made as to the correctness of the CUSIP number either as printed on the bonds or as contained herein, and reliance may only be placed on other bond identification contained herein. D-11 The Bonds have been defeased to [maturity/the first call date, which is __________]. This notice does not constitute a notice of redemption and no bonds should be delivered to the Consolidated Government or to the Paying Agent as a result of this mailing. A Notice of Redemption instructing you where to submit your bonds for payment will be mailed _______ to _______ days prior to the redemption date.] Dated:_____________________ AUGUSTA, GEORGIA Name: ___________________________ Title:_____________________________ D-12 1 OFFICIAL NOTICE OF SALE $92,735,000* AUGUSTA, GEORGIA WATER AND SEWERAGE REVENUE REFUNDING BONDS, SERIES 2017 Electronic bids only will be received by Augusta, Georgia (the “Consolidated Government”), in accordance with this Official Notice of Sale until 11:00 a.m., Eastern Time, on October 17, 2017 (the “Date of Sale”). Immediately thereafter, the bids will be publicly announced, and the Consolidated Government Administrator, will act upon the bids by 3:00 p.m., Eastern Time. Bid Submission Solely as an accommodation to bidders, electronic bids via BIDCOMP/PARITY (the “Electronic Bidding System”) will be accepted in accordance with this Official Notice of Sale. The Consolidated Government is using BIDCOMP/PARITY as a communication mechanism to conduct the electronic bidding for the sale of the Consolidated Government’s $92,735,000* Water and Sewerage Revenue Refunding Bonds, Series 2017 (the “Series 2017 Bonds”), as described herein. To the extent any instructions or directions set forth in BIDCOMP/PARITY conflict with this Official Notice of Sale, the terms of this Official Notice of Sale shall control. Each bidder submitting an electronic bid agrees (i) that it is solely responsible for all arrangements with BIDCOMP/PARITY, (ii) that BIDCOMP/PARITY is not acting as the agent of the Consolidated Government, and (iii) that the Consolidated Government is not responsible for ensuring or verifying bidder compliance with any of the procedures of BIDCOMP/PARITY. The Consolidated Government does not assume any responsibility for, and each bidder expressly assumes the risks of and responsibility for, any incomplete, inaccurate or untimely bid submitted by such bidder through BIDCOMP/PARITY. Each bidder shall be solely responsible for making necessary arrangements to access the Electronic Bidding System for purposes of submitting its bid in a timely manner and in compliance with the requirements of this Official Notice of Sale. Neither the Consolidated Government nor the Electronic Bidding System shall have any duty or obligation to provide or assure such access to any bidder, and neither the Consolidated Government nor BIDCOMP/PARITY shall be responsible for proper operation of, or have any liability for, any delays or interruptions of, or any damages caused by, BIDCOMP/PARITY. For further information about BIDCOMP/PARITY, potential bidders may contact i-Deal at 1359 Broadway, 2nd Floor, New York, New York 10018, telephone (212) 849-5021. In the event of a malfunction of the Electronic Bidding System at 11:00 a.m., Eastern Time, on the Date of Sale, an attempt will be made to reschedule the bidding for 12:00 noon, Eastern Time, on the Date of Sale. Should the Electronic Bidding System malfunction a second time, bidding will be rescheduled at the discretion of the Consolidated Government in coordination with its financial advisor, Davenport & Company LLC (the “Financial Advisor”). To the extent possible, the rescheduled bid time will be communicated to the bidders. Each bid must be unconditional. Change of Date and Time for Receipt of Bids The Consolidated Government expects to take bids on the Series 2017 Bonds on October 17, 2017. However, the Consolidated Government reserves the right to postpone the date and time established for the receipt of bids. Any such postponement will be announced by TM3 newswire, or any other such service. If the receipt of bids is postponed, any alternative date for receipt of bids will be announced via TM3 newswire, or any other such service. Any bidder must submit a sealed bid for the purchase of the Series 2017 Bonds on such alternative sale date in conformity with the provisions of this Official Notice of Sale, except for any changes announced via the TM3 newswire, or any other such service, as described therein. *Preliminary, subject to change. 