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HomeMy WebLinkAbout FULL PACKET_2019-09-17MINUTES OF THE REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF SANTA ANA, CALIFORNIA JULY 2, 2019 REGULAR OPEN MEETING CALLED TO ORDER COUNCIL CHAMBER 22 CIVIC CENTER PLAZA 5:51 P.M. ATTENDANCE COUNCILMEMBERS Present: MIGUELA. PULIDO, Mayor JUAN VILLEGAS, Mayor Pro Tern CECILIA IGLESIAS DAVID PENALOZA VICENTE SARMIENTO JOSE SOLORIO COUNCILMEMBERS Absent: 'WARD 4 VACANT STAFF Present: KRISTINE RIDGE, City Manager SONIA R. CARVALHO, City Attorney NORMA MITRE, Acting Clerk of the Council . Ward 4 councilmember representative resigned on Friday, March 1, 2019. PLEDGE OF ALLEGIANCE MAYOR PULIDO INVOCATION RUPERT VEGA, POLICE CHAPLAIN Mayor announced, Item 75B will not be considered at tonight's council meeting. CLOSED SESSION REPORT— None. Closed Session canceled. CEREMONIAL PRESENTATIONS PROCLAMATION presented by MAYOR PULIDO recognizing July as "Parks Make Life Better!" Month. CERTIFICATE OF RECOGNITION presented by COUNCILMEMBER SOLORIO recognizing Heritage Museum for their contributions to the community. CITY COUNCIL MINUTES 1 JULY 2, 2019 10A-1 PUBLIC COMMENTS Pursuant to Government Code Sec. 54954.3, members of the public may address either the City Council or any of the City's other related entities, such as the Housing Authority, Successor Agency or other legislative bodies, meeting in conjunction with this scheduled meeting. Public comments may be made on any and all matters within the City of Santa Ana's jurisdiction or the jurisdiction of the other related entities. At the discretion of the Chair, at the first Public Comment portion of the meeting, all comments may be considered jointly. The public will be given the opportunity to speak three (3) minutes on any and all matters contained on any of the Consent Calendar and Business Calendar items and/or on issues of public interest within the jurisdiction of the City. For public hearings, members of the public shall be given three (3) minutes for each duly noticed hearing (unless the matter is continued prior to taking public testimony). All requests to speak shall be submitted in writing to the Clerk of the Council at the beginning of the meeting and before Public Comments begin. Speaker forms will be available at the meeting. REQUESTS TO SPEAK SHALL NOT BE ACCEPTED AFTER THE PUBLIC COMMENT SESSION BEGINS WITHOUT PERMISSION OF THE MAYOR. When speaking, all persons addressing the City Council shall follow the rules of decorum as detailed on the back of the speaker form. The presiding officer shall have the power and responsibility to enforce decorum and order of the meeting as set forth in Section 2-104(c) of the Santa Ana Municipal Code. CONSENT CALENDAR ITEMS MOTION: Approve staff recommendations on the following Consent Calendar Items 10A through 25G; 55A; 558; 55C; 60A; 60B and 65A, with the following modifications • Councilmember Iglesias, pulled Agenda Item 11A, 25G, 6013, 65A for separate discussion. • Councilmember Sarmiento, announced that he will be leaving after discussion and vote of Item 11A. MOTION: Solorio VOTE: AYES: NOES: ABSTAIN SECOND: Villegas Iglesias, Penaloza, Pulido, Sarmiento, Solorio, Villegas (6) None (0) None (0) ABSENT: None (0) Ward 4 representative vacant. CITY COUNCIL MINUTES 2 JULY 2, 2019 10A-2 ADMINISTRATIVE MATTERS MINUTES 10A. MINUTES FROM THE REGULAR MEETING OF JUNE 4, 2019 {STRATEGIC PLAN NO. 5, 11 — Clerk of the Council Office MOTION: Approve Minutes. ORDINANCES/SECOND READING In the event a Councilmember recorded an "abstention" before consideration of the following ordinance(s) on first reading, such abstention will also be reflected in the minutes for second reading. On June 18, 2019, the following ordinance was introduced for first reading by a bifurcated motion. 1A. Approve the General Citywide Budget excluding the Police budget; place ordinance on first reading and authorize publication of title by a vote of 6-0; and 1 B. Approve the Police Budget; place ordinance on first reading and authorize publication of title by a vote of 4-2 (Iglesias and Villegas dissented). Published in the Orange County Reporter on June 21, 2019. Councilmember Solorio supportive of transferring all sales tax revenue exceeding estimated projection to non -departmental fund. Supportive of increasing rental assistance program funding to $250,000. Supportive of all future staff recruitment to consist of staff that will provide a direct service to the community. Councilmember Solorio suggested bringing item back to City Council at mid -year budget review. Mayor Pulido suggested bringing item back to City Council in three months. Councilmember Sarmiento directed staff to review status of Orange County Conservation Corp. grant application. Supportive of increasing funding of the rental assistance program as long as it is open to all Santa Ana residents and only if staff reaches out to Manufacturers Homeowners Association requesting matching of City program funding. Supportive of using cannabis revenue allocation towards increasing youth commission participation. CITY COUNCIL MINUTES 3 JULY 2, 2019 10A-3 Councilmember Penaloza unsupportive of increasing rental assistance program funding to $250k. Supportive of funding rental assistance program at a lower funding level than the proposed $250k. Mayor Pulido clarified Councilmember Penaloza's funding level request to be at $125k. Councilmember Penaloza supportive of funding level of $125k. Mayor Pulido clarified Councilmember Penaloza support of City funded rental assistance program at $125k and looking for external matching funds. City Manager Kristine Ridge, advised council that the amendment to increase amount to Rental Assistance Program will need to be included as part of 11A-1 B motion. 1A. MOTION: Bifurcated motion to place ordinance on second reading excluding Police Budget and adopt. ORDINANCE NO. NS-2969 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROPRIATING MONIES TO THE SEVERAL OFFICES, AGENCIES, AND DEPARTMENTS OF THE CITY FOR FISCAL YEAR BUDGET PERIOD COMMENCING JULY 1, 2019 MOTION: Sarmiento SECOND: Solorio VOTE: AYES: Penaloza, Pulido, Sarmiento, Solorio, (4) NOES: Iglesias, Villegas (2) ABSTAIN: None (0) ABSENT: None (0) Ward 4 representative vacant. Councilmember Sarmiento supportive of budget as presented. Supportive of providing police officers with additional training and counseling services. Councilmember Solorio supportive of tracking data and statistics from public communications and prioritizing hiring sworn officers over support staff. Directed City Manager and human resource to review staff promotions. Councilmember Solorio directed staff to ensure candidate that will replace jail administrator has the necessary qualifications and will commit to additional training as needed. CITY COUNCIL MINUTES 4 JULY 2, 2019 10A-4 1B. AMENDED MOTION: Bifurcated motion to place ordinance on second reading as it pertains to the Police Budget, amend to find matching funds that can be used towards the rental assistance pilot program and program to the extent possible additional funds, and adopt. ORDINANCE NO. NS-2969 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROPRIATING MONIES TO THE SEVERAL OFFICES, AGENCIES, AND DEPARTMENTS OF THE CITY FOR FISCAL YEAR BUDGET PERIOD COMMENCING JULY 1, 2019 MOTION: Sarmiento SECOND: Pulido VOTE: AYES: Penaloza, Pulido, Sarmiento, Solorio, (4) NOES: Iglesias, Villegas (2) ABSTAIN: None (0) ABSENT: None (0) Ward 4 representative vacant. MAYOR PULIDO EXCUSED COUNCILMEMBER SARMIENTO FROM REGULAR COUNCIL MEETING AND THE HOUSING AUTHORITY MEETING WHO LEFT AFTER DELIBERATION AND VOTE OF ITEM 11A, AT 6:32 P.M. BOARDS / COMMISSIONS / COMMITTEES 13A. COUNCIL COMMITTEES —AGENDA AND MINUTES {STRATEGIC PLAN NO. 5, 11 - Clerk of the Council Office MOTION: Receive and file. NAME MEETING DATE Public Safety, Code Enforcement and 4/23/2019 Neighborhood Empowerment Committee Economic Development Infrastructure, Budget 5/13/2019 and Technology Committee MISCELLANEOUS ADMINISTRATION 19A. CONFIRMATION OF CLOSED SESSION ACTION(S) — NONE 19B. EXCUSED ABSENCES — Clerk of the Council Office CITY COUNCIL MINUTES 5 JULY 2, 2019 10A-5 19C. RECEIVE AND FILE STRATEGIC PLAN MONTHLY REPORTS FOR MAY AND JUNE 2019 {STRATEGIC PLAN NO. 5, 11 - City Manager's Office The Strategic Plan Monthly Reports are available on the City's website at: http://www.santa-ana.org/strategic-planning/. MOTION: Receive and file. 19D. RECEIVE AND FILE PUBLIC WORKS AGENCY MONTHLY PROJECT STATUS AND CAPITAL IMPROVEMENT PROGRAM REPORT FOR JUNE 2019 {STRATEGIC PLAN NO. 5, 11 - Public Works Agency The CIP Executive Summary Schedule is available on the City's website at https://www.santa-ana.org/sites/default/files/pw/documents/Executive-Monthly- CI P-Update-June-2019. pdf :Za' Fr— Fr1T*filraA -111 Biel =111III Wd�Aleli1=I*1 APPROPRIATION ADJUSTMENTS 20A. APPROVE AN APPROPRIATION ADJUSTMENT AND AWARD A CONSTRUCTION CONTRACT TO FODDRILL CONSTRUCTION CORPORATION FOR NEW LIGHTING AT SIX PARKS (ANGELS PARK, CABRILLO PARK, CESAR CHAVEZ PARK, PORTOLA PARK, RIVERVIEW PARK, AND ROSITA PARK) ESTIMATED DELIVERY COST: $724,000 (PROJECT NOS. 18-2683, 18-2684, 18-2685, 18-2686, 18-2687, 18-2689) {STRATEGIC PLAN NO. 6, 113; 1G) — Public Works Agency and Parks, Recreations and Community Services Agency MOTION: 1. Approve an appropriation adjustment. (Requires five affirmative votes). a. APPROPRIATION ADJUSTMENT NO. 2020-005 - Recognizing $195,476 from Residential Development District 1 prior year fund balance and appropriating the same amount into the Residential Development District 1 Acquisition & Development expenditure account. These funds will be added to the existing budget for this project. b. APPROPRIATION ADJUSTMENT NO. 2020-005 - Recognizing $171,604 from Residential Development District 2 prior year fund balance and appropriating $90,604 into the Residential Development District 2 Acquisition & Development expenditure account and $81,000 into the Residential Development District 2 In - Lieu expenditure account. These funds will be added to the existing budget for this project. CITY COUNCIL MINUTES 6 JULY 2, 2019 10A-6 2. Award a contract to Foddrill Construction Corporation, the lowest responsible bidder, in accordance with the base bid in the amount of $579,378, for the term beginning upon execution of the contract and ending upon project completion, for construction of the New Lighting at Six Parks Project, and authorize the City Manager and the Clerk of the Council to execute the contract, subject to non -substantive changes approved by the City Manager and the City Attorney. 3. Approve the Project Cost Analysis for a total estimated construction delivery cost of $724,000, which includes $579,378 for the construction contract, $86,906 for contract administration, inspection and testing, and a $57,716 project contingency, to be funded with District 1 and District 2 Acquisition & Development funding and District 2 in Lieu Funds. GRANTS/APPLICATIONS 21A. AUTHORIZE THE SUBSEQUENT LOCAL AREA DESIGNATION AND RECERTIFY LOCAL WORKFORCE DEVELOPMENT BOARD UNDER THE WORKFORCE INNOVATION AND OPPORTUNITY ACT FOR A TWO-YEAR PERIOD -JULY 2019 TO JUNE 2021 {STRATEGIC PLAN NO. 2, 4} — Community Development Agency At its regular meeting on May 16, 2019, by a vote of 13-0 (Alegre, Baetz, Korthuis, Smith absent), the Workforce Development Board approved the recommended action. MOTION: Authorize the Mayor and City Clerk to sign the application for Subsequent Local Area Designation and Local Board Recertification for a two-year period from July 1, 2019 to June 30, 2021. SPECIFICATIONS — PURCHASE OF EQUIPMENT AND SERVICES 22A. AWARD A PURCHASE ORDER IN THE AMOUNT OF $86,400 TO UNITED INTERIORS FOR OFFICE WORKSTATION FURNITURE AND INSTALLATION (SPECIFICATION NO. 19-044) {STRATEGIC PLAN NO. 7, 51 - Public Works Agency and Finance and Management Services Agency MOTION: Authorize a one-time purchase and payment of purchase order to United Interiors for office workstation furniture and installation services in the amount of $66,400, plus a contingency of $20,000, for a total amount not to exceed $86,400 in the Water Meter Services fund, subject to non - substantive changes approved by the City Manager and City Attorney. CITY COUNCIL MINUTES 7 JULY 2, 2019 10A-7 22B. APPROVE A CONTRACT AMENDMENT WITH COMMERCIAL CLEANING SYSTEMS FOR JANITORIAL SERVICES AT VARIOUS CITY FACILITIES INCLUDING CITY HALL, ROSS ANNEX, SANTA ANA REGIONAL TRANSPORTATION CENTER, CORPORATION YARD, SANTA ANA MAIN LIBRARY, NEWHOPE AND MCFADDEN LEARNING CENTERS, AND SIX RECREATION CENTERS IN THE AMOUNT OF $236,000 (SPECIFICATION NO. 14-021) {STRATEGIC PLAN NO.6, 1, C) -Public Works Agency and Finance and Management Services Agency MOTION: Amend the contract with Commercial Cleaning Systems for janitorial services in the amount of $236,000, for a new total annual amount not to exceed $973,074, and extend the term by four months for a new contract expiration date of October 31, 2019, subject to non -substantive changes approved by the City Manager and City Attorney. 22C. AWARD A THREE-YEAR BLANKET ORDER CONTRACT TO SMART & FINAL STORES LLC FOR SUNDRY FOOD AND PAPER GOODS IN THE AMOUNT OF $45,000 ANNUALLY FOR A TOTAL AMOUNT NOT TO EXCEED $225,000 IF RENEWAL OPTIONS ARE EXERCISED (SPECIFICATION NO. 19-046) {STRATEGIC PLAN NO. 2, 2; 5, 41 - Finance and Management Services Agency MOTION: Award a blanket order contract to Smart & Final Stores LLC for sundry food and paper goods for a three-year period expiring June 1, 2022, with provisions for two one-year renewals exercisable by the City Manager, in an annual amount of $45,000, for a total amount not to exceed $225,000 if renewal options are exercised, subject to non -substantive changes approved by the City Manager and City Attorney. PROJECTS/CHANGE ORDERS 23A. AWARD A CONSTRUCTION CONTRACT TO ALL AMERICAN ASPHALT IN THE AMOUNT OF $1,716,649 FOR THE LOCAL STREET PREVENTATIVE MAINTENANCE FISCAL YEAR 2018-19 PROJECT ESTIMATED DELIVERY COST: $1,900,000 (PROJECT NO. 19-6942) {STRATEGIC PLAN NO. 6, 1 B; 1C; 1 G) — Public Works Agency MOTION: 1. Award a construction contract to All American Asphalt, the lowest responsible bidder, in accordance with the base bid in the amount of $1,716,649, for construction of the Local Street Preventative Maintenance Fiscal Year 2018-19 Project, for the term beginning upon execution of the contract and ending upon project completion, and authorize the City Manager and the Clerk of the Council to execute the contract subject to non -substantive changes approved by the City Manager and the City Attorney. CITY COUNCIL MINUTES 8 JULY 2, 2019 10A-8 2. Approve the Project Cost Analysis for a total estimated construction delivery cost of $1,900,000, which includes $1,716,649 for the construction contract, $115,351 for contract administration, inspection and testing, and a $68,000 project contingency (approximately 4% of the construction contract amount), paid with Measure M2 Local Fairshare funding. AGREEMENTS 25A. AWARD $474,770 OF WORKFORCE INNOVATION AND OPPORTUNITY ACT FORMULA YOUTH FUNDS FOR FISCAL YEAR 2019-20 {STRATEGIC PLAN NO. 2, 41 - Community Development Agency At its regular meeting on May 16, 2019, by a vote of 13-0 (Alegre, Baetz, Korthuis, Smith absent), the Workforce Development Board approved the recommended action. MOTION: Authorize the City Manager and the Clerk of the Council to execute agreements to award a total of $474,770 in youth program funds as part of the Workforce Innovation and Opportunity Act for a one-year term beginning July 1, 2019 through June 30, 2020, subject to non -substantive changes approved by the City Manager and City Attorney: a. Orange County Children's Therapeutic Arts Center to provide occupational skills training in the areas of office administration, childcare worker certification, career technical training in partnership with Santa Ana College, paid work experience, employment preparation, tutoring, mentoring, counseling, civic engagement and supportive services, for 26 youth in the amount of $199,770 (AGMT. No. 2019-096); b. Charitable Ventures of Orange County dba Project Kinship to provide training in customer service, forklift operator, guard card, and silk screening, provide job preparation, paid work experience, mentoring, counseling, civic engagement, internships, post -secondary education resources, prepare participants to enter training in the electrical and welding certificate programs, and supportive services for 20 youth in the amount of $160,000 (AGMT. No. 2019-097); c. Orange County Conservation Corps to provide alternative secondary education that leads to a high school diploma, offer credential training in forklift operations, safe food handling, customer service, state guard cards, provide job preparation, paid work experience, post -secondary education resources, and supportive services for 14 youth in the amount of $115,000 (AGMT. No. 2019-098). CITY COUNCIL MINUTES 9 JULY 2, 2019 10A-9 25B. APPROVE AGREEMENT AMENDMENT WITH WESTBOUND COMMUNICATIONS, INC. FOR "READY OC" EMERGENCY PREPAREDNESS AND "IF YOU SEE SOMETHING, SAY SOMETHING TM11 PUBLIC AWARENESS CAMPAIGNS REVISING THE ORIGINAL SCOPE OF SERVICE {STRATEGIC PLAN NO. 1.61— Police Department MOTION: Authorize the City Manager and Clerk of the Council to execute an agreement amendment with Westbound Communications, Inc. for the continuation of the Ready OC Emergency Preparedness Campaign and the "If You See Something, Say SomethingTM11 Public Awareness Campaign. The amendment includes revisions and updates to the original scope of work, but does not increase the overall three-year agreement amount of $1,335,000. The amendment will cover the period of July 1, 2019 to June 30, 2020, subject to non -substantive changes approved by the City Manager and City Attorney (AGMT. No. 2019-099). 25C. APPROVE AN AMENDMENT TO AGREEMENT WITH AXON ENTERPRISE, INC. IN THE AMOUNT OF $175,491.78 FOR BODY -WORN CAMERA EQUIPMENT AND SERVICES NEW NOT TO EXCEED FIVE-YEAR AGREEMENT AMOUNT $2,065,055.96 (GRANT FUNDED) {STRATEGIC PLAN NO. 1, 3A) — Police Department MOTION: Authorize the City Manager and Clerk of the Council to execute an amendment to the agreement with Axon Enterprise, Inc. to provide body - worn camera equipment and services for the Santa Ana Police Department, in the amount of $175,491.78, subject to non -substantive changes approved by the City Manager and City Attorney. The new not to exceed five-year agreement amount is $2,065,055.96. The term of the agreement will remain May 2, 2017 through May 1, 2022 (AGMT. No. 2019-100). 25D. APPROVE AN AGREEMENT WITH ECONOLITE SYSTEMS, INC., FOR TRAFFIC SIGNAL SYSTEM MAINTENANCE, FOR A THREE-YEAR PERIOD, IN AN AMOUNT NOT TO EXCEED $675,000 ANNUALLY FOR A TOTAL AMOUNT NOT TO EXCEED $3,375,000 IF ALL EXTENSION OPTIONS ARE EXERCISED {STRATEGIC PLAN NOS. 6, 1 C) — Public Works Agency MOTION: Authorize the City Manager and Clerk of the Council to execute an agreement with Econolite Systems, Inc., to provide traffic signal system maintenance services, for a three-year period beginning July 2, 2019, and expiring July 1, 2022, with provision for two one-year extensions exercisable by the City Manager and City Attorney, in an amount not to exceed $675,000 annually, to be paid with Special Gas Tax funds, subject to non -substantive changes approved by the City Manager and City Attorney (AGMT. No. 2019-101). CITY COUNCIL MINUTES 10 JULY 2, 2019 10A-10 25E. APPROVE AN AGREEMENT WITH GRISWOLD INDUSTRIES FOR FLOW CONTROL VALVE MAINTENANCE, REHABILITATION, AND REPLACEMENT SERVICES IN AN AMOUNT NOT TO EXCEED $500,000 (NONGENERAL FUND) {STRATEGIC PLAN NO. 6, 11 — Public Works Agency MOTION: Authorize the City Manager and Clerk of the Council to execute an agreement with Griswold Industries dba Cla-Val to provide flow control valve maintenance, rehabilitation, and replacement services, for a three- year period commencing July 2, 2019, and expiring July 1, 2022, with provision for one 2-year renewal option exercisable by the City Manager and City Attorney, for $100,000 annually, in a total amount not to exceed $500,000 paid from the Water Utility Water Production & Supply Fund, for the term of the agreement, subject to non -substantive changes approved by the City Manager and City Attorney (AGMT. No. 2019-102). 25F. APPROVE AGREEMENT WITH LANDSCAPE WEST MANAGEMENT SERVICES, INC., FOR RIGHT-OF-WAY AND MEDIAN LANDSCAPE MAINTENANCE SERVICES IN AN AMOUNT NOT TO EXCEED $770,000 {STRATEGIC PLAN NO. 6, 1 C) — Public Works Agency MOTION: Authorize the City Manager and Clerk of the Council to execute an agreement with Landscape West Management Services, Inc., for Right - of -Way and Median Landscape Maintenance Services, for the two-year period beginning July 2, 2019, and expiring on June 30, 2021, with a provision for two, two-year renewal options exercisable by the City Manager and City Attorney, in an amount of $700,000 with a 10% contingency of $70,000 for a total amount not to exceed $770,000, subject to non - substantive changes approved by the City Manager and City Attorney. The agreement will be paid with Special Gas Tax Funds (AGMT. No. 2019-103). MOTION: Approve an employment agreement outlining the terms and conditions of the appointment of Daisy Gomez as the Clerk of the Council for the City of Santa Ana (AGMT. No. 2019-104). MOTION: Solorio SECOND: Penaloza VOTE: AYES: Iglesias, Penaloza, Pulido, Solorio (4) NOES: Villegas (1) ABSTAIN: None (0) ABSENT: Sarmiento (1) Ward 4 representative vacant. CITY COUNCIL MINUTES 11 JULY 2, 2019 10A-11 RESOLUTIONS -CONSENT 55A. RESOLUTION APPROVING THE WATER SUPPLY ASSESSMENT FOR THE ELAN MIXED -USE PROJECT LOCATED AT 1660 EAST FIRST STREET {STRATEGIC PLAN NOS. 3, 3 AND 5, 21 — Public Works Agency Planning Commission approved Site Plan Review No. 2018-02 as conditioned by staff by a vote of 4-0 (Alderete, Contreras -Leo, and Reyna absent) at its meeting of October 22, 2018. MOTION: Adopt a resolution. RESOLUTION NO. 2019-055 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING THE WATER SUPPLY ASSESSMENT FOR THE PROPOSED ELAN MIXED -USE PROJECT LOCATED AT 1660 EAST FIRST STREET 55B. APPROVE APPROPRIATION ADJUSTMENT AND ADOPT RESOLUTION ACCEPTING DEPARTMENT OF ALCOHOLIC BEVERAGE CONTROL FUNDS {STRATEGIC PLAN NO. 1, 3131 — Police Department 1. Adopt a resolution. RESOLUTION NO. 2019-056 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTAANA AUTHORIZING THE CITY MANAGER, AND THE CHIEF OF POLICE OR HIS DESIGNEE TO OBTAIN CALIFORNIA DEPARTMENT OF ALCOHOLIC BEVERAGE CONTROL GRANT FUNDS IN THE AMOUNT OF $100,000 AND TO EXECUTE AN AGREEMENT WITH THE DEPARTMENT OF ALCOHOLIC BEVERAGE CONTROL FOR USE OF THOSE FUNDS AND EXECUTE ANY DOCUMENTS OR ASSURANCES NECESSARY FOR OBTAINING GRANT FUNDS AGMT - State of California, Department of Alcoholic Beverage Control in an amount not to exceed $100,000 for the period of July 1, 2019 through June 30, 2020 subject to non -substantive changes approved by the City Manager and City Attorney (AGMT. No. 2019-105). 2. Approve an appropriation adjustment. (Requires five affirmative votes) APPROPRIATION ADJUSTMENT NO. 2020-007 - Recognizing $100,000 in Department of Alcoholic Beverage Control Grant funds in revenue account, and appropriate same to expenditure accounts for Fiscal Year 2019-2020. CITY COUNCIL MINUTES 12 JULY 2, 2019 10A-12 55C. RESOLUTION AND AGREEMENT ACCEPTING FISCAL YEAR 2018 HOMELAND SECURITY GRANT PROGRAM FUNDS IN THE AMOUNT OF $1,819,025 {STRATEGIC PLAN NO.1,2&6}— Police Department 1. Adopt a resolution. RESOLUTION NO. 2019-057 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AUTHORIZING THE CITY MANAGER AND THE CHIEF OF POLICE OR THEIR DESIGNEE(S) TO ENTER INTO AN AGREEMENT WITH THE CITY OF ANAHEIM FOR THE FY 2018 URBAN AREA SECURITY INITIATIVE FUNDING PROGRAM 2. Authorize the City Manager and the Chief of Police to enter into the Sub - Recipient agreement with the City of Anaheim for reimbursement of funds expended for the purchase of equipment, services, personnel, training and exercises authorized under the FY 2018 Urban Areas Security Initiative in an amount not to exceed $1,819,025subject to non - substantive changes approved by the City Manager and City Attorney (AGMT NO. 2019-106). ADMINISTRATIVE MATTERS - CONSENT 60A. APPROVE AN APPROPRIATION ADJUSTMENT TOTALING $127,011 IN FEDERAL EMERGENCY MANAGEMENT AGENCY (FEMA)/CALIFORNIA GOVERNOR'S OFFICE OF EMERGENCY SERVICES (CAL OES) DISASTER ASSISTANCE GRANT FUNDS AND AMEND THE FY 2019-20 CAPITAL IMPROVEMENT PROGRAM FOR THE C-5-F CHANNEL REPAIR PROJECT (PROJECT NO. 18-6613) {STRATEGIC PLAN NO. 6, 1C; 1G) - Public Works Agency MOTION: 1. Approve an appropriation adjustment. (Requires five affirmative votes) APPROPRIATION ADJUSTMENT NO. 2020-006 - Recognizing $99,617 in FEMA Disaster Assistance grant funds and $27,394 in Cal OES Disaster Assistance grant funds for the C-5-F Channel Repair Project in the Emergency and Health Grants Revenue Account, and appropriating the total amount of $127,011 into the FEMA/OES Disaster Assistance Expenditure Account. 2. Approve an amendment to the Fiscal Year 2019-20 Capital Improvement Program adding $127,011 in FEMA and Cal OES Disaster Assistance funding to the C-5-F Channel Repair Project. CITY COUNCIL MINUTES 13 JULY 2, 2019 10A-13 MOTION: Approve an amendment to the Fiscal Year 2019-20 Capital Improvement Program adding $233,500 in Community Development Block Grant funds to the Santa Ana Regional Transportation Center South Restroom Renovation Project. MOTION: Villegas SECOND: Solorio VOTE: AYES: Penaloza, Pulido, Solorio, Villegas (4) NOES: Iglesias (1) ABSTAIN: None (0) ABSENT: Sarmiento (1) Ward 4 representative vacant. REPORTS -CONSENT Councilmember Iglesias directed staff to allocate funds towards youth services and summer programs. MOTION: Iglesias SECOND: Penaloza VOTE: AYES: Iglesias, Penaloza, Pulido, Solorio, Villegas (5) NOES: None (0) ABSTAIN: None (0) ABSENT: Sarmiento (1) Ward 4 representative vacant. AMENDED MOTION: 1. Approve the recognition of $399,606.30 of revenue in the General Fund and $529,796.45 of revenue in the Water Enterprise Fund for certain unclaimed deposits, as allowed by state law. CITY COUNCIL MINUTES 14 JULY 2, 2019 1 OA-14 2. Approve the transfer of active deposits from the Treasurer's Trust Fund (Fund 098) to the City Services Fund (Fund 053), and the closure of the Treasurer's Trust Fund as of June 30, 2019. 3. Allocate funds towards youth services and summer programs via an appropriation adjustment at the following council meeting. "'"'END OF CONSENT CALENDAR" BUSINESS CALENDAR ITEMS RESOLUTIONS 55D. ADOPT RESOLUTION CALLING FOR AND GIVING NOTICE OF A SPECIAL MUNICIPAL ELECTION TO FILL WARD 4 VACANCY FOR THE REMAINDER OF THE TERM EXPIRING DECEMBER 2022, TO BE HELD ON NOVEMBER 5, 2019 AND REQUESTING THAT THE BOARD OF SUPERVISORS OF THE COUNTY OF ORANGE CONSOLIDATE THE CITY OF SANTA ANA SPECIAL MUNICIPAL WITH THE SANTAANA UNIFIED SCHOOL DISTRICT'S SPECIAL VACANCY ELECTION OF THE SAME DATE ; ADOPT RESOLUTION ADOPTING A REGULATION FOR CANDIDATES PERTAINING TO CANDIDATE STATEMENTS AND ESTABLISHING A SYSTEM FOR CANDIDATES WHOSE STATEMENTS ARE SUBMITTED TO THE ELECTORATE TO PAY THEIR PRO RATA SHARE OF THE COST OF INCLUSION OF THEIR STATEMENT IN VOTER PAMPHLETS {STRATEGIC PLAN NO. 5, 11 - Clerk of the Council Office MOTION: 1. Adopt a resolution. RESOLUTION NO. 2019-058 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA CALLING FOR AND GIVING NOTICE OF A SPECIAL MUNICIPAL ELECTION TO BE HELD IN THE CITY OF SANTA ANA ON TUESDAY, NOVEMBER 5, 2019 TO ELECT CERTAIN OFFICERS OF THE CITY OF SANTAANA AND REQUESTING THAT THE COUNTY OF ORANGE CONSOLIDATE THE CITY'S SPECIAL ELECTION ON TUESDAY NOVEMBER 5, 2019 WITH THE SANTA ANA UNIFIED SCHOOL DISTRICT'S SPECIAL VACANCY ELECTION ON NOVEMBER 5, 2019 AND THAT THE COUNTY OF ORANGE CONDUCT THE CONSOLIDATED ELECTION AND CANVASS THE RETURNS ON BEHALF OF THE CITY OF SANTA ANA CITY COUNCIL MINUTES 15 JULY 2, 2019 10A-15 2. Adopt a resolution and limit candidate statements to 200 words. RESOLUTION NO. 2019-059 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA ADOPTING A REGULATION FOR CANDIDATES FOR ELECTIVE OFFICE PERTAINING TO CANDIDATE STATEMENTS SUBMITTED TO THE VOTERS AT A SPECIAL ELECTION TUESDAY NOVEMBER 5, 2019 AND ESTABLISHING A SYSTEM FOR CANDIDATES WHOSE STATEMENTS ARE SUBMITTED TO THE ELECTORATE IN THE SPECIAL MUNICIPAL ELECTION ON NOVEMBER 5, 2019 TO PAY THE PRO RATA SHARE OF THE COST OF INCLUSION OF THEIR STATEMENT IN VOTER PAMPHLETS AND/OR ELECTRONIC COPY 3. Direct Clerk of the Council to publish legal notices as required by law. MOTION: Villegas SECOND: Iglesias VOTE: AYES: Iglesias, Penaloza, Pulido, Solorio, Villegas(5) NOES: None (0) ABSTAIN: None (0) ABSENT: Sarmiento (1) Ward 4 representative vacant. 55E. ADOPT RESOLUTIONS FOR JOINT POWERS AUTHORITY AGREEMENT BETWEEN THE CITY OF SANTA ANA AND INDEPENDENT CITIES RISK MANAGEMENT AUTHORITY (ICRMA) AND APPROVE ASSOCIATED INSURANCE PREMIUMS {STRATEGIC PLAN NO. 4, 11 — Human Resources Department Councilmember Iglesias directed staff to identify all cities participating in Independent Cities Risk Management Authority (ICRMA) pool and communicate findings to the City Council. MOTION: 1. Adopt resolutions. a. RESOLUTION NO. 2019-060 -A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING EXECUTION OF THE JOINT POWERS AGREEMENT CREATING THE INDEPENDENT CITIES RISK MANAGEMENT AUTHORITY AGMT - Joint Exercise of Powers Agreement for Insurance and Risk Management Purposes subject to non -substantive changes approved by the City Manager and City Attorney (AGMT. No. 2019-107). CITY COUNCIL MINUTES 16 JULY 2, 2019 10A-16 b. RESOLUTION NO. 2019-061 -A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA TO AUTHORIZE AND APPROVE POOLING OF SELF-INSURANCE THROUGH THE LIABILITY PROGRAM OF THE INDEPENDENT CITIES RISK MANAGEMENT AUTHORITY c. RESOLUTION NO. 2019-062 -A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA TO AUTHORIZE AND APPROVE POOLING OF SELF-INSURANCE THROUGH THE WORKERS' COMPENSATION PROGRAM OF THE INDEPENDENT CITIES RISK MANAGEMENT AUTHORITY d. RESOLUTION NO. 2019-063 -A RESOLUTION OF THE CITY OF SANTA ANA TO AUTHORIZE AND APPROVE PARTICIPATION IN THE PROPERTY/AUTO PHYSICAL DAMAGE PROGRAM OF THE INDEPENDENT CITIES RISK MANAGEMENT AUTHORITY e. RESOLUTION NO. 2019-064 -A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING COVERAGE OF ALL OFFICERS AND EMPLOYEES UNDER ONE MASTER FAITHFUL PERFORMANCE BOND f. RESOLUTION NO. 2019-065 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA FULFILLING ITS OBLIGATION AS A MEMBER OF THE INDEPENDENT CITIES RISK MANAGEMENT AUTHORITY (ICRMA) TO APPOINT A VOTING DELEGATE TO THE ICRMA BOARD OF DIRECTORS, ELECTING TO APPOINT ALTERNATES TO THE BOARD OF DIRECTORS IN ORDER TO ENSURE CONSISTENT ATTENDANCE 2. Approve payment of Insurance Premiums under Independent Cities Risk Management Authority (ICRMA) for Excess Liability and Workers' Compensation, Property, Auto and other coverages for protection of City's assets. a. Approve the City's membership in Independent Cities Risk Management Authority's Excess Pool Liability Program from July 1, 2019 to June 30, 2020 with member contribution not to exceed $2,300,000. b. Approve the City's membership in Independent Cities Risk Management Authority's Excess Pool Workers' Compensation Program from July 1, 2019 to June 30, 2020 with member contribution not to exceed $612,000. c. Approve the City's participation in Independent Cities Risk Management Authority's Property & Equipment Program from July 1, 2019 to June 30, 2020 at an estimated premium not to exceed $360,000. CITY COUNCIL MINUTES 17 JULY 2, 2019 10A-17 d. Approve the City's participation in Independent Cities Risk Management Authority's Auto Physical Damage Program from July 1, 2019 to June 30, 2020 at an estimated premium not to exceed $71,000. e. Approve the City's participation in Independent Cities Risk Management Authority's Cyber Liability Insurance Program from July 1, 2019 to June 30, 2020 at an estimated premium not to exceed $22,000. f. Approve the City's participation in Independent Cities Risk Management Authority's Earth Movement & Flood and Difference in Coverage Program from July 1, 2019 to June 30, 2020 at an estimated premium not to exceed $310,000. g. Approve the City's participation in Independent Cities Risk Management Authority's Crime Insurance Program from July 1, 2019 to June 30, 2020 at an estimated premium not to exceed $15,000. h. Approve the City's participation in Independent Cities Risk Management Authority's Terrorism Insurance Program from July 1, 2019 to June 30, 2020 at an estimated premium not to exceed $12,000. i. Approve the City's obligation to pay the State of California Department of Industrial Relations (DIR) fee for the Workers' Compensation Program from July 1, 2019 to June 30, 2020 at an estimated cost not to exceed $300,000. MOTION: Villegas SECOND: Pulido VOTE: AYES: Iglesias, Penaloza, Pulido, Solorio, Villegas(5) NOES: None (0) ABSTAIN: None (0) ABSENT: Sarmiento (1) Ward 4 representative vacant. ADMINISTRATIVE MATTERS - BUSINESS 60C. LEAGUE OF CALIFORNIA CITIES VOTING DELEGATE 2019 {STRATEGIC PLAN NO. 5, 11 — Clerk of the Council Office MOTION: Designate Councilmember Penaloza as the primary voting delegate for the League of California Cities' Annual Conference's General Assembly scheduled for October 18, 2019; and nominated Councilmember Iglesias as the primary alternate and Mayor Pro Tern Villegas as secondary alternate. CITY COUNCIL MINUTES 18 JULY 2, 2019 10A-18 MOTION: Pulido SECOND: Solorio VOTE: AYES: Iglesias, Penaloza, Pulido, Solorio, Villegas(5) NOES: None (0) ABSTAIN: None (0) ABSENT: Sarmiento (1) Ward 4 representative vacant. REPORTS 65B. RECEIVE AND FILE REPORT ON THE STATUS OF EVALUATING AND AMENDING THE HOUSING OPPORTUNITY ORDINANCE {STRATEGIC PLAN NO 5, 31 - Planning and Building Agency and Community Development Agency Council supportive of creating an ad hoc committee to review and provide direction to staff. MOTION: Receive and file report on the status of evaluating and amending the Housing Opportunity Ordinance. MOTION: Solorio SECOND: Pulido VOTE: AYES: Iglesias, Penaloza, Pulido, Solorio, Villegas(5) NOES: None (0) ABSTAIN: None (0) ABSENT: Sarmiento (1) Ward 4 representative vacant. PUBLIC HEARINGS 75A. PUBLIC HEARING — ZONING ORDINANCE AMENDMENT NO. 2019-03 TO AMEND CERTAIN DEVELOPMENT AND DESIGN STANDARDS APPLICABLE WITHIN THE TRANSIT ZONING CODE (SPECIFIC DEVELOPMENT NO. 84) ZONING DISTRICT AMENDMENT SECTIONS INCLUDED: BUILDING HEIGHTS — LINED BLOCK; OFF-STREET PARKING OPTIONS; PARKING DRIVEWAY STANDARDS; UPPER STORY SETBACK; LOT WIDTH AND DEPTH STANDARDS TEXTAMENDMENTS; OPEN SPACE STANDARDS AND MASSING STANDARDS — CITY OF SANTA ANA, APPLICANT {STRATEGIC PLAN NO. 3, 2; 5, 31 — Planning and Building Agency CITY COUNCIL MINUTES 19 JULY 2, 2019 10A-19 Planning Commission approved recommended action on May 14, 2019 by a vote of 4-1 (Cano dissented; Alderete and Contreras -Leo absent). Legal Notice published in the Orange County Reporter May 24, 2019. Continued from the June 4, 2019 City Council meeting by a vote of 6-0. Mayor Pulido opened the Hearing. There were no speakers, no staff presentation and written communication received. Hearing was closed. Councilmember Solorio directed staff to perform a semi-annual or annual progress review. MOTION: Place ordinance on first reading and authorize publication of title. ORDINANCE NO. NS-2970 -AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA ADOPTING ZONING ORDINANCE AMENDMENT NO. 2019-03 AMENDING SECTIONS 41-2010, 41-2011, 41-2012, 41-2013, 41-2014, 41-2015, 41-2022, 41-2023, AND 41-2024 OF THE SANTA ANA MUNICIPAL CODE IN THE TRANSIT ZONING CODE/SPECIFIC DEVELOPMENT (SD) NO. 84 ZONING DISTRICT TO MODIFY HEIGHT, MASSING, OPEN SPACE LOCATION, DRIVEWAY STANDARDS, LOT DIMENSIONS AND AMENDING VARIOUS OPTIONS TO SATISFY REQUIRED PARKING MOTION: Villegas SECOND: Penaloza VOTE: AYES: Iglesias, Penaloza, Solorio, Villegas(4) NOES: None (0) ABSTAIN: Pulido (1) ABSENT: Sarmiento (1) Ward 4 representative vacant. 75B. PUBLIC HEARING CONTINUED — FILED BY FIEDLER GROUP ON BEHALF OF 7-ELEVEN INC. FOR MITIGATED NEGATIVE DECLARATION, ENVIRONMENTAL REVIEW NO. 2017-140 AND AMENDMENT APPLICATION NO.2019-02 TO CHANGE THE ZONING DESIGNATION OF THE PROPERTIES AT 1904, 1910, 1916 WEST FIRST STREET AND 1901 WEST WALNUT STREET FROM LIGHT INDUSTRIAL (M1) TO GENERAL COMMERCIAL (C2) AND 2002 WEST FIRST STREET FROM COMMUNITY COMMERCIAL (Cl) TO C2 TO FACILITATE THE CONSTRUCTION OF A 7-ELEVEN CONVENIENCE STORE AND GAS STATION AT 1904 WEST FIRST STREET — Planning and Building Agency CITY COUNCIL MINUTES 20 JULY 2, 2019 1 OA-20 Legal Notice published in the Orange County Reporter June 21, 2019 and notices mailed on said date. Matter continued to the July 16, 2019 City Council meeting at the request of staff. RECESS TO THE JOINT SESSION OF THE CITY COUNCIL AND THE HOUSING AUTHORITY AND EXCUSE COUNCILMEMBER SARMIENTO 80A. JOINT SESSION -AUTHORIZE ISSUANCE OF FISCAL YEAR 19-20 REQUEST FOR PROPOSALS FOR AFFORDABLE HOUSING DEVELOPMENT {STRATEGIC PLAN NO. 5, 31 — Community Development Agency At its regular meeting on May 22, 2019 the Community Redevelopment and Housing Commission recommended that the City Council and Housing Authority approve the recommended action by a vote of 4-0 (Aguinaga, Frazier, Tardiff, Vasquez and Garcia absent). Councilmember Solorio directed staff to focus on rental properties. MOTION: Authorize the City Manager to release a Fiscal Year 19-20 (FY 19- 20) Request for Proposals seeking proposals to develop affordable rental and ownership project(s) in the City of Santa Ana with funding from the Inclusionary Housing Fund, HOME Investment Partnerships Program, Community Development Block Grant Program, and Rental Rehabilitation Program. MOTION: Iglesias SECOND: Villegas VOTE: AYES: Iglesias, Penaloza, Pulido, Solorio, Villegas(5) NOES: None (0) ABSTAIN: None (0) ABSENT: Sarmiento (1) Ward 4 representative vacant. MAYOR PULIDO REQUESTED COUNCIL TO CONSIDER VOTE ON ITEM 75A BEFORE DISCUSSING ITEM 80B. CITY COUNCIL MINUTES 21 JULY 2, 2019 1 OA-21 80B. JOINT SESSION - APPROVE A PRE -COMMITMENT OF $3,971,440 OF AFFORDABLE HOUSING FUNDS AND AUTHORIZE NEGOTIATIONS OF A SIXTY-TWO YEAR GROUND LEASE TO THE RELATED COMPANIES OF CALIFORNIA AND A COMMUNITY OF FRIENDS FOR THE DEVELOPMENT OF THE CROSSROADS AT WASHINGTON PROJECT LOCATED AT 1126 AND 1146 E. WASHINGTON AVENUE, SANTAANA, CA 92701, (APNS 398-092-13 AND 398-092-14) {STRATEGIC PLAN NO. 5, 3C) — Community Development Agency At its regular meeting on May 22, 2019 the Community Redevelopment and Housing Commission recommended that the City Council and Housing Authority approve the recommended actions by a vote of 8-0 (Garcia absent). CITY COUNCIL ACTION MOTION: Authorize the City Manager and the Clerk of the Council to execute a pre -commitment letter with The Related Companies of California ("Related") and A Community of Friends ("ACOF") as the service provider for $3,971,440 in affordable housing funds consisting of $963,951 in Neighborhood Stabilization Program funds and $3,007,489 in HOME Investment Partnerships Program funds, for the development of the Crossroads at Washington affordable housing project located at 1126 and 1146 E. Washington Avenue, Santa Ana, CA 92701, (APNS 398-092-13 and 398-092-14), subject to non -substantive changes approved by the City Manager and City Attorney. HOUSING AUTHORITY ACTION 1. Authorize the Executive Director of the Housing Authority and the Recording Secretary to execute a pre -commitment letter with The Related Companies of California ("Related") and A Community of Friends ("ACOF") as the service provider to enter into negotiations for a sixty-two (62) year ground -lease of 1126 E. Washington Ave for the development of the Crossroads at Washington affordable housing project located at 1126 and 1146 E. Washington Avenue, Santa Ana, CA 92701, (APNS 398-092-13 and 398-092-14), subject to non -substantive changes approved by the Executive Director of the Housing Authority and Authority General Counsel. 2. Authorize the Executive Director of the Housing Authority and the Recording Secretary to enter into negotiations on a Tenants in Common agreement, or similar document, and any other required actions necessary to draft that Tenants in Common agreement with the County of Orange for the joint ownership and development of the Crossroads at Washington affordable housing project located at 1126 and 1146 E. Washington Avenue, Santa Ana, CA 92701 (APNS 398-092-13 and 398- 092-14). CITY COUNCIL MINUTES 22 JULY 2, 2019 1 OA-22 3. Authorize the Executive Director of the Housing Authority and the Recording Secretary to enter into negotiations on a Joint Powers Agreement, or similar document, and any other required actions necessary for the properties to be held as Tenants in Common with the County of Orange for the joint ownership and development of the Crossroads at Washington affordable housing project located at 1126 and 1146 E. Washington Avenue, Santa Ana, CA 92701 (APNs 398-092- 13 and 398-092-14). MOTION: Iglesias SECOND: Solorio VOTE: AYES: Iglesias, Penaloza, Pulido, Solorio, Villegas(5) NOES: None (0) ABSTAIN: None (0) ABSENT: Sarmiento (1) ' Ward 4 representative vacant. 80C. JOINT SESSION - FIRST AMENDMENT TO REGINA HOUSE LOAN AGREEMENT AND AFFORDABLE HOUSING COVENANTS TO MODIFY THE REGINA HOUSE TRANSITIONAL HOUSING PROGRAM TO BECOME A PERMANENT HOUSING FACILITY {STRATEGIC PLAN NO. 5, 31 — Community Development Agency At its regular meeting on June 26, 2019 the Community Redevelopment and Housing Commission recommended that the City Council and Housing Authority approve the recommended actions by a vote of 8-0 (Garcia absent). CITY COUNCIL ACTION MOTION: Authorize the City Manager and the Clerk of the Council to execute a First Amendment to the Regina House Loan Agreement and Affordable Housing Covenants with Mercy House Living Centers, formerly known as Mercy House Transitional Living Centers, to modify the Regina House transitional housing program to become a permanent housing facility serving large families, subject to non -substantive changes approved by the City Manager and City Attorney (AGMT No. 2019-108). I:wImILI"!IIjIp[@]arr7e[�Y[�PI MOTION: Authorize the Executive Director of the Housing Authority and the Recording Secretary to execute a First Amendment to the Regina House Loan Agreement and Affordable Housing Covenants with Mercy House Living Centers, formerly known as Mercy House Transitional Living Centers, to modify the Regina House transitional housing program to CITY COUNCIL MINUTES 23 JULY 2, 2019 1 OA-23 become a permanent housing facility serving large families, subject to non - substantive changes approved by the Executive Director of the Housing Authority and Authority General Counsel. MOTION: Villegas SECOND: Solorio VOTE: AYES: Iglesias, Penaloza, Pulido, Solorio, Villegas(5) NOES: None (0) ABSTAIN: None (0) ABSENT: Sarmiento (1) Ward 4 representative vacant. COUNCIL AGENDA ITEMS Pursuant to Santa Ana Charter Section 411, any member of the City Council may place items on the City Council Agenda to be considered by the City Council. Only action available to City Council is to provide direction to City Manager. 85A. DISCUSS AND CONSIDER DIRECTING CITY MANAGER VIA HER AUTHORITY TO DIRECT THE POLICE DEPARTMENT AND OTHER CITY DEPARTMENTS, TO FULLY ENFORCE OUR ANTI -CAMPING, ANTI - PANHANDLING AND RELATED LAWS. AN EDUCATION COMPONENT SHOULD BE INCLUDED TO OFFER DRUG TREATMENT, MENTAL HEALTH AND HOUSING SERVICES TO INDIVIDUALS VIOLATING THESE LAWS. GIVEN THE SUBSTANTIAL MEASURE X TAX REVENUE WE ARE NOW RECEIVING FROM OUR LOCAL RESIDENTS AND TAXPAYERS, THIS NEEDS TO BE A TOP PRIORITY, WITH IMMEDIATE, VISIBLE ACTIONS ON A DAILY AND REGULAR BASIS — Councilmember Solorio Councilmember Solorio directed police department to enforce anti -camping laws and to return with plan to address panhandling and enforcement of anti -camping laws. Mayor Pulido directed Police Chief Valentin to provide update of anti -camping laws and panhandling enforcement in the third quarter. Mayor Pulido requested staff to provide statistics as to how many individuals have been provided shelter services. Councilmember Iglesias directed staff to provide update on process for local businesses to authorize police enforcement on private property and to introduce a six-month renewal process. CITY COUNCIL MINUTES 24 JULY 2, 2019 1 OA-24 85B. DISCUSS AND CONSIDER DIRECTING CITY MANAGER TO DIRECT STAFF TO PROVIDE OPTIONS FOR WORK PROGRAM FOR HOMELESS AND POSSIBLE COLLABORATION WITH THE COUNTY OF ORANGE — Councilmember Iglesias Councilmember Iglesias directed staff to review possibility of introducing work program for homeless individuals. Councilmember Solorio supportive of hiring Quality of Life team manager. RECESSED CITY COUNCIL MEETING AT 7:23 P.M. TO THE HOUSING AUTHORITY MEETING AND RECONVENED WITH SAME MEMBERS PRESENT AT 7:24 P.M. COMMENTS PUBLIC COMMENTS (Non-Agendized Items). Dale Helvig, opposed to 2525 Main Street development. Wished everyone a Happy Fourth of July. 90A. CITY MANAGER'S COMMENTS City Manager Ridge provided City Council with water quality report displaying City's continued high -quality standard, noted upcoming 4th of July event, and ongoing Summer Nights program at El Salvador park. Mayor Pulido thanked City Manager Ridge for the good job, reiterated that Councilmember Iglesias stated City Manager Ridge is doing an awesome job and asked to be entered into the record. 90B. CITY COUNCILMEMBER COMMENTS Councilmember Solorio supportive of tracking Measure X revenue, raising awareness of panhandling laws, and implementing aggressive enforcement of illegal fireworks. Councilmember Penaloza provided report of attendance at National Association of Latino Elected and Appointed Officials (NALEO) conference held in Miami and attendance at police simulator training facility. Councilmember Iglesias provided report of attendance at National Association of Latino Elected and Appointed Officials (NALEO) conference held in Miami, Orange County Sanitation District meeting on June 26, 2019. Mayor Pulido wished everyone a happy 4th of July CITY COUNCIL MINUTES 25 JULY 2, 2019 1 OA-25 ADJOURNED- 7:32 P.M. -The next meeting of the City Council is scheduled for Tuesday, July 16, 2019 at 5:00 p.m. for the Closed Session Meeting immediately followed by the Regular Open Business Meeting at 5:45 p.m. in the Council Chamber, 22 Civic Center Plaza, Santa Ana, California. Norma Mitre, Acting Clerk of the Council FUTURE AGENDA ITEMS CONSIDERATION OF SEVENTEENTH AND TUSTIN ANNEXATION GENERAL PLAN UPDATE CITY'S 150TH ANNIVERSARY PLANNING VISTA HERITAGE AMENDMENT APPLICATION DENSITY BONUS AGREEMENT FOR FIRST POINT I AND II 2525 NORTH MAIN STREET DEVELOPMENT PROJECT CITY COUNCIL MINUTES 26 JULY 2, 2019 1 OA-26 LS 9.3 19 ORDINANCE NO. NS-2974 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING AMENDMENT APPLICATION NO. 2018-07 PRE -ZONING THE PROPERTIES LOCATED WITHIN AN UNINCORPORATED COUNTY ISLAND PROPOSED FOR ANNEXATION GENERALLY LOCATED AT THE NORTHEAST CORNER OF SEVENTEENTH STREET AND TUSTIN AVENUE THE CITY COUNCIL OF THE CITY OF SANTA ANA DOES ORDAIN AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. The City of Santa Ana (City) is requesting approval of Amendment Application No. 2018-07 to amend the zoning designation of a 24.78-acre unincorporated area of land that is currently located within the County of Orange and within the sphere of influence of the City of Santa Ana. B. General Plan Amendment No. 2018-04 was filed concurrently with the Amendment Application for consistency with the General Plan to incorporate into the City's various General Plan elements. C. On December 10, 2018, the Planning Commission held a duly noticed public hearing and voted to recommend that the City Council adopt an ordinance approving Amendment Application No. 2018-07 which is consistent with the General Plan, as amended by General Plan Amendment No. 2018-04. D. The City Council has reviewed applicable general plan policies and has determined that this proposed pre -zoning is consistent with the purpose of the general plan. F. The City Council, prior to taking action on this ordinance, held a duly noticed public hearing on September 3, 2019. G. The City Council also adopts as findings all facts presented in the Request for Council Action dated September 3, 2019 accompanying this matter. H. For these reasons, and each of them, Amendment Application No. 2018- 07 is hereby found and determined to be consistent with the intent and purpose of Chapter 41 of the Santa Ana Municipal Code, thus changing of the zoning districts has been found to be consistent with the General Plan Ordinance No. NS-XXXX Page 1 of 4 11 A-1 of the City of Santa Ana and otherwise justified by the public necessity, convenience, and general welfare. Section 2. The Planning Commission of the City of Santa Ana recommends that the City Council adopt an ordinance pre -zoning the real properties generally located at the northeast corner of Seventeenth Street and Tustin Avenue and Amended Sectional District Map number 4-5-9 showing the above described change in use district designation (AA No. 2018-07). This recommendation is based upon the evidence submitted at the above said hearing, which includes, but is not limited to: The Request for Planning Commission and Council Action dated December 10, 2018 and September 3, 2019, respectively and exhibits attached thereto, and the public testimony, all of which are incorporated herein by this reference. Section 3. In accordance with the California Environmental Quality Act (CEQA) and the State CEQA Guidelines, a categorical exemption will be filed for this project pursuant to section 15319. This Class 19 exemption applies to projects involving annexation of existing facilities and lots for exempt facilities such as public and private structures developed to the density allowed by the pre -zoning of the City. The proposed annexation area is developed to the density allowed by the current zoning or pre -zoning, with the extension of utility services having the capacity to serve only the existing facilities. More specifically, the proposed annexation will consist of the 24.78- acre parcels of land in its entirety that includes private residential and commercial structures as well as three vacant parcels of land that are located at the southwest section of the annexation area. As the annexation area is developed to the density allowed by both the current zoning of the County and the pre -zoning designations proposed by the City, and no new utility services are proposed for the existing structures within the annexation area as part of this project, the Class 19 exemption is applicable to this project. The City Council has, as a result of its consideration and the evidence presented at the hearings on this matter, determined that, as required pursuant to CEQA, a categorical exemption adequately addresses the expected environmental impacts of this project. On the basis of this review, the City Council finds that there is no evidence from which it can be fairly argued that the project will have a significant adverse effect on the environment therefore, it is categorically exempt from the requirement for the preparation of environmental documents. Based on this analysis, a Notice of Exemption for Environmental Review No. 2018-89 will be filed for this project. Section 4. The zoning designation of the real properties generally located within the 24.78-acre County island at the northeast corner of Seventeenth Street and Tustin Avenue shall be reclassified from the County's Local Business (C-1) and Single - Family Dwellings (R-1) designations to Community Commercial (Cl), Single - Family Residence (R-1) and Two -Family Residence (R-2). An amended Sectional District Map, showing the above described changes in use district designation, is hereby approved and attached hereto as Exhibit 1 and incorporated by this reference as though fully set forth herein. Ordinance No. NS-XXXX Page 2 of 4 11 A-2 Section 5. This ordinance shall not be effective unless and until Resolution No. 2018- (Environmental Review No. 2018-89 and General Plan Amendment No. 2018-04) is adopted and becomes effective. If either resolution and/or ordinance are for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, or otherwise does not go into effect for any reason, then this ordinance shall be null and void and have no further force and effect. Section 6. This ordinance shall not be effective unless and until the Orange County Local Agency Formation Commission (LAFCO) passes a resolution adopting the annexation of the County island. If the resolution is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, or otherwise does not go into effect for any reason, then this ordinance shall be null and void and have no further force and effect. Section 7. If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of the ordinance. The City Council of the City of Santa Ana hereby declares that it would have adopted this ordinance and each section, subsection, sentence, clause, phrase or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or portions be declared invalid or unconstitutional. ADOPTED this day of 2019. APPROVED AS TO FORM: Sonia R. Carvalho City Attorney //��,,_�� BY: � �� Lisa Storck Assistant City Attorney AYES: NOES: ABSTAIN: NOT PRESENT Councilmembers Councilmembers Councilmembers Councilmembers Miguel A. Pulido Mayor Ordinance No. NS-XXXX Page 3 of 4 11 A-3 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, DAISY GOMEZ, Clerk of the Council, do hereby attest to and certify that the attached Ordinance No. NS- to be the original ordinance adopted by the City Council of the City of Santa Ana on , 2019 and that said ordinance was published in accordance with the Charter of the City of Santa Ana. Date: Clerk of the Council City of Santa Ana Ordinance No. NS-XXXX Page 4 of 4 11 A-4 uaev = AI i ao —••�.