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07-085, San Jose Conservation Corp. ~ . MASTER AGREEMENT BETWEEN THE CITY OF CUPERTINO AND SAN JOSE CONSERVATION CORPS: To carry out community benefit activities, and share in Proposition 84 Funding l ~!HIS AGREEMENT is made and entered onto this 3;e..b day of ~{,. 'I ,2007 by and between the CITY OF CUPERTINO, a MUNICIPAL CORPORATION ("CITY"), and SAN JOSE CONSERVATION CORPS, a California non-profit public benefit corporation ("SJCC"), for community improvement services on an as-needed basis for the Stevens Creek Corridor Project. RECIT ALS The purpose for which this AGREEMENT is made, and all pertinent recitals, are listed on EXHIBIT A, entitled "RECITALS", which is attached hereto and incorporated herein. THE PARTIES HEREBY AGREE AS FOLLOWS: SECTION 1 SCOPE OF SERVICES. SJCC shall perform those services specified in detail in EXHIBIT B, entitled "SCOPE OF SERVICES", which is attached hereto and incorporated herein. SECTION 2. TERM OF AGREEMENT. A. The term of this AGREEMENT shall be two (2) years from the date of final execution of this AGREEMENT as written above, subject to the provisions of SECTION 13 of this AGREEMENT. B. Prior to the expiration of the term of this AGREEMENT, it may be extended by written amendment if such an extension is necessary. In no event shall any such amendment extend the term of this AGREEMENT beyond an additional two (2) years from the date of final execution of Agreement. Page 1 of21 1 SECTION 3. SCHEDULE OF PERFORMANCE The services of SJCC are to be completed according to the schedule set out in EXHIBIT C, entitled "SCHEDULE OF PERFORMANCE", which is attached hereto and incorporated herein. SECTION 4. COMPENSATION. The total compensation for multiple projects approved under this Master Agreement, paid to SJCC, including payment for services, supplies, materials, and equipment provided by SJCC, shall not exceed FIVE HUNDRED THOUSAND AND NO/1 00 DOLLARS (500,000.00) pursuant to the payment terms set forth in EXHIBIT D, entitled "COMPENSATION", which is attached hereto and incorporated herein. Any expenses incurred in the performance ofthis AGREEMENT shall be the sole responsibility of SJCC. SECTION 5. METHOD OF PAYMENT. Payments to SJCC by CITY shall be made within thirty (30) days after receipt of SJCC's itemized invoice. Request for payment shall be made to: City of Cupertino Attention: Therese Smith 10300 Torre Avenue Cupertino, CA 95014 SECTION 6. INDEPENDENT CONTRACTOR It is understood and agreed that SJCC, in the performance of the work and services agreed to be performed by SJCC, shall act as and be an independent contractor and not and agent or employee of CITY. SECTION 7. ASSIGNABILITY. The parties agree that the expertise and experience of SJCC are material considerations for this AGREEMENT. SJCC shall not assign or transfer any interest in this AGREEMENT nor the performance of any of SJCC's obligations hereunder, without the prior written consent of CITY, and any attempt by SJCC to so assign this AGREEMENT or any rights, duties or obligations arising hereunder shall be void and of no effect. SECTION 8. SUBCONSUL T ANTS A. Notwithstanding Section 7 above, SJCC may use subcontractors in performing the work under this AGREEMENT based upon prior written approval by CITY's Project Manager. Page 2 of21 2 B. SJCC shall be responsible for directing the work of the approved subcontractors and for any compensation due to subcontractors. CITY assumes no responsibility whatsoever concerning such compensation. C. SJCC shall change or add subcontractors only with the prior written approval pfthe CITY's Project Manager. SECTION 9. INDEMNIFICATION. SJCC shall defend, indemnify and hold harmless CITY, its officers, employees and agents against any claim, loss or liability arising out of or resulting in any way from work performed under this AGREEMENT due to the willful or negligent acts (active or passive) or omissions by SJCC's officers, employees or agents. The acceptance of said services and duties by CITY shall not operate as a waiver of such right of indemnification. All of CITY's obligations under this Section are intended to apply to the fullest extend permitted by law and shall survive the expiration or sooner termination of this AGREEMENT. SECTION 10. INSURANCE REQUIREMENTS SJCC agrees to have and maintain the policies set forth in EXHIBIT E, entitled "INSURANCE REQUIREMENTS" which is attached hereto and incorporated herein. All policies, endorsements, certificates and/or binders shall be subject to approval by the Director of Finance or the Director's authorized designee ("Risk Manager") as to form and content. These requirements are subject to amendment or waiver if so approved in writing by the Risk Manager. SJCC agrees to provide CITY with a copy of said policies, certificates and/or endorsements before work commences under this AGREEMENT. SECTION 11. NONDISCRIMINATION. SJCC shall not discriminate in any way, against or grant preferential treatment to any person on the basis of