2 Annual Amortization Requirements The Series 2017 Bonds will be dated the date of their issuance (the “Dated Date”), and will mature on October 1 in years and amounts as follows: Maturity (October 1) Amount 2018 $10,000 2019 10,000 2020 10,000 2021 8,275,000 2022 12,260,000 2023 7,500,000 2024 7,875,000 2025 8,270,000 2026 8,685,000 2027 9,115,000 2028 9,575,000 2029 10,320,000 2030 10,830,000 Adjustments to Amortization Requirements The preliminary annual amortization requirements as set forth in this Official Notice of Sale (the “Preliminary Amortization Requirements”) may be revised before the receipt of bids for the purchase of the Series 2017 Bonds. Any such revisions (the “Revised Amortization Requirements”) WILL BE ANNOUNCED ON THOMSON MUNICIPAL NEWS NOT LATER THAN ONE HOUR PRIOR TO THE SPECIFIED BID TIME. In the event that no such revisions are made, the Preliminary Amortization Requirements will constitute the Revised Amortization Requirements. BIDDERS SHALL SUBMIT BIDS BASED ON THE REVISED AMORTIZATION REQUIREMENTS. THE WINNING BID WILL BE DETERMINED ON THE BASIS OF THE REVISED AMORTIZATION REQUIREMENTS. After selecting the winning bid, the Consolidated Government will determine each final annual amortization requirement (the “Final Amortization Requirements”). The Consolidated Government reserves the right, after bids are opened and prior to award, to increase or reduce the principal amount of the Series 2017 Bonds offered for sale including the removal of one or more of the October 1, 2018 through October 1 2020 maturities. THE SUCCESSFUL BIDDER MAY NOT WITHDRAW ANY BID OR CHANGE THE INITIAL REOFFERING PRICES AS A RESULT OF ANY INCREASE OR REDUCTION IN THE REVISED AMORTIZATION REQUIREMENTS WITHIN THE LIMITS PROVIDED FOR IN THE PRECEDING SENTENCE. The bid price by the successful bidder (the “Bid Price”) will be adjusted to reflect any adjustments in the amortization requirements of the Series 2017 Bonds. Such adjusted Bid Price will reflect changes in the dollar amount of the underwriting discount, original issue discount/premium and any applicable insurance premium, but will not change the selling compensation (including any applicable bond insurance premium) per $1,000 of par amount of Series 2017 Bonds from the selling compensation that would have been received based on the Bid Price in the winning bid and the initial reoffering prices. The interest rate for each maturity will not change. The Final Amortization Requirements and the adjusted Bid Price will be communicated to the successful bidder by 2:30 p.m., Augusta, Georgia time on the day following the sale. Serial Bonds and/or Term Bonds Bidders may provide that all of the Series 2017 Bonds be issued as serial bonds or may provide that any two or more consecutive annual principal amounts be combined into one or more term bonds with annual mandatory sinking fund redemption in amounts as provided above. Term bonds with overlapping sinking fund installments or sinking fund installments that overlap serial bond maturities will not be permitted. 3 Optional Redemption The Bonds maturing on or after October 1, 2028 are subject to optional redemption in whole or in part at any time (and in any order of maturity) on or after October 1, 2027, by the Consolidated Government at a redemption price equal to the principal amount thereof, plus accrued interest to the redemption date. Bidding Rules; Award of Bonds Bidders may bid only to purchase all of the Series 2017 Bonds. Bidders are invited to name the rate or rates of interest per annum that the Series 2017 Bonds are to bear in multiples of one-twentieth (1/20) or one-eighth (1/8) of one percent. All Series 2017 Bonds maturing on the same date must bear interest at the same rate. Any number of rates may be named provided that (a) the highest rate of interest may not exceed the lowest rate of interest by more than 3.00%, and (b) the highest rate of interest stated for any maturity may not exceed 5.00% per year. In addition, the Series 2017 Bonds shall bear interest at a “true” or “Canadian” interest cost not to exceed 5.00% (taking into account any original issue discount or premium). No bid for less than 100% of the aggregate principal amount of the Series 2017 Bonds shall be considered. The Consolidated Government reserves the right to reject any or all bids (regardless of the interest rate bid), to reject any bid not complying with this Official Notice of Sale and, so far as permitted by law, to waive any irregularity or informality with respect to any bid for the bidding process. As promptly as reasonably possible after the bids are received, the Consolidated Government will notify the bidder to whom the Series 2017 Bonds will be awarded, if and when such award is made. Such bidder, upon such notice, shall advise the Consolidated Government of the initial reoffering prices or yields to the public of each maturity of the Series 2017 Bonds. The winning bid will remain firm for