•iA1RHAVEN� P $ Y 1 I 1{� Q w 1 Z F i� i SAN TA CLARA AV g � I cI 3 � .l.umr,00u CF 1] nawn000u , 17TH ST 7n AIItJ C. PIISTRICTC At GENFAALAGRCt1LTUW, 03W SM"f" STREET CONSERCIAL DST. M FAO-FMILY PESWICE -E PARKNGI O FICAMN CI C01.14110. YCON49iCPL GC R1 WLLTPL&FA.ULYRESGENCE -GZ OVERLAY20NE C" CCSNRPY?C0AINIERCNL-SRISEVA1015t. WI LIGKTNWSTRML M SURURSANAPARi a PLAMEDRESAENTNL .PRD GEVELOPWENT C2 GENERAL COe1.1ERCIAL W2 t W11 WSMRL RE RESx>ECRNL ESTATE U PLANNEDSH PPNCCEN1`ER 0 OPEM SPACE SO SPECFICDEVELOPWENT -HC2 RE11M01STRICTL CS ARTERPLCO'.VJERCNL P PROFESSIWIAL SP SPECFCPLAN :R CONM1IERCRL PESOENTML i1 511131.Fl FFIAYPESIDENDE p1 SECTIONAL DISTRICT MAP: 4-5-9 e +.mm CITY OF SANTA ANA. CALIFORNIA Exhibit: EXHIBIT 1 11 A-5 11 A-6 LS 9.3.19 ORDINANCE NO. NS-2975 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA CHANGING THE BOUNDARIES OF WARD 3 IN CONJUNCTION WITH THE PROPOSED 24.78-ACRE COUNTY ISLAND ANNEXATION GENERALLY LOCATED AT THE NORTHEAST CORNER OF SEVENTEENTH STREET AND TUSTIN AVENUE THE CITY COUNCIL OF THE CITY OF SANTA ANA DOES ORDAIN AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. In accordance with Sections 101.2 and 101.4 of the Santa Ana City Charter, on May 7, 2019, the City Council of the City of Santa Ana declared its intention to change the boundaries of Ward 3 to include a 24.78-acre area of land currently located in the County of Orange which is proposed to be annexed to the City of Santa Ana. The area proposed for annexation is shown on the map attached as Exhibit 1. B. At the May 7, 2019 Council meeting, there was no opposition raised regarding the change in the boundaries for Ward 3. C. The Clerk of the Council gave notice that on September 3, 2019, at 5:45 P.M. or as soon as possible thereafter, in the Santa Ana City Council Chambers, 22 Civic Center Plaza, Santa Ana, California, a public hearing will be held by the City Council at which time any and all persons interested in or objecting to the proposed change in ward boundaries described above may appear and be heard. Section 2. The City of Santa Ana hereby approves the change in ward boundaries for Ward 3 as shown on Exhibits 2 and 3. Section 3. In accordance with the California Environmental Quality Act (CEQA) and the State CEQA Guidelines, a categorical exemption will be filed for this project pursuant to section 15319. This Class 19 exemption applies to projects involving annexation of existing facilities and lots for exempt facilities such as public and private structures developed to the density allowed by the pre -zoning of the City. The proposed annexation area is developed to the density allowed by the current zoning or pre -zoning, with the extension of utility services having the capacity to serve only the existing facilities. Resolution No. 2019-xx Page 1 of 3 11 B-1 LS 9.3.19 More specifically, the proposed annexation will consist of the 24.78-acre parcels of land in its entirety that includes private residential and commercial structures as well as three vacant parcels of land that are located at the southwest section of the annexation area. As the annexation area is developed to the density allowed by both the current zoning of the County and the pre -zoning designations proposed by the City, and no new utility services are proposed for the existing structures within the annexation area as part of this project, the Class 19 exemption is applicable to this project. The City Council has, as a result of its consideration and the evidence presented at the hearings on this matter, determined that, as required pursuant to CEQA, a categorical exemption adequately addresses the expected environmental impacts of this project. On the basis of this review, the City Council finds that there is no evidence from which it can be fairly argued that the project will have a significant adverse effect on the environment therefore, it is categorically exempt from the requirement for the preparation of environmental documents. Based on this analysis, a Notice of Exemption for Environmental Review No. 2018-89 will be filed for this project. Section 4. If any section, subsection, sentence, clause, phrase or portion of this ordinance for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council of the City of Santa Ana hereby declares that it would have adopted this ordinance and each section, subsection, sentence, clause phrase or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional. ADOPTED this day of .2019. APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney By: Lisa Storck Assistant City Attorney Miguel A. Pulido Mayor Resolution No. 2019-xx Page 2 of 3 11 B-2 LS 9 3 19 AYES: Councilmembers NOES: Councilmembers ABSTAIN Councilmembers NOT PRESENT: Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, DAISY GOMEZ, Clerk of the Council, do hereby attest to and certify that the attached Ordinance No. NS-XXXX to be the original ordinance adopted by the City Council of the City of Santa Ana on , 2019 and that said ordinance was published in accordance with the Charter of the City of Santa Ana. Date: Clerk of the Council City of Santa Ana Resolution No. 2019-xx Page 3 of 3 11 B-3 Santa Ana EXHIBIT 1 t C Wj N f 1,6N ��xt i:14na �: 74 Tl%� }p� �_.J' I _ , a � 11 B-4 SI12019 City Council Ward Map I The City of Santa Ana EXHIBIT 2 City of Santa Ana Council Wards „ Adopted January 17, 2012 0.0 0.6 1.0 1.5 ^ Miles hltpsliwww.aanta- na.o4micly- uncil•ward+ o.p 11 B-5 EXHIBIT 3 City of Santa Ana Proposed 2020 Council Wards, Originally Adopted December 4, 2018 w- Effective 2020 kwov. 12nMDt9 AI Po I 11 B-6 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: SEPTEMBER 17, 2019 TITLE: CLERK OF COUNCIL USE ONLY: APPROVED APPROVE A LEASE AGREEMENT WITH ❑ As Recommended ALDRIDGE ELECTRIC INC., FOR El As Amended STORAGE SPACE AT THE CORPORATE ❑ Ordinance on 1n Reading ❑ Ordinance on 2n° Reading YARD TOTAL POTENTIAL REVENUE: ❑ Implementing Resolution $72,432 ❑ Set Public Hearing For (STRATEGIC PLAN NO. 3, 2C) CONTINUED TO �,�7 FILE NUMBER CIT ANAGER RECOMMENDED ACTION Authorize the City Manager to execute a site lease agreement with Aldridge Electric, Inc., to compensate the City $2,500 per month, with any partial month prorated at $82 per day, for the lease of 1,100 square feet of interior storage space and 7,000 square feet of exterior storage space located at the Corporate Yard, for a term beginning on September 18, 2019, and ending February 19, 2021, with an option for twelve one -month extensions, for a total of $72,432 in lease revenue for the entire term of the agreement, including optional extensions, subject to non -substantive changes approved by the City Manager and City Attorney. 2. Approve an appropriation adjustment recognizing Fiscal Year 2019-20 lease income in the amount of $23,568 into the Corporate Yard Operations Rental -Aldridge Electric revenue account and appropriating the same amount to the Corporate Yard Contract Services - Professional expenditure account. DISCUSSION The Corporate Yard at 220 S. Daisy Street was constructed in 1985 and houses the Public Works Agency Administration Building, Central Stores, and Fleet Services. The facility consists of 11.5 acres and 140,000 square feet of structures. The operating hours are Monday through Thursday from 6 a.m. to 5 p.m., and Friday from 6 a.m. to 4 p.m. In addition to City departments, contractors providing street sweeping services and parking enforcement services are housed at the Corporate Yard. Aldridge Electric, Inc., is one of the subcontractors working on the OC Streetcar Project. On February 19, 2019, City Council approved an agreement with Aldridge Electric, Inc., to lease office space at the Santa Ana Regional Transportation Center (SARTC). Aldridge Electric, Inc., approached the City requesting to lease storage space at the Corporate Yard. By leasing storage 20A-1 Approve Lease Agreement with Aldridge Electric, Inc., for Storage Space at the Corporate Yard September 17, 2019 Page 2 space to Aldridge Electric, Inc., it provides the contractor with a secured storage area in close proximity to the OC Streetcar Project. Staff has evaluated the request and has identified available space within the Corporate Yard Stores Building and the exterior area. The City recommends entering into a lease agreement with Aldridge Electric, Inc., for the same term as the lease agreement for rental of office space at SARTC which is scheduled to expire on February 19, 2021, with twelve one -month extensions. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #3 — Economic Development, Objective #2 (create new opportunities for business/job growth and encourage private development through new General Plan and Zoning Ordinance policies), Strategy C (support business development and job growth along transit corridors through the completion of critical transit plans/projects including: The OC Streetcar Project, Santa Ana Regional Transportation Center Master Plan, Complete Streets and General Plan Circulation Element update). FISCAL IMPACT Approval of the site lease agreement obligates Aldridge Electric, Inc., to compensate the City $30,000 annually for the lease of office space at the Corporate Yard. The agreement term begins September 18, 2019, and ends February 19, 2021. There is also an option for twelve one -month extensions. The requested Appropriation Adjustment will recognize Fiscal Year 2019-20 lease income of $23,568 into the Corporate Yard Operations Rental -Aldridge Electric revenue account (No. 08517002-53826) and appropriate the same amount to the Corporate Yard Contract Services - Professional expenditure account (No. 08517138-62300). The total anticipated revenue and expenditures from this agreement is as follows: Fiscal Year Accounting Unit - Fund Description Accounting Unit, Account Amount Account No. Description REVENUE Agreement 1-Year Term FY 2019-20 Sept. 2019 - 08517002- City Yard Operation City Yard Operations, Rental - $23,568 June 2020 53826 Aldridge Electric FY 2020-21 July 2020 - 08517002- City Yard Operation City Yard Operations, Rental - $19,062 Feb. 2021 53826 Aldridge Electric Optional 1-Month Extensions 20A-2 Approve Lease Agreement with Aldridge Electric, Inc., for Storage Space at the Corporate Yard September 17, 2019 Page 3 Fiscal Year Accounting Unit - Fund Description Accounting Unit, Account Amount Account No. Description FY 2020-21 Feb. 2020 to 08517002- City Yard Operation City Yard Operations, Rental - $10,740 June 2021 53826 Aldridge Electric FY 2021-22 July 2021 to 08517002- City Yard Operation City Yard Operations, Rental - $19,062 Feb. 2022 53826 Aldridge Electric Total Revenues: $72,432 EXPENDITURES FY 2019-20 Sept. 2019 to 08517138- City Yard Operation City Yard Operations, Contract $23,568 June 2020 62300 Services -Professional FY 2020-21 July 2020 to 08517138- City Yard Operation City Yard Operations, Contract $19,062 Feb. 2021 62300 Services -Professional Optional 1-Month Extensions FY 2020-21 Feb. 2020 to 08517138- City Yard Operation City Yard Operations, Contract $10,740 June 2021 62300 Services -Professional FY 2021-22 July 2021 to 08517138- City Yard Operation City Yard Operations, Contract $19,062 Feb. 2022 62300 Services -Professional Total Expenditures: $72,432 Fuad S. S Executive Public We FSS/rC/GL Exhibit: APPROVED AS TO FUNDS AND ACCOUNTS: ss, PE, PLS Kathryn Downs, CPA (b actor Executive Director Agency Finance and Management Services Agency 1. Lease Agreement —Aldridge Electric, Inc. 20A-3 20A-4 EXHIBIT 1 LEASE AGREEMENT THIS LEASE (the "Lease") is made as of September 18, 2019, by and between The City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California ("City" or "Landlord"), and Aldridge Electric, Inc. ("Tenant"). I. EXHIBITS: The following exhibit is attached hereto and incorporated herein by reference: Exhibit "A" The Premises 2. PREMISES: Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, upon the terms, covenants and subject to the conditions set forth herein, a portion of the property located at 215 South Center Street in the City of Santa Ana, commonly known as the City Yard. Specifically, Tenant will be leasing the portion identified as Suite 101, consisting of approximately 1,100 square feet of interior storage space and approximately 7,000 square feet of exterior storage space (hereinafter referred to as the "Premises"). Tenant shall be solely responsible at its own expense for all improvements made to the Premises and obtain all necessary approvals. The Premises are more particularly described in Exhibit A. 3. COMMENCEMENT OF TERM: The term of this Lease (the "Term") shall commence on the date first written above and shall continue through February 19, 2021, unless sooner terminated or extended as provided herein. 4. ADDITIONAL LEASE CONDITIONS: See Exhibit B. 5. EXTENSION PERIODS: Landlord shall have the right, but not the obligation, to provide Tenant the option to extend the Term for additional periods of one (1) month on the same terms and conditions as set forth in this Lease, up to twelve (12) months. Each option shall be agreed to in writing by the Landlord and Tenant prior to the expiration of the Term or any Extension Period then in effect. If Tenant does not exercise its option to extend as provided herein, Tenant will be deemed a holdover Tenant and subject to paragraph 7 of this lease. The lease is subject to a Consumer Price Index (CPI) increase for any extension period. 6. RENT: (a) Tenant shall pay to Landlord, as monthly rent ("Rent), throughout the Term, One Thousand One Hundred Dollars ($1,100) for interior storage space and One Thousand Four Hundred Dollars ($1,400) for exterior storage space, for a total monthly sum of Two Thousand Five Hundred Dollars ($2,500) in advance, on the 1st day of each calendar month and continuing through the life of the Term. Any partial month shall be prorated at Eighty -Two Dollars ($82) per day. All payments of Rent and other sums due to Landlord hereunder shall be made payable to "The City of Santa Ana" and remitted to: City of Santa Ana M-13, 20 Civic Center Plaza, PO Box 1988, Santa Ana, CA 92702. A LATE CHARGE OF TEN PERCENT (109/6) SHALL BE APPLIED TO ANY PAYMENT HEREUNDER DUE BUT UNPAID AFTER THE 10TH of the month. (b) Landlord and Tenant hereby agree that Rent for any 20A-5 DocuSign Envelope ID: 8D50DC2A-E339-4E8C-A386-00OA7CF55027 Extension Period, if the option for such is exercised, shall be subject to a CPI adjustment annually on the anniversary of the commencement date of the term hereof. 7. HOLDOVER: Tenant has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of this Lease. Nothing contained herein shall be construed as consent by Landlord to any holding over by Tenant. Any holding over by Tenant of the Premises after the expiration or termination of this Lease shall operate and be construed as a tenancy from month to month subject to the terms of this Lease, terminable by either party upon thirty (30) days' prior written notice to the other. 8. LANDLORD'S TITLE: Landlord hereby covenants, represents and warrants to Tenant that Landlord has fee simple title to the Premises and has the full right and lawful authority to make this Lease. Notwithstanding anything contained herein to the contrary, if there are any liens, security interests, restrictions, leases, encumbrances, encroachments, laws, ordinances, governmental rules or regulations, title restrictions, zoning, endangered species or any other matters which in fact interfere with Tenant's use of the Premises, then Tenant may terminate this Lease without owing any liability to Landlord. Landlord covenants that so long as Tenant is not in monetary default as defined hereunder, Tenant shall have quiet and peaceful possession and enjoyment of the Premises, all improvements located thereon and of all easements, rights and appurtenances thereunto belonging. 9. DELIVERY OF POSSESSION UPON TERMINATION OR EXPIRATION OF TERM: Tenant agrees to deliver to Landlord physical possession of the Premises upon the termination or expiration of this Lease in good condition except, however, ordinary wear and tear, damage by fire or any other casualty, or damage from any other cause unless such other cause is attributable to Tenant. 10. ASSIGNMENT AND SUBLETTING: Tenant may not assign this Lease or sublet the Premises or any part thereof without the prior written consent of Landlord. 11. TENANT'S REPAIRS, ALTERATIONS AND FIXTURES: Except for reasonable wear and tear, Tenant agrees at Tenant's expense to maintain the premises in good repair. Subject to Landlord approval, Tenant shall make and pay for any renovations, alterations, minor repairs (light bulbs, etc.) and improvements to the Premises as Tenant deems desirable and Tenant agrees that all such alterations and improvements shall be made in a good and workmanlike manner and in such fashion as not to diminish the value of the building, and that no such alterations shall compromise the structural integrity of the Premises. All improvements, additions and alterations, shall be in accordance with applicable laws and at Tenant's own expense. Tenant shall indemnify and defend Landlord for all liens, claims, or damages caused by remodeling, improvements, additions and alterations completed by Tenant. It shall be Tenant's duty to keep the Premises free and clear of all liens, claims, and demands for work performed, materials furnished, or operations conducted on the Premises at the request of Tenant. On surrendering possession of the Premises to Landlord at the expiration or sooner termination of 20A-6 DocuSign Envelope ID: 8D50DC2A-E3394EBC.A388-OOOA7CF55027 this Lease or any Extension Period, Tenant shall be required to return the premises in the same condition upon commencement of lease except for normal wear and tear. Tenant may paint the interior of the Premises and may also paint, erect or authorize the installation of "temporary signs" in accordance with a signage plan that is pre -approved by the Landlord. Landlord shall not install or maintain or permit anyone other than Tenant to install or maintain, any signs on any part of the Premises or within the air space above the Premises during the Term or any Extension Period of this Lease. 12. MAINTENANCE: Landlord shall provide at its own cost and expense any maintenance required to the Premises. 13. COMPLIANCE WITH LAWS: Tenant shall make and pay for nonstructural improvements and alterations to comply with all applicable laws, rules, regulations and ordinances of any and all applicable governmental entities (the "Governmental Laws") applying to the physical condition of the Premises and the building located thereon and arising solely from Tenant's conduct of business. 14. UTILITIES: Landlord agrees to pay for all utilities fumished to the Premises and which are consumed by Tenant, during the Term and any Extension Period, including charges or assessments for water, sewer, gas, heat, electricity, garbage disposal and trash disposal. 15. ESTOPPEL CERTIFICATES: Landlord and Tenant shall, from time to time upon thirty (30) days' request by the other (but not to exceed more than three (3) times in any given calendar year), execute, acknowledge and deliver a statement, dated currently, certifying that this Lease is unmodified and in full, force and effect (or, if there have been modifications, that this Lease is in full effect as modified, and identifying such modifications) and the dates to which the Rent have been paid, and that no default exists in the observance of this Lease and no event of default has occurred and is continuing, or specifying each such default or event of default of which Landlord or Tenant may have knowledge, it being intended that any such statement may be relied upon by Landlord's or Tenant's Mortgagees, any prospective purchaser of the interest of Landlord or Tenant in their respective premises described herein. 16. INDEMNITY: Tenant shall indemnify, defend, and hold harmless Landlord from and against any and all liability, loss, damage, expense, and costs (including attorney's fees) due to bodily injury, including death, to any person, or loss or damage (including loss of use) to any property, caused by the negligence or willful misconduct of Tenant, its employees, representatives, or agents in connection with this Lease. 17. INSURANCE: Throughout the Term or any Extension Period, Tenant shall maintain insurance as described below: a. Commercial General Liability Insurance: Commercial general liability insurance for injury to person (including death) or damage to property occurring within the 20A-7 DowSign Envelope ID: BDSODC2A-E339-4E8C-A8B6-00OA7CF55027 building arising out of the use and occupancy thereof by Tenant, its licensees, employees, invitees, agents and customers. The amounts of insurance shall be not less than the following: single limit coverage applying to bodily and personal injury, including death resulting therefrom, and property damage, in the total amount of $2,000,000 per occurrence and $5,000,000 in the aggregate. Such insurance shall (a) name the City, its officers, employees, agents, volunteers and representatives as additional insured(s); (b) be primary and not contributory with respect to insurance or self-insurance programs maintained by the City; and (c) contain standard separation of insureds provisions. b. Business automobile liability insurance, or equivalent form, with a combined single limit of not less than $5,000,000 per occurrence. Such insurance shall include coverage for owned, hired and non -owned automobiles. C. Worker's Compensation Insurance. In accordance with the provisions of Section 3300 of the Labor Code, Tenant, if Tenant has any employees, is required to be insured against liability for worker's compensation or to undertake self-insurance. Such policy shall include a 'Waiver of Subrogation' endorsement. Tenant shall provide Landlord with a copy of such endorsement along with the certificate of insurance or copy of the policy. Prior to commencing the performance of the work under this Agreement, Tenant agrees to obtain and maintain any employer's liability insurance with limits not less than $1,000,000 per accident. d. Tenant may meet the insurance limits as outlined in 17.a. and 17.b. above through a combination of primary and excess/umbrella insurance policies. e. The following requirements apply to the insurance to be provided by Tenant pursuant to this section: i. If the Tenant maintains broader coverage and/or higher limits than the minimums shown above, the Landlord shall be entitled to the broader coverage and/or higher limits maintained by the Tenant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the Landlord. ii. Tenant shall maintain all insurance required above in full force and effect for the entire period covered by this Agreement. iii. Certificates of insurance shall be furnished to the Landlord upon execution of this Agreement. iv. Certificates and policies shall state that the policies shall not be cancelled or reduced in coverage or changed in any other material aspect without thirty (30) days' prior written notice to the City, except for 10 days' notice for non-payment of premium. V. If Tenant fails or reffises to produce or maintain the insurance required by this section or fails or refuses to furnish the Landlord with required proof that insurance has been procured and is in force and paid for, the Landlord 20A-8 DowSlgn Envelope ID: 8D50DC2A-E339-4E8C-A3B6-OOOA7CF55027 shall have the right, at the Landlord's election, to forthwith terminate this Agreement as provided herein. 18. DAMAGE BY CASUALTY (a) In the event of a fire or other casualty in the Premises, Tenant shall immediately give notice thereof to Landlord. (b) If the Premises, though no fault of Tenant, its agents, employees, invitees, or visitors, shall be partially destroyed by fire or other casualty so as to render the Premises untenantable as reasonably determined by Landlord, Rent shall abate in proportion to the percentage of square footage of the Premises rendered unusable until such time as the Premises are made tenantable as reasonably determined by Landlord. The entire Premises shall be made tenantable by Landlord's diligent repair within sixty (60) days following the fire or casualty incident. (c) Except where Landlord is not obligated to repair or rebuild the Building or the Premises, Landlord will use due diligence to repair or rebuild the same (except that Landlord will have no obligation to repair or replace any alteration, addition, or improvements to the Premises other than the Tenant Improvements installed at Landlord's expense which will be repaired only to the level of Building Standard Improvements). (d) In the event of (i) the total destruction of the Premises, (ii) the partial destruction of the Premises or the Building where the same is so damaged that it cannot, in Landlord's reasonable opinion, be repaired within sixty (60) days of the occurrence of such damage, or (iii) damage or destruction as a result of any casualty for which insurance proceeds are not available to pay 100% of the cost of repair or rebuilding, Landlord will have no obligation to repair or rebuild the Premises or the Building. Landlord will make its determination whether to repair or rebuild within sixty (60) days of the occurrence of such damage or destruction. Upon notification to Tenant of Landlord's decision not to repair or rebuild, this Lease shall terminate. In such an event, Tenant shall be reimbursed by Landlord any rent monies transferred from Tenant to Landlord during this sixty (60) day period within fourteen (14) days after the termination of the lease. 19. EMINENT DOMAIN: (a) If (i) all or part of the Premises, the building located thereon, or (ii) so much of any rights in the Premises or the building located thereon shall be taken or appropriated under any right of eminent domain or under any other legal right whereby the taking authority is obligated to compensate Landlord therefor so that there does not remain premises suitable in the sole opinion of Tenant for the operation of its business, then Tenant may terminate and cancel this Lease without owing any liability to Landlord as of the date on which the condemning authority takes physical possession upon giving to Landlord written notice of such election. Landlord agrees immediately within ten (10) days after any notice of intended or actual taking or appropriation to give Tenant written notice thereof, providing to Tenant full 20A-9 DocuSign Envelope ID: 8050DC2A-E339AEBC-A386-000A7CF55027 details of such taking or appropriation, including, without limitation copies of all condemnation plans or surveys submitted by the condemning authority, a statement of the nature of the project to be conducted by the condemning authority, and such other information as might be necessary to enable Tenant to determine its future course of conduct. TENANT ACKNOWLEDGES THAT LANDLORD'S EXERCISE OF ITS RIGHT TO TERMINATE THIS LEASE UNDER ANY OF THE PROVISIONS OF THIS LEASE SHALL NOT ENTITLE TENANT TO ANY RIGHTS OR CLAIMS FOR RELOCATION BENEFITS OR ANY OTHER CLAIMS RELATED TO CONDEMNATION OR INVERSE CONDEMNATION. (b) If this Lease shall be terminated and canceled as a result of any taking or appropriation, Tenant shall be released from any further liability and Rent and other sums for the last month of Tenant's occupancy shall be prorated and Landlord shall immediately refund to Tenant any sums paid in advance. (c) Tenant reserves unto itself the right to prosecute Tenant's claim for an award for damages for the termination of this Lease caused by such appropriation or taking, together with damages based on the value of Tenant's improvements and Tenant's fixtures and other personal property erected or installed on the Premises and damages Tenant may sustain to the interest in the business operated by Tenant on the Premises, including, but not limited to, goodwill, patronage, and the removal, relocation, and replacement costs and expenses caused by such appropriation or taking, and Tenant may file such claims as are permitted by law for the loss of its leasehold interest, business dislocation damages, moving expense, or other damages caused by such taking or appropriation. Tenant's right to receive compensation or damages for its fixtures or its personal property shall not be affected in any manner by this Lease. 20. LIENS: Tenant shall promptly remove and discharge, at its cost and expense, all mechanic's liens, or other liens, for labor performed or materials furnished with respect to the Premises by or for Tenant. 21. PARKING AREA: Tenant may use the parking areas that are included in the Premises that are the subject of this lease. 22. TENANT'S DEFAULT: (a) If Tenant shall default in payment of Rent, when due, Landlord shall forward written notice, pursuant to Section 22, of such default to Tenant, and the failure of Tenant to cure such default within seven (7) days after the date of receipt of such notice shall, at the sole option of Landlord, cause the termination of this Lease. (b) If Tenant shall default in the performance of any other terns or provisions of this Lease, and if Landlord shall give to Tenant written notice, pursuant to Section 22, of such default, and if Tenant shall fail to cure such default within thirty (30) days after receipt of such notice, Landlord at its sole option, shall cause the termination of this Lease immediately. 23. HAZARDOUS SUBSTANCES: (a) As used herein, the tern "Hazardous Substances" shall mean, without limitation, any substance that is biologically or chemically active or any hazardous, toxic, or dangerous waste, substance (including, but not limited to, lead -based paint, 20A-10 DocuSign Envelope 10: 8D50DC2A-E339-4E8C-A3B6-OOOA7CF55027 asbestos or petroleum derivative substances), or material defined as such in (or for purposes of) (i) any state, federal or local environmental laws, interpretive letters, regulations, decrees or ordinances, (ii) the Comprehensive Environmental Response, Compensation and Liability Act, as amended, (iii) the Resource Conservation and Recovery Act, (iv) any of the state or local "Super Fund", "Super Lien" or "Cleanup Lien" laws or (v) any other federal, state or local statute, law, ordinance, code, rule, interpretive letter, regulation, order or decree regulating, relating to or imposing liability or standards of conduct concerning any such substances or materials or any amendments or successor statutes with respect to any of the foregoing. (b) During the Term of this Lease, Tenant represents and warrants that no Hazardous Substances will be stored on the Premises and that no Hazardous Substances will be discharged on the Premises by Tenant. Tenant agrees that such representations and warranties shall survive any termination of this Lease, and Tenant agrees to indemnify and hold harmless Landlord from any and all costs, expenses, claims and damages, including, but not limited to, attorneys' fees and costs of remediation, arising from Tenant's breach of any of the representations and warranties contained in this Section. 24. NOTICE: Any notice, tender, demand, delivery, or other communication pursuant to this Lease shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, to the following persons. TO TENANT: TO CITY: Aldridge Electric, Inc. Public Works Agency Attn: Eric Von Baumbach City of Santa Ana 844 E. Rockland Rd. 20 Civic Center Plaza (M-21) Libertyville, IL 60048 Santa Ana, California 92701 Attention: Executive Director of Public Works Agency /�\. M Clerk of Council City of Santa Ana 20 Civic Center Plaza (M29) Santa Ana, California 92701 A party may change its address by giving notice in writing to the other party at least 15 days prior to the effective change. Thereafter, any communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. For purposes of calculating these timeframes, weekends, federal, state, County or City holidays shall be excluded. 20A-11 DocuSign Envelope ID: 8D50DC2A-E339-4EBC-A386-00OA7CF55027 25. USE: For the purposes of this Lease, Tenant's intended use of the Premises is for storage space for equipment and materials associated with the OC Streetcar Project. No other use of the Premises shall be permitted without written consent of the Landlord. 26. GENERAL PROVISIONS: (a) This Lease (and the documents referred to herein) constitutes the entire agreement between the parties pertaining to the lease of Suite 101 contained herein and supersedes any and all prior and contemporaneous agreements, representations and understandings, oral or otherwise, between or among the parties with respect to the matters contained herein. (b) Landlord agrees to turn over the Premises is clean, good condition and in working order. (c) This Lease shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, legatees, distributes, legal representatives, successors and assigns. (d) This Lease shall not be modified, amended or supplemented, in whole or part, without the prior written consent of all parties hereto. Each and every waiver of any covenant, representation, warranty or any other provision hereof must be in writing and signed by each party whose interests are adversely affected by such waiver. No waiver granted in any one instance shall be construed as a continuing waiver applicable in any other instance. (e) If any legal action or other proceeding is brought for the enforcement hereof, or because of an alleged dispute, breach, default or misrepresentation in connection with any provisions hereof, the successful or prevailing party or parties shall be entitled to recover reasonable and necessary attorneys' fees, court costs and all reasonable and necessary expenses even if not taxable as court costs (including, without limitation, all such fees, costs and expenses incident to appeals), incurred in that action or proceeding, in addition to any other relief to which such party or parties may be entitled. (0 This Lease shall be governed by the internal laws of the State of California without regard to and excluding its principles of conflicts of laws. (g) The parties further agree that upon request, they shall do such further acts and deeds, and shall execute, acknowledge, deliver and record such other documents and instruments, as may be reasonably necessary from time to time to evidence, confirm or carry out the intent and purposes of this Lease. (h) Unless the context in which used clearly requires another construction, throughout this Lease, the masculine gender shall be deemed to include the neuter of feminine or both, the neuter gender shall include the masculine or both, and the singular of terms shall include the plural and vice versa. The section headings are for convenience only and shall not affect the construction hereof. (i) If any one or more of the provisions hereof shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not 20A-12 DocuSign Envelope ID: BDSODC2A-E339-4EBC-A3B6-000A7CF55027 affect the validity or enforceability of any other provision hereof, which shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. The parties intend that if any provision hereof is capable of two constructions, one of which would render the provision void and the other of which would render the provision valid, then the provision shall have the meaning which renders it valid. 0) Time is of the essence in the performance of each party's respective obligations. (k) This Lease may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one in the same instrument, and it shall not be necessary that any single counterpart bear the signatures of all parties. (1) Unless expressly stated to be exclusive, no remedy conferred herein shall be deemed to be exclusive of any other remedy conferred herein or any other remedy now or hereafter available at law or equity. All remedies conferred herein, and all remedies now or hereafter available at law or equity, shall be deemed to be cumulative and not alternative, and may be enforced concurrently or successively. (m) All provisions of this Lease shall be construed as covenants and agreements where used in each separate provision hereof and shall bind and inure to the benefit of the parties hereto, their respective heirs, legal representatives, successors and assigns. (n) All periods of time shall include Saturdays, Sundays and legal holidays; provided that, if the last day to perform any act or give notice falls on a Saturday, Sunday or legal holiday, then such act or notice shall be timely performed if given on the next succeeding business day. (o) Any holding over by Tenant of the Premises after the expiration or termination of this Lease shall operate and be construed as a tenancy from month to month on all terms of this Lease, terminable by either party upon thirty (30) days' prior written notice to the other. (p) Nothing contained in this Lease shall be deemed or construed by the parties hereto or by any third party to create the relationship of principal and agent or of partnership or of joint venture or of any association between Landlord and Tenant, and no provision contained in this Lease nor any acts of the parties hereto shall be deemed to create any relationship between Landlord and Tenant other than the relationship of landlord and tenant. 27. LANDLORD'S REPRESENTATIONS: Landlord hereby covenants, warrants and represents to Tenant that: (a) Landlord has the sole right, legal power and authority to enter into this Lease. (b) All required actions have been taken and satisfied by Landlord to authorize the execution and performance of this Lease. No other proceedings or actions on the part of Landlord are necessary to authorize this Lease or to carry out the transactions contemplated hereby. This Agreement constitutes the legal, valid and binding obligation of Landlord enforceable against Landlord in accordance with its ternts. 20A-13 DocuSign Envelope ID: 8D500C2A-E339-4E8C-A3B8-00OA7CF55027 (c) The individual(s) executing this Lease, on behalf of Landlord, has (or have) the full right, legal power and actual authority to bind Landlord to the terms and conditions hereof. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers the day, month and year first written above. ATTEST: Daisy Gomez Clerk of the Council APPROVED AS TO FORM Sonia R. Carvalho City Attorney CITY OF SANTA ANA Kristine Ridge City Manager ALDRIDGE ELECTRIC, INC. o«.sie..a br. vo, (}W,�blt.{^ 8/8/2019 �A Jfn M. Funk By: Gene Huebner Assistant City Attorney Title: CFO RECOMMENDED FOR APPROVAL FUAD S. SWEISS, PE, PLS Executive Director Public Works Agency 10 20A-14 DocuSign Envelope ID: BD50DC2A-E339.4E8C-A3B6-O0OA7CF55027 Exhibit A The Premises S�CENTER TSTREET -sxov IIIIIIIIIIIII ej Suito 301 - 1�100 agoare feet interior storage space. _ 79 �� ngoaro foot exterior j stoznce apace. �s e TL 'P�'f'�YPTfi'Yi'IYIY�rl I n CITY OF SANTA ANA CITY YARD 20A-15 DocuSlgn Envelope ID: 8D50DC2A-E339-4E8C-A8B8-OOOA7CF55027 EXHIBIT B 1. Tenant will be provided ten (10) keycards to access the Corporate Yard. 2. The keycards must be returned when the lease expires and/or the leased space is vacated, whichever occurs first. 3. If a keycard is lost or stolen it MUST be reported immediately to the City's Stores and City Yard Property Specialist by email at Eriquier@santa-ana.org. 4. A $25 keycard replacement fee applies for all lost or stolen keycards. 20A-16 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: SEPTEMBER 17, 2019 TITLE: APPROVE AN APPROPRIATION ADJUSTMENT ACCEPTING DEVELOPER FUNDS IN THE AMOUNT OF $296, 940 AND APPROVE AGREEMENTS WITH DEVELOPER AND RAILROAD COMPANY FOR INSTALLATION OF RAILROAD CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 181 Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For ENHANCEMENTS ON DYER ROAD (DP2014-20) (STRATEGIC PLAN NO. 6, 1) CONTINUED TO FILE NUMBER CITY MARAGER RECOMMENDED ACTION 1. Authorize the City Manager to execute an agreement with BNSF Railway Company to construct railroad crossing enhancements on Dyer Road, for the term commencing September 17, 2019, and ending upon construction completion, for the estimated cost of $296,940, subject to non -substantive changes approved by the City Manager and City Attorney. 2. Authorize the City Manager to execute a reimbursement agreement with the Developer, PR/Broadstone Heritage I LLC, whereby the Developer agrees to pay the City for all costs related to the construction of railroad crossing enhancements on Dyer Road, for the term commencing September 17, 2019, and ending upon completion of all work and all reimbursements are paid in full, subject to non -substantive changes approved by the City Manager and City Attorney. Approve an appropriation adjustment recognizing a Developer deposit of $296,940 into the Select Street Construction, Developer Contributions In Lieu revenue account, and appropriating the same amount into the Select Street Construction, Contract Services - Professional expenditure account. DISCUSSION PR/Broadstone Heritage I LLC (Developer) is proposing to build a mixed -use development consisting of 1,400 residential units and 18,000 square feet of commercial space at 2001 East Dyer Road. Among a number of public improvements required of the development, a modification is needed to the railroad crossing on Dyer Road between Red Hill Avenue and Pullman Street (U.S. DOT Crossing 026711U -Exhibit 1). This modification triggers other upgrades to BNSF Railway 20B-1 Agreements with Developer and Railroad Company Railroad Crossing Improvements at 2001 East Dyer Road September 17, 2019 Page 2 equipment. BNSF Railway policy requires their direct coordination with public agencies and not developers. Therefore, the City must act as the lead agency in facilitating the improvements. The City will need to enter into two agreements. The first is a Reimbursement Agreement whereby the Developer agrees to deposit with the City the pass -through funds in the amount of $296,940 for the cost of the required railroad crossing improvements (Exhibit 2). The second agreement is with BNSF Railway Company to construct the required railroad crossing improvements for the estimated cost of $296,940 (Exhibit 3). The Reimbursement Agreement obligates the Developer to pay for any approved additional costs above the project estimate. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #6 — Community Facilities & Infrastructure, Objective #1 (establish and maintain a Community Investment Plan for all City assets). ENVIRONMENTAL IMPACT There is no environmental impact associated with this action. The improvements are required as part of Project Environmental Impact Report EIR # 2015011028. FISCAL IMPACT There is no net cost to the City. Developer will pay the entire cost of the improvements estimated to be $296,940. This full amount will be deposited with the City and used to pay for actual project costs as invoiced by BNSF Railway. The requested Appropriation Adjustment will recognize the Developer deposit of $296,940 into the Select Street Construction, Developer Contributions In Lieu revenue account (No. 05917002- 57080), and appropriate the same amount into the Select Street Construction, Contract Services - Professional expenditure account (No. 05917660-62300). FY 2019/20 budget transactions are summarized as follows: Fiscal Accounting Unit Fund Accounting Unit, Year — Account # Description Account Descri tion Amount REVENUE FY Select Street Select Street Construction, 2019/20 05917002-57080 Construction Developer Contributions In $296,940 Lieu Total Appropriation: $296,940 20B-2 Agreements with Developer and Railroad Company Railroad Crossing Improvements at 2001 East Dyer Road September 17, 2019 Page 2 Fiscal Accounting Unit Fund Accounting Unit, Year - Account # Description Account Descri tion Amount EXPENDITURE Select Street Select Street Construction, FY 19/20 05917660-62300 Construction Contract Services- $296,940 Professional Total Expenditures: $296,940 APPROVED AS TO FUNDS AND ACCOUNTS: titer o Fuad S. S iss, PE, PLS Kathryn Do ns, CPA y Executive ' ector Executive Director Public Work Agency Finance and Management Services Agency FSSM/G/TH Exhibits: 1. Location Map 2. Reimbursement Agreement with PR/Broadstone Heritage 3. BNSF Railway Agreement r�- EXHIBIT 1 r1- rI- REIMBURSEMENT AGREEMENT THIS REIMBURSEMENT AGREEMENT ("Agreement") is made and entered into on September 17, 2019 by and between the CITY OF SANTA ANA, a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California ("City") and PR/BROADSTONE HERITAGE I LLC, a Delaware limited liability company ("Developer"). City and Developer are individually referred to herein as "Party" and together referred to herein as "Parties." WITNESSETH WHEREAS, City previously entered into or concurrently is entering into that certain Grade Crossing Signal Installation Agreement ("Crossing Agreement") with BNSF RAILWAY COMPANY, a Delaware Corporation ("Railroad"), BNSF File No. BF30011783, to provide for the improvement of a railway crossing on Dyer Road between Red Hill Avenue and Pullman Street ("Crossing"). WHEREAS, Developer is the developer of property in the City at the intersection of Dyer Road and Red Hill Avenue ("Development") that has received various approvals from the City. WHEREAS, City has imposed a condition on the Development requiring Developer to reimburse the City for its costs for the Crossing work under the Crossing Agreement, the estimate for which is $296,940, as detailed in the Crossing Agreement. NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS: 1. Recitals. The recitals are true and correct, and are incorporated into this Agreement as though fully set forth as terms of this Agreement. 2. Payment. Developer hereby agrees to pay to City all amounts owing by the City to the Railroad under the Crossing Agreement within thirty (30) days following Developer's receipt of written request by the City evidencing City's obligation to pay such amounts to Railroad under the Crossing Agreement. 3. Documentation. The City shall promptly submit to Developer all correspondence and documentation provided by Railroad to City. City shall not amend or modify the Crossing Agreement without first obtaining Developer prior written consent. 4. Agreement Binding. This Agreement shall be binding upon and for the benefit of the Parties and their respective agents, assigns, directors, employees, executors, officers, representatives, and successors. 