race, sex, color, age, religion, sexual orientation, actual or perceived gender identity, disability, ethnicity, or national origin, in connection with or related to the performance of this AGREEMENT. SECTION 12. CONFLICT OF INTEREST. SJCC shall at all times avoid conflict of interest or appearance of conflict of interest in the performance of this AGREEMENT. SJCC shall disclose any conflict of interest, or potential conflict of interest, which exist or arises at any time during the term of this AGREEMENT. CITY shall have the right to treat any violation of this Section as a material breach of this AGREEMENT, and shall have the right to terminate the AGREEMENT and pursue any and all legal or equitable remedies for said breach of this AGREEMENT. Page 3 of21 3 SECTION 13. TERMINATION. A. CITY shall have the right to terminate this AGREEMENT, without cause, by giving not less than seven (7) days written notice of termination. B. If SJCC fails to perform any of its material obligations under this AGREEMENT, in addition to all other remedies provided by law, CITY may terminate this AGREEMENT immediately upon written notice. C. CITY's Parks and Recreation Director IS empowered to terminate this AGREEMENT on behalf of CITY. D. In the event of termination, CITY shall pay SJCC for services performed and supplies, materials, and equipment provided by SJCC to the date of termination. SECTION 14. GOVERNING LAW. CITY and SJCC agree that the law governing this AGREEMENT shall be that of the State of California. SECTION 15. COMPLIANCE WITH LAWS. SJCC shall comply with all applicable laws, ordinance, codes and regulations of the federal, state and local governments. SECTION 16. CONFIDENTIAL INFORMATION. All data, documents, discussions or other information developed or received by or for SJCC in performance of this AGREEMENT are confidential and not to be disclosed to any person except as authorized by CITY, or as required by law. SECTION 17. OWNERSHIP OF MATERIALS. All reports, documents, electronic equivalents or other materials developed or discovered by SJCC or any other person engaged directly or indirectly by SJCC to perform the services required hereunder shall be and remain the property of CITY without restriction or limitation upon their use. SECTION 18. WAIVER. SJCC agrees the waiver by CITY of any breach or violation of any term or condition of this AGREEMENT shall not be deemed to be a waiver of any other term, or condition contained herein or a waiver of any subsequent breach or violation of the same or any other term or condition. The acceptance by CITY of the performance of any work or service by SJCC shall not be deemed to be a waiver of any term or condition of this AGREEMENT. Page 4 of21 4 SECTION 19. SJCC'S BOOKS AND RECORDS. A. SJCC shall maintain any and all ledgers, books of account, invoices, vouchers, canceled checks, and other records or documents evidencing or relating to charges for services, supplies, materials, or equipment provided to CITY for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to SJCC pursuant to this AGREEMENT. B. SJCC shall maintain all documents and records which demonstrate performance under this AGREEMENT for a minimum period of three (3) years, or for any longer period required by law, from the date of termination or completion of this AGREEMENT. C. Any records or documents required to be maintained pursuant to this AGREEMENT shall be made available for inspection or audit, at no cost to CITY, at any time during regular business hours, upon written request by the CITY's General Counsel, City Manager, Director of Finance/Budget, City Auditor, or a designated representative of any of these officers. Copies of such documents shall be provided to CITY office when it is practical to do so. Otherwise, unless an alternative is mutually agreed upon, the records shall be available at SJCC's address indicated for receipt of notices in this AGREEMENT. D. Where CITY has reason to believe that such records or documents may be lost or discarded due to dissolution, disbandment or termination of SJCC's business, CITY may, by written request by any of the above named officers, require that custody of the records be given to CITY and that the records and documents be maintained at the CITY's office. Access to such records and documents shall be granted to any party authorized by SJCC, SJCC's representatives, or SJCC's successor-in-interest. SECTION 20. GIFTS. A. SJCC is familiar with CITY's policy against the acceptance of any gift by a CITY officer or designated employee. B. SJCC agrees not to offer any CITY officer or designated employee any gift prohibited by City's policy. C. The offer or giving of any prohibited gift shall constitute a material breach of this AGREEMENT by SJCc. In addition to any remedies CITY may have in law or equity, CITY may terminate this AGREEMENT for such breach as provided in SECTION 13 of this AGREEMENT. Page 5 of21 5 SECTION 21. DISQUALIFICATION OF FORMER EMPLOYEES. SJCC shall not utilize either directly or indirectly any officer, employee, or