a period of no less than four hours after the time specified for the opening of bids. An award of the Series 2017 Bonds, if made, will be made by the Consolidated Government within such four-hour period or, with the express consent of the winning bidder, such longer time period as deemed necessary. Unless all bids are rejected, the Series 2017 Bonds will be awarded to the bidder complying with the terms of this Official Notice of Sale and submitting a bid which provides the lowest “true” or “Canadian” interest cost to the Consolidated Government. True interest cost shall be determined for each bid by doubling the semiannual interest rate, compounded semiannually, necessary to discount the debt service payments to the Dated Date and to the price bid. If more than one bid offers the same lowest true interest cost, the successful bid will be selected by the Consolidated Government by lot. Bids for the Series 2017 Bonds shall not be conditioned upon obtaining insurance or any other credit enhancement. If a bidder proposes to obtain a policy of municipal bond insurance or any other credit enhancement, any such purchase of insurance or commitment therefor shall be at the sole option and expense of the bidder, and the bidder must pay any increased costs of issuance of the Series 2017 Bonds as a result of such insurance or commitment. Any failure by the bidder to obtain such a policy of insurance shall not in any way relieve such bidder of its contractual obligations arising from the acceptance of its bid for the purchase of the Series 2017 Bonds. Good Faith Deposit A good faith deposit in the amount of $927,350 (the “Deposit”) is required. The Deposit may be provided in the form of (i) a certified check upon, or a cashier’s, treasurer’s or official check of, a responsible banking institution, payable to the order of Augusta, Georgia (and delivered by 1:30 p.m., Eastern Time, on October 17, 2017, to the Financial Advisor, Davenport & Company LLC, 901 East Cary Street, 11th Floor, Richmond, Virginia 23219 (Attention: Mr. Courtney Rogers) or (ii) a federal funds wire transfer to be submitted to the Consolidated Government by the successful bidder not later than 1:30 p.m., prevailing Eastern time (the “Deposit Deadline”), on the date of sale. Option (ii) is described in more detail below. The Deposit of the successful bidder will be collected and the proceeds thereof retained by Augusta, Georgia to be applied in partial payment for the Series 2017 Bonds, and no interest will be allowed or paid upon the amount thereof; provided, however, that in the event the successful bidder shall fail to comply with the terms of its bid, the proceeds thereof will be retained as and for full liquidated damages. Any checks of the unsuccessful bidders will be returned promptly after the Series 2017 Bonds are awarded. 4 If a federal funds wire transfer is used, the Financial Advisor shall distribute wiring instructions for the Deposit to the successful bidder upon verification of the bids submitted by the bidders and prior to the Deposit Deadline. The award of the Series 2017 Bonds will be made following the receipt of the federal funds wire. If the Deposit is not received by the Deposit Deadline, the award of the sale of the Series 2017 Bonds to the successful bidder may be cancelled by the Consolidated Government, upon the advice of the Financial Advisor, without the Consolidated Government incurring any financial liability to such bidder or any limitation whatsoever on the Consolidated Government’s right to sell the Series 2017 Bonds to a different purchaser upon such terms and conditions as the Consolidated Government shall deem appropriate. Book-Entry-Only System The Series 2017 Bonds will be issued by means of a book-entry system with no distribution of physical bond certificates made to the public. One bond certificate for each maturity of the Series 2017 Bonds will be issued to The Depository Trust Company, New York, New York (“DTC”), or its nominee, and immobilized in its custody. The book-entry system will evidence beneficial ownership of the Series 2017 Bonds in principal amounts of $5,000 or multiples thereof, with transfers of beneficial ownership effected on the records of DTC and its participants pursuant to rules and procedures established by DTC and its participants. Series 2017 Bond certificates registered in the name of Cede & Co. will be deposited with DTC. Interest on the Series 2017 Bonds will be payable from their date semiannually on each April 1 and October 1, beginning April 1, 2018, and principal of the Series 2017 Bonds will be paid annually as set forth above to DTC or its nominee as registered owner of the Series 2017 Bonds. Transfer of principal, premium and interest payments