1205062.01/OC 372942-00005/8-28.19/mrf/kp 1 5. Entire Agreement. This Agreement constitutes the entire agreement between the Parties, and it is expressly understood and agreed that this Agreement may not be altered, amended, modified or otherwise changed in any respect or particular whatsoever except by writing duly executed by authorized representatives of the Parties hereto. 6. Governing Law, This Agreement shall be governed by, construed in accordance with, and interpreted under the laws of the State of California and shall be deemed to have been entered into in the City, for purposes of venue no matter where the Agreement is actually executed. Both parties agree that the state and/or federal courts located in Orange County, California, shall be the venue for any action or proceeding that may be brought in connection with this Agreement. 7. Severability. If any provision of this Agreement shall be determined to be contrary to law or unenforceable, the remaining provisions shall be severable and enforceable in accordance with their terms. 8. Counterparts. This Agreement may be executed in multiple identical counterparts, including the transmission of counterparts via electronic means, each of which shall be deemed an original, but all of which together will constitute one and the same instrument. 9. No Third Party Beneficiaries. This Agreement is made and entered into for the sole protection and benefit of the Parties and any successor or assign of the Parties. No other person shall have any right of action based upon any provision of this Agreement. 10. Authority to Execute. The person or persons executing this Agreement on behalf of each individual Party warrants that he or she/they have the authority to execute this Agreement on behalf of the particular Party and has the authority to bind the particular Party to the performance of the obligations of this Agreement. 11. Waiver. No waiver of any breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this Agreement shall be effective unless it is in writing and signed by the Party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, or right or remedy shall be deemed a waiver of any other breach, failure, right or remedy, whether or not similar, nor shall any waiver constitute a continuing waiver unless the writing so specifies. 12. The Agreement Term. This Agreement shall commence on the date first written above and stay in effect until all reimbursements payable by Developer to City hereunder are paid in full. 13. Notices. Any notice to be given in connection with this Agreement shall be in writing and directed to the addresses below or such other addresses as either Party may later specify in writing. Notice is deemed effective on the date it is given if hand -delivered and on 1205062.01/OC 372942-00005/e-28-19/mrf/kp 2 the day delivered if by overnight mail. Notice given by U.S. mail shall be deemed effective three (3) days after it is deposited in the U.S. Mail, postage prepaid and addressed as follows: CITY: City of Santa Ana 20 Civic Center Plaza P.O. Box 1988 Santa Ana, CA 92702 Attn: Clerk of the Council DEVELOPER: PR/Broadstone Heritage I LLC 450 Newport Center Drive Suite 550 Newport Beach, CA 92660 Attn: Kim Bucklew These Parties agree to the foregoing: CITY OF SANTA ANA, a charter city and municipal corporation Kristine Ridge, City Manager APPROVED AS TO FORM: By: John . Funk, Assistant City Attorney ATTEST: By: Daisy Gomez, Clerk of the Council 1205062.01/OC 372942-0000518-28-19/mrf/kp 3 "Developer" PR/BROADSTONE HERITAGE I LLC, a Delaware limited liability company By: Heritage Village OC LLC, a Delaware limited liability company, its sole member By: PR/Heritage Holdings LLC, a Delaware limited liability company, its sole member By: Broadstone Heritage Alliance, LLC, a Delaware limited liability company, its member By: ,+/ b Name: Kim Bucklew Title: Member 1205052.01/0C 372942-00005/7-30-19/mrf/kp 20B-10 GRADE CROSSING SIGNAL INSTALLATION AGREEMENT BNSF File No.: BF10011783 Mile Post 176.30 Line Segment 7655 Dyer Road U.S. DOT Number 026711U Irvine Industrial Lead Subdivision THIS GRADE CROSSING SIGNAL INSTALLATION AGREEMENT (hereinafter called, "Agreement"), is executed to be effective as of 201_, by and between the City of Santa Ana, a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California, herein represented and acting through its City Council (hereinafter called, "AGENCY"), and BNSF-RAILWAY COMPANY, a Delaware Corporation (hereinafter called, "RAILROAD"). WITNESSETH: WHEREAS, in the interest of aiding vehicular travel and public safety, the AGENCY is undertaking a project to install railroad crossing signals and activation equipment at the Dyer Road crossing; WHEREAS, the Dyer Road crossing is located between Red Hill Avenue and Pullman Street at U.S. DOT crossing 026711U as indicated on Exhibit "A", attached hereto and incorporated herein; WHEREAS, the parties agree that the RAILROAD will receive no ascertainable benefit from the installation of advance warning signs, pavement marking stop bars or crossing signal equipment (hereinafter collectively called, "Crossing Signal Equipment"); WHEREAS, the AGENCY is paying for the acquisition and installation of items 8, 9 and 11 listed under the Construction Notes section of Exhibit `B-1 ", attached hereto and incorporated herein, said items are hereinafter collectively called "Crossing Signal Equipment" at Dyer Road crossing; WHEREAS, the RAILROAD agrees to purchase and install, at AGENCY'S sole expense, the said Crossing Signal Equipment described in the scope of work herein, and upon the terms and conditions set forth below; EXHI_11 WHEREAS, the RAILROAD agrees said Crossing Signal Equipment can and will be installed prior to any other improvement listed in said Exhibit "11-1 ", and Exhibit `B-2 attached hereto and incorporated herein; WHEREAS, the improvements listed in said Exhibits `B-l" and Exhibit `B-2" can be installed by a third party before or after said Crossing Signal Equipment; NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: ARTICLE I — SCOPE OF WORK 1. The term "Project" as used in this agreement includes said Crossing Signal Equipment and any and all work related to the installation thereof to make it operational at U.S. DOT crossing 026711U, indicated on said Exhibit "A" and Exhibit "B-1" which are attached hereto and incorporated herein, including, but not limited to, any and all changes to telephone, telegraph, signal and electrical lines and appurtenances, installation of advance warning signs and pavement marking stop bars, installation of any new crossing surface, temporary and permanent track work, fencing, grading, alterations to or new construction of drainage facilities, preliminary and construction engineering and contract preparation, and disposal of scrap. ARTICLE 11—RAILROAD OBLIGATIONS In consideration of the covenants of AGENCY set forth herein and the faithful performance thereof, RAILROAD agrees as follows: 1. The RAILROAD will, using its own labor forces under applicable labor agreements, install said Crossing Signal Equipment. The work will be performed at AGENCY's expense and in accordance with the MUTCD and the plans and specifications approved by AGENCY. The plans and specifications are attached to this Agreement as said Exhibits "B-l" and `B-21 and incorporated herein. 2. The detailed estimate of RAILROAD'S Project cost include construction engineering, installation labor (including the costs, if anv, of electrical set -vice from a public utility), traffic control, administration costs, plan review costs, permit costs and material costs required for the Project are attached hereto as Exhibit "C" and incorporated herein. In the event construction for the Project has not commenced within (6) months following the effective date of this Agreement, RAILROAD may, in its sole and absolute discretion, revise the cost estimates set forth in said Exhibit "C". In such event, the revised cost estimates will become a part of this Agreement as though originally set forth herein. Any item of work incidental to the items listed on Exhibit "C" not specifically mentioned therein may be included as a part of this Agreetent upon written approval of AGENCY, which approval will not be unreasonably withheld. 3. RAILROAD will furnish all labor, materials, toots and equipment for the railroad portion of the work required for the construction of said Project. 20B-12 4. The RAILROAD will, at AGENCY'S expense, dispose of all scrap from the RAILROAD'S work hereunder. 5. The RAILROAD will finalize and complete billing of all incurred costs under this Agreement no later than 6 months following completion of Crossing. Signal Equipment installation. ARTICLE III — AGENCY OBLIGATIONS In consideration of the covenants of RAILROAD set forth herein and the faithful performance thereof, AGENCY agrees as follows: 1. AGENCY must perform, at AGENCY'S expense, the following work: a) Installation of a pavement marking stop bar in accordance with the Manual on Uniform Traffic Control Devices (hereinafter called, "MUTCD"). b) Installation of advance warning signs in accordance with the MUTCD. 2. The AGENCY will approve the location of the signals and signal bungalow prior to installation by RAILROAD. 3. The actual costs for engineering, materials and labor (including third party charges for the installation of electrical service) associated with the installation of the Crossing Signal Equipment must be paid by the AGENCY (including taxes, such as applicable sales and use taxes, business and occupation taxes, and similar taxes) as shown in Exhibit C. 4. In the event the services of a consultant are needed after execution of this Agreement due to any exigency of the RAILROAD and the Project, the AGENCY and the RAILROAD will mutually agree, in writing, as to the selection of a consultant and the applicable scope of work to be performed by such consultant. All work performed hereunder by any consultant and any resulting costs must be paid by AGENCY as apart of the costs for the Project. 5. During the installation of the Crossing Signal Equipment, the RAILROAD will send AGENCY progressive invoices detailing the costs of the work performed by RAILROAD under this Agreement. AGENCY must reimburse RAILROAD for completed force -account work within forty-five six (6) months of the date of the invoice for such work. Upon completion of the Project, RAILROAD will send AGENCY a detailed invoice of final Project costs, segregated as to labor and materials for each item in the recapitulation shown on Exlvbit "C". Pursuant to this section, AGENCY must pay the final invoice within six (6) months of the date of the final invoice. 3 20B-13 6. The AGENCY must have advance railroad crossing warning signs and standard pavement markings hi place at the crossing location indicated on said Exhibit "A" (if the same are required by the MUTCD) prior to the acceptance of this Project by the AGENCY. The AGENCY assumes full responsibility for the maintenance of advance warning signs and pavement markings and agrees to hold harmless and indemnify the RAILROAD for any claims, damages or losses, in whole or in part, caused by or due to the AGENCY'S failure to maintain the advance warning signs and markings or other requirements of the MUTCD. 7. The AGENCY must give RAILROAD's Manager of Public Projects written Notice to Proceed with the railroad portion of the work after receipt of necessary funds for the Project and this agreement is executed by all parties. BNSF will not begin the railroad work (including, without limitation, procurement of supplies, equipment or materials) until written notice to proceed is received from Agency. 8. BNSF must give Agency a written notice of estimated project start for Agency coordination. This notice by no means executes BNSF start of construction and shall only be used for city coordination of construction. 10. The total amount to be expended under this Agreement by AGENCY is set forth on Exhibit C, which amount shall be subject to actual costs and expenses of BNSF. ARTICLE IV- JOINT OBLIGATIONS In consideration of the mutual covenants of the parties contained herein and the premises, the parties mutually agree as follows: 1. All cost records of the RAILROAD pertaining to said Project will be open to inspection and audit at any reasonable time by representatives of the AGENCY (including the legislative auditor and fiscal analyst for the AGENCY) for a period of one (1) years from the date of the final RAILROAD invoice under this Agreement. 2. Upon completion of the installation of said Project, the RAILROAD,'Mll at its sole cost and expense, operate and maintain the Crossing Signal Equipment. 3. Notwithstanding the preceding provision, if any regulations, ordinances, acts, rules or other laws subsequently passed or amended by the AGENCY or any other appropriate governmental or legislative authority increase the AGENCY'S portion of maintenance costs under this Agreement, RAILROAD will receive the benefit of any such regulations, ordinances, acts, rules or other laws and the AGENCY'S increased portion of maintenance costs will be incorporated into and made a part of this Agreement. 4. If a railway or a highway improvement project necessitates rearrangement, relocation, or alteration of the Crossing Signal Equipment installed hereunder, the costs for such 20B-14 rearrangement, relocation or alteration will be the responsibility of the party requesting such changes. 5. If any of the Crossing Signal Equipment is partially or wholly destroyed, then such repair and/or replacement costs must be distributed among the parties as follows: a) In the event the RAILROAD's negligence destroys or damages the Crossing Signal Equipment, RAILROAD must reimburse AGENCY for the costs to replace or repair such Crossing Signal Equipment. b) In the event the Crossing Signal Equipment is damaged or destroyed by any other cause, AGENCY must, at its sole cost and expense, replace or repair such Crossing Signal Equipment. 6. If the Crossing Signal Equipment installed hereunder cannot, through age, be maintained, or, by virtue of its obsolescence, requires replacement, the cost of installation of new crossing signal equipment will be negotiated by the parties hereto on the basis of the current Federal Aid Railroad Signal Program participation and applicable AGENCY at the time of such replacement is warranted. 7. This Agreement will inure to the benefit of and be binding on the parties hereto, their successors, and assigns. 8. In the event any paragraph contained in this Agreement or any item, part, or term within any particular paragraph is determined by a court of competent jurisdiction to be invalid or unenforceable, the validity of the remaining paragraphs or items will not be affected; and the rights and obligations of the parties will be construed and enforced as if this Agreement did not contain that particular paragraph or item held to be invalid or unenforceable. 9. This Agreement may be signed in counterparts, any one of which will be deemed to be an original. The parties further agree that any facsimile copy of a party's signature is valid and binding to the same extent as an original signature. 20B-15 N NVlii\BSS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. APPROVED AS TO FORM J01WFunk Auiwot City Attorney BNSF RAILWAY COMPANY 13y:. Printed Name: %t,riz* fiDg}ylS 'ritle: / u- 1 6 Pra l ebis V CITY OF SANT'A ANA By: Printed Name: 20B-16 lax 41 ` i *ur Via_ to Yi'sr°•\` �. ;.+Srxww�. .J +!d % 2f; r"! TM ;�rh• f � • to J" d •!� ' s.t �qa . �5g4. ✓/ ✓" /'�` � f {: ��' "�� ♦t, 1� • .. ;boy � i + s � I'}x, �Fir� ♦ Y l FO .'� r� iF}dl::L�ER�. �;� ♦..,� ..4' `:!'1_qt ",' RN 'Y u��klt rrtiiFr3' `. t� �.. ._ T°,ifP .. � y_. Exhibit "ti" [bisect plans and specifications detailing Railroad's work] 8 .1ya��k • y C b u l9 f9f���Si�S3" Fagt` m IFi3x`¢Fefgn6€sfg€sf€a� 0 a�• - -- 000 O 00 O OO OOOmODO it a 2 s A Al t �V"iSeSnP-15R$ re7',F I - AI 1 i _ II ® '�`�"p.T'�uq"� � .... ✓ M 9 vl :, w"'°is� ss r QQQ._ .a�7•�n�.vr Q�v Jlj) Gv3'rEL9'*'.(� .,5�y .v =Li^.'bi�� W.MnYJ �ll / - n, r. `$. M•.'°J e b2 '._,II •'`•d"+-y It ' n.. II 52 � L6J -__ � _ 6 ean' b'N � � �� - ! •"_A.3A It i'�3oe �` � y_ CAAaSX tI e • I .f�1 - � - nil g , �I _S� .. - lit 1 � •tiP, I i a= ... _ n -- - e.r •� it 6 1';1t:,, 1ttt1 ��� € II t I 3 itr I5' 20B-19 § 20 B- O Exhibit "C" JINSERT ESTIMATE OF RAILROAD'S COSTS IIEREj 9 20B-21 LOCATION: IRVIN P. [,No I•A,K PLANITENINUMIIEI- ,,R)24,565 PRol-1-1 IYOF: DNSP IIAIE%vAY CUM1IY,\NY OPERATED U1'. BNSF RAILWAY COMPANY )OINrrACRrTI': SANTA A,NA BILLABLE (V-): IUO.O NIA TL DATE: LOCATION CODE: 482170 TRICK "[VIT: 9 SII,UULUS STATUS: BOYANIERICAN PURPOSE. JUSTIFICATION AND DESCRIPTION CITS PLAN I'FENI DOCUmI:N'F (FOR INTERNAL RN'Sr ILVLAVAY USE ONLY) LINE. SEGMENT : 71.55 MILEPOST. 176.3 DIVISION: CA SUBDIVISION; IRVINE ND PINK ENGR. DIVISION: SOU CALII'ORNIA I'AN SLATE: C\. CO: OILANCE SPONSOR: VP ENGLNEHUNC. DEP'r CODE:: \10%VGII DERAILMP:NT CODE. AFT: NUMBER: RFA NUMBEII : CPAR NUMIIER BUDGET YEAR 20I9 BUDGET CLASS: 10 REI'ORI'INC. OFFICE; 443 PROJECr T Y'PE; sPP DOTNUAIIIER: 0267I1U STINIULUS FIND TYPE, FIOVA DYER ROAD-SAN'TA ANA. CA; RFPLACR CONS rANI%VARNING I FLASIIERS i GATES: C,\I.IFORNLA DI\': S:\N DIF.CO SUBUI V; LS J655: NIP ❑ IJ. DOT9 02671 IU; SEO= 69613 MON7110 PUWVR UTILITY C051' CEN-EER 616112. 111E NIATE:RIAL LIST BELOW REFLECTS TYPICAL REPRESENTATIVE PACKAGUS USED FOR Es rINIAI ING PURPGSF:S ONLY. TIIIS FSTIdIA'fIC 15 GO(!D FUR IR6 DAPS. Tllli. ESTIMATE IS SUBJECT TO CHANGE IN COST FOR LABOR NIATERIAL, AND OVERREAD. CONTRACTS RAVE BEEN ESTABLISHED FOR PORT IONS 01: SIGNAL WORK ON THE RNSF RAILROAD. ..............I................ SIGNAL \VORK ONLY.... I ........... I.............. THE CITY OF SANI'A AN\ IS FUNDING I W%OF'I'illS PROJECT. A:ANT.AIN PROPRIETARY CONFIDGNTLLLI'IY. PRIMARY FUNDING SOURCE IS FRBS\ " BUY ANIERICA(NI APPLIES " LAIIOR WSTS U - lOig15 Mr11T2RIAI. COSTS 9 I 11 U 9 9_'A54 O n U U 69-U6 I69,>16 169,5`n TOTA1COSTS TOTALS 1 11 -- R u ^96.9Jp 26) SY SDili MAINTENANCE AND PLANNINU PRINI'EDON: 93,28,1019 ESIINIAI'BREF.NU111RR: 1109295565.4-2S IMIMATED UY: WALKER COSPING D:\'If.. RJ/'_LL 2UIU I`RINTFF.D BY: WAI. KER Page 1 of 5 20B-22 ACCT CST RSV PPE DESCRIPTION MIST OT NM CASH NONCASH OPER R--%MVAL 8 400 SIGNAL SHOP LABOR- CAP 0.01 00 MH 1 •LABORSUBTGTAL 1 0 0 0 :ADDITIVES DA OVERAEADS I •GANG SUBTOTAL SIGSHOP-IM.- SIGNAL SHOP LABOR, I MAN 2 0 0 0 1120 319 400 9911 ELECTRICAL MATERIAL 1.00 LS N 1560 • MATERIAL SUBTOTAL 1.500 0 0 0 0AD➢IT7VE5 USETAX OFFLTNE TRANSPORTATION18 129 18 •GANG SUBTOTAL CIE COA,NG-IM- ELECTRICAL GANG. I MAN 1,647 0 0 0 8 40D 1037 SIGNAL FIELD-RHPIACE 952D7 0.0 MH 24,949 4,402 •LABOR SUBTOTAL - -- - 24,949 0 4.402 0 1120 313 400 9911 ARRESTOR, MDSA-2 XS 1.00 EA N 697 1120 313 40D 9911 BATTERY, 20 VGL-255, 9 VG _350 1.00 LS N 6,761 1120 313 40C 9911 BELLE 4.00 EA N 823 1120 313 400 9911 BONDING MATERIAL I.CO LS N 3D0 1120 313 400 WlI BUNGALOW B.R8 W/AC 1.00 LS N 10,142 1120 313 400 5911 BUNGALOW MATERIAL 1.00 LSH 7.564 1120 313 400 9911 CABL$2C/6TW 5D0.00 ITT 610 1120 313 400 9911 CABLE, 3C/2 250.00 FT N 1,433 1120 313 400 9911 CABLE, 5C/10 50D.00 PT N 940 1120 313 400 9911 CABLH,5C/6 1000.00 .FTN 4.130 1120 313 4W 3911 CADLE.7C14 1000.00 FT N 1.740 1120 313 400 9911 CANTILEVER 2m EA N 31.650 1120 3I3 400 9911 CHARGERS, 12M (20140/60) 3.W BA N 3,110 1120 313 400 9911 CONDUIT, STEEL 4• 200.00 FT 3,w 1120 313 400 9911 CONSTANT WARNING, 3IP4, ITK 1.00 EA N 16,232 1120 313 400 9911 EVENT RECORDER 1.00 FAN 3,250 I l20 313 400 9911 FIELD MATERIAL LOD Ls 7,372 1120 313 400 9911 FILL DIRT 20.00 Cy N 500 1120 313 400 9911 FOUNDATION, CANT 2.00 EA N 6,615 1120 313 400 9911 FOUNDATION, STEEL 4D0 PA N 2,693 1120 313 400 9911 GALE KEEPER 4,00 EA N 6.668 1120 313 400 9911 GATE MECHANISM, S-60 4.00 BA N 21.821 1120 313 400 9911 HAWK 48 DIM 1.00 EA N 1,930 1120 313 400 9911 LED LIGHT 28.00 EA 5.111 1120 313 400 9911 LIGRTOUTDE'lUCTOR 2.00 EA 1.826 1120 313 400 9911 RELAY 4D11 EA N 3.000 1120 313 403 9911 S11INT, NBS 2.30 EA N 2012 1120 .313 400 9911 SLIRFACB ROCK 10.00 CS• N 500 • MATERLU, SUBTOTAL, 157,822 0 0 0 1120 367 400 9911 CONTRACI'ENOINBRRING 1.00 LS N 8,000 112D 399 400 9911 BUNGALOW, WIREANDTESf 1.00 LSN 4,418 1120 399 400 9911 DIRECTIONAL BORING 300.00 Pi N 15,000 • OTHER SUBTOTAL 27 418 0 0 0 •ADDITIVES PAYROLL ASSOCIATED COSTS DAOVERHBADS 16,3U9 2,877 2QUIPMBNTEKPENSES 27,076 4,778 5,64S 979 1NSURANCEEXPENSES 4.366 770 USETAX 13,146 OfFLCKU TRANSPGRTAttON 1,911 • GANG SUBTOTAL SMM-LU-5M -SIGNAL FIELD LABOR, 5 MAN 273.545 0 13,906 0 1120 910 490 9911 AC POWER SERVICE 1.00 EA N 5.000 •OTHER SUBTOTAL 5.000 0 0 0 •GANG SUBTOTAL NONE. -NO GANG NEEDED 5.000 0 0 0 PROJELTSUBTOTA1. CONTINGENCIES 260,I1E 0 13,806 0 BILL PREPARATION PER 0 0 0 0 2,90-1 0 138 0 PROJECT GROSS COST LESS COST PAM BY O7HE.TS 282,996 0 13,944 0 282,996 0 13944 0 Page 2 of 5 20B-23 ACCT CST RSN PPE DESCWP71O\ QTY/ST OT lNh[ CASH NONCASH CPER REMOVAL PROJECTNETCOST Paso 3 of 5 20B-24 "' MAWTAW PROP.R�M'ARY CONT1DEtFf1ALITY •rr•. BNSFRAILWAY COMPANY FHPM ESTIMATE FOR SANTA ANA LOCATION IRVINEINDPARK DETAILSOFSSN}IAT➢ PLAN ITEM: 000295565 VERSION: 6 PURPOSE, JUST6[CAT10N AND DESCIUPfiON OVER ROAD . SANTA ANA, CA; REPLACE CONSTANT WARNING I FLASHERS/ GATES; CALIFORNIA DIV: SAN DIEGO SUBDIV; LS 7655; MP I763; DOT# o2b711U, SEQ# 69618 MONTHLY POW ER UR1.17Y COST CENTER : 61692. THE MATERALLIST BELOW REFLECTS TYPICAL REPRESENTATIVE PACRAGES USED FOR ESTIMATING PURPOSES ONLY, THIS ESTIMATE 15 GOOD FOR ISODAYS. THEEST/MLATE IS EUDIECFTO CHANCE IN COST FOR LABOR, MATERIAL, AND OVERGEAD. CONTRACTS HAVE BEEN ESTABLISHED FOR PORTIONS OF SIGNAL WORK ON THE DNSF RAILROAD. «•..•.,....w.............••• SIGNAL WORK ONLY...........w«. •• .•o-.ww«. THE C 17Y OF SANTA ANA IS FUNDING 10o%OF THIS PROTECT. MARMAIN PROPRIETARY CONFIDENTTALIIY, PRIMARY FUNDING SOURCE IS FHWA •• BUY AMHRTCA@T APPLIES -- DESCRIPTION LABOR SIGNALFIELD-REPLACE SIGNALSHOP LABOR. CAP PAYROLLASSOCLATED COSTS DAOVERHEADS EQUIPMENT EXPENSPS INSURANCE EXPENSES TOTALLABORCOST MATERIAL muu«••w ARRPSTOH MDSA I XS BATTERY, 20 VGL- S,9 VGL.350 BELLS BONDING MATERIAL BUNGALOW 8X8 W/AC 13UNCALOWNIATBIUAL CABLF. 217/6 TOY CABLE, 3C/2 CABLE. 5C/10 CABLE, JOY, CABLE, 7C/14 CANTILEVER CHARGERS, 12/80 (20/40/60) CONDUIT,ST'EELe CONSTANT WARNINO,XP4, ITK BLECTRICAL MATERIAL EVENT RECORDER FIETD MATEHWL PILL DIRT FOUNDATION,CANT I FOUNDATION, STEEL GATEKEEPER OATH MECHANISM, 5-60 EAWK 48 DIN LEDLIGHT IfGHT OUT DETBCTOR RELAY SHUNT, N➢S SURFACE ROCK Page 4 of 5 Ulm 952.0 MII 0.01 MH 1.0 EA N 1.0 LS N 4.0 EA N 1.0 LS N 1.0 LS N 1.0 LS N 500.0 FT N 250.0 FTN 500.0 PT N 1000.0 FT N 1000.0 FT N 2.0 EA N 3.0 RA N 2000 IT N 1.0 EA N 1.0 LS N 1.0 EA N 1.0 LS N 20.0 CY N 20 EA N 4.0 EA N 4.0 EA N 4,0 EA N 1.0 EA N 78.0 EA N 2.0 EA N 4.0 EA N 20 EA N 10.0 CY N COST TOTALS 29,351 19,186 31,855 6,527 92,056 697 6,763 823 Soo 10,142 7,564 610 1,453 940 4,130 1,740 31,650 3,110 3,064 IS,= 1,500 3,250 7,372 son 6,63fi 2,693 6,643 21,891 1,930 5,111 1,826 3,000 .Zola 500 9Z056 20B-25 USE TAX OFFLR4E TRANSPORTATION TOTA: XATE]1 COST OTHER ACPOIVERSFAVICB OUNGALOIV, RTRB AND TEST CONTRACT ENGINEBRINO DIRECTIONALBORINC TOTAL OTF:ER ITEMS COST PROJECT SUBTOTAL COWINOENCIES BILLPREPARATJONFEE GROSS PROJECT COST LESS COST PAID BY BNSF TOTAL BILLABLE COST Page 5 of 5 13,275 169.526 :69.526 1.0 EA N 5,000 LO LS N 4,416 1.0 LS N 8,000 300.0 FT N 15,000 32,418 32.419 294.000 0 2.940 296,940 0 256,940 20B-26 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: SEPTEMBER 17, 2019 TITLE: APPROVE AN APPROPRIATION ADJUSTMENT AND FIRST AGREEMENT AMENDMENT WITH SERCO, INC., FOR RENTAL OF PARKING SPACES AT THE CORPORATE YARD — STORES FACILITY TOTAL POTENTIAL REVENUE: $13,656 (STRATEGIC PLAN NO. 1, 5) RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1� Reading ❑ Ordinance on 2n' Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER 1. Authorize the City Manager to execute a first amendment to the site lease agreement with Serco, Inc., for the lease of an additional six parking spaces located at the Corporate Yard, at the rate of $300 per month ($50 per parking space), with any partial month prorated at $12 per day ($2 per parking space), for the term beginning September 18, 2019, and ending June 30, 2020, with an option for three one-year extensions, for a net revenue increase of $13,656 for the entire term of the agreement, including optional extensions, subject to non -substantive changes approved by the City Manager and City Attorney. 2. Approve an appropriation adjustment recognizing Fiscal Year 2019-20 lease income of $2,856 into the Corporate Yard Operations Rental-Serco revenue account and appropriating the same amount to the Corporate Yard Contract Services -Professional expenditure account. DISCUSSION The Corporate Yard at Daisy/Center Street was constructed in 1985 and houses the Public Works Agency Administration Building, Central Stores, and Fleet Services. The facility consists of 11.5 acres and 140,000 square feet of structures. The operating hours are Monday through Thursday from 6 a.m. to 5 p.m., and Friday from 6 a.m. to 4 p.m. In addition to City departments, contractors providing street sweeping services and parking enforcement services are housed at the Corporate Yard. On June 19, 2018, the City entered into an agreement with Serco, Inc., to provide parking enforcement services. Serco, Inc., operates out of the Corporate Yard and stores their traffic enforcement vehicles at this site. Earlier this year, Serco, Inc., approached the City requesting to lease office space at the Corporate Yard. On June 18, 2019, the City entered into a lease 20C-1 Approve First Amendment with SERCO, Inc., for Parking Spaces at the Corporate Yard September 17, 2019 Page 2 agreement with Serco, Inc., to lease 230 square feet of available office space. The lease included one parking space. The City wishes to commemorate the utilization of an additional six parking spaces and Serco, Inc., has agreed to a monthly rate of $50 for each space, which is consistent with the monthly parking rate at the City -owned downtown parking structures. Staff has evaluated the request and has identified available parking spaces within the vicinity of the Corporate Yard -Stores Building. The City recommends entering into the first amendment to the lease agreement with Serco, Inc., for the rental of six parking spaces. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #1 — Community Safety, Objective #5 (provide high quality Police and Fire/Emergency Medical Services response within the City of Santa Ana). FISCAL IMPACT Approval of the site lease agreement amendment obligates Serco, Inc., to compensate the City $3,600 annually for the lease of six parking spaces at the Corporate Yard. The one-year agreement term begins September 18, 2019, and ends June 30, 2020. There is also an option for three one-year extensions. The requested Appropriation Adjustment will recognize Fiscal Year 2019-20 lease income of $2,856 into the Corporate Yard Operations Rental-Serco revenue account (No. 08517002-53739) and appropriate the same amount to the Corporate Yard Contract Services -Professional expenditure account (No. 08517138-62300). The total anticipated revenue and expenditures from this amendment is as follows: Fiscal Year Accounting Unit - Account No. Fund Accounting Unit, Account Amount (Project No.) Description No. Description REVENUE 08517002- City Yard City Yard Operations, FY 2019-20 53739 Operation Rental-Serco $2,856 08517002- City Yard City Yard Operations, FY 2020-21 53739 Operation Rental-Serco $3,600 08517002- City Yard City Yard Operations, FY 2021-22 53739 Operation Rental-Serco $3,600 20C-2 Approve First Amendment with SERCO, Inc., for Parking Spaces at the Corporate Yard September 17, 2019 Page 3 Accounting Unit - Fiscal Year Account No. Fund Accounting Unit -Account Amount Description No. Description (Project No.) 08517002- City Yard City Yard Operations, FY 2022-23 53739 Operation Rental-Serco $3,600 Total Revenues: $13,656 EXPENDITURES City Yard City Yard Operations — FY 2019-20 08517138-62300 Operation Contract Services - $2,856 Professional City Yard City Yard Operations — FY 2020-21 08517138-62300 Operation Contract Services - $3,600 Professional City Yard City Yard Operations — FY 2021-22 08517138-62300 Operation Contract Services - $3,600 Professional City Yard City Yard Operations — FY 2023-24 08517138-62300 Operation Contract Services - $3,600 Professional Total Expenditures: $13,656 PE, PLS Executive Rrector Public Work Agency FSS/TC/GL Exhibit: 1. First Amendment — SERCO. Inc. APPROVED AS TO FUNDS AND ACCOUNTS: l% . &W-il� Kathryn Do ns, CPA �� Executive Director Finance and Management Services Agency 20C-3 20C-4 Exhibit 1 FIRST AMENDMENT TO LEASE AGREEMENT WITH SERCO. INC. THIS FIRST AMENDMENT to the above -referenced agreement is entered into on September 18, 2019, by and between Serco, Inc. ("Tenant") and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California ("City"). RECITALS A. The parties entered into Agreement No. N-2019-118, dated June 18, 2019 ("Lease Agreement', by which City leased to Tenant certain office and parking space at the Santa Ana City Yard for Tenant's business operations ("Premises"). B. The Lease Agreement remains in effect through June 30, 2020, with provision for extension. C. The parties now wish to amend the Lease Agreement to include additional parking spaces in the Premises being leased by Tenant under the Lease Agreement. The Parties therefore agree: 1. Section 2, Premises, is amended to include in the Premises being leased by Tenant an additional six (6) parking spaces, as depicted on Exhibit A, so that the total parking spaces subject to the Lease Agreement is seven (7). 2. Section 6, Rent, is amended such that, effective September 18, 2019, the monthly rent payable under the Lease Agreement shall be increased by the monthly sum of three hundred dollars ($300), or fifty dollars ($50) per month for each additional spot, with any partial month prorated at $12 per day ($2 per parking space). 3. Except as modified by this First Amendment, all terms and conditions of the Lease Agreement shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to Lease Agreement on the date and year first written above. ATTEST DAISY GOMEZ Clerk of the Council APPROVED AS TO FORM SONIA R. CARVALHO, City Attorney ,By: ZT� J HN M. FUNK Assistant City Attorney CITY OF SANTA ANA KRISTINE RIDGE City Manager SERCO, INC. Name: 'D; e( r,Srn I c Title: SV�> Page I of 2 20C-5 FOR APPROVAL MAD S. SWEISS, PE, Executive Director Public Works Agency Page 2 of 2 20C-6 , MOP ri _ I =designated parking space I Tl i l i gifl:: ya I l l I-1 I1O I I1-I-I-I-IO >'T SMTA MA r1 The Premises P� Exhibit A N&IOWOUSAGSU 20C-• 20C-8 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: SEPTEMBER 17, 2019 TITLE: APPROVE AN AGREEMENT ACCEPTING $585,500 FROM THE STATE OFFICE OF TRAFFIC SAFETY FOR THE SELECTIVE TRAFFIC ENFORCEMENT PROGRAM GRANT AND APPROPRIATION ADJUSTMENT (STRATEGIC PLAN NO. 1, 3B) � 4" CITYWANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1� Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER 1. Authorize the City Manager to execute a one-year agreement with the State of California - Office of Traffic Safety for Selective Traffic Enforcement Program (STEP) Grant funds, for the period of October 1, 2019 through September 30, 2020, in an amount not to exceed $585,500, subject to non -substantive changes approved by the City Manager and City Attorney. 2. Approve an appropriation adjustment recognizing State of California, Office of Traffic Safety, Selective Traffic Enforcement Program (STEP) Grant funds in the amount of $585,500 in the Office of Traffic Safety revenue account and appropriate same to expenditure accounts. DISCUSSION The Santa Ana Police Department has been awarded a $585,500 grant from the State of California, Office of Traffic Safety under the Selective Traffic Enforcement Program (STEP). The goal of this program is to reduce the number of persons killed and injured in crashes involving alcohol, speed, red light violations, distracted driving, and other primary collision factors. To accomplish these goals, the program will fund both education and enforcement activities. The enforcement activities will follow proven "best practice" strategies and will be conducted on an overtime basis. The funded strategies will include DUI checkpoints and DUI saturation patrols to apprehend impaired drivers. The program will also concentrate on bicycle/pedestrian safety, speed violations, aggressive driving, and seat belt enforcement. The educational portion of the grant will include funding for Santa Ana Police Department staff to facilitate multi -media presentations at local schools in partnership with the Santa Ana Unified School District. Promotional and educational materials will be made available to support ongoing outreach programs already in place. This contract also includes funding to replace obsolete equipment, including hand-held ticket writers and related accessories. Bicycle helmets will also be funded by this grant. 20D-1 Agreement with State Office of Traffic Safety September 17, 2019 Page 2 Overall, the grant includes $435,490 for Officer overtime, $2,000 for training, $20,000 for contractual services, and $128,010 for other direct costs. This one-year agreement covers the program period from October 1, 2019 through September 30, 2020. STRATEGIC PLAN ALIGNMENT Approval of this item allows the City to meet Goal #1 Community Safety, Objective #3 (promote fiscal accountability to ensure financial responsibility at all levels of the organization), Strategy B (promote ongoing efforts to obtain grant funding for activities that will assist in preventing and reducing criminal activity and traffic collisions). FISCAL IMPACT The appropriation adjustment will enhance the Office of Traffic Safety revenue account (no. 16514002-52001) by $585,500 and appropriate same to expenditure account (no. 16514414- various) for the following fiscal years: FY 2019-20 $465,500 FY 2020-21 $120,000 Total $585,500 entin Chief of Police Santa Ana Police Department APPROVED AS TO FUNDS AND ACCOUNTS: 1 Kat ryn Dowrfs, CPA Executive Director Finance and Management Services Agency Exhibit: 1. Agreement.with State Office of Traffic Safety 20D-2 Exhibit 1 State of California — Office of Traffic Safety GRANT AGREEMENT Gu.ANr NUMBER PT20164 1. GRANT TITLE Selective Traffic Enforcement Program STEP 2. NAME OF AGENCY 3. Grant Period Santa Ana From: 10/01/2019 4. AGENCY UNTrTo ADMINISTER GRANT Santa Ana Police Department To: 09/30/2020 5. GRANT DESCRIPTION Best practice strategies will be conducted to reduce the number of persons killed and injured in crashes involving alcohol and other primary collision factors. The funded strategies may include impaired driving enforcement, enforcement operations focusing on primary collision factors, distracted driving, night-time seat belt enforcement, special enforcement operations encouraging motorcycle safety, enforcement and public awareness in areas with a high number of bicycle and pedestrian collisions, and educational programs. These strategies are designed to earn media attention thus enhancing the overall deterrent effect. 6. Federal Funds Allocated Under This Agreement Shall Not Exceed: .$585,500.00 - 7. TERMS AND CONDITIONS: The parties agree to comply with the terms and conditions of the following which are by this reference made a part of the Agreement: • Schedule A— Problem Statement, Goals and Objectives and Method of Procedure • Schedule B —Detailed Budget Estimate and Sub -Budget Estimate (if applicable) • Schedule B-1—Budget Narrative and Sub -Budget Narrative (if applicable) • Exhibit A— Certifications and Assurances • Exhibit B'— OTS Grant Program Manual -Items shown with an asterisk (•), are hereby incorporated by reference and made apart of this agreement as if attached hereto. These documents can be viewed at the OTS home web page under Grants: www.ots.ca.gov. We, the officials named below, hereby swear under penalty of perjury under the laws of the State of California that we are duly authorized to legally bind the Grant recipient to the above described Grant terms and conditions. IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto. 8. Approval Signatures A. GRANTDIRECTOR B. AUTHORIZING OFFICIAL OF AGENCY NAME: Jeffrey Smith PRONE: (714) 245-8210 NAME: Kristine Ridge PRONE: (714) 647-5200 DTLE: Commander FAX: (714) 245-9180 TITLE: City Manager FAN: (714) 647-6956 ADDRESS: 60 Civic Center Plaza ADDRESS: 60 Civic Center Plaza PO Box 1981 PO Box 1981 Santa Ana, CA 92702 Santa Ana, CA 92702 EMAIL: jsln't t2@santa-ana.org EMAIL: kridge@santa-ana.org (SA- /r q - 'Signatare) (Date) (Signature) (Date) C. FISCAL OR ACCOUNTING OFFICIAL D. AUTHORIZING OFFICIAL OF OFFICE OF TRAFFIC SAFETY NAME: Sergio Vidal PRONE: (714) 647-5295 NAME: Randy Weissman PRONE: (916) 509-3030 TITLE: Asst. Director of Finance & FAX: (714) 647-6956 Management Services TITLE: Acting Director FAX: (916) 509-3055 ADDRESS: 20 Civic Center Plaza ADDRESS: 2208 Kausen Drive Suite 300 PO Box 1981 Elk Grove, CA 95758 Santa Ana, CA 92702 EMAIL: svidal@san[a-ana.org EMAIL: randy.weissman@ots.ca.gov (Signature) (Date) (Signature) (Date) E. ACCOUNTING OFFICER OF OFFICE OF TRAFFIC SAFETY 9. DUNS INFORMATION NAME: Carolyn Vu DUNS #: 083153247 ADDRESS: 2208 Kausen Drive, Suite 300 REGISTERED ADDRESS: 20 Civic Center Plaza, 2nd Floor, Elk Grove, CA 95758 P.O. BOX 1988 CITY: Santa Ana ZIP+4:927014058 8/16/2019 2:15:46 PM 20D-3 Page 1 of 17 8/16/2019 2:15:46 PM 20D-4 Page 2 of 17 10. PROJECTED EXPENDITURES FUND CFDA ITEMIAPPROPRIATION F.Y. CHAPTER STATUTE PROJECTED EXPENDITURES 405dAL-20 20.616 0521-0890-101 2019 2019 BA/19 $5.500.00 405cTR-20 20.616 0521-0890-101 2019 2019 BA119 $130.000.00 402PT-20 20.600 0521-0890-101 2019 2019 BA/19 S150000.00 164 AL-20 20.608 0521-089NI01 2019 2019 BA/19 $300,000.00 AGREEMENT TOTAL $585,500.00 AMOUNT ENCUMBERED BY $585,500.00 THIS DOCUMENT 1 CERTIFY upon my own personal knowledge that the budgeted fiords for the current budget year are availablefor the period a:d purpose of the PRIOR AMOUNT ENCUMBERED FOR THIS expenditure stated above. AGREEMENT S 0.00 OTS ACCOUNTING OFFICER'S SIGNATURE DATE TOTAL AMOUNT ENCUMBERED TO DATE SIGNED $585500.00 ATTEST: APPROVED AS TO FORM: SONIA R. CARVALHO DAISY GOMEZ City Attorney Clerk of the Council By: 141 TA ARA BOGOSIAN Assistant City Attorney 8/16/2019 2:15:46 PM RECOMMENDED FOR APPROVAL DAVID VALENTIN Chief of Police Page 3 of 17 20D-5 State of California — Office of Traffic Safety GRAN r NUMBER GRANT AGREEMENT Schedule A PT20164 1. PROBLEM STATEMENT The City of Santa Ana is a dynamic and diverse municipality. It is the heart of employment within Orange County drawing hundreds of thousands of persons to the city on a daily basis. The city features culturally rich landmarks to include Bowers Museum, Orange County High School for the Arts, Cal State University Fullerton Center for the Arts which is a popular destination for student and art aficionados. The downtown area is a popular destination which attracts residents and non-residents alike on weekend nights. This populous increase has caught the attention of chic restaurants and trendy bar, which have flocked to open establishments in the area and welcome all patrons. This influx of patrons has significantly increased the number of drivers on the road in the evenings, many of whom have consumed alcohol. The City of Santa Ana is the home of approximately 330,000 residents. It has approximately 477 miles of local, arterial and collector roadways. They are patrolled by approximately 180 sworn police officers who are fielded either in a patrol assignment or traffic enforcement. The Traffic Division has 17 sworn officers. This includes two Sergeants, three Corporals and twelve officers. One Corporal and two sworn officers are assigned as collision investigators and are not regularly fielded for the purpose of traffic enforcement. There are eleven motor officers who are tasked with daily traffic enforcement and collision investigation. In 2015 and 2016, there were 44 fatal traffic collisions respectively. In 2017, there were 19 fatal collisions. Many of these fatalities have been the result of alcohol related collisions and pedestrian collisions. Injury traffic collisions have increased from 1447 in 2015 to 1694 in 2016 and decreased in 2017 to 1565. Nearly one-half of all injury traffic collisions have been caused by three PCPs: Right -of -Way, Unsafe Speed, and Signs & Signals. Our city has committed itself to traffic safety. In the current five-year strategic plan, traffic safety was deemed a top priority, specially pedestrian safety. In response, the Traffic Division has dedicated to participating in education programs targeting all children and adults. We have hired an employee to focus on the aforementioned efforts. Through our work and focus in education, both grant -funded and internally -Funded measures, we remain optimistic in the prevention of tragic consequences of unsafe drivers, pedestrians, and impaired drivers. The educational efforts, in conjunction with vital enforcement activities will have a tremendous effect on the community and make our roadways safer. We are looking forward to a successful partnership with the California Office of Traffic Safety as we make are 2. PERFORMANCE MEASURES A. Goals: I. Reduce the number of persons killed in traffic collisions. 2. Reduce the number of persons injured in traffic collisions. 3. Reduce the number of pedestrians killed in traffic collisions. 4. Reduce the number of pedestrians injured in traffic collisions. 5. Reduce the number of bicyclists killed in traffic collisions. 6. Reduce the number of bicyclists injured in traffic collisions. 7. Reduce the number of persons killed in alcohol -involved collisions. 8. Reduce the number of persons injured in alcohol -involved collisions. 9. Reduce the number of persons killed in drug -involved collisions. 10. Reduce the number of persons injured in drug -involved collisions. 11. Reduce the number of persons killed in alcohol/drug combo -involved collisions. 12. Reduce the number of persons injured in alcohol/drug combo -involved collisions. 13. Reduce the number of motorcyclists killed in traffic collisions. 14. Reduce the number of motorcyclists injured in traffic collisions. 15. Reduce hit & run fatal collisions. 16. Reduce hit & run injury collisions. 17. Reduce nighttime (2100 - 0259 hours) fatal collisions. 18. Reduce nighttime (2100 - 0259 hours) iniury collisions. B. Objectives: I Target Number 1. Issue a press release announcing the kick-off of the grant by November 15. The kick-off 1 press releases and media advisories, alerts, and materials must be entailed to the OTS 8/16/2019 2:15:46 PM Page 4 of 17 20D-6 Public Information Officer at pio@ots.ca.gov, and copied to your OTS Coordinator, for approval 14 days prior to the issuance date of the release. 2. Participate and report data (as required) in the following campaigns, National Walk to 10 School Day, National Teen Driver Safety Week, NHTSA Winter Mobilization, National Distracted Driving Awareness Month, National Motorcycle Safety Month, National Bicycle Safety Month, National Click it or Ticket Mobilization, NHTSA Summer Mobilization, National Child Passenger Safety Week, and California's Pedestrian Safety Month. 3. Develop (by December 31) and/or maintain a " HOT Sheet" program to notify patrol and 12 traffic officers to be on the lookout for identified repeat DUI offenders with a suspended or revoked license as a result of DUI convictions. Updated HOT sheets should be distributed to patrol and traffic officers monthly. 4. Send law enforcement personnel to the NHTSA Standardized Field Sobriety Testing 4 SFST (minimum 16 hours) POST -certified training. 5. Send law enforcement personnel to the NHTSA Advanced Roadside Impaired Driving 2 Enforcement (ARIDE) 16 hour POST -certified training. 6. Send law enforcement personnel to the Drug Recognition Expert (DRE) training. 2 7. Send law enforcement personnel to the DRE Recertification training. 2 8. Send law enforcement personnel to SFST Instructor training. 1 9. Conduct DUI/DL Checkpoints. A minimum of I checkpoint should be conducted during 12 the NHTSA Winter Mobilization and 1 during the Summer Mobilization. To enhance the overall deterrent effect and promote high visibility, it is recommended the grantee issue an advance press release and conduct social media activity for each checkpoint. For combination DUUDL checkpoints, departments should issue press releases that mention DL's will be checked at the DUUDL checkpoint. Signs for DUUDL checkpoints should read "DUI/Driver's License Checkpoint Ahead." OTS does not fund or support independent DL checkpoints. Only on an exception basis and with OTS pre -approval will OTS fund checkpoints that begin prior to 1800 hours. When possible, DUUDL Checkpoint screeners should be DRE- or ARIDE-trained. 10. Conduct DUI Saturation Patrol operation(s) 52 11. Conduct Traffic Enforcement operation(s), including but not limited to, primary collision 38 factor violations. 12. Conduct highly publicized Distracted Driving enforcement operation(s) targeting drivers 12 using band held cell phones and textin . 13. Conduct highly publicized Motorcycle Safety enforcement operation(s) in areas or during 2 events with a high number of motorcycle incidents or collisions resulting from unsafe speed, DUI, following too closely, unsafe lane changes, improper turning, and other primary collision factor violations by motorcyclists and other drivers. 14. Conduct Nighttime (1800-0559) Click It or Ticket enforcement operation(s). 2 15. Conduct highly publicized pedestrian and/or bicycle enforcement operation(s) in areas or 16 during events with a high number of pedestrian and/or bicycle collisions resulting from violations made by pedestrians, bicyclists, and drivers. 16, Conduct Traffic Safety educational presentation(s) with an effort to reach community 10 members. Note: Presentation(s) may include topics such as distracted driving, DUI, speed, bicycle and pedestrian safety, seat belts and child passenger safety. 17. Conduct Know Your Limit campaigns with an effort to reach members of the community. 4 3. METHOD OF PROCEDURE A. Phase 1— Program Preparation (1" Quarter of Grant Year) • The police department will develop operational plans to implement the "best practice" strategies outlined in the objectives section. • All training needed to implement the program should be conducted this quarter. • All grant related purchases needed to implement the program should be made this quarter. • In order to develop/maintain the "Hot Sheets," research will be conducted to identify the "worst of the worst" repeat DUI offenders with a suspended or revoked license as a result of DUI convictions. The Hot Sheets may include the driver's name, last known address, DOB, description, current license status, and the number of times suspended or revoked for DUI. Hot Sheets should be updated and distributed to traffic and patrol officers at least monthly. 8/16/2019 2:15:46 PM Page 5 of 17 20D-7 • Implementation of the STEP grant activities will be accomplished by deploying personnel at high collision locations. Media Requirements • Issue a press release announcing the kick-off of the grant by November 15, but no earlier than October 1. If unable to meet the November 15 date, communicate reasons to your OTS Coordinator. The kick-off press releases and any related media advisories, alerts, and materials must be entailed for approval to the OTS Public Information Officer at vioag ots.ca.gov, and copied to your OTS Coordinator, 14 days prior to the issuance date of the release. B. Phase 2 — Program Operations (Throughout Grant Year) • The department will work to create media opportunities throughout the grant period to call attention to the innovative program strategies and outcomes. Media Requirements • Send all grant -related activity press releases, media advisories, alerts and general public materials to the OTS Public Information Officer (PIO) at pioRdots.ca.gov, with a copy to your OTS Coordinator. The following requirements are for grant -related activities and are different from those regarding any grant kick-off release or announcement. • If an OTS-supplied, template -based press release is used, there is no need for pre - approval; however, the OTS PIO and Coordinator should be copied when at the same time as the release is distributed to the press. • If an OTS-supplied template is not used, or is substantially changed, a draft press release shall be sent to the OTS PIO for approval. Optimum lead-time would be 10 days prior to the release distribution date, but should be no less than 5 working days prior to the release distribution date. • Press releases reporting the immediate and time -valued results of grant activities such as enforcement operations are exempt from the recommended advance approval process, but still should be copied to the OTS PIO and Coordinator when the release is distributed to the press. • Use the following standard language in all press, media, and printed materials: Funding for this program was provided by a grant from the California Office of Traffic Safety, through the National Highway Traffic Safety Administration. • Email the OTS PIO at pio(rdots.ca.gov and copy your OTS Coordinator at least 30 days in advance, a short description of any significant grant -related traffic safety event or program so OTS has sufficient notice to arrange for attendance and/or participation in the event. • Submit a draft or rough -cut of all printed or recorded material (brochures, posters, scripts, artwork, trailer graphics, etc.) to the OTS PIO at pio6bots.ca.gov and copy your OTS Coordinator for approval 14 days prior to the production or duplication. • Space permitting, include the OTS logo, on grant -funded print materials; consult your OTS Coordinator for specifics and format -appropriate logos. • Contact the OTS PIO or your OTS Coordinator, sufficiently far enough in advance of need, for consultation when deviation from any of the above reeuirements mieht be contemplated C. Phase 3 —Data Collection & Reporting (Throughout Grant Year) • Invoice Claims (due January 30, April 30, July 30, and October 30) • Quarterly Performance Reports (due January 30, April 30, July 30, and October 30) • Collect and report quarterly, appropriate data that supports the progress of goals and objectives. • Provide a brief list of activity conducted, procurement of grant -funded items, and significant media activities. Include status of grant -funded personnel, status of contracts, challenges, or special accomplishments. • Provide a brief summary of quarterly accomplishments and explanations for objectives not completed or plans for upcoming activities. • Collect, analyze and report statistical data relating to the grant goals and obiectives. 