agent ofSJCC, to perform services under this AGREEMENT. SECTION 22. SPECIAL PROVISIONS. Special provisions, if any, to this AGREEMENT are specified in EXHIBIT F, entitled, "SPECIAL PROVISIONS", which is attached hereto and incorporated herein. SECTION 23. NOTICES. All notices and other communications required or permitted to be given under this AGREEMENT shall be in writing and may be delivered by hand, by facsimile transmission with verification of receipt, or by United States mail, postage prepaid and return receipt requested, addressed to the respective parties as follows: To CITY: City of Cupertino Attn: Therese Smith 10300 Torre Avenue Cupertino, CA 95014 To SJCC: San Jose Conservation Corps Attention: Robert J. Hennessy 2650 Senter Road San Jose, CA 95111 Or to such other address as any party may designate by notice in accordance with this Section. A copy of any notice of a legal nature, including, but not limited to, any claims against CITY, its officers or employees shall also be served in the manner specified above to the following address: City of Cupertino Charles Kilian, City Attorney 20410 Town Center Lane, Ste. 210 Cupertino, CA 95014 Notice shall be deemed effective on the date of personal delivery by hand or the date of receipt of facsimile transmission (with verification of receipt) or, if mailed, three (3) days after deposit in the mail. SECTION 24. VENUE. In the event that suit shall be brought by either party hereunder, the parties agree that trial of such action shall be exclusively vested in a state court in the County of Santa Page 6 of21 6 Clara or, or if federal jurisdiction is appropriate, in the United States District Court for the Northern District of California, San Jose, California. SECTION 25. PRIOR AGREEMENTS AND AMENDMENTS. This AGREEMENT, including all Exhibits attached hereto, represents the entire understanding of the parties as to those matters contained herein. No prior oral or written understanding shall be of any force or effect with respect to those matters covered hereunder. This AGREEMENT may only be modified by a written amendment duly executed by the parties to this AGREEMENT. SECTION 26. SEVERABILITY. If any term, covenant, condition or provision of this AGREEMENT, or the application thereof to any person or circumstance, shall to any extend be held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, covenants, conditions or provisions of this AGREEMENT, or the application thereof to any person or circumstance, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. SECTION 27. REPRESENTATION OF AUTHORITY. The person executing this AGREEMENT on behalf of SJCC does hereby represent and warrant that SJCC is a duly authorized and existing California corporation, that SJCC has, is and shall remain during the term of this AGREEMENT qualified to do business in the State of California, that SJCC has full right, power and authority to enter into this AGREEMENT and to carry out all actions contemplated by this AGREEMENT, that the execution and delivery of this AGREEMENT were duly authorized by proper action of SJCC and no consent, authorization or approval of any person is necessary in connection with such execution, delivery and performance of this AGREEMENT except as have been obtained and are in full force and effect, and that this AGREEMENT constitutes the valid, binding and enforceable obligation of SJCC. Upon CITY's request, SJCC shall provide CITY with evidence reasonably satisfactory to CITY confirming the foregoing representations and warranties. Page 7 of21 7 fo./i tf6tJST6? t WITNESS THE EXECUTION HEREOF on the day and year first hereinabove written. "CITY" CITY OF CUPERTINO BY~C~ ~ r avid Knapp, City Manag~ .., Cupertino, CA 95014 (408) 777-3212 {. ~..Of "SJCC" 2650 Senter Road San Jose, CA 95111 (408) 918-1009 Employer J.D. No.?; [ 4>O-~/~- ;?s~ -- 4:PJ- 9/ /~ - C; 3--e,TiJ /00, lJ7ro _ . - 4-trv CW'f} - , I Page 8 of21 8 EXHIBIT A RECITALS A. The CITY is presently engaged in park renovation and creek restoration activities in The Stevens Creek Corridor, between Stevens Creek Blvd. and McClellan Rd. in Cupertino, CA. B. SJCC wishes to provide training in job skills and environmental education to young men and women through a program that includes projects in public service construction and conservation work. C. CITY can provide opportunities for public services through meaningful and productive community programs. D. CITY has projects appropriate for Proposition 84 funding and SJCC has identified CITY as a partner agency, for matching funds to FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00). E. The Cupertino City Council has approved the selection of SJCC for work in the Stevens Creek Corridor and has endorsed the Proposition 84 partnership. Page 9 of21 9 EXHIBIT B SCOPE OF SERVICES A. SJCC shall provide community construction and conservation services on an as needed basis and as directed by CITY. Such services shall be limited to special community projects, including; park and trail improvements; park and facility