to beneficial owners by participants of DTC will be the responsibility of such participants and other nominees of beneficial owners. The Consolidated Government will not be responsible or liable for maintaining, supervising or reviewing the records maintained by DTC, its participants or persons acting through such participants. DTC may discontinue providing its services as securities depository with respect to the Series 2017 Bonds at any time by giving reasonable notice to the Consolidated Government. Under such circumstances, in the event that a successor securities depository is not obtained, Series 2017 Bond certificates are required to be prepared, executed and delivered. The Consolidated Government may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that case, either a successor depository will be selected by the Consolidated Government or Series 2017 Bond certificates will be prepared, executed and delivered. Security and Sources of Payment for the Bonds The Series 2017 Bonds are special limited obligations of the Consolidated Government payable solely from and secured by a pledge of and lien on all income and revenues derived by the Consolidated Government from the ownership and operation of the System remaining after the payment of certain expenses of operating, maintaining, and repairing the System and certain other expenses. Delivery of the Bonds The Series 2017 Bonds in definitive form are expected to be delivered through DTC in New York, New York on or about November 14, 2017. 5 Certificates of Winning Bidder The successful bidder must, by facsimile transmission or overnight delivery received by the Consolidated Government within 24 hours after receipt of bids for the Series 2017 Bonds, furnish the following information to complete the Official Statement in final form, as described below: A. The offering prices for the Series 2017 Bonds (expressed as the price or yield per maturity). B. Selling compensation (aggregate total anticipated compensation to the underwriters expressed in dollars, based on the expectation that all Series 2017 Bonds are sold at the prices or yields described in Subpart A above). C. The identity of the underwriters if the successful bidder is a part of a group or syndicate. D. Any other material information necessary to complete the Official Statement in final form but not known to the Consolidated Government. Prior to delivery of the Series 2017 Bonds, the successful bidder shall furnish to the Consolidated Government a certificate, in form acceptable to bond counsel, to the effect that successful bidder has complied with Rule G-37 of the Municipal Securities Rulemaking Board (the “MSRB”) with respect to the Consolidated Government. Establishment of Issue Price and Certificate of Successful Bidder; Hold-the-Offering-Price Rule May Apply if Competitive Sale Requirements are Not Satisfied The successful bidder will be required to provide to the Consolidated Government within one-half (½) hour after the verbal award of the Bonds the initial offering price/yields of the Bonds to the public (as defined hereinbelow). The successful bidder shall assist the Consolidated Government in establishing the issue price of the Bonds and shall execute and deliver to the Consolidated Government at closing an “issue price” or similar certificate, substantially in the form attached to this Official Notice of Sale, setting forth the reasonably expected initial offering price to the public or the sales price or prices of the Bonds, together with the supporting pricing wires or equivalent communications, with such modifications as may be appropriate or necessary, in the reasonable judgment of the successful bidder, the Consolidated Government and bond counsel to the Consolidated Government. The Consolidated Government intends that the provisions of Treasury Regulation Section 1.148-1(f)(3)(i) (defining “competitive sale” for purposes of establishing the issue price of the Bonds) will apply to the initial sale of the Bonds (the “competitive sale requirements”) because: (1) the Consolidated Government shall disseminate this Official Notice of Sale to potential underwriters in a manner that is reasonably designed to reach potential underwriters; (2) all bidders shall have an equal opportunity to bid; (3) the Consolidated Government may receive bids from at least three underwriters of municipal bonds who have established industry reputations for underwriting new issuances of municipal bonds; and (4) the Consolidated Government anticipates awarding the sale of the Bonds to the bidder who submits a firm offer to purchase the Bonds at the highest price (or lowest interest cost), as set forth in this Official Notice of Sale. Any bid submitted pursuant to this Official