4. METHOD OF EVALUATION Using the data compiled during the grant, the Grant Director will complete the "Final Evaluation" section in the fourthtfinal Quarterly Performance Report (QPR). The Final Evaluation should provide a brief summary of the grant's accomplishments, challenges and significant activities. This narrative should also include whether goals and objectives were met, exceeded. or an explanation of why obiectives were not comnleted. 8/16/2019 2:15:46 PM Page 6 of 17 20D-8 S. ADMINISTRATIVE SUPPORT This program has full administrative support, and every effort will be made to continue the grant activities after grant conclusion. 8/16/2019 2:15:46 PM Page 7 of 17 20D-9 State of California — Office of Traffic Safety GRANT AGREEMENT Schedule B GRANT NuNIBER PT20164 FUND NUMBER CATALOG NUMBER FUND DESCRIPTION TOTAL AMOUNT CFDA 405d AL-20 20.616 Impaired Driving Countermeasures $5,500.00 405c TR-20 20.616 State Traffic Safety Information $130,000.00 System Improvements 402PT-20 20.600 State and Community Highway $150,000.00 Safety 164 AL-20 20.608 Minimum Penalties for Repeat $300,000.00 Offenders for Driving While Intoxicated COST CATEGORY CFDA TOTAL COST TO GRANT A. PERSONNEL COSTS Straight time $0.00 Overtime DUDDL Checkpoints 20.608 $123,600.00 DUI Saturation Patrols 20.608 $161,200.00 Know Your Limit 20.608 $5,880.00 Traffic Enforcement 20.600 $79,800.00 Distracted Driving 20.600 $19,560.00 Motorcycle Safety 20.600 $3,260.00 Night-time Click It Or Ticket 20.600 $3,260.00 Pedestrian and Bicycle Enforcement 20.600 $26,080.00 Traffic Safety Education 20.600 $7,350.00 SFST/ARIDE/DRE Instruction 20.616 $5,500.00 Category Sub -Total $435,490.00 B. TRAVEL EXPENSES In State Travel 20.600 $2,000.00 $0.00 Category Sub -Total $2 000.00 C. CONTRACTUAL SERVICES Traffic Collision Database System Interface 20.616 $20,000. 00 Category Sub -Total $20,000.00 D. EQUIPMENT $0.00 Category Sub -Total $0.00 E. OTHER DIRECT COSTS DUI Checkpoint Supplies 20.608 $8,000.00 Educational Materials 20.608 $1,320.00 Lidar Device 20.600 $5,180.00 Bicycle Helmets 20.600 $2,100.00 Bicycle Safety Equipment 20.600 $1,410.00 Handheld Citation Data Collection Devices 20.616 $110,000.00 Category Sub -Total $128,010.00 F. INDIRECT COSTS $0.00 8/16/2019 2:15:46 PM Page 8 of 17 20D-10 Category Sub -Total $0.00 GRANT TOTAL $585,500.00 8/16/2019 2:15:46 PM Page 9 of 17 20D-11 State of California — Office of Traffic Safety GRANT AGREEMENT Schedule B-1 GiL4NT NUMBER PT20164 BUDGET NARRATI VE PERSONNEL COSTS QUANTITY DUI/DL Checkpoints - Overtime for grant funded law enforcement operations conducted by 12 appropriate department personnel. DUI Saturation Patrols - Overtime for grant funded law enforcement operations conducted by 52 appropriate department personnel. Know Your Limit - Overtime for grant funded traffic safety presentations or campaigns conducted by 4 appropriate department personnel. Traffic Enforcement - Overtime for grant funded law enforcement operations conducted by appropriate 38 department personnel. Distracted Driving - Overtime for grant funded law enforcement operations conducted by appropriate 12 department personnel. Motorcycle Safety - Overtime for grant funded law enforcement operations conducted by appropriate 2 department personnel. Night-time Click It Or Ticket - Overtime for grant funded law enforcement operations conducted by 2 appropriate department personnel. Pedestrian and Bicycle Enforcement - Overtime for grant funded law enforcement operations 16 conducted by appropriate department personnel. Traffic Safety Education - Overtime for grant funded traffic safety presentations or campaigns 10 conducted by appropriate department personnel. SFST/ARIDE/DRE Instruction - Overtime for grant funded instructor training conducted by 1 appropriate department personnel. TRAVEL EXPENSES In State Travel - Costs are included for appropriate staff to attend conferences and training events I supporting the grant goals and objectives and/or traffic safety. Local mileage for grant activities and meetings is included. Anticipated travel may include (enter other known conferences or required events). All conferences, seminars or training not specifically identified in the Budget Narrative must be approved by OTS. All travel claimed must be at the agency approved rate. Per Diem may not be claimed for meals provided at conferences when registration fees are paid with OTS grant funds. CONTRACTUAL SERVICES Traffic Collision Database System Interface - Computer programming required to interface collision 1 database or citation data collection systems with other existing agency or court databases or Records Management Systems, allowing the systems to be electronically integrated for transfer of data. EQUIPMENT OTHER DIRECT COSTS DUI Checkpoint Supplies - On -scene supplies needed to conduct sobriety checkpoints. Costs may I include 28" traffic cones, MUTCD compliant traffic signs, MUTCD compliant high visibility vests (maximum of 10), traffic counters (maximum of 2), generator, gas for generators, lighting, reflective banners, electronic flares, PAS device supplies, heater, propane for heaters, fan, anti -fatigue mats, and 8/16/2019 2:15:46 PM 20D-12 Page 10 of 17 canopies. Additional items may be purchased if approved by OTS. The cost of food and beverages will not be reimbursed. Educational Materials - Costs of purchasing, developing or printing brochures, pamphlets, fliers, 1 coloring books, posters, signs, and banners associated with grant activities, and traffic safety conference and training materials. Items shall include a traffic safety message and if space is available the OTS logo. Additional items may be purchased if approved by OTS. Lidar Device - Light detection and ranging device used to measure the speed of motor vehicles. This 4 device will be used forspeed enforcement. Bicycle Helmets - Helmets to be distributed during bicycle rodeos and other bicycle safety related 300 events. Bicycle Safety Equipment - Safety equipment such as bicycle headlights/taillights, reflectors, and 1 reflective arm and leg bands to be distributed during bicycle rodeos and other bicycle safety related events. Handheld Citation Data Collection Devices - Handheld devices for traffic officer use to collect citation 23 data, print the citation in the field, and transfer the information electronically to the agency RMS system and to the courts. The system will be used by traffic officers to improve the efficiency and accuracy of writing traffic citations. Costs include the purchase of electronic citation device, with integral mag-strip reader, thermal printer, audio recorder, camera, docking/charging station, software, licenses, accessories, training, and associated shipping and taxes. INDIRECT COSTS STATEMENTS/DISCLAINIERS There will be no program income generated from this grant. Nothing in this "agreement' shall be interpreted as a requirement, formal or informal, that a particular law enforcement officer issue a specified or predetermined number of citations in pursuance of the goals and objectives hereunder. 8/16/2019 2:15:46 PM Page 11 of 17 20D-13 State of California — Office of Traffic Safety GRANT AGREEMENT Exhibit A GRAN NwvIBER PT20164 CERTIFICATIONS AND ASSURANCES HIGHWAY SAFETY GRANTS (23 U.S.C. CHAPTER 4 AND SEC. 1906 PUB. L. 109-59 AS A6IENDED) Failure to comply with applicable Federal statutes, regulations, and directives may subject Grantee AQencv officials to civil or criminal penalties and/or place the State in a high -risk grantee status in accordance with 49 CFR §18.12. The officials named on the grant agreement, certify by way of signature on the grant agreement signature page, that the Grantee Agency complies with all applicable Federal statutes, regulations, and directives and State rules, guidelines, policies and laws in effect with respect to the periods for which it receives grant funding. Applicable provisions include, but are not limited to, the following: • 23 U.S.C. Chapter4—HighwaySafety Act of 1966, as amended • 49 CFR Part 18—Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments • 23 CFR Part 1300—Uniform Procedures for State Highway Safety Grant Programs NONDISCRIMINATION (applies to subrecipients as well as States) The State highway safety agency will comply with all Federal statutes and implementing regulations relating to nondiscrimination ("Federal Nondiscrimination Authorities"). These include but are not limited to: • Title VI of the Civil Rights Act of 1964 (42 U.S.C, 2000d et seq., 78 stat. 252), (prohibits discrimination on the basis of race, color, national origin) and 49 CFR part 21; • The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, (42 U.S.C. 4601), (prohibits unfair treatment of persons displaced or whose property has been acquired because of Federal or Federal -aid programs and projects); • Federal -Aid Highway Act of 1973, (23 U.S.C. 324 et seq.), and Title LY of the Education Amendments of 1972, as amended (20 U.S.C. 1681-1683 and 1685-1686) (prohibit discrimination on the basis of sex); • Section 504 of the Rehabilitation Act of 1973, (29 U.S.C. 794 et seq.), as amended, (prohibits discrimination on the basis of disability) and 49 CFR part 27; • The Age Discrimination Act of 1975, as amended, (42 U.S.C. 6101 et seq.), (prohibits discrimination on the basis of age); • The Civil Rights Restoration Act of 1987, (Pub. L. 100-209), (broadens scope, coverage and applicability of Title VI of the Civil Rights Act of 1964, The Age Discrimination Act of 1975 and Section 504 of the Rehabilitation Act of 1973, by expanding the definition of the terms "programs or activities" to include all of the programs or activities of the Federal aid recipients, subrecipients and contractors, whether such programs or activities are Federally -funded or not); • Titles 11 and III of the Americans with Disabilities Act (42 U.S.C. 12131-12189) (prohibits discrimination on the basis of disability in the operation of public entities, public and private transportation systems, places of public accommodation, and certain testing) and 49 CFR parts 37 and 38; 8/16/2019 2:15:46 PM 20D-14 Page 12 of 17 • Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low - Income Populations (prevents discrimination against minority populations by discouraging programs, policies, and activities with disproportionately high and adverse human health or environmental effects on minority and low-income populations); and • Executive Order 13166, Improving Access to Services for Persons with Limited English Proficiency (guards against Title VI national origin discrimination/discrimination because of limited English proficiency (LEP) by ensuring that funding recipients take reasonable steps to ensure that LEP persons have meaningful access to programs (70 FR 74087-74100). The State highway safety agency • Will take all measures necessary to ensure that no person in the United States shall, on the grounds of race, color, national origin, disability, sex, age, limited English proficiency, or membership in any other class protected by Federal Nondiscrimination Authorities, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any of its programs or activities, so long as any portion of the program is Federally -assisted; • Will administer the program in a manner that reasonably ensures that any of its subrecipients, contractors, subcontractors, and consultants receiving Federal financial assistance under this program will comply with all requirements of the Non -Discrimination Authorities identified in this Assurance; • Agrees to comply (and require its subrecipients, contractors, subcontractors, and consultants to comply) with all applicable provisions of law or regulation governing US DOT's or NHTSA's access to records, accounts, documents, information, facilities, and staff, and to cooperate and comply with any program or compliance reviews, and/or complaint investigations conducted by US DOT or NHTSA under any Federal Nondiscrimination Authority; • Acknowledges that the United States has a right to seek judicial enforcement with regard to any matter arising under these Non -Discrimination Authorities and this Assurance; • Agrees to insert in all contracts and funding agreements with other State or private entities the following clause: "During the performance of this contract/funding agreement, the contractor/funding recipient agrees — a. To comply with all Federal nondiscrimination laws and regulations, as may be amended from time to time; b. Not to participate directly or indirectly in the discrimination prohibited by any Federal non- discrimination law or regulation, as set forth in appendix B of 49 CFR part 21 and herein; c. To permit access to its books, records, accounts, other sources of information, and its facilities as required by the State highway safety office, US DOT or NHTSA; d. That, in event a contractor/funding recipient fails to comply with any nondiscrimination provisions in this contract/funding agreement, the State highway safety agency will have the right to impose such contractlagreement sanctions as it or NHTSA determine are appropriate, including but not limited to withholding payments to the contractor/funding recipient under the contract/agreement until the contractor/funding recipient complies; and/or cancelling, terminating, or suspending a contract or funding agreement, in whole or in part; and e. To insert this clause, including paragraphs (a) through (e), in every subcontract and sub agreement and in every solicitation for a subcontract or sub -agreement, that receives Federal funds under this program. 8/16/2019 2:15:46 PM Page 13 of 17 20D-15 POLITICAL ACTIVITY (HATCH ACT) (applies to subrecipients as well as States) The State will complywith provisions of the Hatch Act (5 U.S.C. 1501-1503), which limits the political activities of employees whose principal employment activities are funded in whole or in part with Federal funds. CERTIFICATION REGARDING FEDERAL LOBBYING (applies to subrecipients as well as States) Certification for Contracts, Grants, Loans, and Cooperative Agreements The undersigned certifies, to the best of his or her knowledge and belief, that: 1. No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement; 2. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions; 3. The undersigned shall require that the language of this certification be included in the award documents for all sub -award at all tiers (including subcontracts, subgrants, and contracts under grant, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly, This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. RESTRICTION ON STATE LOBBYING (applies to subrecipients as well as States) None of the funds under this program will be used for any activity specifically designed to urge or influence a State or local legislator to favor or oppose the adoption of any specific legislative proposal pending before any State or local legislative body. Such activities include both direct and indirect (e.g., "grassroots") lobbying activities, with one exception. This does not preclude a State official whose salary is supported with NHTSA funds from engaging in direct communications with State or local legislative officials, in accordance with customary State practice, even if such communications urge legislative officials to favor or oppose the adoption of a specific pending legislative proposal. CERTIFICATION REGARDING DEBARMENT AND SUSPENSION (applies to subrecipients as well as States) Instructions for Primary Tier Participant Certification (States) 1. By signing and submitting this proposal, the prospective primary tier participant is providing the certification set out below and agrees to comply with the requirements of 2 CFR parts 180 and 1200. 8/16/2019 2:15:46 PM 20D-16 Page 14 of 17 2. The inability of a person to provide the certification required below will not necessarily result in denial of participation in this covered transaction. The prospective primary tier participant shall submit an explanation of why it cannot provide the certification set out below. The certification or explanation will be considered in connection with the department or agency's determination whether to enter into this transaction. However, failure of the prospective primary tier participant to furnish a certification or an explanation shall disqualify such person from participation in this transaction. 3. The certification in this clause is a material representation of fact upon which reliance was placed when the department or agency determined to enter into this transaction. If it is later determined that the prospective primary tier participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government, the department or agency may terminate this transaction for cause or default or may pursue suspension or debarment. 4. The prospective primary tier participant shall provide immediate written notice to the department or agency to which this proposal is submitted if at any time the prospective primary tier participant learns its certification was erroneous when submitted or has become erroneous by reason of changed circumstances. 5. The terms covered transaction, civil judgment, debarment, suspension, ineligible, participant, person, principal, and voluntarily excluded, as used in this clause, are defined in 2 CFR parts 180 and 1200, You may contact the department or agency to which this proposal is being submitted for assistance in obtaining a copy of those regulations. 6. The prospective primary tier participant agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency entering into this transaction. 7. The prospective primary tier participant further agrees by submitting this proposal that it will include the clause titled "Instructions for Lower Tier Participant Certification" including the "Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion —Lower Tier Covered Transaction," provided by the department or agency entering into this covered transaction, without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions and will require lower tier participants to comply with 2 CFR parts 180 and 1200. 8. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded from the covered transaction, unless it knows that the certification is erroneous. A participant is responsible for ensuring that its principals are not suspended, debarred, or otherwise ineligible to participate in covered transactions. To verify the eligibility of its principals, as well as the eligibility of any prospective lower tier participants, each participant may, but is not required to, check the System for Award Management Exclusions website (httos://www,sam. Gov/). 9. Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings. 10. Except for transactions authorized under paragraph 6 of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction, in addition to other remedies available to the Federal government, the department or agency may terminate the transaction for cause or default. Certification Regarding Debarment, Suspension, and Other Responsibility Matters -Primary Tier Covered Transactions (1) The prospective primary tier participant certifies to the best of its knowledge and belief, that it and its principals: (a) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participating in covered transactions by any Federal department or agency; 8/16/2019 2:15:46 PM Page 15 of 17 20D-17 (b) Have not within a three-year period preceding this proposal been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; (c) Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State or Local) with commission of any of the offenses enumerated in paragraph (1)(b) of this certification; and (d) Have not within a three-year period preceding this application/proposal had one or more public transactions (Federal, State, or local) terminated for cause or default. (2) Where the prospective primary tier participant is unable to certify to any of the Statements in this certification, such prospective participant shall attach an explanation to this proposal. Instructions for Lower Tier Participant Certification 1. By signing and submitting this proposal, the prospective lower tier participant is providing the certification set out below and agrees to comply with the requirements of 2 CFR parts 180 and 1200. 2. The certification in this clause is a material representation of fact upon which reliance was placed when this transaction was entered into. If it is later determined that the prospective lower tier participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal government, the department or agency with which this transaction originated may pursue available remedies, including suspension or debarment. 3. The prospective lower tier participant shall provide immediate written notice to the person to which this proposal is submitted if at any time the prospective lower tier participant learns that its certification was erroneous when submitted or has become erroneous by reason of changed circumstances. 4. The terns covered transaction, civil judgment, debarment, suspension, ineligible, participant, person, principal, and voluntarily excluded, as used in this clause, are defined in 2 CFR parts 180 and 1200. You may contact the person to whom this proposal is submitted for assistance in obtaining a copy of those regulations. 5. The prospective lower tier participant agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency with which this transaction originated. 6. The prospective lower tier participant further agrees by submitting this proposal that it will include the clause titled "Instructions for Lower Tier Participant Certification" including the "Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion— Lower Tier Covered Transaction," without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions and will require lower tier participants to comply with 2 CFR parts 180 and 1200. 7. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded from the covered transaction, unless it knows that the certification is erroneous. A participant is responsible for ensuring that its principals are not suspended, debarred, or otherwise ineligible to participate in covered transactions. To verify the eligibility of its principals, as well as the eligibility of any prospective lower tier participants, each participant may, but is not required to, check the System for Award Management Exclusions website (httos://www.sani.eov/). 8. Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings. 8/16/2019 2:15:46 PM 20D-18 Page 16 of 17 9. Except for transactions authorized under paragraph 5 of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction, in addition to other remedies available to the Federal government, the department or agency with which this transaction originated may pursue available remedies, including suspension or debarment. Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion— Lower Tier Covered Transactions: 1. The prospective lower tier participant certifies, by submission of this proposal, that neither it nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participating in covered transactions by any Federal department or agency. 2. Where the prospective lower tier participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this proposal. BUY AMERICA ACT (applies to subrecipients as well as States) The State and each subrecipient will comply with the Buy America requirement (23 U.S.C. 313) when purchasing items using Federal funds. Buy America requires a State, or subrecipient, to purchase with Federal funds only steel, 'iron and manufactured products produced in the United States, unless the Secretary of Transportation determines that such domestically produced items would be inconsistent with the public interest, that such materials are not reasonably available and of a satisfactory quality, or that inclusion of domestic materials will increase the cost of the overall project contract by more than 25 percent. In order to use Federal funds to purchase foreign produced items, the State must submit a waiver request that provides an adequate basis and justification for approval by the Secretary of Transportation. PROHIBITION ON USING GRANT FUNDS TO CHECK FOR HELMET USAGE (applies to subrecipients as well as States) The State and each subrecipient will not use 23 U.S.C. Chapter 4 grant funds for programs to check helmet usage or to create checkpoints that specifically target motorcyclists. LAW ENFORCEMENT AGENCIES All subrecipient law enforcement agencies shall comply with California law regarding profiling. Penal Code section 13519.4, subdivision (e), defines "racial profiling" as the "practice of detaining a suspect based on a broad set of criteria which casts suspicion on an entire class of people without any individualized suspicion of the particular person being stopped." Then, subdivision (f) of that section goes on to provide, "A law enforcement officer shall not engage in racial profiling." 8/16/2019 2:15:46 PM Page 17 of 17 20D-19 20D-20 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: SEPTEMBER 17, 2019 TITLE: AMENDMENT TO THE BLANKET ORDER CONTRACTS FOR PROMOTIONAL ITEMS AND SERVICE AWARD IN THE AMOUNT OF $110,000 FOR A TOTAL NOT TO EXCEED $185,000 (SPECIFICATION NO. 17-125) {STRATEGIC PLAN NO. 7,2) CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1s' Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For_ CONTINUED TO A&�� FILE NUMBER CITY MMAGER RECOMMENDED ACTION Amend the blanket order contracts aggregate amount for Citywide promotional items and service awards in the amount of $110,000 for a total annual amount not to exceed $185,000 subject to non -substantive changes approved by the City Manager and City Attorney. DISCUSSION On January 16, 2018, Council awarded two-year contracts with provisions for three one-year renewals (five years total) for promotional items and service awards for an amount not to exceed $75,000 to the following vendors: • Authentic Promotions • Geri's Screen -printing LLC, • PromoteThis • TIE Consulting, Inc. During the following twelve (12) months, we will be sponsoring various community engagement events such as the City of Santa Ana's 150th Year Anniversary and 2020 Census. Specifically, the City will be celebrating its 150th Anniversary, which will include several events promoting community pride and engagement. The events will include giveaways, props, banners, flyers and other necessary supplies and equipment. In preparation for the 2020. Census, the Santa Ana Census Ambassador Program (Program) will educate, motivate, and activate the city's trusted voices and leaders throughout hard -to -count communities to help ensure that everyone in Santa Ana is counted. The Program serves as a liaison between business, education, and faith based organizations. Outreach for both the 2020 Census and the 150th Celebration will be conducted at various city - sponsored events including the Mariachi Festival, Fiestas Patrias, 5K race, 150th Celebration, Viva 22A-1 Contracts Amendment for Promotional Items and Service Awards September 17, 2019 Page 2 la Vida, Noches de Altares, and Plaza Navidena. Thus, in order to prepare for these events, the City Manager's Office, will be procuring various items including those promotional in nature. In order to have enough funds to cover all citywide events through the end of the contract term, funds in the amount of $110,000 ($185,000 — total) are requested. The recommended amendment amount includes $5,000 contingency for unforeseen expenses. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's effort to meet Strategic Goal #7 — Team Santa Ana, Objective #2 (establish communications plans to engage and inform employees and community about City objectives). FISCAL IMPACT Funds in the amount of $110,000 are available in FY 2019-2020 General Non -Departmental Contract Services -Professional account 01105015-62300. APPROVED AS TO FUNDS AND ACCOUNTS: /4a� Kathryn Downs, CPA Executive Director Finance and Management Services Agency sh/sp 22A-2 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: SEPTEMBER 17, 2019 TITLE: APPROVE THE FIRST AMENDMENT TO THE AGREEMENT WITH THE ORANGE COUNTY CONSERVATION CORPS IN THE AMOUNT OF $14,935.85 TO ENHANCE SERVICES FOR AT -RISK YOUTH (STRATEGIC PLAN NO. 2,4) CLERK OF COUNCIL USE ONLY: • T9 o, ❑ As Recommended ❑ As Amended ❑ Ordinance on 1s' Reading ❑ Ordinance on 2ntl Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO 04z, FILE NUMBER CITY MANAGER RECOMMENDED ACTION Authorize the City Manager to execute a first amendment to the agreement with the Orange County Conservation Corps to provide workforce development programs for at -risk youth by an additional amount of $14,935.85 for a total amount not to exceed $129,935.85 for the period of September 17, 2019 to June 30, 2020, subject to non -substantive changes approved by the City Manager and the City Attorney. DISCUSSION The City and Orange County Conservation Corps entered into a one-year agreement under the Workforce Innovation and Opportunity Act (WIOA) dated July 1, 2019, by which City agreed to expend federal funds for workforce development programs for at -risk youth that provide preparation for their high school diploma and post -secondary education, occupational training in construction, fork lift licensing, paid work experience and other employment skills for entry into the labor market. The Agreement included funding from the Department of Labor, Employment and Training Administration for fiscal year 2019-2020. In accordance with the terms and conditions of said Agreement, the parties desire to amend the agreement to provide additional funds to the Orange County Conservation Corps for the WIOA Youth Workforce Development Program based on unspent funds from fiscal year 2018-2019. The amendment will increase the agreement with the Orange County Conservation Corps by $14,935.85 for a new amount not exceed $129,935.85 effective September 17, 2019 to June 30, 2020. The additional funding will allow for an increase in hours for participant work experience wages, support services, incentives, transportation and Conservation Corps staff wages (Exhibit 1). 25A-1 First Amendment with OC Conservation Corps To Serve At -Risk Youth September 17, 2019 Page 2 STRATEGIC PLAN ALIGNMENT Approval of this item support's the City's effort to meet Goal # 2 Youth, Education, Recreation, Objective # 4 (Partner with groups and organization to promote education, senior services, job training and development for all Santa Ana residents). FISCAL IMPACT Additional funds in the amount of $14,935.85 are budgeted and available in Fiscal Year 2019- 2020 in the WIOA Youth, Payment to Subagent account (no. 12318750-69135). Accounting Unit Accounting Unit, Amendment Fiscal Year — Account # Fund Description Account Total Description Workforce WDB Youth Council - FY 2019-20 12318750-69135 Innovation & Payment to $ 14,935.85 July - June Opportunity Act Subagent W IOA Amendment Total $ 14,935.85 APPROVED AS TO FUNDS AND ACCOUNTS: Steven A. Mendoza Kathryn Downs, CPA Executive Director Executive Director Community Development Agency Finance and Management Services Agenc Exhibit: 1. First Amendment to Agreement — OC Conservation Corps 77 25A-2 EXHIBIT 1 FIRST AMENDMENT TO AGREEMENT UNDER THE WORKFORCE INNOVATION AND OPPORTUNITY ACT THIS FIRST AMENDMENT TO AGREEMENT is hereby made and entered into this 17°1 day of September, 2019, by and between the City of Santa Ana, a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California ("CITY"), and Orange County Conservation Corps, a non-profit corporation ("SUBRECIPIENT"). RECITALS: A. The parties entered into a one-year agreement under the Workforce Imiovation and Opportunity Act (WIOA) dated July 1, 2019 (hereinafter "Agreement"), by which CITY agreed to expend federal funds for workforce development programs for at -risk youth that provide preparation for secondary and post -secondary education, occupational training and employment skills for entry into the labor market, as defined in the scope of work attached to said Agreement. B. The Agreement included funding from the Department of Labor, Employment and Training Administration for fiscal year 2019-2020. For fiscal year 2019-2020, CITY was designated a Local Workforce Development Area (LWDA) under WIOA, Public Law 1-1 13-128, Catalog of Federal Domestic Assistance (CFDA) Number 17.259 and Federal Award Identification Number (FAIN) AA253421455A6, and the CITY was awarded $785,103.00 for youth workforce development programs. C. In accordance with the terns and conditions of said Agreement, the parties desire to amend the Agreement to provide additional funds for fiscal year 2019-2020 to SUBRECIPIENT for the WIOA Youth Workforce Development Program based on unspent funds from fiscal year 2018- 2019. WHEREFORE, in consideration of the covenants contained in said Agreement, and subject to all the terms and conditions of said Agreement, except those amended in this First Amendment to Agreement, the parties agree as follows: L Section 11, City's Obligations, Subsection A, on page 5 of the Agreement, shall be amended to increase the amount of youth funds CITY agrees to pay to SUBRECIPIFNT by a sum not to exceed $14,935.85 for fiscal year 2019-2020, for a total amount during the tern of the Agreement not to exceed $129,935.85 for youth workforce development programs in accordance with the Budget attached hereto as "Exhibit A" and incorporated herein by reference. 2. Except as hereinabove amended, all terms and conditions of said Agrexment shall remain unchanged and in full force and effect. 25A-3 EXHIBIT 1 IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to Agreement on the date and year first written above. ATTEST: ATTEST: Daisy Gomez Clerk of the Council APPROVED AS TO FORM: Sonia R. Carvalho City Attoryey7, , By: RECOMMENDED FOR APPROVAL: Steven A. Mendoza Executive Director Community Development Agency CITY OF SANTA ANA "CITY" 0 Kristine Ridge City Manager "SUBRECIPIENT": atha 10. Muniz, Chief Executive Officer Orange County Conservation Corps 25A-4 EXHIBIT 1 Orange County Conservation Corps Santa Ana Workforce Investment Board - The Youth Service Provider Network Request for Proposal PY 201912020 ORANGE COUNTY CONSERVATION CORI'S BUDGET NARRATIVE Administrative Staff — .02 FTE — S2,800 or 2.43% of budget Administrative staff consists of a small percentage of the Chief Financial Officer to perform various administrative functions including; general & financial management, payroll, accounts payable and office coordination. Administrative Staff Taxes and Benefits - $242 or 0.21 % of budget Taxes and benefits include state unemployment at 6.2% of first S7,000 earned, 7.65% FICA and workers compensation. Program Staff —1.27 FTE — $59,550 or 45.83% of budget Program staff consists of 3 individuals of which 1 Program Specialist will he exclusively dedicated to ensure the programmatic success of the grant which includes recruit, enroll youths and overall case management. Other programs staff will be involved to provide overall support, leadership, management, coordination, daily supervision, training engagement and mentorship of enrolled youths. WIOA Program Specialist— 80% FTE: fully responsible for the success of grant Operations Manager— 2% FTE: projects management and acquisition Crew Supervisor I — 45% FTE: project supervision and mentorship Program Staff Taxes and Benefits — $12,190 or 9.38% of budget These include taxes and fringe benefits associated with each staff and their corresponding percentage of time spent on fulfilling all programmatic aspect of the grant. 6.2% for State Unemployment Insurance for first S7,000 earned, 7.65% for FICA and an allocated % of respective health benefits including retirement contribution cost for each associated staff. Project Transportation — $1,925 or 1.48% of budget Project transportation includes vehicle insurance, fuel, repair and maintenance. Costs are allocated based on the number of participant hours on the grant compared to overall Corps total participants hours. Total costs are computed and allocated during each billing period. Participant Wages, Taxes and Benefits — $39,577 or 30.46% of budget Wages are paid directly to participants who earn a minimum o1'SI2.00/S13.00 per hour and are scheduled to work up to 29 hours per week while enrolled in our program. Taxes and workers compensations are directly associated with participants wages and are paid by the Crops. 14 participants 27 weeks with 29 hours per week average @$12 per hour and I0S 13 per hour 25A-5 EXHIBIT 1 Orange County Conservation Corps Santa Ana Workforce Investment Board - The Youth Service Provider Network Request for Proposal PY 201912020 effective January 1, 2020, NOT including any additional leveraged wages by OCCC. Additional costs include taxes and workers compensation. Support Services — $9,100 or 7.00 % of budget Supportive Services mainly include uniforms, bus passes and gas cards. Other supportive service may include hotel voucher, car repair, tattoo removal, dress for success, material and supply for certification training and any other related costs in helping the participants to successfully complete the program. This is for both new enrollments and follow-up services. Incentives—$4,550 or 3.50% budget Incentives are costs associated with prepaid cards given directly to the participants for successfully completing or accomplishing certain required or encouraged milestones. These include obtaining certification, eaming a high school diploma and other milestones. This is for both new enrollments and follow-up services. Budget Summary Overall, 97% of the budget is budgeted toward programmatic expenses where most of the fiend budgeted is directly benefiting the participants in forms of wages, benefits, incentives and supportive services. In addition to the budget, the Corps twill also be leveraging approximately up to $115,964 of various costs associated with operating the program. Follow-up Services — Follow-up services for prior year participants (PY18/19) using current budgeted amount in supportive services. Tracking OCCC uses finger bionnetric to track all participant hours in additional to daily Geld sign -in sheet. Time cards are generated bi-weekly and are signed off by participants with the corresponding supervisor. Various labor distribution reports are used to track participant hours and earnings. Incentives and supportive services are requested through an applicable form with proper approval before they are delivered. Incentives and supportive services report can be generated at will from our tracking databases. Subcontracting— OCCC does not subcontract any obligations or duties in this proposal. 25A-6 EXHIBIT 1 Santa Ana Workforce Investmet BoardYouth Council Workforce Innovation & Opportunity Act Program Year201912020 Budaet Form Orange County Conservation Corps Adnllnistralive Program Total WIOA Personnel Salaries (Ust titles and F1Es)' 2,800.00 59,550.00 62,350.00 Benefits' 242.20 12,190.58 12,432.78 Total Personnel 3,042.201 71,740.581 74,782.78 Operating Expenses Rent -Occupancy Related' Utilities _ Phones hriemel fees Parkirg fees _ Security Maintenance Insuranw Equipment rental fees' Vehicle lease charges (�ehides may not bo purchased) Office expenses (consumables) Accounting Senices Project Expenses Adminstmthe Serdces Indirect costs (allach indirect cost rat. plan') Professional Senices Marketing/Membership Finance Charges Start (raining Slag Iraiellmileagefconfemnces Particiant Wages&Benefits• 39.577.21 39,577.21 Support senices' w/follow ups 9,100.00 9,100.00 Profit (for profits only) Olher(lisl)' Incentives 4,550.00 4,550.00 Project Transportation 1,925.87 1.925.87 Charter School Total Operating Expenses 55,153.08 55,153.08 L. tC �ift r{�1l lti .Yt 3 J f 5 �4 '"i w aye v jTLf �I -t i i Follow-up Services (221(staff time +fol up secs) - Grand Total with Follow-up Services 3,042.20 126,893.65 129,935.85 25A-7 EXHIBIT 1 Santa Ana Workforce Investmet BoordYouth Council OCCC Workforce Innovalion a Opportunfly Act Direct Program Expenes Program Year 201912010 VVOA WIOA OCCC Slap Wa9essalaries Time% Amount Adenwi3f,eive Sfeff Chef Fln n ial Oscar T. Huynh TA 2.800.00 Subtotal Admin Slap 2,800.00 Employer Taxes 214.20 Walkers Compensation 28.00 Benefits SublotelAdmin Staff Taxes/Sen.rrfs 242.20 Total AdminigmUvo Expenees 3,042.20 Proem. Staff Project Manager J. Newton 2% 2.030.00 SUPONSWI TBO 45% 17.550.00 W IOA Program ST•ecialml 0. Garcia 8! % 40.0Il100 Subtotal Program Staff 59,5%00 Employer Taxes 4,555.58 Workers Compensation 2,175.00 Benefits 5,460.00 Subtotal Proon, nr Staff Tawslacnerls 12,190.w Program Erpenses Project Transportation (ugucte. lomnnee. fuel. repair mam0 1,925.B7 Stall lmining - Oecupancy, Related (rental, utilities, rap* a maul) Subtotal Program Expenses 1,925.87 Total Program Expenses 73,666.45 Corpsnmmber(VA) Erp.nses Average Total hN WIOA CM. Sneerer; 9of New ClAs Hourly Rat. C74 Amount CMs (29 NNA x l l Wxs) 14 $12 to $13 2.842 34,221.00 Carry-overs 0 CIs Total Hows/Paid Word Experience 2.842 Employer Taxes 2,618.53 Workers Compensation 2,737.68 CM. stipend Total 14 39.577.21 SupportiveServices/Unif/bus p/6as c/books/tuition/w follw up services 14 $ 650 9,300.00 Cra Incentives/w fallow -up services 14 5 325 41550.00 Subtotal Cms Expenses 53.227.21 Followmp Services Pdor Year (22) (gaff lime+ we s c) _ Tolaf pith Follow-up Services 129.935.85 OCCC Aliech OCCC Star. Salaries a wages 47,610-00 Tries 5 Benefits 9,150.n OCCC Mardi • Participant Wages a Benefits 20.000.00 OCOE Charter School 2,40734 OCCC Expanses 35.,79626 Total OCCC Cash a In Kind 115,964.3G 2% 57% WY 25A-8 EXHIBIT 1 Santa Ana Workforce Investr act BoardVouth Council Workforce Innovation B.Opporsunity Act OCCC Program Year 201912CM tAalDMng W1OA Occc SMrTsalar2es[LY/ago4 WIC Ohem Imklm CWef Eacutisfi OAcer K. Bandp0l 0% 3,300.03 CFtic/Financial Of T. liu2nh 2% 2.=M 2,80 M Acour%Pe,pea, 115Tua'ea 09% 1,2woo Pe110 Speci>dst S. Cortex 0!: - 1,2110.03 ITNamget P. SICege 0% - 2.WO.W ❑rectaol ODreaions J.VWp On - 2,060.03 Poject Meager J. t:ew,on 2% 2,O1T.O0 2A00.00 Sul 1 TBO 45% 12,550.LO 9,750.00 s4e.'a 0 TBO 3.9C0.O3 Ptogams Manager SS.. 0% 3,600m Program Speci ldl V. Ycpez 0°A - 3.O01.03 WINFe, rn Specia6zs D. GeV. M% 40,COOw 10,=.W R cttdter B. Faa+ac Op 2,2O0OD Sublose[S WlSetades 6 WSgea 62.351 42,610.00 Subfofa2Spp BeneSls 12,432.28 9,150.11 Tour StaglWgesane BmM11 14,T8128 66d60.21 WIOAAmount WIOA WIOA CCCC apeat Eaoenm' Budget 11X Per0on 0.03 Ir lnd Note Administration Msou 1,354 - - 1.153.52 Stall Naining)stali anJ Wardmeesings Ocup'a'rs, S-V,Ow 3,210 - - S209J9 ger•Vutili[iea/Dhwes/boildout/pcmpanu2 related FAsedn,'ban'.abgrp42.sn1 Clual 35,OLU Lin, - 1,170.24 Bank/101/payroll processor fen hlaACOngtAlembenhp 27.= 903 902J5 Corps reembenhipandoulteach campaign O0ce Ecpanses 191 us 635.22 Olhce supplies I'mr.sonN Be.. Blom MG 835.83 CPA A6elU Nft'Lega`AConsullanicmirametl scices Eegos(F 18;IXn 24,,W3 - 25,OWA0 Cm rased Proem TrarnpataSm lFutl.6auranrn, ma:nt) ]44,gO3 4,815 4p: . 1,925.81 2,lVb,81 lieselsaletvwpplleh allorprms/pmjecea.mem Vuhlease/purahaws, veh allocation, lud,irss, mains Larll&Cmible. OCDB CIal. SolaD v°SCO 1,000 O°! - 1,000.00 Stall mi leage and miscelieneousuaveis/mnferm", MCC ParJcipant Wages &Berens 22,WD 2,402 - - 2,4 .M Stall mi large and miscellaneous Navels/perfai,mas g0,CW 20,000 - 20,000,00 Other levercged pmdtlpants e:orking hours & benefits Total Operating Erpenmv 5 1=600 S 61,129 1.925.87 59,20160 Tom, OCCC Match (Cash & In Modf 115,9g4.36 Trial V/qA Protected sbu. 2,842 Total OCCC Projector lbn 8&000 Project %fVVM hill beef S3C 25A-9 25A-10 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: SEPTEMBER 17, 2019 TITLE: APPROVE AMENDMENT TO THE AGREEMENT WITH HF&H CONSULTANTS, LLC, FOR SOLID WASTE CONSULTANT SERVICES IN AN AMOUNT NOT TO EXCEED $221,119 {STRATEGIC PLAN NOS. 4, 1 & 5} RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 91 Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Authorize the City Manager to amend the agreement with HF&H Consultants, LLC, by expanding the scope of work for Solid Waste Consulting Services and including additional contract extension negotiation services to address organics recycling and green waste legislation; extending the term through June 30, 2022, with a provision for one 1-year optional extension exercisable by the City Manager and City Attorney; and increasing the total compensation by $184,266, plus a 20% contingency of $36,853, for a total increase of $221,119, and resulting in total compensation not -to - exceed $441,919, subject to non -substantive changes approved by the City Manager and City Attorney. DISCUSSION The City's agreement with Waste Management for collection and handling of solid waste is due to expire on June 30, 2021. The Public Works Agency is working with HF&H Consultants (HF&H) to develop a Request for Proposals (RFP) for city solid waste services that will provide appropriate solid waste services in Santa Ana that considers recycling trends and compliance with State legislation. HF&H has already assisted the City in establishing the City's "Green Policy" and goals, and developing a draft RFP and agreement. The scope and terms of the agreement need to be expanded for the following purposes: 1. The City desires to negotiate a one-year extension with Waste Management (WM) to accommodate the expanded RFP process timeline. The one-year extension from July 1, 2021, to June 30, 2022, will be impacted by Senate Bill 1383, which requires implementation of residential curbside organics recycling by January 1, 2022. An extension at this time also provides an opportunity to address the requirements of Assembly Bill 1594. This bill eliminates diversion credit for green waste sent to County landfills as Alternative Daily Cover. HF&H will 25B-1 Amend the Agreement with HF&H Consultants, LLC, for Solid Waste Consulting Services September 17, 2019 Page 2 assist the City in negotiating the extension and ensure the additional programs are compliant with State mandates. The base amount of compensation for the additional consultant negotiation services is $50,000 plus a 20% contingency of $10,000, for a total of $60,000 for these additional services at the City's sole discretion. 2. A significant portion of the consultant agreement has been expended in the development of the RFP. With additional modifications still needed, the extended solid waste contract with WM, and expected supply -chain impacts, the City desires to amend the contract with the consultant to finalize the RFP and agreement, and assist the City in the RFP process, which includes negotiation of the final solid waste services contract. Compensation is $134,266 for this expanded scope of work plus a 20% contingency of $26,853, for a total of $161,119 for these additional services at the City's sole discretion. Staff recommends amending the contract with HF&H Consultants, LLC, to negotiate an extension with WM, ensuring that the City remains in compliance with State mandates, and to complete the RFP process for selecting new solid waste services. HF&H Consultants is experienced with similar work in the solid waste industry and has made significant progress in the work already completed on the Draft RFP and Draft Agreement. The total compensation for the amendment is in the amount not to exceed $221,119 (Exhibit 1). STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #4 — City Financial Stability, Objective #1 (maintain a stable, efficient and transparent financial environment); and, Goal #5 - Community Health, Livability, Engagement & Sustainability. ENVIRONMENTAL IMPACTS There is no environmental impact associated with this action. FISCAL IMPACT The total amount of the requested amendment is $221,119. Funds are available for expenditure in FY 2019-20 and will be budgeted in subsequent years as follows: Fiscal Accounting Unit Fund Description Accounting Unit, Account Amount Year — Account# Description FY 19-20 06917640-62300 Refuse Collection Refuse Collection Service, Contract $75,000 Service Services -Professional FY 20-21 06917640-62300 Refuse Collection Refuse Collection Service, Contract $100,000 Service Services -Professional FY 21-22 06917640-62300 Refuse Collection Refuse Collection Service, Contract $25,000 Service Services -Professional Optional 1-Year Extension FY 22-23 06917640-62300 Refuse Collection Refuse Collection Service, Contract $21,119 Service Services -Professional Total Amendment: $221,119 25B-2 Amend the Agreement with HF&H Consultants, LLC, for Solid Waste Consulting Services September 17, 2019 Page 3 GI Fuad S. Swes, PE, PLS Executive Dir for Public Works Aciencv FSS/MLM/CK I Exhibit: 1. Amendment APPROVED AS TO FUNDS AND ACCOUNTS: i4tTvin' Kathryn Do ns, CPA Executive Director Lt] Finance and Management Services Agency 25B-3 25B-4 EXHIBIT 1 FIRST AMENDMENT TO AGREEMENT FOR SOLID WASTE CONSULTING SERVICES THIS FIRST AMENDMENT to the above -referenced agreement is entered into on September 17, 2019, by and between HF&H Consultants,' LLC ("Consultant"), and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California ("City"). RECITALS A. The parties entered into Agreement No. A-2018-134, dated May 15, 2018, by which Consultant agreed to provide solid waste consulting services ("Agreement"). B. The Agreement remains in effect through June 30, 2020, with provision for. extension up to one year, and the parties now wish to further extend the term, expand the scope of work, and increase the amount to be expended under the Agreement in consideration of the expanded time and scope. The Parties therefore agree: 1. Section 1, Scope of Services, is amended to include the additional services that are described on Exhibits A and B. 2. Section 2.a, Compensation, is amended in its entirety so that the total sums to be expended for the scope of services originally described in the Agreement and expanded by those services described on Exhibits A and B, including during any extension periods, are as follows: • Original Scope and Exhibit A: $381,919. This sum is comprised of (1) the base amount of $318,266 and (2) a 20% contingency of $63,653 for additional services at the City's sole discretion. • Exhibit B: $60,000. This sum is comprised of (1) the base amount of $50,000 and (2) a 20% contingency of $10,000 for additional services at the City's sole discretion. 