construction and creek restoration work. B. The performance of all services by SJCC shall be to the satisfaction of the CITY. C. All of the services to be furnished by SJCC under this AGREEMENT shall be of the professional standard and quality which prevail among SJCCs of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. D. SJCC shall coordinate all services with the CITY and CITY's separate SJCCs and contractors performing work on this Project as necessary. E. All work performed under this AGREEMENT shall be authorized by a Special Project Approval Form as approved by the CITY's Project Manager. SJCC shall not perform any services unless authorized by a Special Project Approval Form. Any unauthorized services performed by SJCC shall be at no cost to CITY. Page 10 of21 10 EXHIBIT B-1 SAN JOSE CONSERVATION CORPS PROJECT APPROVAL FORM Date San Jose Conservation Corps Project Approval Form Project # The terms of the "Master Agreement By and Between the City of Cupertino and the San Jose Conservation Corps to Carry Out Community Benefit Activities" are incorporated by reference into this Project Approval Form. 1. Project Name: 2. Project Location: Cross Streets 3. Project Description: 4. Project Start Date: 5. Project Contacts: Phone: 6. Project financial requirements not to exceed: Labor: Materials: Equipment: Subcontractors: 7. Materials and equipment needs: a.Contract not to exceed $ for material, labor, equipment and/or subcontractor costs 9. The City of Cupertino agrees to reimburse the SJCC in full upon the successful completion of this project. Approved: SJCC Designee Date Approved: City of Cupertino Designee Date Page 11 of21 11 EXHIBIT C SCHEDULE OF PERFORMANCE All services provided by SJCC pursuant to this AGREEMENT shall be on an as- needed basis pursuant to a specific Project Approval Form issued to SJCC by CITY. EXHIBIT D COMPENSATION A. The maximum amount of compensation to SJCC under this AGREEMENT, including payment for professional services, supplies, materials, and equipment provided by SJCC, shall not exceed FIVE HUNDRED THOUSAND AND NOI100 DOLLARS ($500,000.00). B. The parties shall negotiate a maximum fee for each project based on the scope of services for each project. This fee will be specified in a written Project Approval Form. Any hours worked or expenses incurred in excess of this fee shall be at no cost to the CITY. C. Each Project Approval Form shall be paid based on hours worked. If the parties agree that the fee for the project shall be paid as a lump sum payment, that lump sum payment shall be for all costs incurred by SJCC in performance of the project and there shall be no separate payment by CITY for reimbursement expenses. EXHIBIT E INSURANCE REQUIREMENTS SJCC shall procure and maintain for the duration of the AGREEMENT at its sole cost and expense, insurance against claims for injuries to persons or damages to property which may arise from, or in connection with, the performance of the work hereunder by the SJCC, its agents, representative, employees or subcontractors. A. Minimum Scope of Insurance Coverage shall be at least as broad as: 1. Insurance Services Office form number GL 0002 (Ed. 01/96) covering Commercial General Liability and Insurance Services Office Form Number GL 0404 covering Broad Form Comprehensive General Liability; or Insurance Services Office Commercial General Liability coverage Page 12 of21 12 ("occurrence") Form Number CG 0001 (Ed. 01/96), including Explosion, Collapse and Underground; Environmental Impairment Liability; and 2. Insurance Services Office Form Number CA 0001 (Ed. 12/93) covering Automobile Liability, Code 1 "any auto", or Code 2 "owned autos" and Endorsement CA 0025. Coverage shall also include Code 8 "hired autos" and Code 9 "nonowned"; and 3. Workers' Compensation insurance as required by the California Labor Code and Employers Liability insurance. B. Minimum Limits of Insurance SJCC shall maintain limits no less than: 1. Commercial General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this projectllocation or the general aggregate limit shall be twice the required occurrence limit; and 2. Automobile Liability: $1,000,000 combined single limit per accident for bodily injury and property damage; and 3 . Workers' Compensation and Employers Liability: Workers' Compensation limits as required by the California Labor Code and Employers Liability limits of $1 ,000,000 per accident. C. Deductibles and Self-Insured Retentions Any deductibles or self-insured retentions must be declared to, and approved by, the CITY. At the option ofthe CITY, either; the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the CITY, its officials, employees, agents and contractors; or the SJCC shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses in an amount specified by the CITY. D. Other Insurance Provisions The policies are to contain, or be endorsed to contain, the following Coverages. 