Notice of Sale shall be considered a firm offer for the purchase of the Bonds, as specified in the bid. In the event that the competitive sale requirements described above are not satisfied, the Consolidated Government shall so advise the successful bidder. The Consolidated Government may determine to treat (i) the first price at which 10% of a maturity of the Bonds (the “10% test”) is sold to the public as the issue price of that maturity and/or (ii) the initial offering price to the public as of the sale date of any maturity of the Bonds as the issue price of that maturity (the “hold-the-offering-price rule”), in each case applied on a maturity-by-maturity basis. The successful bidder shall advise the Consolidated Government if any maturity of the Bonds satisfies the 10% test as of 6 the date and time of the award of the Bonds. Any maturities of the Bonds that do not satisfy the 10% test as of the date and time of the award shall be subject to the hold-the-offering-price rule. Bids will not be subject to cancellation in the event that the competitive sale requirements described above are not satisfied. Bidders should prepare their bids on the assumption that some or all of the maturities of the Bonds will be subject to the hold-the- offering-price rule in order to establish the issue price of the Bonds. By submitting a bid, the successful bidder shall (i) confirm that the underwriters have offered or will offer the Bonds to the public on or before the date of award at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in the bid submitted by the successful bidder and (ii) agree, on behalf of the underwriters participating in the purchase of the Bonds, that the underwriters will neither offer nor sell unsold Bonds of any maturity to which the hold-the-offering-price rule shall apply to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following: (1) the close of the fifth (5th) business day after the sale date; or (2) the date on which the underwriters have sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public. The winning bidder shall promptly advise the Consolidated Government when the underwriters have sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public, if that occurs prior to the close of the fifth (5th) business day after the sale date. The Consolidated Government acknowledges that, if the hold-the-offering price rule applies, in making the representation set forth above, the successful bidder will rely on (i) the agreement of each underwriter to comply with the hold-the-offering-price rule, as set forth in an agreement among underwriters and the related pricing wires, (ii) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the hold-the-offering-price rule, as set forth in a selling group agreement and the related pricing wires, and (iii) in the event that an underwriter is a party to a retail distribution agreement that was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the hold-the-offering- price rule, as set forth in the retail distribution agreement and the related pricing wires. The Consolidated Government further acknowledges that each underwriter shall be solely liable for its failure to comply with its agreement regarding the hold-the-offering-price rule and that no underwriter shall be liable for the failure of any other underwriter, or of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a retail distribution agreement to comply with its corresponding agreement regarding the hold-the-offering-price rule as applicable to the Bonds. By submitting a bid, each bidder confirms that: (i) any agreement among underwriters, any selling group agreement and any retail distribution agreement (to which the bidder is a party) relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter, each dealer who is a member of the selling group, and each broker-dealer that is a party to such retail distribution agreement, as applicable, to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allotted to it until it is notified by the successful bidder that either the 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the public, and (B) comply with the hold-the- offering-price rule, if applicable, in each case if and for so long as directed by the successful bidder and as set forth in the related pricing wires and (ii) any agreement among underwriters relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter that is a party to a retail distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such retail distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allotted to it until it is notified by the successful bidder or such underwriter that either the 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the public and (B) comply with the hold-the-offering-price