3. Section 3, Term, is amended to extend the term of the Agreement through June 30, 2022, with provision for extension through June 30, 2023 upon a writing executed by the City Manager and City Attorney. 4. Except as modified by this First Amendment, all terms and conditions of the Agreement shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to the Agreement on the date and year first written above. ATTEST DAISY GOMEZ Clerk of the Council CITY OF SANTA ANA KRISTINE RIDGE City Manager Page 1 of 2 25B-5 APPROVED AS TO FORM CONSULTANT SONIA R. CARVALHO, City Attorney By: V. J M. FUNKWarne: Assistant City Attorney Title: FOR APPROVAL Fuad S. Sweiss, PE, PLS Executive Director Public Works Agency Page 2 of 2 r EXHIBIT A 19200 Von Karman Avenue, Suite 360 Irvine, California 92612 Telephone: 949/251.8628 www.hfh-consultants.com September 10, 2019 Ms. Christy Kindig Project Manager Public Works Agency City of Santa Ana 20 Civic Center Plaza; 41h Floor Reception, Ross Annex Santa Ana, California 92701 Re: Scope of Services to Perform Remaining Tasks: RFP NO:18-006 Dear Ms. Kindig: Tomorrows Resources Today Robert D. Hilton, Emeritus John W. Farnkopf, PE Laith 6. Ezzet, CIVIC Richard J. Simonson, CMC Marva M. Sheehan, CPA Rob C Hilton, CIVIC We have developed the attached scope of services to complete the City of Santa Ana's (City) request for proposals (RFP) for integrated solid waste services based on direction received from City staff during my meeting with you and the City Manager on July 8, 2019, and subsequent conversation with you on August 22, 2019. Our consulting agreement was entered into with the City on May 15, 2018. HF&H was retained to assist In the preparation of an RFP and agreement for integrated solid waste services, review of submitted proposals, and the negotiation of the final agreement. On June 9, 2019, HF&H forwarded a project status and budget update to City staff documenting tasks performed that were in addition to our originally executed scope. In summary, these Included: We have produced six iterations of the RFP package to date, versus four revisions budgeted In the work plan, and there will be at least one more based on the newest comments, which brings the anticipated total to seven Iterations. Each version of the RFP documents Is a significant effort. For example, a change to the RFP service requirements may Impact the agreement and cross references In several places, and possibly result In substantive changes to the rate proposal forms, supporting cost and operating data forms, rate adjustment formula, and related EXCEL exhibits. • Many of the City's existing service arrangements are not described In the existing franchise agreement, Increasing the level of effort to research and document current procedures. • We conducted a series of briefings at the start of the project with individual Council members to confirm their goals for the process but these were not budgeted activities. The approved budget was $184,000, As previously documented, we have absorbed $20,000 In fees as a one-time client service adjustment. The requested budget adjustment is $134,266. Please see the attached workplan for details. Therefore, the updated total budget is $318,266 ($184,000 + $134,266). 25B-7 Managing Tonnorrov/s Resources Today Ms, Christy Klndig September 10, 2019 Page 2 of 2 We appreciate the opportunity to submit the attached scope of work and fee estimate to complete our work for the City. If you have any questions, please contact me at (949) 251-8902, lezzet ar@hfh- consuitants.com. Very truly yours, HF&H CONSULTANTS, LLC 1.v G��v'I Laith Ezzet, CIVIC Senior Vice President r City of Santa Ana Scope of Work Solid Waste Consulting Services Scope of Work Task 1: Prepare and Issue Request for Proposals Subtask 1A: Revise RFP and Agreement up to Two Times Based on Direction of City Staff Based on the information and direction received by City staff on July 8, 2019 as documented in our correspondence dated July 16, 2019, we will revise the draft RFP, and draft the agreement. HF&H will submit the draft RFP and agreement to City staff for review. After City staff has reviewed the documents and provided us with one set of written comments, we will confer with City. staff and make appropriate revisions to these documents one additional time. Subtask 18: Attend First City Council Meeting to Consider RFP Package HF&H will attend one City Council meeting at which the City Council will consider the RFP and draft agreement. We will assist City staff with the preparation and presentation of the RFP process and key contracting terms to be requested. Subtask 1C: Update Documents Based on Council Direction HF&.H will update the RFP and draft agreement to reflect changes that may be requested by City Council during the Council meeting to considerthe documents. As the City Council previously provided direction at the meeting on October 16, 2018, the budget assumes that such changes will consist of minor refinements that do not require significant changes to structure of the documents. Subtask ID: Attend Second City Council Meeting to Approve RFP Package If the RFP package is not approved for release at the first City Council meeting In Task 1B, HF&H will attend a second City Council meeting at which the City Council will approve the RFP and draft agreement. Subtask 1E: Finalize Documents Based on Council Direction HF&H will finalize the RFP and draft agreement to reflect changes that may be requested by City Council during the second Council meeting to approve the documents. The budget assumes that such changes will consist of minor refinements that do not require significant changes to structure of the documents. Subtask SF: Solicit Proposals Once the RFP and draft agreement have been approved by the City Council, they can be distributed to potential proposers. We can provide the City with a recommended list of potential proposers to whom the City may send the RFP. Alternatively, to avoid the time, expense and environmental Impact of production and mailing of multiple copies of a large document, we recommend that HF&H or the City e- mail the RFP document to all potential proposers and the local waste haulers' association, and other interested parties. We can provide the City with a list of recipients for City records. By e-mailing the document, proposers are immediately notified of its availability, can Immediately review the document to determine their level of Interest without having to print It out, and can forward It to the appropriate parties within the firm Immediately without having to print extra copies. As we regularly distribute our RFPs this way, we may have all or most of these key individuals already on our e-mail distribution list. September 10, 2019 Page 1 HF&H Consultants, LLC 25B-9 City of Santa Ana Scope of Work Solid Waste Consulting Services Subtask 16: Prepare for and Conduct Proposers' Conference We will schedule, along with City staff, a proposers' conference to be conducted shortly after release of the RFP. Potential proposers will have an opportunity to receive clarification of any Issues and ask questions at this conference. We will also accept written requests for clarification until a set deadline. We recommend that contact between proposers and the City be controlled and will suggest methods to do so, based on City staff and City Council's desired level of interaction with proposers. Subtask 11-1: Prepare Addenda We will prepare written responses to questions posed at the proposers' conference, or submitted in writing, and prepare any necessary addenda arising from Issues posed at the proposers' conference. All questions and responses shall be made available to all proposers In attendance at the conference. TASK 2: Review and Evaluate Proposals Subtask 2A: Review Proposals for Completeness We will perform an Initial review of each proposal submitted for compliance with the City's RFP requirements and consult with City staff regarding the handling of Incomplete proposals. Subtask 2B: Evaluate Complete Proposals The specific criteria for which we evaluate the complete proposals will be developed using Input received from City staff and the City Council. Based on our experience In other cities, we anticipate evaluating the proposals based on the following criteria: • Exceptions taken to the terms and conditions of the draft agreements; • Proposed total compensation (rate revenue), based on the rates Included in the financial section of the proposal; • Experience of the proposers In providing the requested services In other Jurisdictions, based on Information contained In their proposals; • Financial resources of the proposers, based on Information contained in their proposals; and, • Unique proposal features that exceed the RFP's minimum requirements. Subtask 2C: Evaluate Proposed Rates and operating Assumptions, Perform Fiscal and Rate Analysis We will evaluate the proposed rates and rate revenue, supporting costs, number of route hours, diversion plans and other submitted operating assumptions for reasonableness. We will review each proposers' fiscal stability based on key financial ratios, ability to provide required Insurance and performance sureties, and the financial Impact of the growth necessary to assume servicing these contracts. We will present the overall Impact of the proposed rate revenue on the City and Its rate payers, as well as noting the Impact to rate payers at common service levels. It is Important not to focus on Just a few low rate categories, without determining whether other customers will be similarly Impacted. September 10, 2019 Page 2 HF&H Consultants, LLC 25B-10 City of Santa Ana Scope of Work Solid Waste Consulting Services Subtask 21): Prepare Follow -Up Questions for Proposers After'performing our Initial review and evaluation, we will provide each proposer with our summary evaluation of the company's Individual proposal in order to confirm our understanding of the information presented in the proposal. Subtask 2E: Review Responses and Clarify Unresolved Issues We will review responses received from proposers and resolve any 'open Issues to help ensure that proposers are satisfied with the representation of their proposals. Subtask 2F: Interview Proposers At this stage In the process, usually one, two, or three proposals are, more likely to he selected. Along with the City's evaluation team, we will Interview up to three proposers, scheduling all Interviews on one day. Subtask 2G: Contact References for Recommended Proposer We will contact references provided for the proposer to be recommended to the City Council for award of the agreement. We will summarize the results of the reference checks within the evaluation report. Subtask 2H: Prepare Draft Evaluation Report All proposals will receive a preliminary evaluation. A detailed evaluation Is performed of the one or two proposals that appear to offer the most value for the services and costs proposed. Additionally, we will review the overall reasonableness of the operational and financial assumptions contained In the technical section of the proposals selected for detailed evaluation. After our evaluation Is complete, we will provide the City with a report describing the evaluation results, Subtask 21: Review City Comments and Prepare Final Evaluation Report HF&H will review and incorporate City comments into the evaluation report and provide a final evaluation report, Subtask 21: Attend First City Council Meeting to Consider.Contractor for Negotiations HF&H will attend one City Council meeting at which the City Council will consider the proposer(s) with whom the City would like to negotiate a franchise agreement. Subtask 2K: If Required, Gather and Provide Additional Information to Respond to City Council Inquiries Based on questions and/or comments from the City Council at the meeting In Task 2J, HF&H will gather additional information to respond and provide the information to City staff to distribute to the Council. September 10, 2019 Page 3 HF&H Consultants, LLC 25B-11 City of Santa Ana Scope of Work Solid Waste Consulting Services Subtask 2L: Attend Second City Council Meeting to Select Contractor for Negotiations If the Council does not select a contractor for negotiations at the first meeting in Task 21, HF&H will attend a second City Council meeting at which the City Council will select the proposer(s) with whom the City would like to negotiate a franchise agreement. TASK 3: Negotiate With Too Ranked Contractors. and Prepare a New Agreement with Selected Contractor for City Council Approval Subtask 3A: Prepare for and Participate In Negotiation Sessions HF&H will participate in negotiation sessions with one or more proposers, up to a total of four negotiation meetings. The fee estimate Includes costs for up to four negotiation sessions. The City may prefer to negotiate with multiple proposers at this time, as multiple proposals may appear attractive prior to finalizing the agreement. Proposers are most cooperative when they are still In competition. After finalizing negotiations, we would then assist the Clty's evaluation team in Its determination of a final selection. If the City desires to negotiate further with the final selection, we would assist In those negotiations as well. Subtask 3B: Prepare Revised Portions of Agreement Based on the negotiations, we will make up to three sets of revisions to the final agreement negotiated with the selected proposer. The City can then make a decision based on clearly defined contract terms, verses general promises often made In proposals and during negotiations. Also, at award, neither the successful nor unsuccessful proposers can debate what was or was not the final offer to the City. Subtask 3C: Attend First City Council Meeting for Consideration of the Final Agreement We will attend the City Council meeting at which the agreement will be considered by the City Council. Subtask 313: Prepare Additional Analysis If Requested by the City Council HF&H will prepare additional analysis If requested by the City Council during the meeting In Task 3C. HF&H will submit the analysis to City staff for distribution to City Council prior to City Council meeting In Task 3E, If the additional analysis Is more than anticipated and budgeted for, we will discuss this with City staff, and Inform staff when the budget for this task Is expended. Subtask 3E: Attend Second City Council Meeting for Approval of the Final Agreement We will attend the City Council meeting at which the final agreement will be approved by the City Council. The City Attorney or City Clerk will be responsible for obtaining signatures and completing attachments with the contractor such as bonds and Insurance certificates. September 10, 2019 Page 4 HF&H Consultants, LLC 25B-12 City of Santa Ana Scope of Work Solid Waste Consulting Services Fee Estimate We will perform the scope of work based<on time and materials as described In the workplan on the following page. The proposed budget adjustment Is $134,266. The remaining tasks include updating the Integrated residential and commercial RFP and agreement based on direction provided by City staff on July 8, 2019, revising the documents one additional time based on City staff review, soliciting proposals, conducting a pre -proposal conference, evaluating up to six proposals, participating in up to four negotiation sessions, and finalizing an agreement with one proposer. We have budgeted to attend a total of up to six City Council meetings during the process. If we are requested to change previous direction and split the Integrated residential and commercial RFP/agreement into 'separate pieces to be proposed upon (such as collection zones, or _separate residential vs. commercial contracts), our fee estimate will significantly Increase. The workplan on the next page Itemizes hours by,task and staff classification. Hours may be shifted among tasks and staff. September 10, 2019 Page 5 HF&H Consultants, LLC 25B-13 City of Santa Ana Scope of Work Solid Waste Consulting Services Solid Waste Agreement Competitive Procurement Workplan Task Description S'. VICO P,�sld..I/ Sr. P,.I.t rJanagor staff T.t.1 Hour. T. 'pr-pa-ro and Issue Request far Proposals Prostd.nt 1:2 '-o A. Revise clocnerento up to bw Unnes based an dliftUan from City staff 13. Attend first Council meeting to consider RFP package (CC Mtq 01) C. update docurnents based on Council direction D. Attend Second Council Meting to approw RFP package (CC Mlq 92) E. Finalize docurrounto based on Counucil cormew F. Solcltpmpmls G. Prepare far and attend proposere conference H. Prepare addenda 24 6 a 5 4 1 2 4 60 5 8 5 8 2 4 a 40 - a - 4 - 2 144 10 24 10 16 3 6 14 63 121 M 227 Subtotal: Took I Hours 2. RoVI" and Evaluate Propor"Is' 'ReAm A. prop m" Is for can Islatenwea B. Evaluate cwpbt. proposals (mradcrourn of s14 C. Evaluate proposed rates and operating assumptions D. Prepare fogowup questions for propose, F Review responses and clarify unresolved Issues F. InterJewixoposers G. Control references for reconnnanded Proposer K Prepare draft evaluatlon report I. ReAm City conirrents and prepare Onal evaluatfort report J. Attend First My Council nnocRJng to consider contacbDr for negalattons (CC Kit 03) K. If required, gaLhor and provide addlIonail InIonradlon to respond to Council Inquiries L. Attend Second City Counall mating to WW contractor for negotiations (CC MtU 94) 1 a a a 4 a 1 Is 4 5 6 6 24 2 a a 8 2 24 8 5 8 5 Go 24 8 a - 0 Is 2 4 102 24 22 20 is 11 so 12 10 20 IS 03 106 130 319 Subtotal: Took2 Hours 3. Negotiate Final Agreement and Prepare a Now Agroannont A. Prepare for and participate In up ta four negoiaung sessions B. PrepamreMwdporVmsofAgmemnt(uptD3rovIslons) C. Attend First Council Mating for consideration of final agroorrann (CC Nag US) D. Prepare additlonwil analysts If requested! by Clty Council E. Attend Second Council meeting for approval of final agrearrent (CC Mit; as) 24 12 5 a 5 32 24 5 a b 4 as 38 10 20 IS 54 74 4 132 Subtotal: Task 3 Hours Total Hours for Remaining Tasks ISD 300 188 67a Hourly Rate $ 288 S 2S3 $ 181 Subt.1.1; Fees for fternalning Work to be Performed $ 64,720 $ 75,900 $ .028 t 1134,648 Saps Bur I d ses ..... ..... S 420 $ 165,068 Remaining rj'I Work 071311201210 ........... �$30 802 $ 134.266 Budget AdjuBlurnentM (1) Exchdastil.15M for translation aubconarawbrappned to contingency. (2) Budget adjustment Is net of$20.GOD client service acrju3taxint, City's contingency 13 separate from IN5 mount September 10, 2019 Page 6 HF&H Consultants, LLC 25B-14 'Solid Hourly Rates Hourly rates through December 31, 2019 for professional and administrative personnel are listed below. Rates will adjust each January 1 by the annual percentage change In the CPI-0, (Los Angeles -Long Beach -Anaheim). Position Senior Vice President/President Senior Project Manager Project Manager Senior Associate Associate Analyst Assistant Analyst Administrative Staff Expenses will be billed as follows Automobile Travel Document Reproduction (over 20 pages/run) Facsimile, Telephone Postage, Overnight Mail and Couriers Schedule Rate $288 $253 $219to $235 $181to.$201 $129to $165 $119 $98 Prevailing IRS mileage rate 15 cents per page (black & white) 75 cents per page (color) No charge Actual DATE ACTIVITY September 17, 2019 City Approves Consulting Amendment September to December 2019 Update Draft RFP and Agreement January 2020 Present RFP Package to Council for Approval February 2020 Finalize and Release RFP June 2020 Proposals Due (4-month proposal preparation period) July - December 2020 Evaluate Proposals and Interview Proposers January 2021 Council Selects Contractor(s) for Negotiation February to May 2021 Negotiate and Prepare Final Agreement June 2021 Award by City Council Summer 2021 Proposition 218 Noticing (45 days in advance of hearing) Summer 2021 Proposition 218 Hearing July 1, 2022 Commence New Services September 10, 2019 Page 7 HF&H Consultants, LLC 25B-15 EXHIBIT B 29200 Von Karman Avenue, Suite 360 Irvine, California 92612 Telephone: 949/251-8628 www.h/h-consultonts.mm August 23, 2019 Ms. Christy Kindlg Project Manager Public Works Agency City of Santa Ana 20 Civic Center Plaza; 4" Floor Reception, Ross Annex Santa Ana, California 92701 Resources Today Robert D. Hilton, Emeritus John W. Famkopf, PE Lath B. Ezzet, CMC Richard J. Simonson, CMC Marva M. Sheehan, CPA Rob C. Hilton, CMC Re: Scope of Work and Fee Estimate to Negotiate an Extension of the Solid Waste Agreement with Waste Management Dear Ms. Kindlg: As the City requested at my meeting with you and the City Manager on July 8, 2019, we have developed the attached scope of work and fee estimate to assist the City of Santa Ana (City) In negotiating a one- year extension of the solid waste agreement with Waste Management (WM) to June 30, 2022. If you have any questions, please contact me at (949) 252-8902, lezzLt@hfh-consultants.com. Very truly yours, HF&H CONSULTANTS, LLC Cl�i/';' Lalth Ezzet, CMC Senior Vice President 25B-16 City of Santa Ana Scope of Work Solid Waste Consulting Services SCOPE OF WORK Background The City of Santa Ana (City) contracts with Waste Management (WM) for exclusive residential and commercial collection services, Including permanent and temporary roll -off and bin service (excluding temporary construction and demolition debris service), and construction and demolition debris which is generated from Citygovernment operations, The City recently exercised Its option to extend the term of WNI's agreement to June 30, 2021. The City desires to further extend the agreement for one additional year to June H, 2022,in order to accommodate the city's desired timeframe for the competitive RFP' process, and to do so will require a mutual agreement between the City and WM as we understand the City does not have a unilateral option to extend it further in Its sole discretion. As described below, certain regulatory requirements will need to be addressed In the extended agreement, and it is anticipated that rate adjustments for regulatory changes related to organics services will need to be negotiated with WM. Regulatory Requirements and Background The following regulations should be addressed in the Citys extended solid waste agreement. AB 1594: Assembly Bill 1594, was signed by Governor Brown in 2014, and includes the following provisions: o As of January 1, 2020, the use of green material as Alternative Daily Cover (ADC) does not constitute diversion through recycling and will be considered disposalfor purposes of measuring a jurisdiction's 50 percent per capita disposal rate. Yard Waste Diversion Reouirements In Current Agreement Section 14(a)(3) of the City s agreement with WM states: Ward Waste Collection and Recycling Plastic Carts: The contents of the plastic carts containing Yard Waste will be transported to a Composting Facility which meets oil state, federal and local laws for Yard Waste Diversion and which Is acceptable to the City. Contractor shall be responsible to ensure that the Yard Waste collected by Contractor is diverted in compliance with CIWMA and the City's SRRE." City's 2017 Electronic Annual Report (EAR) to CalRecvcle— "Green Material ADC" Although, the agreement requires WM to transport yard waste to a composting facility, the City's EAR, and CalRecycle's Disposal Reporting System, Identify that yard waste collected by WM is being diverted as ADC. The City/WM reported via the 2017 Electronic Annual Report to CalRecycle: 'The City's hauler, Waste Management, is currently exploring options which include in -county and out -county solutions, including utilizing OC Recycle's composting pilot programs, now in the August 23, 2019 Page 1 HF&H Consultants, LLC 25B-17 City of Santa Ana Scope of Work Solid Waste Consulting Services second phase at all County landfills. In addition, Waste Management Is securing third -party private solutions, such as composting facilities out of county." As reported by CalRecycle, 32,603 tons of yard waste were used as Alternative Daily Cover In 2017, and 29,332 In 2018, If those tons were counted as disposal, this could reduce the City's state -calculated diversion rate by approximately 4 percentage points for 2017 (data to accurately calculate the 2018 Impact is not yet available). SO 1383: In September 2016, Governor Brown signed Senate Bill 1383 establishing methane emissions reduction targets in a statewide effort to reduce emissions of short-lived climate pollutants in various sectors of California's economy. As It pertains to Jurisdictions, SB 1383 establishes targets to achieve a 50 percent reduction In the level of the statewide disposal of organic waste from the 2014level by 2020, a 75 percent reduction by 2025, and establishes an additional target that not less than 20 percent of currently disposed edible food is recovered for human consumption by 2025. The definition of organic waste in SB 1383 Is expanded to Include: o Food waste o Yard waste o Landscape and pruning waste o Applicable textiles and carpets o Wood and lumber o Fiber o Manure o Biosollds o Digestate and sludges August 23, 2019 page 2 HF&H Consultants, LLC 25B-18 City of Santa Ana Scope of Work Solid Waste Consulting Services 5B 1383 Tlmellne SB 1383 TIMELINE Jurisdiction shall Implement an organksrerycling program for ALL generators Unciuding residential) V Jurisdiction shall take progressive enforcement actions against non -compliant organics generators, haulers, and processors State to achleve76% reduction In organics disposal and recoverM of disposed edible food for human consumotion On December 18, 2018, the City Council approved an amendment to the Fourth Amended and Restated Agreement with WM, which among other Items, included a commercial organics rate structure where WM charges customers with organics service 50% of the refuse rate for comparable service. The City reimburses WM for the costs of the organic service not covered by the customer rates. Additionally, the City Is required to offer an organics program to residential customers starting January 1, 2022, and this will require the City to negotiate an, adjustment to the residential rate with WM for residential organics collection (including food waste), The new program will have been In place for six months forsix months from January 1, 2022, through the desired term of the extended agreement, June 30, 2022, Study Objective The project objective is to assist the City In negotiating a one-year extension to the solid waste agreement with WM which will Incorporate programs to comply with AB 1594 and SB 1383 as described above. August 23, 2019 Page 3 HF&H Consultants, LLC 25B-19 City of Santa Ana Scope of Work Solid Waste Consulting Services Scope of Work Task 1 Review Waste Management's Proposed Rate Adiustment for Yard Waste Collection and Processing to Comply with the Requirements of AB 1594 Historically, CalRecycle permitted Jurisdictions to use yard waste and landscaping waste as alternative daily cover (ADC) on landfills for vector and erosion control, and odor mitigation, and jurisdictions received diversion credit for this use. Beginning January 1, 2020, yard waste used as ADC will Instead be considered disposal In terms of measuring a Jurisdiction's annual 50 percent per capita disposal rate. To receive diversion credit forthis waste stream jurisdictions must divert this material in methods as defined by CalRecycle as highest and best use of the material, such as composting and other beneficial uses. Waste Management currently diverts yard waste collected In the City as ADC at the Orange County Landfills (OC Landfills). The OC Landfills do not charge haulers for yard waste used as ADC: WM Is required to perform processing of the yard waste (removal of contaminants, chipping and grinding) prior to delivery to the OC Landfills, however, WM may Incur additional costs to divert yard waste from landfilling as required by AB 1594. These costs may Include, but are not limited to, additional pre- processing of the yard waste including enhanced screening for contaminants, transportation costs if yard waste must be taken to facilities other than OC Landfills, and composting or other processing related costs. To determine the reasonableness of the AB 1594 rate adjustment that may be requested by WM, HF&H will: 1. Review material provided to the City by WM regarding Its proposed yard waste diversion plans, Including supporting cost Information made available by WM. 2. Meet with City staff and/or WM representatives to discuss proposed plans. 3. Request additional financial and/or operating data to confirm the reasonableness of the proposed rate increase. 4. Negotiate the rate Increase for the diversion of yard waste. Task Review Waste Management's Proposed Rate Adlustment to Implement a Residential Food Waste Diversion Program SB 1383 requires that City's provide food waste diversion programs for residential customers starting January 1, 2022. Therefore, WM's proposal to provide this service will be based Incurring the costs of providing a compliant program for six months until the proposed extension period terminates on June 30, 2022. It is our understanding that WM has proposed to co -collect food waste with yard waste from residential customers. August 23, 2019 Page 4 HF&H Consultants, LLC 25B-20 City of Santa Ana Scope of Work Solid Waste Consulting Services To determine the reasonableness of the SB 1383 residential rate adjustment requested by WM, HF&H will: 1. Review material provided to the City by WM regarding Its proposed residential food waste collection program, Including supporting cost information made available by the waste hauler, 2. Review relevant publicly available rate documentation from the limited number of Orange County cities that have Implemented a residential food waste collection program. 3. Meet with City staff and/or WM representatives to discuss proposed plans. 4. Request additional financial and/or operating data toconfirm the reasonableness ofthe proposed rate adjustment. 5. Negotiate rates and terms for residential food waste collection. Task 3 Prepare Contract Amendment HF&H will prepare a draft contract amendment based on the negotiated rate and terms. HF&H will revise the draft once based on review by City staff, and the City Attorney will be responsible for finalizing it according to City form. Fees We will perform the scope of work based on time and materials, not to exceed $50,000 without prior written City authorization. HF&H will bill the City based on the number of hours worked multiplied by our hourly billing rates, plus expenses Incurred. Payment Is due within 30 days of invoicing. Hourly Rates Hourly rates through December 31, 2019 for professional and administrative personnel are listed below. Rates will adjust each January 1 by the change In the Consumer Price Index Position Senior Vice President/President Senior Project Manager Senior Associate Associate Analyst Assistant Analyst Administrative Staff Exoenses will be billed as follows Automobile Travel Facsimile, Telephone Postage, Overnight Mall and Couriers Rate $288 $253 $181 to $201 $129 to $165 $119 $98 Prevailing IRS mileage rate No charge Actual August 23, 2019 Page 5 HF&H Consultants, LLC 25B-21 25B-22 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: CLERK OF COUNCIL USE ONLY: SEPTEMBER 17, 2019 TITLE: APPROVED ❑ As Recommended APPROVE STREET NAMING NO. 2019-01 ❑ As Amended TO RENAME A STREET SEGMENT WITHIN ❑ Ordinance on 1� Reading THE SANTA ANA AUTO MALL "ROGER El Ordinance on Reading El El Implementing Resolution PENSKE DRIVE" ❑ Set Public Hearing For (STRATEGIC PLAN NO. 5,4) CONTINUED TO - l �r FILE NUMBER CITY &NAGER RECOMMENDED ACTION Approve Street Naming No. 2019-01 to rename a street segment within the Santa Ana Auto Mall, from Dan Gurney Drive to "Roger Penske Drive." PLANNING COMMISSION ACTION At its regular meeting on August 12, 2019, the Planning Commission by a vote of 6:0 adopted a resolution approving Street Naming No. 2019-01 to rename a street segment within the Santa Ana Auto Mall "Roger Penske Drive." The Planning Commission made no changes to the recommendation outlined in the attached staff report (Exhibit A). DISCUSSION In June 2019, staff received a request to rename a street within the Santa Ana Auto Mall to recognize Roger Penske, a nationally recognized racing legend and owner of several dealerships within the auto mall. The street segment to be renamed `Roger Penske Drive' will commemorate the positive contributions Mr. Penske has made to the City of Santa Ana and the Santa Ana Auto Mall, including the purchase and rehabilitation of seven of the nine dealerships. Most of the purchases were made during the recession that occurred approximately 10 years ago, when Mr. Penske made a commitment to Santa Ana and the auto mall during difficult economic conditions. Since his first purchase, Mr. Penske has invested approximately $70,000,000 on upgrades and improvements to his dealerships, resulting in the employment of over 1,000 individuals and a significant increase in City revenue. These improvements have resulted in the Penske owned Crevier BMW facility being recognized as the top dealership in the Country for the past 4 years. The proposed renaming of "Roger Penske Drive" will replace an east -west segment of "Dan Gurney Drive." The north -south segment will continue to be named "Dan Gurney Drive," in recognition of another nationally recognized racing legend that operates a local automotive facility. 39A-1 Street Naming No 2019-01 September 17, 2019 Page 2 ENVIRONMENTAL IMPACT This project was reviewed in accordance with the Guidelines for the California Environmental Quality Act. The recommendation is exempt from further review pursuant to Section 15061 (b)(3) under the General Rule Exemption. Environmental Review No. 2019-63 will be filed for this project. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #5 — Community Health, Livability, Engagement and Sustainability, Objective #4 (support neighborhood vitality and livability). FISCAL IMPACT There is no fiscal impact associated with this action. Minh Thai Executive Director Planning and Building Agency VF: S:RFCA\2019\09-17-19\SN 2019-01 RFCA Exhibit: A. Planning Commission Staff Report 39A-2 REQUEST FOR Planning Commission Action PLANNING COMMISSION MEETING DATE: AUGUST 12, 2019 TITLE: STREET NAMING NO.2019-01 TO RENAME A STREET SEGMENT WITHIN THE SANTA ANA AUTO MALL "ROGER PENSKE DRIVE" Prepared by Vince Fregoso Executive Director RECOMMENDED ACTION PLANNING COMMISSION SECRETARY APPROVED ❑ As Recommended ❑ As Amended ❑ Set Public Hearing For DENIED ❑ Applicant's Request ❑ Staff Recommendation CONTINUED TO Planning Manager Adopt a resolution approving Street Naming No. 2019-01 to rename a street segment within the Santa Ana Auto Mall "Roger Penske Drive." In June 2019, staff received a request from a member of Penske Automotive requesting that a street within the Santa Ana Auto Mall be renamed to recognize Roger Penske, owner of seven dealerships within the auto mall and a nationally recognized racing legend. After reviewing the request, staff is proposing that one street segment within the auto mall be renamed from "Dan Gurney Drive" to "Roger Penske Drive." The renaming is to recognize an individual who has played a significant role in the rehabilitation and growth of the auto mall. Roger Penske is a businessman and entrepreneur involved in professional auto racing and formerly a professional auto racing driver himself. He is most famous for his ownership of Team Penske Racing, the Penske Corporation and several other automotive -related businesses, including seven of the nine auto dealerships in the Santa Ana Auto Mall. Mr. Penske's accomplishments include being named Sports Car Club of America Driver of the Year by Sports Illustrated and being inducted into the International Motorsports Hall of Fame, the Motorsports Hall of Fame of America, the Indianapolis Motor Speedway Hall of Fame, the Automotive Hall of Fame and the NASCAR Hall of Fame. As an owner, Mr. Penske was a four -time IndyCar Series Champion and a two-time NASCAR Cup Series Champion. He is the most successful owner in the Indianapolis 500 with 18 victories. Finally, Mr. Penske will be awarded the Presidential Medal of Freedom, the highest civilian award of the United States. Sections 33-5 and 33-6 of the Santa Ana Municipal Code (SAMC) govern the naming of streets and public facilities, including parks, park playgrounds and other recreational facilities. The code 39A-3 Street Naming No. 2019-01 August 12, 2019 Page 2 includes guidelines for the naming of streets and public facilities and identifies policy guidelines for the naming of streets. In general, the naming of streets should consider: A name which serves to identify the location of the subject area. 2. A name which references the history of the site or area. 3. A name which identifies a person or family which made extraordinary donation of land or funds to promote the improvement of the public facility. 4. A name which recognizes a person or family who made a significant contribution to the well being of the city, including city council, commissioners, officers and employees of the city, but not anyone who currently holds such position. Analysis of the Issues Based on the guidelines established in the SAMC and in consideration of what would best identify the street, the following analysis was considered for the street renaming: Existing Name: Currently, two street segments within the auto mall are identified as "Dan Gurney Drive." One segment traverses north and south and the second segment traversing east and west, with both segments intersecting at Auto Mall Drive (Exhibit 2). 2. Proposed Name: "Roger Penske Drive" will replace the east -west segment of "Dan Gurney Drive." The north -south segment will remain "Dan Gurney Drive," in recognition of another nationally recognized individual that operates a local automotive facility. "Roger Penske Drive" commemorates the positive contributions Mr. Penske has made to the City of Santa Ana and the rehabilitation of seven of the ninf during the recession that occurre made a commitment to Santa j conditions. Since his first pur $70,000,000 on upgrades and ii employment of over 1,000 indivi Further, these improvements have in the Country for the past 4 years. Santa Ana Auto Mall, including the purchase and dealerships. Most of the purchases were made f approximately 10 years ago, when Mr. Penske ,na and the auto mall during difficult economic ;hase, Mr. Penske has invested approximately iprovements to his dealerships, resulting in the uals and a significant increase in City revenue. led to BMW being recognized as the top dealership • Roger Penske is nationally known contributor to the automotive industry due to his successes as a race car driver as well as owner of cars in the Indy Racing Series and Stock Car circuit. Due to Mr. Penske's accomplishments, he has been elected to several automotive racing hall of fames. 39A-4 Street Naming No. 2019-01 August 12, 2019 Page 2 A street segment within the auto mall will continue to be named "Dan Gurney Drive," in honor of another nationally known racing legend and owner of an automotive racing related business in Santa Ana. Additionally, no businesses will be impacted by the renaming of the street as Volvo Cars Orange County will maintain frontage and will continue to be addressed on Dan Gurney Drive. Based on the above analysis, staff recommends that the Planning Commission approve the renaming of a street segment within the Santa Ana Auto Mall as "Roger Penske Drive." CEQA Compliance This project was reviewed in accordance with the Guidelines for Quality Act. The recommendation is exempt from further review (b)(3) under the General Rule Exemption. Environmental Review this project. A t, (-;-� Vin` regoso, CP Principal Planner VF: vUreportssfn19-01 Roger Penske Drive Attachments: Exhibit 1 — Resolution Exhibit 2 — General Vicinity Map the California Environmental pursuant to Section 15061 No. 2019-63 will be filed for 39A-5 LS 07.22.19 RESOLUTION NO. 2019-xx A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF SANTA ANA TO CHANGE THE NAME OF A STREET SEGMENT IN THE SANTA ANA AUTO MALL AS ROGER PENSKE DRIVE BE IT RESOLVED BY THE PLANNING COMMISSION OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The Planning Commission of the City of Santa Ana hereby finds, determines and declares as follows: A. The City of Santa Ana is requesting approval of Street Naming No. 2019-01 to rename a street segment within the Santa Ana Auto Mall as Roger Penske Drive. B. Street Naming No. 2019-01 came before the Planning Commission on August 12, 2019. C. Pursuant to sections 33-5 through 33-8 of the Santa Ana Municipal Code (SAMC), the Planning Commission is the decision making body for the naming of public streets, subject to confirmation by the City Council. Further, the policy guidelines in the SAMC pertaining to the naming of public streets state that a facility may be named if the name serves to recognize a person who made a distinct, significant contribution to the well-being of the City. D. Based on these guidelines, the street name of 'Roger Penske Drive" was selected as the name of a street segment in the Santa Ana Auto Mall in honor of Roger Penske, owner of seven of the nine dealerships within the Auto Mall and well-known automotive racing legend. His commitment to improving the Santa Ana Auto Mall has resulted in major upgrades to all of his dealerships and a significant increase in City revenue. Section 2. In accordance with the California Environmental Quality Act the recommended action is exempt from further review per Section 15061 (b)(3). This general rule exemption is allowed provided it can be determined with certainty that the proposed project will not have a significant effect on the environment. As the project consists of the renaming of a public street, the general rule exemption is applicable. Categorical Exemption Environmental Review No. 2019-63 will be filed for this project. Section 3. The Planning Commission of the City of Santa Ana, after conducting the public hearing, hereby approves Street Naming No. 2019-01 to rename a street segment within the Santa Ana Auto Mall 'Roger Penske Drive." This decision is based upon the evidence submitted at the abovesaid hearing, which includes, but is not limited Resolution No. 2019-xx Page 1 of 2 39A-6 LS 07.22.19 to: the Request for Planning Commission Action dated August 12, 2019 and exhibits attached thereto; and the public testimony, written and oral, all of which are incorporated herein by this reference. ADOPTED this 12th day of August, 2019. Mark McLoughlin Planning Commission Chairman APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney By: Lisa Storck Assistant City Attorney CERTIFICATE OF ATTESTATION AND ORIGINALITY I, Sarah Bernal, Recording Secretary, do hereby attest to and certify the attached Resolution No. 2019-xx to be the original resolution adopted by the Planning Commission of the City of Santa Ana on August 12, 2019. Date: Recording Secretary City of Santa Ana Resolution No. 2019-xx Page 2 of 2 39A-7 At It It rat A ElEdin- A REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: SEPTEMBER 17, 2019 TITLE: APPROVE RENAMING THE SKATE PARK AT CENTENNIAL PARK "PAT MCGUIGAN SKATE PARK" {STRATEGIC PLAN NO. 5, 41 RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1r Reading ❑ Ordinance on 2n° Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Approve renaming of the Centennial Park skate park to the "Pat McGuigan Skate Park." DISCUSSION At the September 3, 2019 City Council meeting, Mayor Pro Tern Villegas proposed renaming the skate park at Centennial Park after former City Councilmember Patricia McGuigan who recently passed away. Patricia A. McGuigan was Santa Ana's first councilwoman and one of the longest -serving council members in Orange County history. McGuigan, known as "Pat," served on the city council from 1981-1992, and then reappointed in 1993 to fill a vacancy. After two successful elections, she retired in 2002 due to term limits. Pat served during a period when Santa Ana demographics were affected by immigration, with big increases in the city's Latino and Asian populations. Some credited Pat for forging relations with immigrant communities, particularly Asian refugees. She created the Asian -Pacific Advisory Council of Santa Ana in 1994 and headed that council for eight years. Among her many accomplishments was the opening of the Salgado Community Center, which she backed for years. The center was the first of its kind on the west side of town, serving youth with a gymnasium, a pool, a game room and more. She was an early advocate of the Asian community, helping Vietnamese and Cambodians to access resources. She was a member of the city's Historic Resources Commission, and advocate for creating Santa Ana's downtown Artist Village, served on the Orange County Senior Citizens Advisory Council, served as a director of Soroptomist International of Santa Ana -Tustin, and worked as a government relations consultant, according to city officials. She was instrumental in the development and opening of the first skate park at Centennial Park in Santa Ana in 2002. 39B-1 Re -naming skate park at Centennial Park "Pat McGuigan Skate Park" September 17, 2019 Page 2 ANALYSIS Sections 33-5 and 33-6 of the Santa Ana Municipal Code (SAMC) govern the naming of streets and public facilities, including parks, park playgrounds and other recreational facilities. The code includes guidelines for the naming or renaming of these facilities and identifies policy guidelines. In general, the naming or renaming of parks and public facilities should consider: 1. A name that serves to identify the location of the subject area. 2. A name that references the history of the site or area. 3. A name that identifies a person or family, which made extraordinary donation of land or funds to promote the improvement of the public facility. 4. A name that recognizes a person or family who made a significant contribution to the wellbeing of the City, including City Council. Commissioners, Officers and employees of the City, but not anyone who currently holds such position. Based on the guidelines establish in the SAMC and in consideration of Pat McGuigan's significant contributions to the community and efforts to construct a skate park in Santa Ana the City is recommending the renaming of the skate park at Centennial Park to the "Pat McGuigan Skate Park" STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Strategic Plan Goal #5 — Community Health, Livability, Engagement and Sustainability, Objective #4 (support neighborhood vitality and livability). FISCAL IMPACT The cost to remove and replace the existing sign is estimated at approximately $11,000. Funds are budgeted and available in the following account for the following fiscal year: Fiscal Year Accounting Fund Accounting Unit, Amount Unit -Account # Description Account Description 01113250- PRCSA-Park Facilities, FY 2019-20 62320 General Fund Maint. & Repair Buildings and $11,000 Ground APPROVED AS TO FUNDS AND ACCOUNTS: >741,,A�'_ VxKga�� Ala, " (LisaAudloff Kathryn Dowrfs, CPA xecutive Director Executive Director j; ^ Parks, Recreation, and Community Finance and Management Services Agency Services Agency 39B-2 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: SEPTEMBER 17, 2019 CLERK OF COUNCIL USE ONLY: TITLE: APPROVED ADOPT A RESOLUTION OPPOSING THE ❑ As Recommended ESTABLISHMENT OF CLEAN NEEDLE AND ❑ As Amended ❑ Ordinance on 1n' Reading SYRINGE EXCHANGE PROGRAM ❑ Ordinance on 2n° Reading OPERATIONS IN THE CITY OF SANTA ANA ❑ Implementing Resolution (STRATEGIC PLAN NO. 5) ❑ Set Public Hearing For CONTINUED TO �. FILE NUMBER CITY ANAGER RECOMMENDED ACTION Adopt a resolution opposing the establishment of Clean Needle and Syringe Exchange Program Operations in the City of Santa Ana. DISCUSSION In late November 2018, a San Diego County Superior Court judge issued a preliminary injunction blocking a state -approved mobile needle -exchange service from operating as proposed in Costa Mesa and three other Orange County cities, including Santa Ana. On August 6, 2018 the City of Santa Ana was informed via a letter that the California Department of Public Health (CDPH), Office of AIDS (OA) had approved the Orange County Needle Exchange Program (OCNEP) to provide needle exchange operations in the County effective August 6, 2018. The authorization was granted over strong objections from the City of Santa Ana. While Santa Ana supports the concept of needle exchange to mitigate the spread of communicable diseases and as a public health tool, the actual implementation experience related to the OCNEP program was more focused on distribution and less on exchange, resulting in significant syringe litter in areas of distribution. On June 25, 2018, the City of Santa Ana officially provided a letter to the California Department of Public Health declaring the City of Santa Ana's strong opposition to the proposed Orange County Needle Exchange Program ("OCNEP") application for certification of mobile syringe needle exchange services, in the City of Santa Ana. A similar letter, dated June 8, 2018 from the City of Santa Ana's Chief of Police, was submitted to the California Department of Public Health opposing the operation of the OCNEP Mobile Needle Exchange. The letter referenced the standards for refusal to certify an initial SEP Application, indicating "here, the harm to public safety significantly outweighs the benefits to public health conferred by the OCNEP." A copy of the letters identified above are available at https://www.santa-ana.org/homelessness/needle-exchange. 