1. Commercial General Liability and Automobile Liability Coverages. a. The CITY, the City of Cupertino, their officials, employees, agents and contractors are to be covered as additional insureds as respects: Page 13 of21 13 liability arising out of activities performed by, or on behalf of, the SJCC; products and completed operations of the SJCC; premises owned, leased or used by the SJCC; automobiles owned, leased, hired or borrowed by SJCc. The coverage shall contain no special limitations on the scope of protection afforded to the CITY, their officials, employees, agents and contractors; and b. The SJCC 's insurance coverage shall be primary insurance as respects the CITY, their officials, employees, agents and contractors. Any insurance or self-insurance maintained by the CITY, their officials employees, agents, or contractors; and c. Any failure to comply with reporting provisions ofthe policies shall not affect coverage provided to the CITY, their officials, employees, agents, or contractors; and d. Coverage shall state that the SJCC's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respects to the limits of the insurer's liability. 2. All Coverages Each insurance policy required by this AGREEMENT shall be endorsed to state that coverage shall not be suspended, voided, cancelled, or reduced In limits except after thirty (30) days prior written notice has been given to the CITY. E. Acceptability of Insurers Insurance is to be placed with insurers acceptable to the City's Risk Manager. F. Verification of Coverage SJCC shall furnish the CITY with certificates of insurance and with original endorsements affecting coverage required by this AGREEMENT. The certificates and endorsements for each insurance policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. G. Subcontractors SJCC shall include all subcontractors as insureds under its policies or shall obtain separate certificates and endorsements for each subcontractor. Page 14 of21 14 EXHIBIT F NATIONAL SERVICE PROGRAM National and Community Service Trust Act of 1993, signed into Law by the President on September 21, 1993 (hereafter the National Service Act). The National Service Program The national service program initially proposed by the Clinton administration emphasized loan forgiveness for college-bound youth who engaged in a period of public service work. Because some members of Congress felt the President's proposal provided insufficient opportunities for low-income youth not planning to attend college, the administrator bill was amend in the House of Representatives to provide service opportunities for such youth. The key amendments, which were accepted by the Senate, authorize the participation of "qualified urban youth corps" (such as the conservation corps programs earlier described) in federal public works projects at the local level that do not require great technical skill. 5 The authors of the key amendments were the three California Democrats on the House Education & Labor Committee-- Congressmen George Miller, Matthew Martinez and Xavier Becerra -- as well as California Congressman Norman Mineta, Chairman of the House Committee on Public Works and Transportation. 6 The term "qualified urban youth corps" is defined in the National Service Act as "any program established by a State or local government or by a nonprofit organization that - "(A) is capable of offering meaningful, fulltime, productive work for individuals between the ages 16 and 25, inclusive, in an urban or public works or transportation setting; "(B) gives participants a mix of work experience basic and life skills, education, training, and support services; and "(C) provides participants with the opportunity to develop citizenship values and skills through service to their communities and the United States." (S 106 (c) (3).) Page 15 of21 15 Secretary of Transportation is expressly authorized to "make grants to States (and through States to local governments) for the purpose of establishing, operating or supporting qualified urban youth corps that will perform appropriate service projects relating to transportation resources or facilities." (Ibid. ) In short, the appropriate federal agencies possess the legal authority to involve state and local conservation corps in public works projects, and large amounts of funds that can be used for that purpose have already been appropriated.8 Expansion of conservation corps can also help ameliorate the unemployment and other problems that will result from the large number of military base closures in California. It is worth noting, in this connection, that the National Service Act authorizes the Secretary of Defense "to identify military installations and other facilities of the Department of Defense ... that may be used, in whole or in part, by [participants in corps programs.]" (S 205(c).) There is significant congressional support for financing the work of urban youth corps on public works and 8 It should be noted that, under the Act, the specified federal agencies "are each authorized to pay not more that 75 percent of the costs of any appropriate service proj ect carried out pursuant to [Section 106 of the Act] by a