rule, if applicable, in each case if and for so long as directed by the successful bidder or such underwriter and as set forth in the related pricing wires. Sales of any Bonds to any person that is a related party to an underwriter shall not constitute sales to the public for purposes of this Official Notice of Sale. Further, for purposes of this Official Notice of Sale: (i) “public” means any person other than an underwriter or a related party, (ii) “underwriter” means (A) the successful bidder, (B) any person that agrees pursuant to a written contract with the successful bidder to form an underwriting syndicate to participate in the initial sale of the Bonds to the public and (C) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (B) to participate in the initial sale of the 7 Bonds to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the public), (iii) “related party” means any entity if an underwriter and such entity are subject, directly or indirectly, to (I) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (II) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another) or (III) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and (iv) “sale date” means the date that the Bonds are awarded by the Consolidated Government to the successful bidder. CUSIP Numbers It shall be the obligation of the successful bidder to furnish to DTC an underwriter questionnaire and to the Consolidated Government the CUSIP numbers for the Series 2017 Bonds within two business days following the date of award. It is anticipated that CUSIP identification numbers will be printed on the Series 2017 Bonds, but neither the failure to print such numbers on any Series 2017 Bond nor any error with respect thereto shall constitute cause for failure or refusal by the successful bidder thereof to accept delivery of and pay for the Series 2017 Bonds in accordance with the terms of its bid. All expenses in connection with the assignment of CUSIP numbers shall be paid by the successful bidder. Official Statement The Consolidated Government will furnish the successful bidder, at the expense of the Consolidated Government, up to 50 copies of the final Official Statement within seven business days from the date of the award of the Series 2017 Bonds, as specified in Rule 15c2-12 (the “Rule”) of the Securities and Exchange Commission (the “SEC”) and the rules of the MSRB; provided that minor delays in furnishing such final Official Statement will not be a basis for failure to pay for and accept delivery of the Series 2017 Bonds. Additional copies will be made available at the successful bidder’s request and expense. The Consolidated Government does not assume any responsibility or obligation for the distribution or delivery of the Official Statement to anyone other than the successful bidder. The successful bidder, by executing the Official Bid Form, agrees to provide two copies of the Official Statement (with any required forms) to the MSRB or its designee no later than ten business days following the Date of Sale. The successful bidder shall notify the Consolidated Government as soon as practicable of (1) the date which is the end of the underwriting period (such “underwriting period” is described in the Rule) and (2) the date of filing of the Official Statement with the MSRB or its designee. If the Series 2017 Bonds are awarded to a syndicate, the Consolidated Government will designate the senior managing underwriter of the syndicate as its agent for purposes of distributing copies of the Official Statement to each participating underwriter. Any underwriter executing and delivering a bid form with respect to the Series 2017 Bonds agrees thereby that if its bid is accepted it shall accept such designation and shall enter into a contractual relationship with all participating underwriters for the purposes of assuring the receipt and distribution by each such participating underwriter of the Official Statement, unless another firm is so designated by the syndicate in writing and approved by the Consolidated Government. Legal Opinion Butler Snow LLP, Bond Counsel, will deliver the approving opinion with respect to the Series 2017 Bonds. The approving opinion will provide, among other things, that, in the opinion of Bond Counsel, under existing laws, regulations, rulings and judicial decisions and assuming the accuracy of certain representations and continuing compliance with certain covenants, interest on the Series 2017 Bonds is (i) excludable from gross income for federal income tax purposes, (ii) not a specific preference item for purposes of the federal alternative minimum tax, and (iii) exempt from State of Georgia income taxation. See Appendix C to the Preliminary Official Statement for the