55A-1 Adopt Resolution to Ban Syringe Exchange Programs in the City of Santa Ana September 17, 2019 Page 2 It is believed, and has been proven through prior City experiences, that this constituency will expose the improper disposal of dirty and used needles, which will endanger the health and safety of the community. OCNEP's earlier and documented operations in the Santa Ana Civic Center had significant adverse impacts, including but not limited to excessive needle litter at the Civic Center and associated public safety concerns, which ultimately resulted in the City's termination of its Memorandum of Understanding with OCNEP to operate a syringe access program at the Civic Center. In the termination letter dated December 6, 2017, a plethora of written and verbal complaints regarding the mismanagement of the OCNEP program and its deficiency in operation, illustrating serious health and safety concerns to the Santa Ana community. Chief among the safety concerns were numerous complaints by citizens conducting business in the Civic Center, families visiting the Santa Ana Library, and employees of the City of Santa Ana, the County of Orange, the federal government, and the State of California. The OCNEP Mobile Needle Exchange proposal will not only adversely impact the quality of life for Santa Ana residents, visitors, and businesses, but will also re-create a public health and safety crisis for the Santa Ana community at large which has been mitigated with the cancellation of the prior OCNEP MOU and permit denial. Following direction received at the July 29, 2019 Legislative Affairs, Ethics, Transparency and Communications Council Committee meeting, the City Manager is recommending that the City Council adopt a resolution opposing the establishment of Clean Needle and Syringe Exchange Program Operations in the City of Santa Ana. This recommendation reaffirms Councilmember Penaloza's discussion of a resolution to oppose the establishment of needle exchange operations within the City of Santa Ana. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #5 — Community Health, Livability, Engagement & Sustainability. ENVIRONMENTAL IMPACT There are no environmental impacts associated with this action FISCAL IMPACT There is no fiscal impact at this time. Exhibit: 1. Resolution 55A-2 RESOLUTION NO.2019-XXX RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA ANNOUNCING ITS OPPOSITION TO THE ESTABLISHMENT OF CLEAN NEEDLE AND SYRINGE EXCHANGE PROGRAM OPERATIONS IN THE CITY WHEREAS, the Orange County Needle Exchange Program once operated on City -owned property adjacent to City Hall; and WHEREAS, as a result improper collection and disposal of used needles and syringes provided by the needle exchange program (NEP) occurred; and WHEREAS, the NEP created a public nuisance; and WHEREAS, the City Council desires to protect the health and safety of the public and the welfare of its businesses and residents; and WHEREAS, the County of Orange initiated litigation to halt NEP operations; and WHEREAS, after a judge granted a preliminary injunction to halt the NEP operations; and WHEREAS, the City Council desires to ensure that new NEP operations which are detrimental to health, safety, and welfare, are not established in the City in the future; NOW, THEREFORE, the Santa Ana City Council does hereby resolve as follows: SECTION 1. The City Manager is hereby directed to work with staff to prepare an urgency land use ordinance regarding the operation of clean needle and syringe exchange programs. SECTION 2. The Clerk of the Council shall certify to the passage and adoption of this resolution and enter it into the book of original Resolutions. SECTION 3. This Resolution shall take effect immediately upon its adoption. SECTION 4. The Mayor shall sign this Resolution, and the City Clerk shall attest and certify to the passage and adoption thereof. ADOPTED this day of , 2019. Miguel A. Pulido Mayor Resolution 2019-xxx Page 1 of 2 55A-3 APPROVED AS TO FORM: By: Yam" v ^ti �• C�7N� Sonia R. Carvalho City Attorney AYES: Councilmembers NOES: Councilmembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, DAISY GOMEZ, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2019-xx to be the original resolution adopted by the City Council of the City of Santa Ana on 2019. Date: Clerk of the Council City of Santa Ana Resolution 2019-xxx Page 2 of 2 55A-4 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: SEPTEMBER 17, 2019 TITLE: APPROVE SECOND EXCLUSIVE NEGOTIATION AGREEMENT WITH THRIVE SANTA ANA, INC. FOR 1901 WEST WALNUT STREET (STRATEGIC PLAN NO. 7,6) RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 181 Reading ❑ Ordinance on 2ntl Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER 1. Authorize the City Manager to execute a Second Exclusive Negotiation Agreement with THRIVE Santa Ana, Inc., for 1901 West Walnut Street, Santa Ana, for the period of one hundred and eighty (180) consecutive calendar days commencing on September 17, 2019, subject to non -substantive changes approved by the City Manager and City Attorney. 2. Authorize the City Manager to negotiate a Disposition and Development Agreement with THRIVE Santa Ana, Inc., for the development of a microfarm at 1901 West Walnut Street, Santa Ana. DISCUSSION THRIVE Santa Ana, Inc. (THRIVE), a Community Land Trust (CLT), established in 2017, was formed by local nonprofit leaders and residents to acquire land for the purposes of providing community benefits, such as affordable housing, parks, urban microfarms, and marketplaces for small businesses. A CLT is a community based nonprofit dedicated to the stewardship of land for the permanent benefit of local residents. As a CLT, THRIVE would work with local residents to determine the use of acquired land based on the needs of the local community. On May 1, 2018, the City Council approved an Exclusive Negotiation Agreement (ENA) with THRIVE for the potential future development of the 0.38-acre property located at 1901 West Walnut Street, Santa Ana, CA 92703. During the ENA period, which expired on April 26, 2019, THRIVE's completed milestones included, but were not limited to, selecting the use for the site as a microfarm and submission of an initial pro forma, Phase I Environmental Assessment, site plans, and a community benefits report. The Second ENA (Exhibit 1) would provide additional time for THRIVE to finalize site plans, provide proof of ability to obtain financing for the project, and negotiate a Disposition and 60A-1 Second Exclusive Negotiation Agreement THRIVE Santa Ana, Inc. September 17, 2019 Page 2 Development Agreement with the City. This project would be the first acquisition and development project by THRIVE. Proposed Development THRIVE proposes to develop a microfarm to grow and distribute fresh produce and ornamentals, and host weekly open-air markets and community activities that promote health (Illustration A). The site would include raised garden beds, a work area, produce pick-up table, and lunch tables. In partnership with a local food cooperative, items would be sold through a community supported production model, wherein members pay a monthly subscription to receive a box of produce at their home, or available for pickup. An on -site parking lot would host the open-air markets. I J LEGEND Q PLANTING BED O PARKING LOT/ FARMERSMARKGT 412PARKINGSTALLS) Q WORKROOM 0 FARM STAND ® STORAGE Q SERVICE IPOTENTMLRESTROOM) Q MEETING ROOM © CANOPIES/CARPORTS 1 ® BIOSWALES Q NATIVE GARDEN © BIKERACKS ` 0 CURBEKTGNSION ? © DIAGONALPARKING PL I L , ® DWARFFRUITTREGS Illustration A Q WALNUT TREES STREETTREES Q PALOVERDETREES The Conceptual Design Package and Site Plans (Exhibit 2) submitted by THRIVE provides images of the current conditions the site, the proposed site plan, and case studies of successful and similar microfarm and community land trust projects. The plans are currently in a second review phase with the City's Planning and Building Agency. 60A-2 Second Exclusive Negotiation Agreement THRIVE Santa Ana, Inc. September 17, 2019 Page 3 The project site (Illustration B) has been vacant for over 12 years. It was acquired by the City in 2007, and the former Orange County Rescue Mission structure was demolished in 2011. The site was recently rezoned as C2 (General Commercial) and the proposed microfarm is a permitted use. Illustration B Community Outreach and Benefits Since 2016, nonprofit groups such as Santa Ana Building Healthy Communities, who are now part of the THRIVE board of directors, have conducted community engagement to educate local residents and inform them about the benefits of CLT's which include promotion of health and wellness, building, generational wealth, supporting long-term housing affordability, and improving access to housing. This process included over 20 outreach events and surveys of the surrounding site which are described in the Community Benefits Report (Exhibit 3) submitted by THRIVE. The Community Benefits Report also describes the positive impacts of a microfarm to the community. These benefits include: 1) making organic produce and other healthy options more available in the local neighborhood, 2) implementing a membership -based model to provide monthly baskets of vegetables, fruit and other garden products to members at a low cost, 3) creating worker cooperative jobs, 4) encouraging participation from local residents which can contribute to the local neighborhood economy, civic engagement, and prevention of costly health conditions including obesity and mental health illnesses. 60A-3 Second Exclusive Negotiation Agreement THRIVE Santa Ana, Inc. September 17, 2019 Page 4 The report states that "The project will create jobs, supplemental income, provide healthy food, physical activity and other healthy lifestyle options. Cost savings for residents include food items, improved physical and mental health, and for the City cost savings include preventing emergency services, as well as increments in neighborhood sales, which contributes to local taxes." THRIVE continues to engage the local community throughout the project development process. STRATEGIC PLAN ALIGNMENT Approval of this item allows the City to meet Goal #5 — Community Health, Livability, Engagement and Sustainability. FISCAL IMPACT There is no fiscal impact associated with this action. Steven A. Mendoza Executive Director Community Development Agency Exhibits: 1. Second Exclusive Negotiation Agreement 2. Conceptual Design Package and Site Plans 3. Community Benefits Report 4. Location Map 60A-4 EXHIBIT 1 SECOND EXCLUSIVE NEGOTIATION AGREEMENT This Second Exclusive Negotiation Agreement ("Agreement") is dated September 17, 2019, for reference purposes only, and is entered into by and between the CITY OF SANTA ANA, a Califomia charter city in the County of Orange of the State of California ("City"), and THRIVE Santa Ana; Inc:, -a 501(c)(3) tax exempt California public benefit corporation ("Developer"), to provide a specified period of time to attempt to negotiate a disposition and development agreement ("DDA") between the City and Developer. City and Developer are sometimes referred to in this Agreement individually, as a "Party" and, collectively, as the "Parties." This Agreement is entered into by the Parties with reference to the following recited facts (each, a "Recital"): RECITALS WHEREAS, the Parties entered into an Exclusive Negotiation Agreement dated May 1, 2018, to negotiate the potential future development of the property located at 1901 West Walnut Street, Santa Ana, CA (APN 007- 332-08) ("Property"), but that original Exclusive Negotiation Agreement expired on its own terms on April 26, 2019; and WHEREAS, the Parties entering into this Agreement intend to establish a specific, limited period of time to negotiate regarding a future agreement among them governing the potential use and development of the Property, subject to mutually agreeable terms, conditions, covenants, restrictions and agreements to be negotiated and documented in a future DDA; and WHEREAS, City owns the Property; and WHEREAS, the Property is more particularly described in the legal description attached to this Agreement as Exhibit "A" and incorporated into this Agreement by this reference; and WHEREAS, Developer proposes to develop a community micro -farm on the Property. The term "micro -farm" refers to a small space primarily used to cultivate crops in an urban or suburban setting. Additionally, micro -farms are used to teach gardening and farming skills to community members. Developer will use a comprehensive assessment of community needs to determine the specific use of the Property, as particularly described in Exhibit `B" attached to this Agreement and incorporated into this Agreement by this reference ("Project"); and WHEREAS, the Parties propose to conduct negotiations in order to produce a DDA in accordance with the timeline and milestones attached to this Agreement as Exhibit "C' ; and WHEREAS, the Parties now agree to enter into this Agreement for the purpose of further planning and evaluating the feasibility of the proposed Project; and WHEREAS, the Developer has represented its willingness and ability to undertake certain studies, plans and other activities necessary to define the scope of development and determine the feasibility of the Project on the Property, and that such plans and other information to be prepared during the course of this Agreement shall serve as the basis for entering into a DDA between City and Developer; and -1- EXHIBIT 1 60A-5 EXHIBIT 1 WHEREAS, City is willing to enter into a period of exclusive negotiations with Developer concerning Developer's potential development of the Project, subject to the terms and conditions of this Agreement. NOW, THEREFORE, IN VIEW OF THE GOALS AND OBJECTIVES OF THE PARTIES RELATING TO THE PROJECT AND THE COVENANTS AND PROMISES OF THE CITY AND THE DEVELOPER SET FORTH IN THIS AGREEMENT, THE CITY AND THE DEVELOPER AGREE AS FOLLOWS: 1. Incorporation of Recitals. The Recitals of fact set forth above are true and correct and are incorporated into this Agreement, in their entirety, by this reference. 2. Term of Agreement. (a) The rights and duties of the City and the Developer established by this Agreement shall commence on the first date on which all of the following have occurred ("Effective Date"): (1) execution of this Agreement by the authorized representative(s) of the Developer and delivery of such executed Agreement to the City, and (2) approval of this Agreement by the City's execution of this Agreement by their respective authorized representatives and delivery of such executed Agreement to the Developer. The City shall each deliver a fully executed counterpart original of this Agreement to the Developer, within ten (10) calendar days after the governing bodies of the City have approved this Agreement, and their authorized representatives have executed this Agreement. This Agreement shall continue in effect for the period of one hundred and eighty (180) consecutive calendar days immediately following the Effective Date ("Negotiation Period"), subject to the limitations of Sections 2(b). (b) This Agreement shall automatically expire and be of no further force or effect at the end of the Negotiation Period (as may be extended pursuant to the terms of this Agreement), unless prior to that time, the City and the Developer approve and execute a separate DDA acceptable to the two Parties, in their respective sole and absolute discretion, in which case this Agreement will terminate on the effective date of such DDA. 3. Obligations of Developer. During the Negotiation Period, the Developer shall proceed diligently and in good faith to develop and present to City staff for review, all of the following: (a) A complete development application, together with the payment of all applicable review fees for the Project on the Property, that describes and depicts: (1) the location and placement of proposed property modifications and, if applicable, (2) the architecture and elevations of any proposed buildings; (b) Proposed zoning change or changes to the City's General Plan, if any, necessary to accommodate the Project on the Property; (c) A proposed financing plan identifying financing sources for all private and public improvements proposed for the Project; and -2- 60A-6 EXHIBIT 1 (d) A preliminary financial analysis demonstrating the costs and benefits to the City regarding all construction, maintenance and operations of all proposed public improvements, the costs of additional or increased levels of public services and any new public revenues anticipated to be generated by the Project. Said information shall be provided in an Economic Development Subsidy Report and/or Community Benefit Report, as determined and requested by the City. 4. Negotiation of DDA. During the Negotiation Period, the Parties shall negotiate diligently and in good faith to negotiate a DDA among them. The Parties shall generally cooperate with each other and supply such documents and information as may be reasonably requested by the other to facilitate the conduct of the negotiations. The Parties shall exercise reasonable efforts to complete discussions relating to the terms and conditions of a DDA and such other matters, as may be mutually acceptable to the Parties, in their respective sole discretion. The exact terms and conditions of a DDA, if any, shall be determined during the course of these negotiations. Nothing in this Agreement shall be interpreted or construed to be a representation or agreement by either the City or the Developer that a mutually acceptable DDA will be produced from negotiations under this Agreement. Nothing in this Agreement shall impose any obligation on either Party to agree to a definitive DDA in the future. Nothing in this Agreement shall be interpreted or construed to be a guaranty, warranty or representation that any proposed DDA that may be negotiated by City staff and the Developer will be approved by the governing bodies of the City. The Developer acknowledges and agrees that the City's considerations of any DDA is subject to the sole and absolute discretion of their City Council and all legally required public hearings, public meetings, notices, factual findings and other determinations required by law. 5. Restrictions Against Change in Ownership, Management and Control of Developer and Assignment of Agreement. (a) The qualifications and identity of the Developer and its principals are of particular concern to the City. It is because of these qualifications and identity that the City has entered into this Agreement with the Developer. During the Negotiation Period, no voluntary or involuntary successor -in -interest of the Developer shall acquire any rights or powers under this Agreement, except as provided in Section 5(c). (b) The Developer shall promptly notify the City in writing of any and all changes whatsoever in the identity of the business entities or individuals either comprising or in Control (as defined in Section 5(d)) of the Developer, as well as any and all changes in the interest or the degree of Control of the Developer by any such person, of which information the Developer or any of its shareholders, partners, members, directors, managers or officers are notified or may otherwise have knowledge or information. Upon the occurrence of any significant or material change, whether voluntary or involuntary, in ownership, management or Control of the Developer (other than such changes occasioned by the death or incapacity of any individual) that has not been approved by the City, prior to the time of such change, the City may terminate this Agreement, without liability to the Developer or any other person, by sending written notice of termination to the other Parties, referencing this Section 5(b). (c) Notwithstanding anything in this Agreement to the contrary, Developer may assign its rights under this Agreement to an Affiliate (as defined in Section 5(d)), on the condition -3- 60A-7 EXHIBIT 1 that such Affiliate expressly assumes all of the obligations of the Developer under this Agreement in a writing reasonably satisfactory to the City and further provided that Developer shall, at all times, control any such Affiliate. (d) For the purposes of this Agreement, the term "Affiliate" means any person, directly or indirectly, controlling or controlled by or under common control with the Developer, whether by direct or indirect ownership of equity interests, by contract, or otherwise. For the purposes of this agreement, "Control" means possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether by ownership of equity interests, by contract, or otherwise. 6. Developer Obligations to Review Draft Agreements and Attend Meetings. (a) During the Negotiation Period, the Parties shall diligently review and comment on drafts of a DDA prepared by the City Attorney, and if the terms and conditions of such a DDA are agreed upon among the City staff and the Developer, Developer shall submit the DDA fully executed by the authorized representative(s) of the Developer to the City Manager for submission to City Council for review and approval or disapproval. Any future DDA shall consist of terms and conditions acceptable to the Developer and the City Council of the City, in their respective sole and absolute discretion. (b) During the Negotiation Period, the Developer shall also keep City staff advised on the progress of the Developer in performing its obligations under this Agreement, on a regular basis or as requested by City Staff including, without limitation, having one or more of the Developer's employees or consultants who are knowledgeable regarding this Agreement, the design and planning of the Project and the progress of negotiation of a DDA, such that such person(s) can meaningfully respond to inquiries from City and regarding the progress of the design and planning of the Project or the negotiation of a DDA, attend meetings of the City's, when reasonably requested to do so by their respective staff. 7. Developer to Pay All Costs and Expenses. All fees or expenses of engineers, architects, financial consultants, legal, planning or other consultants or contractors, retained by the Developer for any study, analysis, evaluation, report, schedule, estimate, environmental review, planning and/or design activities, drawings, specifications or other activity or matter relating to the Property or the Project or negotiation of a DDA that may be undertaken by the Developer during the Negotiation Period, pursuant to or in reliance upon this Agreement or in the Developer's discretion, regarding any matter relating to a DDA, the Property or the Project, shall be the sole responsibility of and undertaken at the sole cost and expense of the Developer and no such activity or matter shall be deemed to be undertaken for the benefit of, at the expense of or in reliance upon the City. The Developer shall also pay all fees, charges and costs, make all deposits and provide all bonds or other security associated with the submission to and processing by the City and all applications and other documents and information to be submitted to the City and by the Developer pursuant to this Agreement or otherwise associated with the Project. The City shall not be obligated to pay or reimburse any expenses, fees, charges or costs incurred by the Developer in pursuit of any study, analysis, evaluation, report, schedule, estimate, environmental review, planning and/or design activities, drawings, specifications or other activity or matter relating to the Property or the Project or negotiation of a DDA that may be undertaken by the Developer during EXHIBIT 1 the Negotiation Period, whether or not this Agreement is, eventually, terminated or extended or a DDA is entered into among the Parties, in the future. 8. City Not To Negotiate With Others. (a) During the Negotiation Period, the City, and their respective staff shall not negotiate with any other person regarding the sale or development of the Property, except owners of or business tenants occupying property within the Project. The term "negotiate," as used in this Agreement, means and refers to engaging in any discussions with a person other than the Developer, regardless of how initiated, with respect to that person's development of the Property to the total or partial exclusion of the Developer from redeveloping the Property, without the Developer's written consent, subject to the provisions of Section 8(b) and further provided that they may receive and retain unsolicited offers regarding development of the Property, but shall not negotiate with the proponent of any such offer during the Negotiation Period. (b) Nothing in this Agreement shall limit, prevent, restrict or inhibit the City from providing any information in its possession or control that would customarily be furnished to persons requesting information from the City concerning their respective goals, matters of a similar nature relating to development plans or as required by law to be disclosed, upon request or otherwise. 9. Acknowledgments and Reservations. (a) The Parties agree that, if this Agreement expires or is terminated for any reason, or a future DDA is not approved and executed by the Parties, for any reason, none of the Parties shall be under any obligation, nor have any liability to each other or any other person regarding the sale or other disposition of the Property or the development of the Project or the Property. (b) The Developer acknowledges and agrees that no provision of this Agreement shall be deemed to be an offer by the City, nor an acceptance by the City of any offer or proposal from the Developer for the City to convey any estate or interest in the Property to the Developer or for the City to provide any financial or other assistance to the Developer for development of the Property or execution of the Project. (c) The Developer acknowledges and agrees that the Developer has not acquired, nor will acquire, by virtue of the terms of this Agreement, any legal or equitable interest in real or personal property from the City. (d) Certain development standards and design controls for the Project may be established among the Parties, but it is understood and agreed among the Parties that the Project and the development of the Property must conform to all City, and other applicable governmental development, land use and architectural regulations and standards. Drawings, plans and specifications for the Project shall be subject to the approval of the City through the standard development application process for acquiring the real estate and entitlements within the Project. Nothing in this Agreement shall be considered approval of any plans or specifications for the Project or of the Project itself by the City. -5- 60A-9 EXHIBIT 1 (e) The City reserves the right to reasonably obtain further information, data and commitments to ascertain the ability and capacity of the Developer to purchase, develop and operate the Property and/or the Project. The Developer acknowledges that it may be requested to make certain financial disclosures to the City, their staff, legal counsel or other consultants, as part of the financial due diligence investigations of the City and relating to the potential sale of the Properties and development of the Project on the Property by the Developer and that any such disclosures may become public records. The City shall maintain the confidentiality of financial information of the Developer to the extent allowed by law, as determined by the City Attorney. Notwithstanding the foregoing, if the City receives a request for documents related to this Agreement or the Project pursuant to the California Public Records Act (Govt. Code Section 6254 et. seq) or similar statute, and the City determines that the City has responsive documents, the City shall provide Developer notice not less than three (3) days prior to releasing the responsive documents to the requesting party. During this three (3) day period Developer may seek a court order prohibiting the release of the documents. Any litigation or costs associated with protecting documents from disclosure shall be borne solely by Developer. (f) The City shall be deemed to be a Party to any agreement for the acquisition of, lease of or disposition of real or personal property, the provision of financial assistance to the Developer or development of the Project on the Property or elsewhere, until the terms and conditions of a complete future DDA are considered and approved by the City Council, in their respective sole and absolute discretion, following the conclusion of one or more duly noticed public hearings, as required by law. The Developer expressly acknowledges and agrees that the City will not be bound by any statement, promise or representation made by their respective staff or representatives during the course of negotiations of a future DDA and that the City shall only be legally bound upon the approval of a complete DDA by the City Council, in their respective sole and absolute discretion, following one or more duly noticed public hearings, as required by law. 10. Nondiscrimination. The Developer shall not discriminate against nor segregate any person, or group of persons on account of race, color, creed, religion, sex, marital status, handicap, national origin or ancestry in undertaking its obligations under this Agreement. 11. Default. (a) Failure or delay by any Party to perform any material term or provision of this Agreement shall constitute a default under this Agreement. If the Party who is claimed to be in default by another Party cures, corrects or remedies the alleged default within fifteen (15) calendar days after receipt of written notice specifying such default, such Party shall not be in default under this Agreement. The notice and cure period provided in the immediately preceding sentence shall not, under any circumstances, extend the Negotiation Period. If there are less than fifteen (15) days remaining in the Negotiation Period, the cure period allowed pursuant to this Section 13(a) shall be automatically reduced to the number of days remaining in the Negotiation Period. Nothing in this subparagraph (a) shall prohibit Developer from extending the Negotiation Period pursuant to Section 2. (b) The Party claiming that a default has occurred shall give written notice of default to the Party claimed to be in default, specifying the alleged default. Delay in giving such -6- 60A-10 EXHIBIT 1 notice shall not constitute a waiver of any default nor shall it change the time of default. However, the injured Party shall have no right to exercise any remedy for a default under this Agreement without first delivering written notice of the default. (c) Any failure or delay by a Party in asserting any of its rights or remedies as to any default shall not operate as a waiver of any default or of any rights or remedies associated with a default. (d) If a default of any Party remains uncured for more than fifteen (15) calendar days following receipt of written notice of such default, a "breach" of this Agreement by the defaulting Party shall be deemed to have occurred. In the event of a breach of this Agreement, the sole and exclusive remedy of the Party who is not in default shall be to terminate this Agreement by serving written notice of termination on the Party in breach. 12. Compliance with Law. The Developer acknowledges that any future DDA, if approved by the City Council, will require the Developer to, among other things, carry out the development of the Project in conformity with all applicable laws, including all applicable building, planning and zoning laws, environmental laws, safety laws and federal and state labor and wage laws. 13. Press Releases. The Developer agrees to obtain the approval of the City Manager in function of any press releases Developer may propose relating to the lease or development of the Property or negotiation of a DDA with the City prior to publication. 14. Notice. All notices required under this Agreement shall be presented (A) in person, (B) by a reputable same -day or overnight delivery service, or (C) facsimile and confirmed by first class certified or registered United States Mail, with return receipt requested, to the address and/or fax number for the Party set forth in this Section. Notice shall be deemed confirmed by United States Mail effective the third (3rd) business day after deposit with the United States Postal Service. Notice by personal service or reputable same -day or overnight delivery service shall be effective upon delivery. Either Party may change its address for receipt of notices by notifying the other Parties in writing. Delivery of notices to courtesy copy recipients shall not be required for valid notice to a Party. TO DEVELOPER: THRIVE Santa Ana, Inc. Cesar Covarrubias, Treasurer THRIVE Santa Ana, Inc. P.O. Box 1935 Santa Ana, CA 92702 (T) 949-250-0909 (F) 949-263-0647 Email: cesarc@kennedycommission.org -7- 60A-11 EXHIBIT 1 COPY TO: THRIVE Santa Ana, Inc. c/o Carrie Hempel 401 East Peltason Drive Law 3500-F Irvine, CA 92697 (T) 949-824-3575 Email: chempel@law.uci.edu TO CITY: The City of Santa Ana Executive Director Community Development Agency 20 Civic Center Plaza (M-20) P.O. Box 1988 Santa Ana, California 92702 COPY TO: City Attorney 20 Civic Center Plaza (M-29) P.O. Box 1988 Santa Ana, California 92702 Fax:714-647-6515 15. Warranty Against Payment of Consideration for Agreement. The Developer warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement. Third parties, for the purposes of this Section, shall not include persons to whom fees are paid for professional services, if rendered by attorneys, financial consultants, accountants, engineers, architects and other consultants, when such fees are considered necessary by the Developer. 16. Acceptance of Agreement by Developer. The Developer shall acknowledge its acceptance of this Agreement by delivering to the City three (3) original counterpart executed copies of this Agreement each signed by the authorized representative(s) of the Developer. 17. Counterpart Originals. This Agreement may be executed by the Parties in multiple counterpart originals, all of which together shall constitute a single agreement. 18. No Third -Party Beneficiaries. Nothing in this Agreement is intended to benefit any person or entity other than the Parties. 19. Governing Law. The Parties acknowledge and agree that this Agreement was negotiated, entered into and is to be fully performed in the City of Santa Ana, California. The Parties agree that this Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the laws of the State of California, without application of such laws' conflicts of laws principles. 20. Waivers. No waiver of any breach of any tern or condition contained in this Agreement shall be deemed a waiver of any preceding or succeeding breach of such tern or -8- 60A-12 EXHIBIT 1 condition, or of any other term or condition contained in this Agreement. No extension of the time for performance of any obligation or act, no waiver of any term or condition of this Agreement, nor any modification of this Agreement shall be enforceable against a Party, unless made in writing and executed by the Parties. 21. Construction. Headings at the beginning of each section and sub -section of this Agreement are solely for the convenience of reference of the Parties and are not a part of this Agreement. Whenever required by the context of this Agreement, the singular shall include the plural and the masculine shall include the feminine and vice versa. This Agreement shall not be construed as if it had been prepared by one Party, but rather as if the Parties cooperated equally in preparing this Agreement. Unless otherwise indicated, all references to sections are to this Agreement. All exhibits referred to in this Agreement are attached to this Agreement and incorporated into this Agreement by this reference. If the date on which a Party is required to take any action pursuant to the terms of this Agreement is not a business day of the City, the action shall be taken on the next succeeding business day of the City. 22. Attorneys' Fees. If a Party hereto files any action or brings any action or proceeding against another Party arising out of this Agreement, then the prevailing Party shall be entitled to recover as an element of its costs of suit, and not as damages, its reasonable attorneys' fees as fixed by the court, in such action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees. For the purposes hereof the words "reasonable attorneys' fees" mean and include, for both the Developer and the City, salaries (or fees) and expenses of the lawyers employed (allocated on an hourly basis) who may provide legal services in connection with the representation in any such matter. 23. Enforced Delay. No party shall be deemed in default of its obligations under this Agreement where a delay or default is due to an act of God, natural disaster, accident, breakage or failure of equipment, enactment of conflicting federal or state laws or regulations, third -party litigation, administrative action, including strikes, lockouts or other labor disturbances or disputes of any character, interruption of services by suppliers thereof, unavailability of materials or labor, unforeseeable and severe economic conditions, rationing or restrictions on the use of utilities or public transportation whether due to energy shortages or other causes, war, civil disobedience, riot, or by any other severe and unforeseeable occurrence that is beyond the control of that party (collectively, "Enforced Delay"). Performance by a party of its obligations shall be excused during, and extended for a period of time equal to, the period (on a day -for -day basis) for which the cause of such Enforced Delay is in effect. [Signatures on following page] -9- 60A-13 EXHIBIT 1 IN WITNESS WHEREOF, the Parties have executed this Second Exclusive Negotiation Agreement on the dates indicated next to each of the signatures of their authorized representatives, as appear below. ATTEST: DAISY GOMEZ Clerk of the Council APPROVED AS TO FORM: By: for SONLAL1 CAUVALHO City Attorney CITY OF SANTA ANA KRISTINE RIDGE City Manager RECOMMENDED FOR APPROVAL: STEVEN A. MENDOZA Executive Director Community Development Agency DEVELOPER BY: CESAR COVARRUBIAS Treasurer, THRIVE Santa Ana, Inc. Dated: By: SANDRA ORTEGA Secretary, THRIVE Santa Ana, Inc. Dated: -10- 60A-14 EXHIBIT 1 IN WITNESS WHEREOF, the Parties have executed this Second Exclusive Negotiation Agreement on the dates indicated next to each of the signatures of their authorized representatives, as appear below. ATTEST: DAISY GOMEZ Clerk of the Council APPROVED AS TO FORM: By: SONIA R. CARVALHO City Attorney CITY OF SANTA ANA KRISTINE RIDGE City Manager RECOMMENDED FOR APPROVAL: STEVEN A. MENDOZA Executive Director Community Development Agency DEVELOPER By: (nn.� Imo_._. (/ _ CESAR COVARRUBIAS Treasurer, THRIVE Santa Ana, Inc. Dated: 30 t By -A" SANDRA ORTEGA Secretary, TH VE Santa Ana, Inc. Dated: 0 -10- 60A-15 EXHIBIT 1 EXHIBIT "A" TO NEGOTIATION AGREEMENT Property Legal Description 1901 West Walnut Street ("Property") is situated in the State of California, County of Orange, and the City of Santa Ana. The Property has a lot size of 16,558 square feet (.38 acre) as shown on a Map recorded as parcel 8 in Book 7 on page 332 of Assessor Parcel Maps of Orange County, California. The Property is bounded on its easterly edge by South Daisy Avenue and its southern edge by West Walnut Street. The following is the Property Legal Description: P BK 54 PG 50 PAR 3 EXHIBIT "A" EXHIBIT 1 EXHIBIT `B" TO NEGOTIATION AGREEMENT Project Description Thrive proposes a microfarm use for the Walnut and Daisy lot (1901 W. Walnut St.). The microfarm space would be used to grow and distribute fresh vegetables, flowers, other ornamentals, and fruit, also hosting weekly open-air markets and community activities that promote health. The site would include raised garden beds, a work area, produce pick-up table, and lunch tables. In partnership with a local food cooperative, items will be sold through a Community Supported Production model, wherein members pay a monthly subscription to receive a box of vegetables and other produce at their home, or available for pickup. An on -site parking lot would be used on weekends as an open-air market area. 60A-17 EXHIBIT 1 EXHIBIT "C" TO NEGOTIATION AGREEMENT Exclusive Negotiating Agreement Timeline and Milestones Milestone Description Status First Exclusive Negotiation Agreement Period Select Use Developer will provide the City written notice of a finalized Submitted by THRIVE: Property use between either: 1) a community micro -farm; or May 31, 2018 2) a mercadito, pursuant to the terms of this Agreement. Initial Pro Forma Developer will submit initial pro forma for the proposed Submitted by THRIVE: development. July 2, 2018 Project Development Developer will submit projected construction schedule for Submitted by THRIVE: Schedule the proposed development. July 2, 2018 Due Diligence Developer will provide written determination of property's Submitted by THRIVE: physical suitability for development, taking into account July 2, 2018 relevant regulatory and environmental conditions. Economic Subsidy Submit a preliminary market assessment containing a Submitted by THRIVE: Report and/or forecast of regional and local real estate market conditions August 14, 2018 Community Benefit and anticipated performance of project. Report Full Project Developer will submit site plans and all relevant applications Submitted by THRIVE: Submittal and fees December 12, 2018 Plan Review Staff will review plans for compliance with applicable codes Plan Review provided and regulations. Project Manager will submit a letter by City of Santa Ana: summarizing staff comments to the Developer. March 11, 2019 Revised Site Plans Developer will submit revised site plans to City staff. Submitted by THRIVE: July 30, 2019 Second Exclusive Negotiation Agreement Period By September 30, 2019 2nd Plan Review Staff will review plans for compliance with applicable codes and regulations. Project Manager will submit a letter summarizing staff comments to Developer. EXHIBIT "C" EXHIBIT 1 Funding Partners Developer will submit letter identifying lenders, investment and Structure partners, and proof of ability to obtain financing. Updated Pro Forma Developer will submit an updated pro forma for the proposed development. Preliminary Terms Developer will submit preliminary terms for negotiation for for DDA a DDA, to include purchase price of property, timeline for disposition, or other desired terms. By Janyary15,2020 Draft DDA Parties will complete negotiations and draft Disposition and Development Agreement. By February 15, 2020 Final Revisions Parties will finalize revisions to development proposal and all relevant materials. By March 3, 2020 City and Hearings Developer and Staff will present development proposal and DDA to City for final review and approvals by governing bodies. EXHIBIT "C" 60A-19 60A-20 N H m 2 X W W 0 x V Z w 4 z Z 4 IA u u ua. s 60A-22 A a Ol ■■ luu, 60A-23 a IXZ LL Q F01 OZ C C u o Sw O� O 2 Q F 7 Z J 5 T Y_ c0a 7 Y a E 0 3 O N p O m O N u U y •m N j 7 L O u u 7 N m •Q O O O O C c N 7 a O y E o a o M E a0'r c O N V O N 2 m ^ T u w„ EL'O. O Y Y Y C L C m 7 m O w aE>Ev C W 00 O r> 0 Lm °u o W N O O m N QT L E Wp 0 °m>NwE0 01 N A W O V ? E mini i.+ „ -c N aLC$3w'� . c CL m 3= 0 0 V_ 0 0 w''Nto E3 3 u-'LE°c° �.F i Lu i N N N L ~ O. 7 ~O 'O o o E m J c 0'a aci w � aL m w 0 N N y t i+ ..V...0 O N ap 3 O N u W Y y L C • ? E m EL oo.wv O C O. Ot N F O a > 7 F to 60A-24 LN r m 2 X W F W i wM a J a a } mw w49 N F01 i t~!1 w N O i LL J V i QQ ? O u ~O i i Z w� -1 i H a 3a _ I- s 'VA4Lu o m u' Q' Z O —1 j0. {p ul Z O Z i V- Z w u i e- = 0 Z i Ln LL LL ® 04 VI (7 Q i g 3Q i l0 N m O N Q W i H H i g LLLL � i uLLI Q H ^6 o O F Q W i N LL i (7 o Ln w J a 0 v � 0 i = W � 67 Q Z Cl w ; ( � Y i W ? Z o' W to O �n O i W N > z� u 0 i Z LL W Z 0.' i 0 0 i Q_ Jx CO OJ w 0 u a a i mF U') T 60A-25 7 Ik lo S i JU Mi 1¢ ' r 4 �'- i 4'` a j 1. se= ., W off• S mZ 1- iy •I �, p DIN t o'Id uva a q .z O .O 44 w_sw -'i3j rN: tr 1 7' 1.f t : 'M1 a . 9 -+ < ti •.0 i . 1. .6• N.. W W ' is Oi _ aT•�) _ ��. f' � a.. 1! '3'�. .. ti I . ] • a , F i •'�` `td s "� i 1 '3 r "rit �1 Is Apr ! . , I _ .�z F - •� .nl by � ! rP� rj4fa. frt � � � r� � �r .a . � 4t'u z., .Q �+ p W • a• i 9IL wl - R �. R. C J . W.+ . --- °ar ulvq .07 4}R7J■17 _' 113 � v _� i �. � yN„'� f t.: �. h r}•yr'r? ^`� _.�{ �. �N ":-ram _.__-. v Imo', 4 A�r.3 r � .a y,..4 }, tom. t } . •..� r aoom •` r t « � ! :F .. i LL V •i 1 i,7 f1Y . i s t 'n . y` = ,.uf x 2 n i � ♦ } r 111 Oi 444 i 4 .! rJ��rgq 11 a t A � ' -• Jn - c. tl6ln fjIlr WlLi �'• i I r �{.� 4 � vd •I ONO WtlIO ♦11 ♦ 3t. l.'. Z. v r r '. 6k m7i c. tR L 11' rc ^r I�il � .e � s - Ala i• m a _ Qib r � } rsl � n�• rit. •e9ti lWIVytyy ` � r lu. . r.f �ai 6 7 ! � F s'i _ _ • } A� i _ r. as 1' N tlAI'11r15 -t i .�pa It0 11 ao yi ��ta• '•�'* "x.lit 3 immw_jl IRV Ni €C'•�v ? •� . y ;� `r+ as c� '�: I •Ta. • t �+`� e�':j 3 n »'asiia'_ nto p �¢ • � � 2 mu�' Sw �, 1 �.. w;,. slrq'` '• siJ 4a r' -' rt, ii 1 rS, r i yw J s } } ♦sa.,. i. a �• OJV ...e v. ;g A pp �,� f'!" ,` � i ! sr ♦1 �''-.t ♦:iasla it I WJI � Y`e ;_.� '� _IeaTt m _...,f, 'haw+111 .. �71_I U la. y-+ WM r i� •aw . M31Atlitld 1--$:a �pY+�i Z �!. .�.�� ._._:l�lc? .a'°t`/?GGa �I Yi Ma.... .e is _� .: k� `?I ;7. . Y gv- r r{ g 1N� ?ram � �f�. rf 3 ��,. s • •'y,�t�'�', r• �E6g t •y ! ', M -r N• r ++• � � � � r� 3 f Fk hi".� yyjj[jj�� V y� � x �'ffl L I i I m C C m Y .� 3 L� m u m n^0�°a01am0.0 CE3�E LY oc vi O u E ,L-+ m i O m A .L O' L >> 0 0 C 1p C 7 vai N w `O v E Y L u V' n N L L m N m E mry v o --C �+0''a c c aY 3 c 0 ca 3 o rno o Ec � °� c 0.0 c am man mz mm-Q) �o�mWwYmtLn.Y-c°'oo,rno3L'0��.'U-`oEu'i°1. 0 n m E xv m� N i}' W>, m7v'u O m m w Ol O` a) a O CL-0 m m V'O a 0 a a0 -0L L j 0 'L N m m m m pmj 0 a� In 0 m M° 0 V 3 h Q m C "O L w" 0 M m O N m rc0�cm°�w�mYCLm E r'7'��c>E 2 rho°m. �w.0.0 � '_^ , U m a 0 00 m 60A-31 t m C '° aJ W N In C ul >1 TC O U C C 7° V U C �n ro 7 !� m 7 _' i 'O O 'n O w Q 7 Y ® U Em C rn'ud`m w voatMwui cmEo W r E�a C M'O 7. N �'d O Y �" '- > C -O 0 V i0 O Y '° v0 ca �' O C 01 O in O. N C w E cEmvF°W t a °N'nrnm+°"°ca3iw'° ° c° c> v° E L a v m rn° c C a� v o c 3v c c °c t c" a c v� o °1v�,:3 W 0$ ar a) �a� > �a) 0.naswE>>p1,r�a�. -°�roQE`m�Lw��EnV>>D>�m�moc3°E�° tcvwC,+'0'-", a m E N rYa C 7 C C°.0 al i0.+ C O t w C ) C C w W� >cu°�mvwm� .O �co °vac3 ^NDc`o= �mN� C ���E�mcEWCLa— 0c°-0°v�E 3�u° aaL'� Q F H O u m L .O E> 2 m m m °. m N Q1 w cc 10 u N -. O u u E al 60A-32 J• r 1, J of a+ 01 01 al CLL 01 C E 1 L L O m C O O J O 4! N m m L 'j O 0> �L-- m 3 E° o" c a) m m °o r E , O� L m C N u 7 N Ul 3 y m N �o m N C C a) C Val L >, O V> "; E � t C �0 V� m m d O C� t a) E v tea)= u avi'avmm-O'u3amnomv°��'ym,>ai 0u r3>>�'m� �aYac�o�oc°i3�N�c�a v T. ��°c.-m-6 ,, '0'amt-onnoocE�oz �aE'�>,mPcrn3mmcw�'mEEE3r�va�crn J a C> Y m 0 c m Y, a N O m 01 r� m 1 O m E i� S C J ui a VOi�°umiwd°''�LmN �rn�m�0.>,o� d mOE> nn�'s "n£YEc� aEE-00-0 r �a r rUEv�LvM'oEovrq �E o��E'vmoo0 LL ¢ ¢0uoc,TQE2cm4 2 Eu580w��tmaomu 60A-33 Rf P Ol C ty0 Ul 0 m .O N O N O N "O O 34J CU ,U Vir Ol Ol V m L a+ C OL �• a0.+ C •- f- L > •- > m 7 °L C. m� mCcr°O.Ou .'ma cu c�c�asorm�F-^'`-ov0�ornvc J cIn r- L W o u i U Q(v E° t0 = a+ = w U '° 7.j Y o W U ul 0 ou O Eco CL d e r `� > L E a) T� V= V C W Z m 0 �p C N C C)> 0 Y C t Uo G C> U N N wcv'o'w °m�a)0.0 E=`m�oo .� W c w0. rnam�o�YYo��m3EvaEvvc VI F 0 N .01c ° W N 0 0. m Y Y w O N �'N 7 N 's 60A-34 N m X W O +� ° �p O m C+'� C� OmYEu mLw O.w a C U 7 V- •— T ;a+ C 3 in w C L C ._ Lwy �•3 aL Oam+� v(DO or=mY m•E L'0O m c C C 7 •O w w c V C a�°�L c 13 N v.N o o v UL 7o.w rna E E !d C CO O m m •O 3 aw+ " •O L C w O• L E a V •a a) L m E U N u m 0 m a C C m 7 m 0- 0 •p D. i N •J7Cwca�0 Emo+•-E °YwcamYEN- Q m O C Y M a i m 'O in m° 7 L C L O" V w U w° m 01 Y �n 7 w -° w C Y •— a' L m L i L +'ONCOCam+C�mm•L m'^Eaw,,CTC�TmO V C t Y VI V-uj N m Y w y� Y E �p 7 Y O C -' w w w L "° 01 7 L N m L m •Y M V 7 °i m a m N m a LU m w-Qu w c w u° u w m V E` � o m w c w 0'- p mowmat3��v�avr+ �oww�oaL f l O O •0 V) i� L tEo N maw+ C a O O L E CL C w j V C tl� J i C 1/) V VI w L LL U) V m VI Y Y Y ._ w O. m O .- 60A-35 An P 6 rm ■ C I� nt e i 9 i A,f a a °3, A O T w M 'O c 1p-9 yj c w ai ++ p i w N C w Y ry w p m Y fA = 7 C C u Jp-9 O. 