qualified urban youth corps. The remaining 25 percent of the costs of such a project may be provided from the nonfederal sources in the form of funds, services, facilities, materials, equipment, or any combination of the foregoing." environmental restoration projects with federal funds appropriated for those purposes. (See, for example, the attached letter date March 31, 1993 from Congressman Norman Mineta (Chairman of the House Committee on Public Works and Transportation) and Congresswoman Nancy Pelosi (member of the House Appropriations Committee) to Secretary of Transportation Federico Pena, which is attached to this paper.) Page 16 of21 16 ." Possible Concerns of Organized Labor Opposition to the involvement of urban youth corps in public works projects was never expressed during congressional debates on the National Service bill, nor has any such opposition yet appeared. If it does develop, it is most likely to come from elements within organized labor fearing job displacement. Such a concern would be unjustified. The National Service Act strengthens and reaffirms the strong nondisplacement provisions of the National and Community Service Act of 1990 (42 U.S.C. SS 12501 et seq.) (which was initiated by President Bush to promote volunteerism). The applicable statute now provides that "An employer shall not displace an employee or position, including partial displacement such as reduction in hours, wages, or employment benefits, as a result of the use by such employer of a participant in a program receiving assistance under [the law relating to national service]." (42 U.S.C. S 12637(b) (1).) Similarly, "A participant in a program receiving assistance [under the national service law] shall not perform any services or duties or engage in activities that would be otherwise performed by an employee as part of the assigned duties of such employee." (Id., S 12637(b) (3).) Federal law also provides that a participant in any program receiving assistance under the national service program "shall not perform any services, duties, or engage in activities, that - (i) will supplant the hiring of employed workers; or (ii) are services, duties, or activities with respect to which an individual has recall rights pursuant to a collective bargaining agreement or applicable personnel procedure." (Id., S12637 (b) (3). In short, labor cannot genuinely claim there are inadequate safeguards against displacement of other workers by urban youth corps. Conclusion The state and local conservation corps programs that exist throughout California, which have been the chief model for such programs elsewhere, serve two great heretofore unmet needs: (1) the need to engage large numbers of urban youth in forms of public service that will develop in them a sense of civic consciousness, personal responsibility and self-worth; and (2) the need to restore disintegrating urban environments. Page 17 of21 17 .' The success of these programs lies in their roots in the communities they serve and the fact that most are or can become self-supporting. These programs cannot continue to grow to meet the needs they serve, however, without developing new sources of revenue. Simply stated, as Congress has recognized, they need more remunerative public service work. The provision of such work, vast amounts of which has already been funded, should be an important goal of public officials and other policymakers. Application of the Davis Bacon Act The extent to which the Davis Bacon Act (40 U.S.C. SS 276a -276e) may apply to the participation of youth corps programs in public works projects is unclear. That Act provides that the minimum wages that may be paid in connection with federal public works projects shall not be less than "the wages that will be determined by the Secretary of Labor to be prevailing for the corresponding classes of laborers and mechanics employed on projects of a character similar to the contact work on the city, town, village or other civil subdivision of the State in which the work is to be performed.. 00" (S276a.) The purpose of the Davis Bacon Act -like Labor Code section 1771, the state law counterpart 9 - is to protect local wage standards by preventing contractors on government projects from basing their bids on wages lower that those prevailing in the area, and to give local labor organizations a fair opportunity to participate in government subsidize b.uilding programs. Under current law the Davis Bacon Act applies to federal public works contracts over $2,000. However, pending 9 Labor Code section 1771 provides in material part that "Except for public works projects of one thousand dollars ($1,000) or less, not less than the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is to be performed. .. shall be paid to all workers employed on public works." Page 18 of21 18 Legislation supported by organized labor would raise that threshold to $100,000. Community conservation corps, which pay corpsmember at or above the federal minimum wage (Cal. Pub. Resources Code, S 14507, subd. (c) could not survive if required to pay the prevailing wage, as the revenue they receive in excess of what needed to pay corpsmember is essential to defray their administrative expenses and the cost of maintaining their essential educational components. The Davis Bacon Act does not, however, necessarily apply to urban youth corps participating in public works projects. First, the Davis Bacon Act only applies to "contracts". 