form of the opinion Bond Counsel proposes to deliver in connection with the issuance of the Series 2017 Bonds. For a more complete discussion of such opinion and certain other tax consequences of owning the Series 2017 Bonds, 8 including certain exceptions to the exclusion of the interest on the Series 2017 Bonds from gross income, see “LEGAL MATTERS – Opinion of Bond Counsel” in the Preliminary Official Statement. Federal and State Securities Laws No action has been taken to qualify the Series 2017 Bonds under the federal securities laws. Continuing Disclosure For purposes of the Rule, the Consolidated Government is an obligated person with respect to the Series 2017 Bonds. The Consolidated Government will agree, pursuant to the Continuing Disclosure Certificate, to provide certain annual financial information and operating data and notices of the occurrence of certain events. A description of these undertakings is set forth in the Preliminary Official Statement for the Series 2017 Bonds and will also be set forth in the final Official Statement for the Series 2017 Bonds (See Appendix D of the Preliminary Official Statement). Additional Information For further information relating to the Series 2017 Bonds, the Consolidated Government and the Consolidated Government, reference is made to the Consolidated Government’s Preliminary Official Statement. The Consolidated Government and the Consolidated Government have deemed the Preliminary Official Statement to be final as of its date within the meaning of the Rule, except for the omission of certain pricing and other information permitted to be omitted pursuant to the Rule. The Official Bid Form and the Preliminary Official Statement may be obtained from the Financial Advisor, Davenport & Company LLC (telephone 804-697-2900). Janice Allen Jackson, Administrator Augusta, Georgia Dated October 9, 2017. 9 $ [To Come] AUGUSTA, GEORGIA WATER AND SEWERAGE REVENUE REFUNDING BONDS, SERIES 2017 ISSUE PRICE CERTIFICATE The undersigned, on behalf of [NAME OF UNDERWRITER] (“[SHORT NAME OF UNDERWRITER]”), hereby certifies as set forth below with respect to the sale of the above- captioned obligations (the “Bonds”). 1. Reasonably Expected Initial Offering Price. (a) As of the Sale Date, the reasonably expected initial offering prices of the Bonds to the Public by [SHORT NAME OF UNDERWRITER] are the prices listed in Schedule A (the “Expected Offering Prices”). The Expected Offering Prices are the prices for the Maturities of the Bonds used by [SHORT NAME OF UNDERWRITER] in formulating its bid to purchase the Bonds. Attached as Schedule B is a true and correct copy of the bid provided by [SHORT NAME OF UNDERWRITER] to purchase the Bonds. (b) [SHORT NAME OF UNDERWRITER] was not given the opportunity to review other bids prior to submitting its bid.1 (c) The bid submitted by [SHORT NAME OF UNDERWRITER] constituted a firm offer to purchase the Bonds. 2. Defined Terms. (a) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities. (b) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (c) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is October 17, 2017. (d) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents [SHORT NAME OF UNDERWRITER]’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the [Tax Certificate] and with respect to compliance with the federal 10 income tax rules affecting the Bonds, and by Butler Snow LLP in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. [UNDERWRITER] By:__________________________________ Name:________________________________ Dated: [ ______ ], 2017 11 SCHEDULE A EXPECTED OFFERING PRICES (Attached) 12 SCHEDULE B COPY OF UNDERWRITER’S BID (Attached) Commission Meeting Agenda 10/17/2017 2:00 PM 2018 Proposed Budget Department:Administrator/Finance Department:Administrator/Finance Caption:Presentation of the 2018 FY Proposed Budget. Background:The proposed budget is required to be presented at the second commission meeting in October. Analysis:The proposed budget is the starting point with the budget being adopted at the November 21, 2017 Commission Meeting. Over the next 35 days works session will be held to review and discuss what is being presented today. Financial Impact:n/a Alternatives:n/a Recommendation:Receive as information Funds are Available in the Following Accounts: n/a REVIEWED AND APPROVED BY: Finance. Law. Administrator. Clerk of Commission Cover Memo Commission Meeting Agenda 10/17/2017 2:00 PM Affidavit Department: Department: Caption:Motion to approve execution by the Mayor of the affidavit of compliance with Georgia's Open Meeting Act. Background: Analysis: Financial Impact: Alternatives: Recommendation: Funds are Available in the Following Accounts: REVIEWED AND APPROVED BY: Cover Memo