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WQf i V ta u U O F W M J QY jx [a lz ZO a Z O C Z N O W a U 0 Z W Q U' W U Q K Q Z LL LL F 7 ~ 1- W 1- 6 W La a 6' O K w W Z N f, W N O Q .ZJ W J A aIL- 3 u E ms° F u m z m u o c 3 m a 3 a� 00 0000 ®® Coco ®® A O O or l � • N z z W z O a f 0 u In f N u u W 0 0 06 06 rig. 1r�f Nr Y I LLI UJ 'tn- Lu Ul pv 1, LLI LU ti) Ix LL wii 4� ,4{ I5' Lr Y9 }I L fin Z2 N F- m X W J s=a U) ens a 19 s c W ~ IA ®; n� Rti n, V R W 0 < v 07 0 Z L9 ,J ® G' Q1J F9 QD L9 C: P UA tl. Ll U i J v c � m c G o m ice+ C m N A � Y N NE G C u ' W Cm a Ln > N d N a 2 7 41 N FJ �+n e 1 Community Benefits Report Walnut and Daisy Micro -Farm Project THRIVE Santa Ana, Inc. August 14, 2018 6€6XB 4� EXHIBIT 3 CONTENTS • EXECUTIVE SUMMARY • BACKGROUND • PROJECT DESCRIPTION • COMMUNITY HEALTH / NEIGHBORHOOD CONTEXT • COMMUNITY BENEFITS • Participation, Health, and Sustainability • Cooperative Jobs, Supplementing Household Incomes • Community -led Development • CONCLUSION • ADDENDUM A: SITE PLAN EXECUTIVE SUMMARY This Community Benefits Report outlines existing market conditions in the area around 1901 W. Walnut St., the "Walnut and Daisy Street" parcel, how THRIVE Santa Ana's proposed Micro - farm project will provide numerous community benefits to the local neighborhood, and to the City of Santa Ana as a whole. Current market trends are characterized by worsening economic and health conditions including increased rates of poverty, lack of open or green space, youth and adult obesity. Demand for more inclusive economic development, access to healthy food and lifestyle options, is also an opportunity to involve local residents in a solution -oriented approach to development. Using this approach, the Walnut and Daisy Micro -farm anticipates successful provision of economic and social benefits: civic engagement, healthy food and lifestyle choices; local jobs and supplemental income for providers and consumers; cost savings for residents and for the City of Santa Ana; increased local investment and municipal taxes; and increased community wealth through community -led development. BACKGROUND THRIVE Santa Ana is a Community Land Trust (CLT), a nonprofit, community -based agency that stewards land for local needs in Santa Ana, California. Founded by local organizations and residents with over 50 years combined experience in resident -led initiatives. THRIVE's mission is to build community wealth by holding land in trust and to drive development that ensures access to affordable, healthy neighborhoods. Resident leadership, and resident -led development in particular, are THRIVE's key means to address local demand for affordable housing, open space, job, and business opportunities. 2 �• EXHIBIT 3 THRIVE programs include land acquisition, community development, resident education and community engagement around access to land and other public resources in Santa Ana. On May 1st, 2018, THRIVE entered into an Exclusive Negotiating Agreement (ENA) with the City of Santa Ana. The project is currently in design: engaging local residents via community meetings, door-to-door surveys, art projects and events, and working with City staff to navigate the City Planning process, all the while setting precedents for community -driven development. PROJECT DESCRIPTION THRIVE proposes a community microfarm on the 1901 West Walnut Street ('Property') in the City of Santa Ana. The Property has a lot size of 16,558 square feet (.38 acre), bounded on its easterly edge by South Daisy Avenue and its southern edge by West Walnut Street. The purpose of the community microfarm would be to promote gardening and farming skills to community members, as a mean of economic self -empowerment and community building. COMMUNITY HEALTH / NEIGHBORHOOD CONTEXT According to the California Healthy Places Index, the area where the Property is located scores a Healthy Places Index ("HPI") score of 22.8 out of a scale 100, with 100 being the healthiest neighborhoods.' HPI is scored according to the following conditions: economic, education, transportation, social, neighborhood, clean environment, housing and healthcare access. The median household income for this census tract is $48,646 (HPI), and per capita income for the 92703 zip code $13,537 (OC Healthier Together2) -- far below the County median Image from Site Plan by City Fabrick. income on both counts. Health care access, employment for ages 25-64, and voting, are also ranked very low compared to County levels, indicating disenfranchisement of these communities, and lack of access to basic quality of life elements. Due to a history of disinvestment, the lack of open space, economic opportunities, or healthy food options, youth ' The California Healthy Places Index REPORT. http://healthyplacesindex.org Public Health Alliance of Southern California, 2018. 2 2012-2016. "OC Dashboard." http://www.ochealthiertogether.org/ �• ' • EXHIBIT 3 face high rates of obesity: over 30% of 5th graders in the Lincoln Elementary and Romero Elementary catchment areas3 - those immediately surrounding the Walnut and Daisy parcel Currently, the area around the Walnut and Daisy microfarm parcels lack green space. According to the HPI, "Trees are beneficial for mental and physical health... [They] provide shade and cool surrounding areas, reduce stress, and promote health, wellness, and physical activity." Walnut and Daisy's ranking for green space is in the 13.85 percentile, on a scale of 100, compared to the rest of California, indicating a need for green space. As seen in the map below, the Walnut and Daisy microfarm would close a gap, making green space - with shade and trees - available to community members within '/: mile, a good walking distance. The well -documented issues above reveal an area with great demand for green space, healthy food and activities, and economic opportunity. These are the market conditions that surround the Walnut and Daisy parcel, and these are the social and economic demands that will be met by the micro -farm project. Proximity of open or green spaces. "Central Santa Ana urgently needs improved access to healthy foods and an increase in available and adequate employment opportunities. A micro -farm is one step to provide such access... to locally grown produce while also increasing community awareness of nutrition and healthy eating options." - THRIVE Santa Ana, "1901 W. Walnut St. (Walnut and Daisy) Development Plan" 5 3 31.8% and 32.9%, respectively. California Department of Education https://datal.cde-ca.gov/dataguest/PhysF!tness/PFTDN/Summary2ol 1.aspx?r-0&t=1 &v=2016- 17&c=30666706115836&n=0000 4 Data provided by Orange County Health Care Agency * "Parks for All Californians," http://www.parksforcalifornia.org/communities?base=map°/`3Aphoto&v=33.74490&x=- 117.88845&z=14&lavers=labels%2Cparks%2Cdisadvantaged&opacs=n ull%2Cnull%2Cnull&qrants=&cff= 33.7446825%2C-117.8949451 &searchtvpe=&searchid 5 "The Walnut and Daisy Development Plan," shared with the City in December, 2017, was produced in collaboration with consultants Concerned Capital and Genesis LA. 4 60A-50 EXHIBIT 3 COMMUNITY BENEFITS The community land trust (CLT) model is based on the principle that land is a vital public asset, to be used for public benefit. This section breaks down the community benefits of the project proposed at the Walnut and Daisy Property: how the project will meet the needs outlined in the previous section and increase local income, bringing cost savings for both residents and the City, contributing to community wealth, health and wellbeing in the Casa'Bonita neighborhood. Participation, Health, and Sustainability THRIVE understands, as do many health and planning professionals, that physical and mental health, equity and sustainability are all linked. The Walnut and Daisy Micro -Farm will not only make organic produce and other healthy options more available in the neighborhood, but also create a cost savings for the City. THRIVE plans to develop a Community Supported Agriculture (CSA) program at the Walnut and Daisy site -- a CSA is a membership -based model that provides monthly baskets of locally - grown vegetables, fruit and other garden products such as flowers or herbs, to local members at a low cost. THRIVE will advance a cooperative -owned business model that promotes healthy food options, as well as an active local economy. The connection between civic engagement and improved health outcomes is well documented, and would benefit the City as a whole. The Micro -Farm project will follow THRIVE's tradition of community -led development, based on profound resident involvement both in volunteer and paid capacities. Volunteerism, as explained by Laura C. Batista and A. Margarita Cruz-Led6n, is directly connected to improved health in older adults.6 Improved physical and mental health means less City -spending on Police, Fire, and other costly emergency services. Moreover, volunteerism and involvement with community groups are linked to improvements in "physical health, altruism, compliance with the law, education, employment, and child welfare"7 -- all of which represent direct, positive impacts on the local economy and the City as a whole. Cooperative Jobs, Supplementing Household Incomes Community micro -farms provide healthy food options, physical activity, and supplement the economies of producers, workers, and consumers. Compared to large commercial or industrial businesses, income from sales at micro -farms is sometimes small but sufficient to provide 6 Laura C. Batista and A. Margarita Cruz-Led6n, "The Relationship between Civic Engagement and Health among Older Adults:' Florida International University, USA. https:Hcore.aG.uk/download/pdf/46946362.pdf 7 The Committee on National Statistics Panel on Measuring Social and Civic Engagement and Social Cohesion in Surveys. Quoted in "Civic Health & Public Health," by The National Conference on Citizenship. https://ncoc.org/data-in-action/civic-health-public-health/ 60A-51 EXHIBIT 3 stipends for volunteers or coordinators. The Walnut and Daisy Micro -farm will incorporate diverse income -generating strategies including the CSA Membership program, fundraising events and farmer's markets. This is following the model of successful micro-farm's in the United States, which combine economic strategies to keep fresh produce accessible to low income residents. Shiloh Farms, a similar sized micro -farm in Pittsburgh, PA, hosts a weekly farm stand, distributes seedlings locallyto fellow farmers, raises chickens, even installed solar - panels that provide electricity for an adjacent home. Braddock Farms, in the industrial town of Braddock, also sells produce to local corner stores, and has begun a wood -mulching cooperative.8 In the surrounding neighborhoods, the availability of locally -grown produce - especially from small-scale, values -driven farmers - often means more accessible pricing on fruits and vegetables for low-income residents like those around the Walnut and Daisy area. For example, similar projects have resulted in savings between $75 and $380 in food costs per household per season (Hlubik et al. 1994; Armstrong, 2000)9. Savings on this healthy food translates into extra income, especially for families, who in turn may invest in savings, educational or recreational activities -- all of which involve greater circulation of this capital in the local economy, and increased community wealth. In Albuquerque, Civic Economics' Indie Impact Survey demonstrated that the local recirculation of revenue by independent and locally -owned retail businesses was 3 times higher than that of four major national chain stores10. THRIVE visited Pittsburgh community farms in June 2018. These transactions also contribute to sales and income tax at local stores. In Milwaukee, community gardens were shown to increase the value of surrounding properties, and add 8 Interviews with Grow Pittsburgh and community farmers. In June 2018, members of THRIVE visited the Pittsburgh area to learn about a growing urban agriculture movement in that region. A Second Chance, Shiloh Farms, Sankofa Village Community Garden, and Braddock Farms were some of the community farm projects visited. 9Hlubik, W.T., Hamm, M.W., Winokur, M.A., Baron, M.V., (1994). Incorporating research with community gar- dens: the New Brunswick Community Gardening and Nutrition Program. In: Armstrong, Donna. A survey of community gardens in upstate New York: Implications for health promotion and community development. Health & Place 6 (2000) 319-327. 10 Civic Economics, "India Impact Study Series: A National Comparative Study with the American Booksellers Association," Milwaukee Wisconsin: http://www.civiceconomics.com/indie-impact.htmi. 60A-52 EXHIBIT 3 approximately $9,000 a year to the city tax revenue (Bremer et al, 200311). In New York, "net tax benefit [of community gardens, above any public subsidy] would be, in the aggregate, about $480 million or, per garden over $750,000" (2006, p. 28)."12 This is in addition to increased availability of fresh produce, physical activity, and local jobs, as well as broader benefits around civic engagement, physical and mental health outcomes, and cost savings for the City around emergency services. Community -led Development Overall, the Walnut and Daisy Micro -farm represents an opportunity to demonstrate a community land trust's ability to generate local wealth. THRIVE's development model is centered around the involvement of local residents in planning and implementation of economic projects. The participation of local residents is seen in itself as an important contribution to local neighborhood economy, social capital, civic engagement, and the prevention of costly health conditions including obesity and mental health issues. Moreover, THRIVE's model of community -led development - in particular the CLT model used for the Walnut and Daisy Property - can produce far-reaching, positive results in the City if implemented in other areas such as housing or commercial developments. Below is a table with community outreach events after June 2016 to the present day, which engaged Santa Ana residents and achieved the following public benefits: community members became familiarized with the concept of public lands and provided feedback specific to Santa Ana; they learned about relevant City policy; participated in community visioning for improved economic development; and dialogue with City officials and developers. This list of events pre- dates the establishment of THRIVE, August 4`" Community Outreach Event 11 From Gardening Matters, "Multiple benefits of Community Gardening," 2012. Citing p. 20 of Bremer, A., Jenkins, K. & Kanter, D. (2003). Community Gardens in Milwaukee: Procedures for their long- term stability & their import to the city.— Milwaukee: University of Wisconsin, Department of Urban Planning. ;p. 10 of Chicago Botanic Garden and the City of Chicago. (2003). Green connections: A research assessment of community gardening in Chicago. Chicago: City of Chicago.; and Sherer, P.M. (2006). The benefits of parks: Why America needs more city parks and open space. Retrieved October 31, 2006, from http://www.tpi.org 12 From Gardening Matters, "Multiple benefits of Community Gardening," 2012. Citing p. 28 of Been, V. Voicu, I., "The Effect of Community Gardens on Neighboring Property Values." Law & Economics Research Paper Series Working Paper No. 06-09. Retrieved October 31, 2006, from http://tpl.org 60A-53 EXHIBIT 3 includes up to present day activities, resident meetings, door-to-door surveying, and community events. THRIVE Outreach & Community Engagement Events June, 2016—April, 2018 Date Subject Location No of Participants 6/9/16 Art workshop with local Kidworks 18 youth and the Center for 1902 W Chestnut St Story -based Strategies — telling the story of community lands from youth perspective 9/24/2016 "61JIsted que haria con Corazones Verdes 167 Tierras Comunitarias?" Park Lanzamiento / "What would 602 E 0 St. you do with Community Lands?" Launch 11/30/2016 "Elotes en los totes" Kidworks 82 Growing Together: A case for Community Land Trust Strategies In Santa Ana 5/19/2017 "Santa Ana Prospera" event Kidworks 80 9/30/2017 "Here to Stay" Community Centro Cultural de 55 Mural unveiling Mexico 837 N Ross St. 9/20/2017 Bike Ride with Santa Ana Community murals 21 Active Streets and vacant lots throughout Santa Ana 11/18/2017 "Chilaquiles y Cambio" Latino Health 80 event at Latino Health Access 450 W 41h Access St. 60A-54 EXHIBIT 3 03/01/2018- Neighborhood Survey Between Raitt, 120 03/15/2018 Sullivan, Willits, and 15t St. 3/17/2018 Community Lands Art Kidworks 32 Workshop and focus group 3/31/2018 Cesar Chavez Day Event Cesar Chavez 20 Community Park — art workshop and community outreach 04/08/2018 Festival De Arte Daisy & Walnut 100 Property 1901 W Walnut St 4/20/2018 Thrive Conference on Delhi Center 298 community -driven 505 E Central Ave. development models. Outreach table next to registration 5/3 Walnut/Daisy neighborhood KidWorks 10 meeting 5/24 Walnut/Daisy neighborhood KidWorks 7 meeting 6/21 Walnut/Daisy neighborhood KidWorks 4 meeting 7/5 Walnut/Daisy neighborhood KidWorks 14 meeting 7/12 SAASy Thursday bike ride Corazones Verdes 18 and community lands event 7/19 Walnut/Daisy Outreach KidWorks 6 Committee Meeting 60A-55 EXHIBIT 3 8/4 Community Outreach Event Friendship Park 22 2210 W Myrtle St Additional community events: > Presentations at schools, neighborhood associations, community centers, churches, and more Monthly Equity for All meetings with residents and community organizations Bi-yearly Equity for All Retreats Mercaditos — once a month since Fall 2016 Community Health Needs Assessment: In early 2018, THRIVE partnered with Dr. Carolina Sarmiento, Dr. Erualdo R. Gonzalez, and Santa Ana Building Healthy Communities (SABHC) to conduct a neighborhood survey as part of its effort to develop the parcel of land on Walnut Street and Daisy Street in the City of Santa Ana. The survey helped THRIVE document the vision, aspirations, assets, health and social needs of the community and to supplement THRIVE's existing data to match the needs and best use for this plot of land. The survey reached across the surrounding neighborhood and surveyors collected information from residents 18 and older who live within close proximity of the empty plot of land on Daisy and Walnut Streets. Seventeen percent of dwellings completed a survey, yielding 120 sets of responses. The data was collected over a two -week period in March 2018, and later shared at the Community Art Festival at Walnut and Daisy on April 8th. Moving forward, data and planning processes have been shared at neighborhood meetings, providing residents multiple Presenting survey results and Art Workshop opportunities and formats to give feedback and guidance to the development process. Community engagement activities have provided the basis for THRIVE's development decisions including the definition of the Property's use as a community micro -farm. Moreover, THRIVE has successfully prepared a group of residents to lead the project moving forward, including the Outreach Committee, ensuring that the planning process with the City does not exclude local needs or talents. THRIVE sees this work as a great investment into Santa Ana's future, where we envision economic development that is inclusive and momentous, guided by a residents across several generations. This type of development is sustainable, as it does not contribute to neighborhood inequality, nor displacement. 10 �• •. EXHIBIT 3 CONCLUSION Resident -led developments provides vital tools to confront current issues - throughout the City - around rent -burden, overcrowding, and other housing -related problems. More specifically, the Walnut and Daisy Micro -farm will provide social and economic benefits to the surrounding neighborhood and to the City as a whole. The project will create jobs, supplemental income, provide healthy food, physical activity and other healthy lifestyle options. Cost savings for residents include food items, improved physical and mental health, and for the City cost savings include preventing emergency services, as well as increments in neighborhood sales, which contributes to local taxes. These aspects of the Micro -farm project align perfectly with gaps in the existing neighborhood design - particularly in the area of economic opportunity, physical activity, the availability of green space and healthy foods. Current market conditions will tend to exacerbate issues of obesity, poverty and inequality, among others -- that is, unless local residents, in partnership with the City of Santa Ana, begin to see these gaps and vacant spaces as opportunities for community -led intervention towards equitable, sustainable economic development. 11 60A-57 CM H m X w u a W 43 W J ray co r S4 Cz lai a 1 F OZ K Q Uy N Lu fW F E 0 O ccW O Z W W NK pr- F Q¢ E O V O N C a F ~ N W Wcc 99 f o IIIJJJJ p S p LU Ia O NU O Q W -� W W ~ Q C a> yn WCu' ixZ Nu Qu~i r UuWi G Q WZ > rWZ Z .~J J da' O Q � mu naE 3 O A 00 O ® © ®O ® ® © ® O O A or l � • EXHIBIT 4 Location Map SECOND STREET W pw W to y FIRST STREET CHESTNUT AVENUE 1901 West Walnut Street EXHIBIT 4 a cc 60A-59 o.1 � .1 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: SEPTEMBER 17, 2019 TITLE: APPROVE APPROPRIATION ADJUSTMENTS FOR CARRYOVER UNSPENT AMOUNTS FROM FISCAL YEAR 2018-19 TO FISCAL YEAR 2019-20 AND APPROPRIATE $4.0 MILLION OF ADDITIONAL REVENUE FOR FISCAL YEAR 18-19 (STRATEGIC PLAN NO.4, 1) CITY MA AGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: ❑ As Recommended ❑ As Amended ❑ Ordinance on 151 Reading ❑ Ordinance on 2n° Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Approve an Appropriation Adjustment to reduce the FYI 8-19 budget for unspent amounts to be carried over to FYI 9-20. 2. Approve an Appropriation Adjustment to increase the FY19-20 budget for amounts carried forward from FYI 8-19. 3. Approve an Appropriation Adjustment to move FY 19-20 budget in the Addressing Maintenance Enhancing Services (AMES) fund, from the Reserve Appropriations account to the appropriate accounts for expenditure. 4. Approve an Appropriation Adjustment in the amount of $4.0 million based upon the availability of Revenue within the General Fund (Fund 011) as follows: Roadway Maintenance ($2.0 million) for expenditure during FY 2018-19, Quality of Life Team (QOLT) to be carried to FY 19-20 for expenditure ($1.0 million), and additional Youth Spending via a transfer to the Cannabis Public Benefit Fund for expenditure during FY 19-20 ($1.0 million) DISCUSSION Carryover budgets from FY 18-19 It is common for a City to budget for non -recurring (one-time) expenditures, such as construction projects, which are not completed by the close of the fiscal year on June 30. When this happens, the City Council may 'carryover" the unspent budget from one fiscal year to the next to provide resources for project completion. We do not request carryover for recurring operating budget amounts, as each annual budget already includes provision for operational expenses. 65A-1 Appropriation Adjustments to Carryover Unspent Amounts from FY18-19 to FYI 9-20 September 17, 2019 Page 2 The City Council adopts a budget one year at a time, and the City's Charter requires City Council approval for appropriation adjustments. Increasing the current year budget for unspent amounts carried over from the prior year constitutes an appropriation adjustment. A list of requested carryovers is attached to this report (Exhibit 1). The list includes the account, description, amount, and expenditure status. All requests on the list were discussed with City departments and vetted to ensure funds are available and the allocation is non -recurring. Each request on the list includes the amount available one month after the end of FYI 8-19. Staff will continue paying FYI 8-19 invoices through September, and will continue reconciling FY18-19 accounts through October. The FY18-19 ledger will not be final and closed until the financial statements have been audited in November. Therefore, the requested carryovers are "maximum" amounts. The actual amounts processed for carryover will be limited to the available budget once the FYI 8-19 ledger is closed (Exhibit 2). Additionally, a list of projects has been attached (Exhibit 3) for unspent items in the AMES (Addressing Maintenance Enhancing Services) Fund. The FYI 9-20 budget already includes an allocation to re -budget unspent monies; however, that allocation was placed in "Reserve for Appropriations" (Reserve). Staff requests an appropriation adjustment to move the unspent project allocations from the "Reserve" account to the appropriate accounts for expenditure. Unanticipated Revenue - FYI 8-19 Revenue and proposed reclassification/transfers The FY18-19 books have not yet been closed and audited. However, actual receipts to date indicate the General Fund will receive at least $4.0 million more revenue than budgeted for FYI 8- 19. Additional revenue includes but not limited to the following: $2.0 million of tax increment distributed from the Redevelopment Property Tax Trust Fund (primarily related to interest savings from the 2018 tax allocation bond refunding), $1.6 million of various planning and building fee revenue(s), and $0.4 million from paramedic services charges (Exhibit 4). Due to the public demand for service, at this time staff recommends conservatively appropriating $4.0 million (Exhibit 4) of the additional revenue as follows: Amount to Appropriate Program to be funded • $2.0 million Roadway maintenance • $1.0 million Additional youth spending set -aside in the Cannabis Public Benefit Fund • $1.0 million Quality of Life Team (QOLT) activities Once the books are closed and audited, the City Council may review the General Fund balance to determine if any additional amounts should be appropriated. Each year, the City is required to spend General Fund money for roadway maintenance in order to receive restricted revenue for street projects. In addition, there is public demand for various streets to be immedidately repaired. Staff recommends reclassifying up to $2.5 million of FY18-19 roadway expenditures from the Gas Tax Fund to the General Fund to ensure the City has met its 65A-2 Appropriation Adjustments to Carryover Unspent Amounts from FY18-19 to FY19-20 September 17, 2019 Page 3 spending obligation. In turn, the unused Gas Tax revenue will be available for high priority street repair during FYI 9-20. With the $2.0 million appropriation requested above, the General Fund will have sufficient budget to reclassify up to $2.5 million in Street Repair expenditures (Gas Tax — Fund 029 and Select Street Construction — Fund 059 funds). The City Council established a Cannabis Public Benefit Fund to spend one-third of adult -use and commercial cannabis tax revenue on youth programs, and one-third on enforcement. Ordinance No. NS-2959 requires contributions to the Public Benefit Fund beginning in FYI 9-20. To date, the City has collected $4,615,664 of FY18-19 tax revenue for adult -use and related commercial business activities, which was programmed for General Fund purposes. One-third of that tax revenue is $1,538,555. The City Council may consider using a portion of the unexpected General Fund revenue outlined above to make an additional FY 19-20 contribution of $1.0 million to the Cannabis Public Benefit Fund, for youth spending. There is a public desire for more efforts to address the impacts of homelessness. Staff recommends appropriating $1.0 million from the unexpected revenue for FYI 9-20 QOLT efforts. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's effort to meet Goal #4 — City Financial Stability, Objective #1 — Maintain a stable, efficient and transparent financial environment. FISCAL IMPACT Carryover Appropriation FY 2018-19 to FY 2019-20 There is no net fiscal impact associated with this action related to carryover of unspent appropriations. The previously authorized expenditures will simply be spent in a later period, which only affects the timing of cash flow. Appropriation Adjustment Upon Council Approval, the following budgets will 20 (Exhibit 3 & 4): FY 2018-19 Fund / Department • AMES — Fund 050 Funding Source: General Fund / Miscellaneous Appropriate to: • General Fund / Public Works Budget • General Fund / Community Development • General Fund / Public Works be augmented during FY 2018-19 and FY 2019- Amount Activity $1.9 million re -appropriate budget $4.0 million Available Revenue $2.0 million Street Repair $0.5 million Homeless - QOLT $0.5 million Homeless - QOLT 65A-3 Appropriation Adjustments to Carryover Unspent Amounts from FY18-19 to FY19-20 September 17, 2019 Page 4 FY 2019-20 • Transfer from the General Fund (Fund 011) to the Cannabis Public Benefit Fund (Fund 012) - $1.0 million and appropriate $1.0 million to PRCSA Youth Services Kathryn Dow s, CPA Executive Director Finance and Management Services Agency Exhibits 1: List of requests to carryover unspent appropriations Exhibits 2: List of requests to carryover unspent appropriations by fund Exhibits 3: List of AMES projects with projected completion dates Exhibits 4: Appropriation Adjustment and Transfer during FY 2018-19 and FY 2019-20 65A-4 EE8 8 Ee a o88 e oQ Wa. - f E d oe o Y o _ E r o e A o- 3: - a 9 M. t;r m= dm o2 t ¢ g A 2 a o8= i a n e m c" 0 2 o s v E 9 2 c S a 0 c^ o L E u o a L S o E:.35 A S_ E E3c E Y Q 4 "'¢ E g E o E E P E ff a o o B e x a e i«= e 8 8 _ - d E C E S S o e" 3 a— a r E dSS2t o- v o o e --_ _ d a m m u m o gM E£ �\• \ °^' E c E v$ a E E E K ^ s u o o o$ X'' m w G G u .} L L L L G L`= o e'aaoo¢aoa>$aI Eo vdsd�a�¢°a.��°e__„.aae5o E L _ c^ Lv X. 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I\)\I -------_ .)) q){/ oamam _G /{{}\({/}}/ \ \ \}\\\ \��/}\ } \ \\\}\ to to z H'P3:; /) ; ;|!;! 65A- EXHIBIT 2 Preliminary List of Carry Forwards By Fund FY18-19 Balances to FY19-20 As of August 2019 Fund I Fund Name O11 GENERAL FUND 029 SPECIAL GAS TAX 032 MEASURE M-STREET CONSTRUCTION 034 NEW TRANSPO SYS IMPR AREA E 035 NEW TRANSPO SYS IMPR AREA 051 CAPITAL OUTLAY FUND 052 STRATEGIC PLAN PROJECTS 055 SEWER CONNECTION FEE 056 SANITARY SEWER SERVICE 057 FED CLEAN WATER PROTECTION ENT 059 SELECT STREET CONSTRUCTION O60 WATER REVENUE 067 REGIONALTRANSP CENTER O69 SANITATION FUND 070 EQUIPMENT REPLACEMENT 124 ORANGE COUNTY GRANTS 125 OES UASI 127 D.O-I. GRANT FUND 130 HOME PROGRAM FEDERAL GRANT 135 COMMUNITY DEV BLOCK GRANT 147 FEDERALAID SAFETY PROGRAM 148 TRAFFIC SYSTEM MGMT GRANT 165 OFFICE OF SAFETY GRANT 169 RECREATION GRANTS FUND 312 RESIDENTIAL DEVELOP DISTRICT 403 SCAG GRANTS 405 FEDERAL HOPWA PROGRAM GRANT 417 CDA INCLUSIONARY HOUSING FEE Budget Expenditures I August 2019 I Carry Forward 280,910,936 258,676,053 22,234,883 1,126,400 16,560,070 9,163,390 7,396,680 1,546,600 33,107,338 13,997,707 19,109,631 15,278,300 795,348 506,602 289,746 288,746 1,589,036 564,071 1,024,965 1,024,965 3,864,471 5,812,447 (1,947,976) 31,400 2,522,456 2,016,416 506,040 12,500 7,974,478 187,158 7,787,320 7,391,600 8,115,693 7,060,851 1,054,842 563,200 7,141,893 3,274,113 3,867,780 1,438,700 23,652,064 6,476,984 17,175,080 17,302,300 60,916,132 50,685,781 10,230,351 1,421,200 1,956,323 1,397,795 558,528 43,900 7,798,766 6,718,240 1,080,526 195,000 1,297,325 287,698 1,009,627 37,400 1,858,240 693,545 1,164,696 30,900 6,422,589 1,629,551 4,793,038 2,800,000 539,742 491,385 48,357 56,700 4,622,352 1,102,518 3,519,834 3,686,500 13,492,923 3,964,278 9,528,645 8,220,300 1,200,877 316,037 884,840 769,500 13,830,830 1,059,700 12,771,130 11,859,900 722,419 553,455 168,965 168,964 311,628 167,059 144,569 83,700 4,019,674 877,449 3,142,225 200,000 292,329 85,317 207,012 128,300 23,720 2,992 20,728 20,728 14,922,260 4,568,609 10,353,651 555,500 (A) (B) (C) (D) Notes: (A) Available balance is negative as a result of $5.5 million expenditures for Streetlight project. City Council approved a financing agreement for $8.6 million in April 2018 to fund the project, but no appropriation adjustment was processed. (B) Approximately $0.6 million will be reclassified for on -call pavement maintenance. (C) Approximately $90,000 of FY17-18 expenditures were posted to FY38-19. (D) City received approximately $100,000 program income and $68,000 de -obligated CHDO funds from granting agency during FY18-19 for which no appropriation was processed. These funds will be added to total carry forward for FY2019-20. 65A-9 65A-10 EXHIBIT 3 List of Council Special Projects AMES (Addressing Maintenance Enhancing Services) Available for FY19-20 Accounting Unit Project Activity p Project Description Anticipated Completion Date Amount 05005018 16015201102 Homelessness/Communications June 2020 180,500 05010024 16120001501 Network, data centers and software upgrade June 2020 4,000 05010024 16120301500 Financial Budgeting Application June 2020 88,900 05010024 16120401500 Planning & Building Permitting Application March 2020 263,100 05005018 16015101102 Communications Equipment June 2020 125,600 05017018 16600701022 Public Works Cl P, Asset Management June 2020 193,900 05016018 16500001102 General Plan Update December 2020 974,700 05017018 17600801011 SARTC Deferred Maintenance - HVAC June 2020 75,700 Total 1,906,400 65A-11 65A-12 .i b m b a 0 0 m. N m b O rv.. V n b m N g N a b R. a m o m m ry m m n m m n a m 00 m .i .t 00 O 0 O lC M m m n W R b O b V v o n o N m n O m .-I O m m .i Vf N w r w N N Vl' 1.I vl 00 Vf R O1 .i O 6 O h .y Vf b m O Vf a0 .i N M b O N .i rl m n b m N V N N b N m m R m O O V O' N N v1 ttl N a VI p 01 tt1 N O Op N cVtm .I N m O .i n Ow V1 0 n m m b O Vf N .i N R O N � h p o o m O m O m b o o o 0 0 0 N O O m n 0 b n n o o b O m M O O N O W n m M m LL O VI m o0 Q 00 O O N n V R1 t0 Oi n of N O ^1 .O N b .i m 0m m N ed N C D] R N I p N N Cf '•1 00 N O h N Y _ °J LL C C y 'V K N 1p w N .2 m 6 c c O 'O c '�^ a o- h Q ¢ vi N m o 'ai tg N ¢ ¢ E"L., rvt O YI �"� N W a N U1 W m IO L 00 C L d N L 00 C L d y 9 p Q L a L¢ a c° C d Y, c« g p ILL m E m>> w a>> c C S G ` F Fo- O d 'o u i o o d •V 1 r U y y V N N N N N N N N N a 3 C j y N y y t L U N c N c N c N c N c IO C N c R C N c V p 6 a '� '^ " E.E N .� V U u c c c c c c c c c c mC U Q m E c c ma u u u" u" u" u u uu' V m 'V m 'iJ n 'u ER 'u ER 'u 'Au mu a u N Q a— V d 00 m C 1 00 V p0 C V c u a u V N N c • E00 E c -o 't c a c '� a r E E N E E E E E N E N E W E E E E E 'a m ,� E E " E E E E E E E E E 9 v n m `mom w w '� w 0C1 0 0 u 0 u 0 u 0 0 0 0 0 0 0 U o U c J c J o IL/1 m 0 0 0 0 0 m w • O V1 0 b b b b b b b .bi b .ni 1p 1p .mi 1p N 1p N b N b N b N b .mi b b b m m m m m .� .i .i .i .a .y .i .a .a m m m VI V1 VI m v1 m V1 V1 VI VI V1 1(I IA m v1 V1 V1 V1 1!I V1 1!1 V1 N N N N N N N N N N N N N N N N N N N N N N 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N V1 b lD lO b t0 b 1p 1p b b 1p 1p b b b b t0 1p b 1p • O O O O O O O O O O O O O O O O O O O O O O 65A-13 65A-14 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: SEPTEMBER 17, 2019 TITLE: AUTHORIZE STAFF TO PREPARE DOCUMENTS FOR PROPOSED WATER AND SEWER RATE ADJUSTMENTS AT A COST NOT TO EXCEED $75,000 (STRATEGIC PLAN NO. 6, 1H) CITY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: Uiaa r ❑ As Recommended ❑ As Amended ❑ Ordinance on 1" Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO 51111PETIIM7 . Authorize and direct staff to prepare all required documents necessary to proceed with notification of proposed water and sewer rate adjustments in compliance with Proposition 218 requirements, including, but not limited to, the following: a) Prepare and mail proposed rate adjustment notices to all Santa Ana property owners in compliance with Proposition 218 requirements at cost not to exceed $75,000; b) Schedule a public hearing at a future Council meeting, on or after November 5, 2019; c) Prepare all other documents required to proceed with proposed water and sewer rate adjustments. d) Explore the feasibility of implementing a water and sewer low-income assistance program. DISCUSSION Background The City owns and operates a water distribution system and a sewer collection system that provides services to a community of nearly 350,000 residents and 5,000 businesses. The City water system consists of approximately 480 miles of mains, 10 reservoirs, 7 pumping stations, and 20 active wells. The City sewer system consists of 398 miles of main, 8,000 manholes, and 2 lift stations. The cost to keep these critical assets operational and invest in their replacement comes from the water and sewer rates charged to and collected from the community they serve. The California Constitution, via Proposition 218, ensures that all revenue collected from water and sewer charges is used for water and sewer operations and infrastructure related expenses. The City last performed a cost of service and rate study in 2014. The last adopted rate adjustment took effect on July 1, 2018. Due to various factors, including the drought conditions 65B-1 Authorize Staff to Prepare Documents for Proposed Water and Sewer Rate Adjustments September 17, 2019 Page 2 experienced in recent years, the rate revenue collected for both the water and sewer enterprises has been far below that which is necessary keep up with needed capital improvement projects. Currently 20% of the water distribution infrastructure is past its useful life and an estimated 70% will reach its useful life by 2040. Similarly, the sewer system requires an average of 4 miles of pipe replacement a year for the next 100 years but currently only about 1 mile of replacement a year can be afforded. On February 5, 2018, the City Council directed staff to perform a comprehensive rate study for both the water and sanitary sewer enterprises. A prior such study had been performed in 2014. On July 3, 2018, upon completion of a competitive bid process, the City awarded a contract to Stantec to develop a financial plan, cost of service, and rate structure analyses for water, recycled water, and sewer rates. The objectives of the study is to ensure the financial stability of both water and sewer enterprises while ensuring that the rates are in compliance with applicable law (namely California's Proposition 218 requirements). Capital Improvement Program The City's Water Resources Division has determined that both the water and sewer utilities need significant investment in the repair and rehabilitation of its aging infrastructure. The Water Enterprise has completed a Water Master Plan which identifies critical projects that will average nearly $15 million in annual capital spending for the next 20 years. Over the past 4 years the City has spent an average of less than $4 million annually. The water and sewer systems are already showing signs of distress. In past year alone the systems experienced 21 water main breaks, 173. water service leaks, 132 sewer laterals repaired, and 2 pump stations and 6 groundwater wells downed due to mechanical and/or electrical failures. While the Public Works Agency has excelled in making cost-effective repairs and rehabilitations, continued deferral of capital project investment will eventually result in the complete failure and loss of critical assets. The proposed projects predominately focus on groundwater well improvements, pipe replacement, and a major Advanced Metering Infrastructure (AMI) Project. With this increase in capital spending, the Water Enterprise will require a higher level of staffing to manage the projects (as many as an additional 8 full-time positions). Planned capital spending for the Sewer Enterprise includes pipe replacement at rate of 4 miles of aging pipe per year and the construction of a new $7 million pump station (which will be paid for with developer fees). This signifies an increase in average annual capital spending from under $1 million to over $6 million for the next 20 years. With this increase in capital spending, the Sewer Enterprise will require a higher level of staffing to manage the projects (as many as an additional 3 full-time positions). Financial Plan The rate study proposes to primarily cash finance the above re -investments in critical water and sewer infrastructure, with the exception of the AMI project. Cash financing is more appropriate to pay for average/typical capital spending levels. Cash financing avoids the cost of interest and ensures that a utility is not creating undue burden on future ratepayers through the accumulation of debt. For the AMI Project, some grant funding has already been secured and additional debt financing is being sought. Debt financing is appropriate for one-time, large capital projects (such 65B-2 Authorize Staff to Prepare Documents for Proposed Water and Sewer Rate Adjustments September 17, 2019 Page 3 as the AMI Project) that are anomalies compared to normal capital spending levels. Debt financing in those cases allows the utility to avoid unnecessary "rate shock" and helps spread the cost of large projects over a longer period. It also ensures that future ratepayers who benefit from the project will also pay for the project. As part of the analysis, existing reserve levels were examined. Recommended reserves include an Operating & Maintenance Reserve target equal to 90 days (3 months) of annual operating expenses; an Emergency Reserve set a $4 million (for both the Water and Sewer Enterprises); and a Repair, Renewal, and Replacement Capital Reserve equal to 50% of average annual projected capital spending. Rate Design Over the past decade the legal requirements surrounding utility rate setting in California have evolved. Namely the courts have made rulings with respect to California Constitution Article XIII C and D (commonly known as Proposition 218) that have created a higher "cost of service" standard for rate setting than has historically been practiced by public utilities. Simply put, the burden of proof is on utilities to demonstrate that all aspects of water and sewer rates are directly proportionate to the cost of providing service. This means aligning fixed revenue (fixed charges) with fixed costs, and variable revenue (usage rates) with variable costs. In addition, Stantec looked at opportunities to strengthen revenue stability for both utilities, which were found to rely too heavily on usage rates, making the utilities susceptible to revenue volatility. Currently, the City's water utility recovers approximately 17% of revenues through the fixed base charge while the sewer utility collects approximately 13% through fixed charges. These rates were not found to be aligned with the utilities' actual fixed costs, which were found to be closer to 40% for the water utility and nearly 100% for the sewer utility. The proposed water rates are structured to directly align the water utility's variable costs (i.e., water purchases and electricity) with the wafter usage rates ("Water Usage Charge"). By extension, the water utility's fixed costs (i.e., salaries, capital spending, maintenance, and overhead) will be aligned with the fixed water charges ("Water Utility Charge"). Sewer rates ("Sewer Utility Charge") are proposed to be fixed for all customers based on the size of their meter and the type of customer, since some customers (e.g., commercial accounts) return a larger percentage of their water to the sewer than others (e.g., single-family residences) which have higher irrigation needs. The Fats Oils and Grease (FOG) Charge for food service accounts will increase by 68% in order to better reflect the cost of the FOG Control Program. The proposed rate revenue adjustments outlined below support the recommended CIP plans and allow both enterprises to meet their respective financial goals: L• Authorize Staff to Prepare Documents for Proposed Water and Sewer Rate Adjustments September 17, 2019 Page 4 Typical Bill Impact The financial impact of the proposed revenue adjustments and rate structure changes on the typical customer was carefully evaluated. The overall increase in the combined typical bill of a single-family residential customer will be $4.92 per month (based on the average 1,257 cubic feet of water used per month by typical single-family residences). When compared to neighboring cities, the typical Santa Ana customer will continue to pay a similar amount, on average, for water and sewer services as compared to its neighboring cities such as Garden Grove, Brea, Fullerton and Orange. Low-income Assistance Program While the proposed rate structure will provide rate relief to numerous multifamily accounts, the rate setting requirements of applicable law (namely California's Proposition 218) disallows the use of rate revenue to fund a low-income water and/or sewer rate assistance program. Any such program needs to be funded through an outside source of revenue. Staff will explore viable options for funding a low-income subsidy program and report findings to Council at a future date. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #6 — Community Facilities & Infrastructure, Objective #1 (establish and maintain a Community Investment Plan for all City assets), Strategy H (complete water/waste water rate study to ensure adequate resources to capture critical long-term capital needs). ENVIRONMENTAL IMPACT There is no environmental impact associated with this action. FISCAL IMPACT $75,000 has been budgeted and is available for expenditure in Fiscal Year 2019-20 in the Water Admin Engineering -Miscellaneous Operating Expense and Sanitary Sewer Service - Miscellaneous Operating Expense accounts (Nos. 06017645-63001 and 05617640-63001) to cover any costs incurred for preparing and mailing the notices. Fiscal Accounting Unit — Fund Accounting Unit, Account Amount Year Account No. Description Description FY19-20 06017645-63001 Water WaterAdmin/Engineering, $37,500 Misc. Operating Expenses FY19-20 05617640-63001 Sanitary Sewer Sanitary Sewer Service, Misc. $37,500 Service Operating Expenses Total Amount $75,000 L. Authorize Staff to Prepare Documents for Proposed Water and Sewer Rate Adjustments September 17, 2019 Page 5 APPROVED AS TO FUNDS AND ACCOUNTS l '�, 6= D Kathryn — o*ns, CPA Executive Director Finance and Management Services Agency Exhibits: 1. Please click on link: https://www. santa-a na.org/sites/defau lt/files/pw/docu ments/W ater-and-sewer- rates-Cost-of-Service-Report. pdf 2. 2019 Rate Study Presentation 3. Proposition 218 Compliant Notice of Proposed Rate Adoption L• EXHIBIT 1 IS AVAILABLE AT: ana.orq/si https://www.santa- s/default/files/pw/d( ate r-a nd-sewe r-rates-Cost-of-Se rvi ce- Report.pdf 65B-7 Water Rate Study Recommendations September 17, 2019 1 2019 Water Rate Study Drivers Schedule: ✓ The previous rate study was completed in 2014 ✓ The last adopted rate adjustments were for FY 2019 (last year) • Legal: ✓ Recent court decisions have "raised the bar" for transparency and cost -to - service requirements forwater rates (Prop 218). • Rate Structure: ✓ Revenue was significantly lower than forecasted during drought years System Investment Needs: ✓ 20% of the water distribution infrastructure is past its useful life ✓ 70% of the existing infrastructure will reach its useful life by 2040 ✓ A Water Master Plan was developed to identify system deficiencies and develop a capital program 2 2 Stantec Consulting & Hildebrand Consulting 1 6581& 2 Water Rate Study Recommendations September 17, 2019 7 4 Survey - Residential Water Users (typical monthly water use with 5/8" x 3/4" meter) $- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 Laguna Beach Placentia Brea Yorba Linda Garden Grove Fullerton La Habra Santa Ana (Proposed( La Mirada Santa Ana (Current) Buena Park Orange Water Enterprise Revenue FY2018 Actuals Rate Revenue Fixed Rate Revenue $ 8,392,030 Variable Rate Revenue $ 45,154,453 Total Revenue $ 53,546,483 Other Revenue Other Operating Income $ 826,226 Interest Income $ 553,964 Non -Operating Income $ 1,187,776 Total Other Revenue $ 2,567,966 TOTALREVENLIE $56,114,449 onthl 4 Stantec Consulting & Hildebrand Consulting 2 65B-10 Water Rate Study Recommendations September 17, 2019 Water Enterprise Expenses FY2018 Actuals Purchased Water and Electricity $23,694,899 Salaries and Benefits $6,165,137 Other Variable O&M $421,375 Fixed Operations & Maintenance Costs $9,616,819 Clean Water Compliance $1,347,355 Fixed Overhead $8,567,409 Debt Service $1,361,525 Capital Expenditures $6,274,059 Totals $57,448,577 9, aams.r mp" 2% �. uwnaibm. ux ales. Wamr CamplWnco FUMOpxalbnas xx Mamt.n.naacoae. to Other Varlable0&M 1% — 5 w i F •.'i. t l� r t lirr {{ � Y yGA N Stantec Consulting & Hildebrand Consulting 3 65B-11 Water Rate Study Recommendations September 17, 2019 Water Enterprise Master Plan Capital Spending Forecast Projects include: • Drilling new wells • Rehabilitating existing wells • Rehabilitating pump stations • Rehabilitating tanks • AMI project funded with debt • Will create 8 full time jobs (@ $185K / FTE) 7 $20 10-year total: $143.6 million $16 - - - - - - -- $14 - -- --- - - ,n $12 ° $10 Historical $8 spending - $6 $411 1 F�ti6Fi'14'vroF�•,aF�vo�,y~�vv�v��vaF°vy�v6�,y1�,ya�,ya 7 hqle,_ Enler• _ ■ Non -Rate Revenue ❑ Exismg Rate Revenues a Rate Revenue from Increases ■ 08h1 Expenses 8 Transfers Financial■ Debt Service ■ Cash -Funded CIP and s $120 ecornmencled Rate N $100es X — $80 — $60 i-Mina tca� $50 �\—Mlnlmum Reserves —Ending Fund Bela... ----Target Reserves 0 a so FY2016 FY2019 FY2020 FY2021 H2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2000 Jul.1 Jul.1 Jul.1 Jul.1 Jut.1 Jul.1 Rate Increases 1 I'. 