10 The National Service Act provides that specified federal agencies may not only enter into contracts with qualified urban youth corps, but may alternatively enter into "cooperative agreements" with such organizations when appropriate. (S 1 06 (d) (2).) Unlike a contract - the chief purpose of which "is to acquire (by purchase, lease or barter) property or services for the direct benefit or use of the United States Government." (31 US.C. S 6303(1) - a "cooperative agreement" may be used when "the principal purpose of the relationship is to transfer a thing of value to the State, local government, or other recipient to carry out a public purpose of support or 10 The state law counterpart to the Davis Bacon Act is also "applicable only to work performed under contract ...." (Cal. Labor Code, S 1771.) Stimulation authorized by a law of the United States instead of acquiring (by purchase, lease or barter) property or services for the direct benefit or use of the United States Government." (31 U.S.c. S 6305.) Work performed under cooperative agreements is exempt from the Davis Bacon Act because the purpose of such arrangements is not so much to obtain a government benefit as to confer a benefit on the other party to the arrangement beyond compensation for services provided. Because the National Service Act was in part designed to confer such a benefit on urban youth corps programs, it justifies the use of cooperative agreements to exempt such programs from the prevailing wage requirement. Page 19 of21 19 The provision of the Act pertaining to urban youth corps commences with the finding that "[t] he rehabilitation, reclamation, and beautification of urban public housing, recreational sites, youth and senior centers, and public roads and public works facilities through the efforts of young in the United States in Urban Youth Corps can benefit these youths .... by - (A) providing them with education and work opportunities; (B) furthering their understanding and appreciation of the challenges faced by individuals residing in urban communities; and (C) providing them with a means to pay for higher education or to repay indebtedness they have incurred to obtain higher education... "(S106 (a).) The Act then states that the purpose of the section relating to urban youth corps is, among other things, "to expose young people in the United States to public service while furthering their understanding and appreciation of their community; . . . . to expand educational opportunity for individuals who participate. . . by providing them with an increased ability to pursue postsecondary education or job training; and [] to stimulate interest among young people in the United States in lifelong service to their communities and the United States." (S 106(b).) Because these legislative goals would be frustrated by application of prevailing wage requirements to urban youth corps, Congress authorized the use of cooperative agreements. If for any reason a cooperative agreement cannot be used in connection with a particular public works projects and a work contract must be utilized, a youth or conservation corps program can be administratively exempted from the prevailing wage requirement by the Department of Labor where the employment in question may be certified as job-training. As earlier noted, "job-training" is one of the stated purpose of the portion ofthe National Service Act authorizing the participation of urban youth corps in public works projects. (See, e.g., S 106 (b) (4).)11 Such certification would presumably be easier to obtain by a youth corps program if it were authorized by the California Department of Industrial Relations to sponsor apprenticeship programs forecorpsmember Page 20 of21 20 11 This portion ofthe Act states that 'It is the purpose ofthis section. . . to expand educational opportunity for individuals who participate in [urban youth corps] by providing them with an increased ability to pursue postsecondary education or iob training engaged in a public work contract. 12 The prevailing wage for apprentice, which is lower than that for ordinary employees, is within the ability to pay of many youth corps programs. 12 See California Labor Code sections 3075 et seq. Section 3075.1 states in part that "It is the public policy of this state to encourage the utilization of apprenticeship as a form of on-the-job training, when such training is cost effective in developing skills needed to perform public services. State and local public agencies shall make a diligent effort to establish apprenticeship programs for apprenticeship occupations in their respective work forces." Page 21 of21 21