7.00% 6.50% 2.60% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% mmored Deb/issuances - - $8.7M - $11.7M - - - - - - - 8 r Stantec Consulting & Hildebrand Consulting 112 65B-12 Water Rate Study Recommendations September 17, 2019 Proposed Water Rate Design Approach 1. Enhance connection between water rates and the cost to provide water service • Water usage rates are directly tied to the cost of purchased and pumped water... • ... this will result in increased fixed revenue and decreased variable revenue 2. Update Pass -Through Provision • Automatic updates to rates to reflect changes in wholesale water costs 3. Minor modifications to meter equivalency schedule • Bringing the meter equivalency schedule in line with industry standards Reflects the hydraulic capacity of the respective meter sizes. n Rate Structure Cost Categories Commodity Costs Driven by the volume of water sold Water purchases Pumping electricity Associated general & administrative i Water Usage Charge (variable) 10 66% Revenue 10 Utility costs Driven by the size of the utility infrastructure Stantec Consulting & Hildebrand Consulting • Salaries & benefits • Operations & maintenance Capital • Associated general & administrative 1 Water Utility Charge (fixed) 34% revenue I Current fixed revenue: 16.2% 5 65B-13 Water Rate Study Recommendations September 17, 2019 Proposed Tiered Water Usage Rates Volume (AF) Unit Cost of Water ($/AF) Tier 1 Tier 2 Recycled Water 11 Tier 1 Allocations* Increase Tier 1 allocation with meter size Current Recommended I ` I Account Size: Tier 1 Allocation: • • All • *Allocation sizes are designed to result in all Tier 1 sales to equal OCWD purchases 12 12 Stantec Consulting & Hildebrand Consulting 6 65B-14 Water Rate Study Recommendations September 17, 2019 Recommended Water Rate Schedule Year Monthly Water Utility Charge (fixed Meter Size 5/8" X 314" Current $6.95 Proposed $20.51 314" $15.10 $30.76 1" $28.65 $51.27 11/2" $44.93 $102.53 2' $82.90 $164.04 3' $137.15 $358.84 4" $272.78 $645.91 6" $435.53 $1,332.83 Multi -Family Residential is currently charged $4.75 per dwelling unit. 13 Water Usage Charges current Rate ProposedRate pe Tier 1 $3.02 mot. $2.03 Tier 2 $3.59 $4.79 Recycled Water $2.42 $2.15 Tier 1 Water Usage Allocation (CCF per Month) Single FamlV 22 10.5 Mufti-Famiy" 22 8.5 Non -Residential' 22 31.0 Proposed Tier 1 allocation allocated per equivalent meter Pmposed Tier 1 allocation per dwelling unit Example Monthly Water Bills Single Family Homes with 5/8" X 3/4" meter Low Water User (5 HCF) Current Proposed $22.05 $30.66 Increase of $8.61 14 Typical Water User (10.5 HCF) Current Proposed $38.66 $41.82 Increase of $3.16 Stantec Consulting & Hildebrand Consulting 13 High Water User (25 HCF) Current Proposed $84.16 $111.28 Increase of $27.12 14 7 65B-15 Water Rate Study Recommendations September 17, 2019 15 16 Monthly Water Bill Impacts Single Family Customers (all meter sizes, 35,991 accounts) <so 1 i $o to $4 - $4 to $8 $8 to $12 m S12 to$16 o. S16 to 520 $20 to $24 'a S24 to $28 C $28 to $32 , $32 to $36 , $36 to $40 S40 to $44 ' >$44 , 0% 10% 20% 3096 40% Percent of Accounts 15 Monthly Water Bill Impacts Multi -Family (All meter sizes, 3,713 accounts) <$-600 ■ $-600 to $-525 $-525 to S-450 I a $450 to $-375 i u $-375 to S-300 $-300 to $-225 c $-225 to $450 m 5-150 to $-75 n 5-75 to $0 s u $0 [0 $75 j $75 to $150 S150 to $225 >$225 ■ 0% 20% 40% 60% Percent of Accounts 16 Stantec Consulting & Hildebrand Consulting 8 65B-16 Water Rate Study Recommendations September 17, 2019 Survey — Residential Water Users (typical monthly water use with 5/8" x 3/4" meter) Laguna Beach Placentia Brea Yorba Linda Garden Grove Fullerton La Habra Santa Ana (Proposed) La Mirada Santa Ana (Current) Buena Park Orange 17 18 $- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 Rate Study Achievements onth)17 ,('Enhanced connection between water rates and the cost to provide water service • Improves fairness and legal defensibility ✓ Increased revenue stability through higher fixed rates • Stabilizes revenue and makes rates "drought tolerant' ✓ Rate revenue increases will meet the needs of system deficiencies • Addresses deferred maintenance and allows the utility to implement efficient asset management practices Stantec Consulting & Hildebrand Consulting 9 65B-17 Water Rate Study Recommendations September 17, 2019 Next Steps • Request City Council to direct Staff to send Proposition 218 Notification • 45-day waiting period • Public Hearing on or after November 5, 2019 to adopt rates • Rates are active on January 1, 2020 19 19 Stantec Consulting & Hildebrand Consulting M- • Sewer Rate Study Recommendations September 17, 2019 1 2019 Sewer Rate Study Drivers Schedule: • The last rate study was completed in 2014 • The last adopted rate adjustments were for FY 2019 (last year) Legal: • Recent court decisions have "raised the bar" for transparency and cost -to - service requirements for water rates (Prop 218). Rate Structure: • Revenue is being un-necessarily affected by drought events • System Needs: Sewer system has significant capital investment needs. • Currently averaging less than 1 mile of sewer line replacement per year • Proposed plan jumps sewer line replacement to an average of 4 miles a year 2 2 Stantec Consulting & Hildebrand Consulting 1 65B-19 Sewer Rate Study Recommendations September 17, 2019 3 4 Survey - Residential Sewer Users (typical monthly water use with 5/8" X 3/4" meter) $- $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 Garden Grove — I i I I I Huntington Beach i I I I Orange I I Brea ��..^�—� ■ Fixed La Habra ,. I o Commodity Yorba Linda t I I I Santa Ana (Current) 1 I Santa Ana (Proposed) Sewer... Survey at 10.5 CCF (7654 gallons per Month) Sewer Enterprise Revenue FY2018 Actuals Rate Revenue Fixed Rate Revenue $ 1,053,874 Variable Rate Revenue $ 5,290,773 Total Revenue $ 6,344,647 Other Revenue: Other Operating Income $ 2,605 Interest Income $ 223,019 Non -Operating Income $ 33,882 Other Revenue $ 259,506 Restricted Revenue Connection Fees $ 1,480,855 Total Restricted Revenue $ 1,480,855 TOTAL REVENUE $ 8,085,008 Other 3 Sewer J Stantec Consulting & Hildebrand Consulting 2 65B-20 Sewer Rate Study Recommendations September 17, 2019 5 Sewer Enterprise O&M Expenses Salaries and Benefits Fixed Operations & Maintenance Costs Minor Capital Outlay Fixed Overhead Capital Expenditures FY 2018 $1,821,74 $2,392,581 $183,568 $519,266 $194,350 Totals $5,111,514 Sewer Enterprise Capital Spending Forecast Projects include: • Immediately ramp up to 7 $16 o connection Fee Funded -- - -- - - miles of pipe replacement to $14 ■ Rate Funded 10-year total: $83.0 million draw down on the $23M from $12 - - - OCSD $to -- - - - - -- - - • Leveling off at 3.5 miles of ^ pipe replacement thereafter p $8 -- Historical - ----- ----- '- ---- • $s spending San Lorenzo Pump Station in = - FY2020($7M) • Will create 3 full time jobs $z - (@ $185K / FTE) l•' lb 'i� l� ti9 ti� ti~ titi ti� ti� ti5 ryb ti� ti$ 19 9� 'Assumes a cost of $1.5 million per mile of pipe) Stantec Consulting & Hildebrand Consulting 41 a 3 65B-21 Sewer Rate Study Recommendations September 17, 2019 Se r Enterprise I E35 ■ Non -Rate Revenue Financial Forecast E30 — El Existing Rate Revenues • • Q Rate Revenue from Increases _ • _ • _ • . • _ = $25 — _ ■ 0&M Expenses & Transfers $20 — —_ ■ Cash -Funded CIP Increases a = - Wr .. — — — z.-_, — _ __ sin a° ----Target Reserves —Ending Fund Balance —Minimum Reserves 3 u° sss• _ ______________ _________________________________-_ FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 Jul.1 Jul.1 Jul.1 Jul.1 Jul.1 Jul.1 9.0% 9.0% 9.0% 9.0% 3.0% 3.0% •361f Estlmoted 8va•985M91•Fvrvlypr6bnol 71.03 Iiin 3188 $6.99 $1.62 $8.31 $9.08 19.88 3f0.11 511.09 VIA 7 7 Proposed Sewer Rate Design Modifications 1. Create 3 customer classes to account for a Return -to -sewer factor • 50% Single Family Residential • 80% Multi -Family Residential • 90% Non -Residential 2. Minor Modifications to meter equivalence factors • Bringing the meter equivalency schedule in line with industry standards 3. Fixed utility charges only • Use of fixed charges only is recommended, as all utility expenses are fixed costs • Utility charges are scaled largely based on meter size e 0 Stantec Consulting & Hildebrand Consulting 0 65B-22 Sewer Rate Study Recommendations September 17, 2019 n Fixed Revenue Cost Categories 0 0 ?Q G Account Costs (7%) Meter Costs Driven by the cost of Driven by the size of the managing accounts collection system infrastructure • Operations • Billing • Maintenance • Customer Service • Capital J* Sewer Utility Charge Total fixed revenue: 100% (vs. 177o currently) Proposed Rate Structure Proposedrr Slogle Multi -Family 5/8" X 3/4" $5.60 $8.40 $9.33 Fixed (fvlonthly): 314" $7.93 $12.12 $13.52 $1.68 1" $12.59 $19.57 $21.90 11/2" $24.23 $38.20 $42.85 Volumetric: 2" $38.20 $60.55 $68.00 $0.43 / CCF 3" $82.43 $131.32 $147.62 4" $147.62 $235.63 $264.96 6" $303.61 $485.21 $545.74 8" $559.71 $894.97 $1,006.73 10" $885.66 $1,416.49 $1,593.43 10 Stantec Consulting & Hildebrand Consulting 0 10 5 65B-23 Sewer Rate Study Recommendations September 17, 2019 11 12 Monthly Sewer Bill Impacts Single Family Residential (5/8" X 3/4"meter, 35,915 accounts) < $-40 $40 to $-30 $-30 to $-25 m $-25 to $-20 ._ $-20 to $-15 $-15 to $-10 t $-10 to $-5 $-5 to $0 $0 to $5 $5 to $10 >$10 0% 10% 20% 30910 Percent of Accounts 40% Example Monthly Sewer Bills Single Family Homes (with typical water usage of 10.5 HCF) 5/8 x 3/4" Meter Current Proposed $6.20 $5.60 Decrease of $0.60 3/4" Meter Current Proposed $ 6.20 $7.93 Increase of $1.73 1" Meter Current Proposed $6.20 $12.59 Increase of $6.39 12 Stantec Consulting & Hildebrand Consulting 6 65B-24 Sewer Rate Study Recommendations September 17, 2019 13 14 Survey - Residential Sewer Users (average monthly water use, 5/8" X 3/4" meter) $- $2.00 $4.00 $6.00 $6.00 $10.00 $12.00 $14.00 Garden Grove Huntington Beach Orange Brea La Habra Yorba Unda Santa Ana (Current) Santa Ana (Proposed) FOG Charge onth) Charge is designed to pay for the extra cost of monitoring accounts with fats, oils & grease abatement measures (primarily food establishments). • Annual cost of program: $673,000 • 1,372Accounts • FOG Charge: $40.92 per month, (currently $24.38) 13 14 Stantec Consulting & Hildebrand Consulting 7 65B-25 Sewer Rate Study Recommendations September 17, 2019 Rate Study Achievements ✓ Enhanced connection between sewer rates and the cost to provide water service • Improves fairness and legal defensibility ✓ Increased revenue stability through fixed rates • Stabilizes revenue and makes rates "drought tolerant" ✓ Rate revenue increases will meet the needs of system deficiencies • Addresses deferred maintenance and allows the utility to implement efficient asset management practices 15 Next Steps 15 • Request City Council to direct Staff to send Proposition 218 Notification • 45-day waiting period • Public Hearing on or after November 5, 2019 to adopt rates • Rates are active on January 1, 2020 16 15 Stantec Consulting & Hildebrand Consulting A 65B-26 Concerning proposed changes to the City of Santa Ana water and sewer rate structure and adjustments to water service, sewer service and consumption charges. The Santa Ana City Council will hold a public hearing at the time, date, and location specified above to consider a proposed five-year schedule of increases to the City's water rates and sewer charges. If adopted, proposed rate increases and charges will become effective on July 1, 2019; July 1, 2020; July 1, 2021; July 1, 2022; July 1, 2023, respectively. The public hearing will be conducted per California Constitution Article XIII D, Section 6 (also known as "Proposition 218"). This notice is being sent to all property owners and customers whose parcels receive water and/or sewer service from the City of Santa Ana, who would be impacted by imposed rates and charges. All members of the public are invited to attend the public hearing. Additionally, under California State Law, all of the City's property owners and customers of record may submit a written protest to the proposed rate changes. Only one protest per parcel is permitted. Please refer to the "How Can I Participate?" section of this document for instructions on submitting a formal written protest against the proposed action. You may also appear at the public hearing at the date and time specified above. More information, including a rate estimator, is available online at: www.Santa-Ana.org/pw/Water-and-Sewer. The City of Santa Ana is dedicated to providing reliable and cost- effective water and sewer service to its customers at rates that do not exceed the cost of service, while maintaining essential water and sewer infrastructure. The City hired an independent, third -party consultant to determine that cost of service. The City of Santa Ana is proposing changes to its water and sewer rate structures and charges. Customers who may be impacted by these changes are receiving this notice. We are seeking feedback to help the City Council make the right choice for the City of Santa Ana-and-fts-ratepayers. Y� r EXPIRING RATE SCHEDULE $ $ The City's existing 5-year rate schedule was established in 2014. A new schedule of rates is needed to ensure the City is fairly and equitably recovering the costs of providing service, using industry best practices and meeting legal requirements. AGING SYSTEM 4 0 The City of Santa Ana maintains a complex system of pipelines and facilities to provide safe, reliable water and sewer service to customers. As the system ages, resources are needed to keep these assets in good working condition and benefit rate payers by making timely re -investments in critical infrastructure. FINANCIAL HEALTH IlcW�1111��W;lbl The City of Santa Ana's Public Works Agency must ensure adequate revenue to meet its financial requirements, including bond repayments and maintaining cash reserves for a strong credit rating. 7W C'AN J PAPTICIPA R 0 I The City of Santa Ana welcomes your participation and input throughout the process as the City Council considers the changes explained in this Notice. If you have questions or comments about the proposed rates, you can: r h �n✓� �- r •t CALL OR VISIT. The cost -of -service study and other information on the proposed adjustments and increases are available for �I review at the City's Public Works Department and on our website: a © www.Santa-Ana.org/pw/Water-and-Sewer. WRITE. Written protests may be mailed to The City of Santa Ana, Attention: City Clerk, P.O. Box 1988, M31, Santa Ana, CA 92701, or delivered in -person to City Hall, 20 Civic Center Plaza, Santa Ana. ATTEND THE PUBLIC HEARING: Written protests may also be submitted at the Public Hearing on [Date] at 5:45 p.m. in the City Council Chambers at 20 Civic Center Plaza, Santa Ana, CA 92701. All members of the public will have an opportunity to speak and give testimony regarding the proposed water recycled water and sewer and rate adjustments at the Public Hearing; however, only written protests will count toward a majority protest. Written protests must be received before the conclusion of the Public Hearino. .,. DESCRIPTION OF PROPOSI 1c1:FUcrcustomers1 '_ r WHAT WOULD CHANGE? WATER RATE STRUCTURE The proposed water rate structure is comprised of two components: a fixed monthly service charge (the "Water Utility Charge"), and the variable water consumption charge (the "Water Usage Charge"). Four customer classes would be established — Single Family, Multi -Family, Non -Residential and Recycled Water users. Commodity costs would be distributed among them based on each customer classes' total water use. Commodity costs for recycled water would be allocated 100 percent to those customers. Utility costs would be allocated to each respective customer class based on meter size. Water usage charges would have two tiers based on the source of the water and its availability. The Tier 1 rate would recover the cost of groundwater extraction, the electricity for producing and distributing that water, and some other costs. Tier 2 would recover the costs of purchasing imported water, the electrical costs for distributing that volume of water. The allocation of water in each tier would be based on the amount of water supply that is available from each respective source. SEWER RATE STRUCTURE The variable Sewer Commodity Charge and fixed Service Charge would be replaced by a single fixed Sewer Utility Charge, based on the size of the water meter and customer class. FIXED CHARGES are independent of the amount of water used. They cover non -fluctuating costs such as capital projects, transmission, distribution, meters and service. VARIABLE CHARGES are calculated based on the amount of water moving through a customer's meter. These charges cover expenses such as purchased water, electricity and treatment chemicals. ED RATE STRUCTURES If the proposed rate changes are approved by the City Council, all water and sewer services will be billed at the rates set forth in the tables on the following pages: Current Effective Effective Effective Effective Effective .I, Rate January 1,July 1, 2020 July 1, 2021 .July 1, 2022 July 1, 2023 r ' Per CCF") 2020 TIER 1•• $3.02 $2.03 $2.17 I $2.31 $2.36 $2.41 TIER 2`•' - $3.59 $4.79 $5.13 $5.46 $5.57 $5.68 - - - ------ I-.- --- -- RECYCLED ��------ ----- _--- - � - WATER $2.42 $2.15 $2.30 $2.45 $2.55 ---- --i------�---- $2.50 Z- - - 1 CCF=748 Gallons **See tier allocation table. ••' Tier 2 is any amount of water used over the amount allocated in Tier 1 i I w Proposed Proposed Proposed I. Meter Current Single Family Non -Residential. Multi -Family �' Size Allocation Residential Customer Customer i Allocation Allocation Allocation 5/8" x 0 - 22 CCF O -10.50 CCF O - 31.00 CCF 0 - 8.50 CCF 3/4" 0 - 22 CCF 0 -15.75 CCF 0 - 46.50 CCF 0 -12.75 CCF 1" 0 - 22 CCF 0 - 26.25 CCF O - 7Z50 CCF- 0 - 21.25 CCF 1 1/2" 0 - 22 CCF 0 - 52.50 CCF O-155.00 CCF 0 - 42.50 CCF 2" 0 - 22 CCF 0 - 84.00 CCF 0 - 248.00 CCF 0 - 68.00 CCF 3" 0 - 22 CCF O-183.75 CCF 0 - 542.50 CCF 0-148.75 CCF 4" 0 - 22 CCF 1 0 - 330.75 CCF 0 - 976.50 CCF O - 267.75 CCF 6" 0.- 22 CCF 0 - 682.50 CCF 0 - 2,015.00 CCF 0 - 552.50 CCF all 0 - 22 CCF 0-1,260.00 CCF 0 - 3,720.00 CCF 0 -1,020.00 CCF E Effective :Current E meter Size January 1; ffective Effective Charges July 1,2020 JWy 1; 2021 Effective --Effective, JuIY 1, 2022 July 1, 2023 2020 5/8" x 3/4" $6.95 $20.51 $21.94 $23.37 $23.84 $24.31 3/4" $15.10 $30.76 $32.91 $35.05 -4 $35.75 -, $36.47 " $2 18.65 $51.27 $54.85 $58.42 $59.59 $60.78 11/2" $44.93 $102.53 $109.70 $116.83 $121.55 __--$119.17 2" $82.90 $164.04 $175.52 $186.93 $190.67E$194T.8 3" $137.15 $358.84 $383.96 $408.92 $417.10 $425.44 J 4" $272_78T$645.91 I $691.12 ( $736.04 $750.76 $765.78 j 6" $435.53 $1,332.83 $1,426.12 $1,518.82 $1,549.20 $1,580.18 all $435.53 �$2,460.60 $2,632.84 $2,803.97 $2,860.05 $2,917.25 Current Multi -Family Residential Charge Per Unit: $4.75 SINGLE FAMILY RESIDENTIAL . Meter Size �CUrfent ' Effective January 1,"- Effective Effective ' Effective �' Effecti`ve Charges 2020 July 1, 2020 J41Y 7"2021 JuIY•t 2022" July t; zoz3 ' 5/8" x 3/4" $5.60 $5.88 I $7.93 $8.33 $6.41 $9.08 $6.99 $7.62 $9.90 $10.79 3/4" 1. $1.68 + $12.59 $13.22 - - _ $14.41 _ .�- $15.71 $17.12 _ --- - I1/2" (Number 1 $24.23 $25.44 $27.73 $30.23 $32.95 2„ of CCF x $38.20 $40.11 $43.72 $47.65 $51.94 0.426) (1 CCF = 748 $82.43 $86.55 $147.62 $155.00 �- L- $94.34 - $168.95 $102.83 $112.08 - $184.16 $200.73 3" - 4" - gallons) $303.61 ! $318.79 $347.48 ------� $378.75 $412.84 6" 8" r $559.71 $587.70 $640.59 $698.24T $761.08 10" 'I $885.66 $929.94 $1,013.63 $1,104.86 $1,204.30 K MULTI -FAMILY RESIDENTIAL Efifectrve Current Effective Effective Effective,- ; •Effectve Meter Size January 1, charges2020' ` JUIy 1, 2020 July 1, 2021 JulY'1 2022 July 1, 2023 5/8" x 3/4" 3/4" - ----- -i $1.68 + 11/2" (Number of CCF x 2„ 0.426) 3" (1 CCF = 748 - gallons) 6 8„ -- 10„� $8.40 $8.82 $9_61-- $10_ $11.41 - - L - --- - $12.12 $12.73 $13.88 $15.13 $16.49 1 1 $19.57 .----------J--------' $20.55 $22.40 $24.42- ----- $26.62 $38.20 $40.11 $43.72 $47.65 $51.94 $60.55 $63.58 $69.30 _$75.5147 $82.34 $131.32 $137.89 $150.30 $163.83 $178.57 $235.63 $247.41 $269.68 $293.95 I } $320.41 --------.. $485.21 --- -- $509.47 -___- ---- $555.32 - -- $605.30 --- -- $659.78 $694. _7 $939 72 $1,024.29 $1,116.48 $1,216.96 $1,416.49 ' $1,487.31 $1,621.17 $1,767.08 $1,926.12 ■ NON-RESIDENTI,Arl C.urr'ent Effective, Meter Site `January i, (3 5/8" x 3/4" j $9.33 $9.80 - $10.68 - - $11.64 1 $12.69 - 3/4" $13.52 $14.20 $15.48 $16.87 $18.39 �--.__ $21.90 F$23.00 $25 07 $27.33 � l $29.79 - ---- j $1.68 + -__l.____.--- -----_ -- -----�-`---- j 1 1/2" (Number i $42 85 $44.99 $49.04 $53 45 $58 26 ----- of CCF x r._ . - ._- i.. -- --- -- - �- ----' 21I 1 0.426) 00 $71.40 $77.83 $84 83 $92 46 _ -_-- -$68 - 3" $147.62 $155.00 $168.95 $184.16 $200.73 - - - - (1 CCF t - -- j--- - - -- --- -- 4" ----- -� = 748 $264 96 - --- $278.21 j 21 $303 25 --- $330.54 -1 3 -j- - $360.29 gallons) 6" $545.74 $573.03 $624.60 $680.81 $742.08 8" C $1,006 73 $1,057.07 $1,152.21 $1,255.91 $1,368.94 101, $1,593.43 $1,673.10 $1,823.68 , $1,987.81 $2,166.71 $26.06 + FOG (Number $40.92 $42.97 $46.84 $51.06 $55.66 Customers of CCF x 0.426) "ISO DE AUDIENCIA PUBLICA: Respecto de los cambios propuestos a la estructura de tarifas de aqua y alcantarillado, y ajustes a los cargos de consumo, servicio de agua y servicio de alcantarillado de la Ciudad de Santa Ana. El Consejo de la Ciudad de Santa Ana Ilevara a cabo una audiencia publica a la hora, en la fecha y en el lugar especificados anteriormente Para considerar un cronograma propuesto de cinco anos para aumentar las tarifas de agua y los cargos de alcantarillado de la Ciudad. Si se adopta, los aumentos de tarifas y los cargos propuestos entraran en vigencia el 1 de julio de 2019; 1 de julio de 2020; 1 de julio de 2021; Julio 1,2022; Julio 1,2023, respectivamente. Si se adopta, los aumentos de tarifas y los cargos propuestos entraran en vigencia el 1 de julio de 2019; 1 de julio de 2020; 1 de julio de 2021; Julio 1,2022; Julio 1,2023, respectivamente. Todos los miembros del pGblico estan invitados a asistir a la audiencia publica. Ademas, de acuerdo con la ley estatal de California, todos los Buenos de propiedades y los clientes del registro de la ciudad pueden presentar una protesta por escrito contra los cambios de tarifa propuestos. Solo se permite una protesta por parcela. Consulte la seccion "IComo puedo participar?" de este documento para conocer las instrucciones para presentar una protesta por escrito formal en contra de la acciSn propuesta. Tambien puede comparecer en la audiencia publica en la fecha y hora antes especificadas. Encontrara mas informacion, incluida una calculadora de tarifa, en linea en: www.Santa-Ana.org/pw/Water-and-Sewer. F La Ciudad de Santa Ana se dedica a proporcionar un servicio confiable y rentable de agua y de alcantarillado para sus clientes a tarifas que no excedan el costo del servicio, a la vez que mantengan la infraestructura esencial de agua y alcantarillado. La ciudad contrat6 a un consultor externo a independiente para determinar el costo del servicio. La Ciudad de Santa Ana propone cambios en sus tarifas y estructuras de tarifas de agua y alcantarillado. Los clientes que pueden verse afectados por estos cambios reciben este aviso. Esperamos recibir comentarios para ayudar al Concejo de Ia'Ciudad a tomar la decision correcta para la Ciudad de Santa -Ana y sus contribuyentes. y rf P! VENCIMIENTO DEL CRONOGRAMA DE TARIFAS $ El cronograma actual de tarifas de 5 anos de la Ciudad se estableci6 en 2014. Se necesita un nuevo cronograma de tarifas Para garantizar que la Ciudad recupere de manera justa y equitativa los costos de proporcionar servicios, utilizando las mejores practicas de la industria y cumpliendo los requisitos legales. SISTEMA ENVEJECIDO La ciudad de Santa Ana mantiene un complejo sistema de 0 tuberias a instalaciones Para proporcionar servicios seguros y confiables de agua y alcantarillado a los clientes. A medida que el sistema envejece, se necesitan recursos para mantener estos activos en buenas condiciones de trabajo y beneficiar a los pagadores de tasas al realizar reinversiones oportunas en infraestructura critica. _ FINANCIERA La Age IlII�llllnllnl�lbll La Agencia de Obras Publicas de la Ciudad de Santa Ana debe garantizar ingresos suficientes para cumplir con sus requisitos financieros, incluidos los reembolsos de bonos y el mantenimiento de reservas en efectivo para una calificaci6n crediticia s6lida. 1 e 1 0 La Ciudad de Santa Ana agradece su participacion y aporte durante todo el proceso mientras el Concejo de la Ciudad considera los cambios explicados en este Aviso. Si tiene alguna pregunta o comentario sobre las tarifas propuestas, puede: 0 LLAMAR O CONSULTAR EN L[NEA. El estudio del costo del servicio y otra informacion sobre los ajustes y aumentos propuestos estan disponibles para su revision en el Departamento aO de Obras Publicas de la Ciudad y en nuestro sitio web: www.Santa-Ana.org/pw/Water-and-Sewer. M/w, ESCRIBIR. Las protestas escritas pueden enviarse por correo a la Ciudad de Santa Ana. Atencidn: Secretaria de la Ciudad, P.O. Box 1988, M31, Santa Ana, CA 92701, o entregarse en persona al Ayuntamiento, 20 Civic Center Plaza, Santa Ana. ASISTIR A LA AUDIENCIA PUBLICA: Las protestas escritas tambien pueden entregarse en la audiencia publica el [Fecha] a las 5:45 p. m. en las Salas del Concejo de la Ciudad en 20 Civic Center Plaza, Santa Ana, CA 92701. Todos los miembros del publico tendran la oportunidad de hablar y dar testimonio con respecto a los ajustes propuestos Para las tarifas de aqua, de agua reciclada y de alcantarillado en la audiencia publica; sin embargo, solo las protestas por escrito se consideran en una protesta mayoritaria. Las protestas por escrito deben recibirse antes del final de la audiencia publica. �. ° ", w.:'. kFt'� ,µ �` •as w' z.+` ' ,Yid aL'i �; r ire DESCRIPCION DE LAS ESTRUCTI La estructuran tarrfaria propesta para else icio de agua fiiene cuatro clases de clien es usuaos�resideles um amiliares, r�esidenciales rnultifa iliares, ono res�tlenciales y dewagua reciclada La�estructura de--as'de alcantarillado pp esta •tamb.en tiene uatro clases de elien es: clientes residenciales ,. w unifamre_s, res;denc;ales mult;familiares no residenciales y E. r • • • LA ESTRUCTURA DE LA TARIFA DE AGUA La estructura de la tarifa de agua propuesta consta de dos componentes: un cargo fijo mensual por servicio (el "Cargo de servicios publicos de agua") y el cargo variable por consumo de agua (el "Cargo por use de agua"). Se establecerian cuatro clases de clientes: usuarios unifamiliares, multifamiliares, no residenciales y de agua reciclada. Los costos del producto se distribuirian entre ellos en funci6n del use total de agua de cada clase de cliente. Los costos del producto basico para el agua reciclada se asignarian al 100 por ciento a esos clientes. Los costos de servicios publicos se asignarian a cada clase de cliente respectiva en funci6n del tamano del medidor. Los cargos por use de agua tendrian dos niveles basados en la fuente del agua y su disponibilidad. La tarifa de Nivel 1 recuperaria el costo de la extracci6n de agua subterranea, la electricidad para producir y distribuir esa agua, y algunos otros costos. El Nivel 2 recuperaria los costos de comprar agua importada y los costos electricos para distribuir ese volumen de agua. La asignaci6n de agua en cada nivel se basarfa en la cantidad de suministro de agua disponible de cada fuente respectiva. LA ESTRUCTURA DE LA TARIFA DE ALCANTARILLADO El cargo variable por producto basico de alcantarillado y el cargo fiijo por servicio se reemplazarian por un unico cargo por servicios publicos de alcantarillado, basado en el tamano del medidor de agua y la clase de cliente. CARGOS FIJOS VS. VARIABLES LOS CARGOS FIJOS son independientes de la cantidad de agua utilizada. Cubren costos no MAS INFORMACION fluctuantes Como proyectos de capital, transmisi6n, distribuci6n, medidores y servicio. .. LOS CARGOS VARIABLES se calculan en funci6n de la cantidad de agua clue pasa a traves del medidor de un cliente. Estos cargos cubren gastos tales como agua comprada, electricidad y productos cluimicos de tratamiento. KIWA'"ICIOICS Oei 104 • <, Tarifa A�partii del A partq'.del ,,�,A,partir del Apart�r del�i,A,.partir d de>enero 1 de julib de 1 de j4116 de l,de Julio c�,e��y de Julio. de 2020 20215 2021 1-2022 NIVELI" I $3.02 $2.03 $2.17 $2.31 $2.36 $2.41 NIVEL 2•"' $3.59 $4.79 $5.13 ; $5.46 ' $5.57 $5.68 i RECICLADA $2.42 $2.15 $2.30 $2.45 $2.50 $2.55 AGUA 01 CCF=748 Galones •'Consultar tabla de asignaci6n de niveles. "' El Nivel 2 es cualquier cantidad de agua utilizada por encima de la cantidad asignada en el Nivel 1 farnano Asignacion Asignacion Ail 6nacion A3ignaclori y`: propuesta para _: propuesta propuestalpara'_ ..del "Actual ° _" ^�' `ciiente residential' "' pararcliente no dlente Y sidenc�a riedidor unifamiliar_ - resi enciaT Mu' ltifamiliar' 5/8" x 3/4" 0 - 22 CCF 0 -10.50 CCF 0 - 31.00 CCF 0 - 8.50 CCF 3/4" 0 - 22 CCF 0 -15.75 CCF 0 - 46.50 CCF 0 -12.75 CCF 1" 0 - 22 CCF 0 - 26.25 CCF i O - 77.50 CCF 0 - 21.25 CCF 1 1/2" 0 - 22 CCF 0 - 52.50 CCF 0-155.00 CCF 0 - 42.50 CCF 2" 0 - 22 CCF 0 - 84.00 CCF 0 - 248.00 CCF 0 - 68.00 CCF 3" 0 - 22 CCF i 0-183.75 CCF 0 - 542.50 CCF 0-148.75 CCF 4" 0 - 22 CCF 0 - 330.75 CCF 0 - 976.50 CCF 0 - 267.75 CCF 6" 0'- 22 CCF O - 682.50 CCF 0 - 2,015.00 CCF 0 - 552.50 CCF 8" 0 - 22 CCF 0-1,260.00 CCF I 0 - 3,720.00 CCF 0-1,020.00 CCF Tamano del -- Cargos. A partir del A partir dei A partir del A-partirdel .A.partir der - medidor Actuates 1 de ener8 1 de Julio 1 de jalio 7 de jtilio .' 1 aelulio _ - - de 2020, de. 2020 deg 2021 de 2022 - do 2023' 5/8" x 3/4" $6.95 _ $20.51 $21.94 $23.37 I-- $23.84 $24.31 ' r.._..---------- 3/4" $15.10 ---- ----L--------_ $30.76 $32.91 $35.05 $35.75 --� $36.47 j 1" $28.65 J----i $51.27 $54.85 $58.42 $ $59.59 $60.78 11/2" $44.93 --_--�__L--�_.._1 $102.53 $109.70 $116.83 $119.17 $121.55 2" $82.90 ---- = L-= __ $164.04 i $175.52 $186.93 ---- -------- �___ -__! $190.67 ----- T=== '194.48 3" $137.15 $358.84 $383.96 $408.92 $417.10 1 $425.44 ---------------- 4" $272.78 --- $645.91 $691.12 J -- - $750.76 $765.78 j - - _-_.-I -$736.04 6" $435.53 $1,332.83 $1,426.12 $1,518.82 . $1,549.20 ; $1,580.18 f----- - 8" $435.53 I $2,460.60 $2,632.84 $2,803.97 _1- 1 $2,860.05 $2,917.25 Cargo residential multifamiliar actual por unidad; $4.75 - RESIDENCIAL UNIFAMILIAR Tamano del modidor " • Cargos Actuales A partir del, 1 de enero de.2D20 A partir'del 1 de julio de 2020 A partir del 1 de jullo- do 2o21 A partir del Tde julio de 2022 A partir del 7 de julio do 2023 5/8" x 3/4" $5.60 $5.88 $6.41 $6.99 $7.62 3/4" $7.93 $8.33 $9.08 $9.90 $10.79 1" $12.59 $13.22 $14.41 $15.71 $17.12 ------------ $168+ 11/2FF (Cantidad $24.23 $25.44 $27.73 $30.23 $32.95 de CCF x - --- -i $40.11 ---------- $43.72 - - 2„ 0.426)--$38.20_ _ -$47.65 3" $82.43 $86.55 $94.34 $102 83 $112.08 ------ 4" 0 CCF - = 748 I --- - $147.62 $155.00 $168.95 $184.16 $200.73 -- --_. - 9alones) -- 6" $303.61 1 $318.79 $347.48 $378.75 j $412.84 8" $559.71 $587.70 $640.59 $698.24 $761.08 10" $885.66 $929.94 $1,013.63 $1,104.86 $1,204.30 Q. RESIDENCIAL MULTIFAMILIAR Tamatio del Cargos A party del A partir del A partir,del A partir del A partir de medidor Actuales 1 de ener6 1 de julio'de 1 de -Julio 1 de Julio Tde juI[o - de 2020 2020 tle. 2021 d1e 2022 de:2023 5/8" x 3/4" $8.40 $8.82 $9.61-� $10.47 I $11.41 3/4" $1.68 + $12.12 $12.73 $13.88 $15.13 $16.49 It, $19.57 $2�.55 $22.40 $24.42 $26.62 11/2" (Cantidad $38.20 $40.11 $43.72 $47.65 $51.94 de CCF x 0.426) -1-�L 6$69.30 $75.54$82.342" 5 - 3" $131.32 $137.89 $150.30 $163.83 $178.57 (1 CCF = 748 4" $235.63 $24Z41 ---- $269.68 $293.95 $320.41 - galones) -- .-- - I-- 1 $485.21 $509.47 $555.32 $605.30 $659.78 6" --'- 8" $894.97 $939.72 $1,024.29 $1,116.48 $1,216.96 10" $1,416.49 $1,487.31 $1,621.17 $1,767.08 $1,926.12 ATA Loll fell• NO RESIbDENCIAL(j • Ifte f� Tamano del Cargos A partir del: A partir del A partir del _ A parnr,, del , A P artir del - .. medidor Actuales 1 de enero 1 de juliode 1 de Julio =1 de Julio fi:'de Julio, de 202O 2020 de. 2021 de.2022 de 2023 5/8" x 3/4" $9.33 $9.80 $10.68 $11.64 $12.69 3/4" $13.52 $14.20 $15.48 $16_87 $18.39 1" I $21.90 $23.00 $25.07 I- $27.33 $29.79 $1.68+ `- ----. -�-�--- 11/2" (Cantidad $42.85 $44.99 , $49.04 $53.45 $58.26 -- --- 2" de CCF x - -- -- $68.00 - --�.__ $71.40 ._ $77.83 $84.83- 2 46 0.426) 3" $147.62 $155.00 $168.95 $184.16 $200.73 4" (1 CCF = 748 ----- $264.96 - $278.21 $303.25 - T--- $330.54 $360.29 -- - -- galones) - -----�-- - - ---- 6" $545.74 $573.03 $624.60 $680.81 $742.08 all $1,006.73 $1,057.07 I $1,152.21 $1,255.91 $1,368.94 101, $1,593.43 $1,673.10 $1,823.68 $1,987.81 $2,166.71 $26.06 + J$55.66 Clientes FOG (Cantidad de CCF x $40.92 $42.97 1 $46.84 $51.06 0.426) W a in g 12 Q Q rG a cnCL W � avi CLz 06 a 101 LV Z O Z D NW LL Q J W ir O Z O ix u I sir dung va ntrfrc thoat cua Thanh pho S chinh ve- dich vu cap ntrbc, dich vu thoat 'o'i co' cau mtrc gia ntrbc anta Ana va nhirng dieu ntxbc va Ig phf tieu thu. Hoi Bong thanh pho Santa Ana se to chirc mot buoi dieu tran tong chung vao ngay gia, die diem neu tren de duy0t qua lich trinh de nghi tang mirc gia ntrac sir dung va ntrac thoat cua Thanh pho trong nam nam. Neu duet thong qua, m(rc gia va le phi gia tang se c6 higu Ivc vao ngay 1 thing 7, 2019; 1 thing 7, 2020; 1 thing 7, 2021; 1 thing 7, 2022; 1 thing 7, 2023, theo thin tw. Buoi dieu tran cling chung dvac thuc hion then Dieu XIII D, Muc 6 (c6n gqi la "Lust 218") cua Hien phap California. Thong bao nay dugc giri den tat ca cac sa hiru chu daft dai va khach hang c6 nhDng to dat dang nhon dich vu nu'ac sir dung v6/ hoot dich vu thoat ntrac qua Thanh pho Santa Ana va It, nhOng ngtrai se bi anh htrang bai sv thay doi mtrc gia ntrac va Ig phi nay. Moi thanh phan tong chung duet mai them du' buoi dieu tran cling chung nay. Ngoai ra, theo Luat Tieu bang California, tat ca cac sa hDu chu dat dai va khach hang cua Thanh pho hien c6 trong ho sa sir dung dich vu c6 quyen giri thtr viet tren giay chong doi nhirng thay doi ve mirc gia dtrgc de nghi. Moi mot 16 dat chi dtrgc mot thtr chong dci. Vui Ibng xem phan "TSi tham dtr bang cach nao?" trong tai lieu nay de dtrgc htybng din ve cach viet thtr chinh thtrc tren giay chung doi nhirng thay doi da de nghi. Quy vi cOng c6 the tnrc tiep tham du buoi dieu tran cbng chung nay vao ngay gia neu tren. Thong tin chi tiet, gom ca tong cu trac tfnh mirc gia, dtrac trinh bay tren trang mang: www.Santa-Ana.org/pw/Water-andSewer. Thanh pho Santa Ana quyet tam cung cap dich vu nuybc sir dung va thoat nLrbc tin ttrang va gia ca phai chang cho khach hang vai mirc gia kh6ng vu(yt qua chi phi dich vu nhupng cung luc van duy tri co, s& ha tang nw6c va cong ranh thiet yeu. Thanh pho da tuyen mot co van de, tam nhan do, c lap de xac Binh chi phi dich vu nay. Thanh pho Santa Ana dang de nghi mot so sira doi doi v(ri co, cau mivc gia nwac sir dung va nwbc thoat. Khach hang nao c6 the bi anh hudmg bai nhirng thay doi nay nhan dugc thong bao nay. Chung t6i mong qug khach hang d6ng g6p y kien nham giOp H¢i dxng thanh-pho quyet dinh tot dap cho Thanh pho Santa Ana va khach; hang: 1-C, PC LICH TRINH MU'C GIA SAP HtT HAN Lich trinh mOc gia nam nam hign tai cua Thanh pho da dugc dtra ra tir nam 2014. Do d6 Thanh pho can mot lich trinh gia mdei de bao dam la Thanh pho, qua sq, sir dung cac thong le tot nhat trong nganh va dap Ung mqi d6i h6i phap ly, thu lai dLrgc chi phi cung cap dich vu mot cach dong deu va c6ng bang. HE TH6NG CO M( Thanh pho Santa Ana hien c6 m$t he thong du6°ng ong va co, sa phirc tap de cung cap dich vu ntrbc sir dung va dich vu thoat nuCrc an town, tin tu&ng cho khach hang. Vi ho thong c6ng ngay c6ng cQ va A mu -on tiep tuc hoat do, ng m§t cach hoan hao va mang Iqi ich den cho khach hang, Thanh pho can them nguon tai chanh de dau tv lai kip thai vao ca sa ha tang quan trQng. TINH TRANG TAI CHANH S& Cong chinh cua Thanh pho Santa Ana phai c6 du doanh thu de dap Ong cac nhu cau tai chanh cua co, quan, gom ca thanh town ng trai phieu va du trO tien mat de dugc xep hang tin dung cao. TOI . e . e Thanh pho Santa Ana han hanh chao don str tham gia va d6ng g6p Y' kien cua quy vj trong suot tien trinh nay trong Ift Hpi Bong thanh pho ciru xet�nh&ng thay doi dwyc giai thich trongaTh6ng bao nay. Neu quy vi co dieu gi thac mac hoac c6 nhan xet gi ve mirc gia de nghj, quy vi c6 the: GOI DIEN THOAI HOAC TRU'C TItP ON vAN PHdNG. Quy vi ° c6 the xem thong tin ve cong trinh nghien ciru ve chi phi djch v4 va nhirng thong tin khac ve cac dieu chinh va tang le phi de nghj �© tai S& C6ng chinh Thanh pho va tren trang mang cua chung t6i: i www.Santa-Ana.org/pw[Water-and-Sewer. GU'I THU . Quy vi c6 the girl thu chong doi ve The City of Santa Ana, �Ldd Attention: City Clerk, P.O. Box 1988, M31, Santa Ana, CA 92701, hoac tan tay mang den t6a thj tr rang City Hall, 20 Civic Center Plaza, Santa Ana. THAM DV BU6I DIItU TRAN LONG CHUNG: Thu chong d`oi viet tren giay cong c6 the duge n6p trong Buoi dieu tran cong chung, ngay XX, IGc 5 gia 45 chieu tai Nghi trtrang Hqi Bong thanh pho tai 20 Civic Center Plaza, Santa Ana, CA 92701. Tat ca mpi ngtrai trong cong dong se c6 co hoi phat bieu va trinh bay lien quan den de nghj dieu chinh mirc gia ntrac, ntrbc tai sir dang va ntr(vc thoat trong Buoi dieu tran cong chung; tuy nhien, chi c6 thtr chong do`i viet tren giay chinh thirc m&i dtrac tinh vao trtrang hgp da so chong doll. Thu chong doi viet tren giay phai dtrvc nhan trtrbc khi Buoi dieu tran cling chung ket th0c. bbb-44 M® TA CO' CAU IV UC GIA Cu cau mft gia de nghi cho nubc six dung gom cb hai thank phan le phi dich:,,, ' vu co dinh hang-thang (Le", phf,ti6n fch nuac"),va IQ phiaieu thu nuac that'; doi ("Le phiso,dung"nuac').,Bon hang khach hang du'Oc,thanh lap; Nguau- dung nuac thuoc mot gia dinh rieng, nhieu gia,dinh ca sakhong,phai nha a, va nuft tai su dung. Chi phf'ti6n nghi se dugcphan phogarong,nhng nay can cty tren tong so luang`ntrbc roof hang khach hang su dung` Chi phf' tier fch cho nuac fai six dung se dug0% c phan phoi 10cho kkhach'hang hang nay. Chi phf tien fch se dtvac phan phoi cho moi hang khach hang then ca cua d6ng`116. 'a j c0 CAu MOC GIA Nutt SCF DUNG Ca cau mirc gia de nghi cho nuac sir dung gom co hai thanh ph 'an: le phi dich vu co dinh hang thang ("Le phf thin fch nuac") va Ig phi tieu thy nuac thay doi ("L@ phf sir dung nubd'). Bon hang khach hang duryc thanh lap- Ngubi dung nuthuoc mot gia dmh rieng, nhieu gia Binh, ca sa khong phai nha a va nuac tai sir dung. Chi phf tion nghi se dugc phan phoi trong nhirng hang nay can cir i tr@n tong so luang nuac moi hang khach hang sir dung. Chi phf tion fch cho nuac taf sir dung se dugc phan phoi 100% cho khach hang trong hang nay. Chi phf tien fch se duac phan phoi cho moi hang khach hang theo cry cua dong ho. GO Ig phf sir dung nuac se c6 hai bec tuy theo nguon nubc va luang nuac san co. Mirc gia Cap 1 ap dung de thu lai chi phf khai that nubc ngam, chi phf dien f de san xuat va phan phoi nubc do va mot so chi phi khac. Mirc gia Cap 2 ap i dung de thu lai chi phf mua nuac nhep vao tir ben ngoaf. chi phf dign cho viec j phan phoi khoi luang nuac d6. Viec phan phoi nuac cho moi cap se can c& tren moc cung cap nuac co san tip moi nguon twang Ong. CO' CAu MIPC GIA NU(C THOAT Gia le phf tion fch cho nuac tho6t thay doi v6 gia le phi dich vu co dinh se dugc thay the vbi chi mot gia to phf tion fch nuac tho6t co dinh, can cir theo ca cua dong ho nubc v6 hang khach hang. GiA LE PHI C • D • VCYl THAY9 • i I GIA LE PHI c6 DINH dqc lap vbi so lugng nuac sir dung. Nhirng le phf IDEBI'T THEM nay dung de thanh town cac chi phf •NG TIN co dinh, khong that' doi nhu cat dyv an von, tai nuac, phan phoi, long ho i1 i _ _ nuac va dich vu. GIA LE PHI THAY DOI dugc tfnh theocdaqu� •timhieI so luang nuac di ngang qua long ho I + i -thay d6i trong cua khach h6ng. Nhirng chi phi nay dung de thanh town cho nhCpng chi phf ftrcyng Ong to trang nhu tien mua nuac, dign va h6a chat lot nuac. BE NGHI P kich-thtrroc .: Le phi Hi$u Ivc ngay HiWvcngay Hieu,likcngay Hi6u IvcngSiy "Mu It c,ngay mct hies tai `` 1 giang 1-,.,` 1 thing 7, 1 thing 7, 1.,thang 7, ;�4 ihdng 7, - 2020 2020 2021.. - 2022 2023: .. 518" x 3/4" $6.95 I $20.51 $21.94 I $23 37 $23.84 $24.31 3/4" $15.10 $30.76 $32.91 $35.05 $35.75 $36.47 1" $28.65 $51.27 $54.85 $56.42 $59.59 ? -$60.78 11/2" $44.93 $102.53 $109.70 $116.83 $119.17 $121.55 - - -- 2" I $82.90 --- -- ( $164.04 ] $175.52 -- $186.93 $190.67 -- ---- j $194.48 -- ----- 3" $137.15 $358.84 $383.96 $408.92 $417.10 $425.44 - -- --_-� 4" ----- $272.78 $645.91 ---- $691-12 $736.04 $750.76 $765.78 I _ - ---- -� $1,426.12 ---.- -�-- -- $1,518.82 $1,549.20 -,--: $1,580.18 6" $435.53 $1,332.83 l $435.53 $2,460.60 $2,632.84 $2,803.97 $2,860.05 $2,917.25 -8" -1 -- - -- GM 10 phi hien tai cOa moi dun vi cua khu nha a nhlhu gia dinh: $4.75 NHA TU NHAN MOT GIA DINH kich thu ft Le phi Hiau Ivc ngay ; Hlev l4c ngay Hiou f vc ngay Higtt IUc ngay Hiog ltrc Noy hign tai ' 1 giang 1, '. l th3ng.7, 1 66ng 7, 1 tfi5ng 2020• 202n 2621 2022 ` 2023 5/8" x 314" 3/4" 1" 1 1/2" - 2• - - 3" -4„ -- - 6" 10" $5.60 $5.88 $6.41 $6.99 $7.62 j $7.93 $8.33 $9.08 $9.90 $10.79 $12.59 I $13.22 $14.41 $15.71 - $17.12 $1.68 + _ __ - (So of $24.23 $25.44 $27.73 $30.23 $32.95 CCF x 0.426) F- - --- $38.20A $40.11 I- $43.72_I $47.65 - $51.94_- r $82.43 $86.55 $94.34 $102.83 $112.08 (1 CCF = 748 $147 62 T $155.00 $168.95 $184.16 $200.73 ga-long) -------1 -- -'-- - I -- : $303.61 $318.79 $347.48 $378.75 $412.84 r---j $559.71 , --- $587.70 $640.- 9 $698 24 - $761.08 $885.66 $929.94 $1,013.63 $1,104.86 $1,204.30 KHU NHA 6 NHIEU GIA -DINH kich-thttl&c - LO phi Higu hyc ngay Hint Itecng6y Higu Itvc ngay Higuhrc ngay HiOu Itrc ngay mkt hign t0 i gieng 1, 7 Thing 7, 1 [hang 7, 1 thing 7, 1 thing 7, 2020 2020 2021. 2022 2023 518" x 3/4" $8.40 J $8.82 $9.61 $10.47 $11.41 3/4" _I $12.12 $12.73 $13.88 $15.13 $16.49 1" $1.68 + (So of CCF x0.426) (1 CCF I $19.57 $20.55 $22.40 $24.42 $26.62 1 1/2" $ 20 $40.11 $43.72 $47.65 $51.94 2" $60.55 $63.58 $69.30_L $75.54 $82_34 $131.32 $137.89 $150.30 $163.83 $178.57� 3" 4 = 748 ga-long) --- $235.63 $247.41 $269.68 $293.95 $320.41 6" $485.21 $509.47 $555.32 $605.30 $659.78 $894.97 $939.72 1 $1,024.29 $1,116.46 1 $1,216.96 loll $1,416.49 } $1,487.31 $1,621.17 $1,767.08 $1,926.12 • • n�F•'' CO' SO'cKHONG VAI NHA C�' �Por Ail/J_l kich thuft 'te phi 'Hieu IUc ngay HiOu fqc ngay H!� Iva ngay Hieu lun ngay HiQu luc nga7 met hign to Lgieng 1,` 1 thing 7. 1 thing 7; 1 thing 7,, (1 thing 7; 2020 2020 2021 2022. 2623 5/8" x 3/4" $9.33 $9.80 $10.68 $11.64 $12.69 314" $13.52 $14.20 $15.48 $16.87 $18.39 1" $21.90 �$23 00 3_�-L----T------ $25.07 l $27.33 $29.79 ----- $1.68+ .-_I _- 1 1/2" (So of $42.85 $44.99 $49.04 $53.45 $58.26 - - 2 CCF x 0.426) $68.00 $71.40 - $77.83 ---- $84.83 $92.46 - 3 --- (1 CCF 1_ $147.62 $155.00 $168.95 $184.16 $200.73 4" = 748 $264.96 $278.21 $303.25 ---- $330.54 $360.29 - ---- 6" ga-Tong) ---� $545.74 $573.03 --� $624.60 -- $680.81 $742.08 8" $1,006.73 $1,057.07 $1,152.21 $1,255.91 $1,368.94 10" $1,593.43 $1,673.10 $1,823.68 $1,987.81 $2,166.71 Khdch hang $2s.os + So CCF x (^ $40.92 $42.97 $46.84 $51.06 $55.66 FOG A- W Q U U) F Q K Q Q Q W as w F-- muS az a=i U) Z � W U W v J 5 V p CD m W U o W a z �N C m Q P R V ' F- W W s V c Q � c � o i Z C1 y O U o. --._ 65B--49 H N m a d c d u V 2 'v 0 N m �o E^ m N L 01 V Q _u C_ oa V m �+ C 'v vi REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: SEPTEMBER 17, 2019 TITLE: PUBLIC HEARING — APPROVE AN UPDATE TO THE CITIZEN PARTICIPATION PLAN FOR HOME, ESG AND CDBG PROGRAMS (STRATEGIC PLAN NO 5, 1) Cl-rY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1� Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Authorize the submission of the Citizen Participation Plan to the U.S. Department of Housing and Urban Development. COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION RECOMMENDATION At its special meeting on August 14, 2019, the Community Redevelopment and Housing Commission recommended that the City Council authorize submission of the Citizen Participation Plan to the United States Department of Housing and Urban Development by a vote of 7:0 (Frazier, Tardif absent). DISCUSSION Each year, the City of Santa Ana receives funding from various formula grant allocation programs administered by the United States Department of Housing and Urban Development (HUD). These federal grant funds provide valuable services to the community for affordable and supportive housing, community development, public services, and economic development. The programs include the Community Development Block Grant Program (CDBG), HOME Investment Partnerships Program (HOME), and Emergency Solutions Grants Program (ESG). In order to receive these federal grant allocations, the City must submit to HUD its Five -Year Consolidated Plan, a five-year comprehensive planning document and application for all of these programs. It describes our strategies to meet the needs of the community and identifies resources and programs that can be used to address them. As part of this planning process, the City is required to have a Citizen Participation Plan as a component of the Consolidated Plan (Exhibit 1). The Citizen Participation Plan describes the City's policies and procedures for community participation in the planning, implementation, and evaluation of the CDBG, HOME, 75A-1 Update to the Citizen Participation Plan September 17, 2019 Page 2 and ESG programs. The current version of the Citizen Participation Plan was last updated/amended in 2014. This update to the Citizen Participation Plan was drafted with the assistance of the City's consultant, MDG Associates. This update is an overhaul of the document and provides a complete revision to the City's current Citizen Participation plan adopted in 2014. This update is much more thorough than the document before and describes in significant detail the City's policies and procedures for community participation. This update ensures that all of the applicable federal regulations and policies are correctly referenced and properly implemented for the Citizen Participation Plan. The federal regulations for HUD require that the draft Citizen Participation Plan be made available for a 30-day public review and comment period. On July 23 and on August 30, 2019, a public notice was published in the Orange County Register, La Opinion, and Nguoi Viet News indicating that the draft Citizen Participation Plan would be available for public review and comment from August 12 through September 12, 2019 and that Public Hearings would be held on August 14 and September 17, 2019. In accordance with the federal regulations, all neighboring jurisdictions were also informed of the draft's availability for review. All comments received will be included in the final document, which will be submitted to HUD. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #5 — Community Health, Livability, Engagement & Sustainability, Objective #1 (Establish a comprehensive community engagement initiative to expand access to information and create opportunities for stakeholders to play an active role in discussing public policy and setting priorities). FISCAL IMPACT There is no fiscal impact associated with this action. Steven A. Mendoza Executive Director Community Development Agency Exhibit: 1. Citizen Participation Plan 75A-2 EXHIBIT 1 U.S. Department of Housing and Urban Development (HUD) Community Planning and Development Grant Programs September 17, 2019 Community Development Agency, 20 Civic Center Plaza, 6th Floor M D G Santa Ana, CA 92702 A$SOCIA,Es.I,C (714) 647-5360 75A-3 100:1-4 City of Santa Ana Citizen Participation Plan Table of Contents A. Encouraging Citizen Participation.........................................................................................................2 B. Citizen Participation Plan........................................................................................................................3 1. Plan Development................................................................................................................................3 2. Citizen Participation Plan Amendments..........................................................................................4 C. Five -Year Consolidated Plan..................................................................................................................5 1. Plan Development................................................................................................................................5 2. Consolidated Plan Amendments......................................................................................................8 D. Action Plan.................................................................................................................................................9 1. Plan Development................................................................................................................................9 2. Action Plan Amendments.................................................................................................................10 E. Consolidated Annual Performance and Evaluation Report (CAPER)..........................................12 1. Report Development.........................................................................................................................12 F. Analysis of Impediments or Assessment of Fair Housing (AI or AFH)..............................................13 1. AI or AFH Development.....................................................................................................................13 2. Al or AFH Amendments.....................................................................................................................14 G. Public Hearings, Notification and Access..........................................................................................15 1. Public Hearings/Meetings.................................................................................................................15 2. Documents for Public Review..........................................................................................................16 3. Access to Meetings and Hearings...................................................................................................17 4. Access to Consolidated Plan Documents and Records............................................................18 H. Technical Assistance..............................................................................................................................18 I. Comments and Complaints.................................................................................................................19 J. Appeals.....................................................................................................................................................19 K. CDBG Disaster Recovery (CDBG-DR).................................................................................................19 L. Anti -Displacement and Relocation.....................................................................................................20 1. Persons Not Eligible for Assistance...................................................................................................22 2. Anti -Displacement Policy..................................................................................................................23 3. Displacement Assistance..................................................................................................................23 4. One -For -One Replacement Dwelling Units...................................................................................24 5. Decent, Safe and Sanitary Dwelling........................................................................................... 25 M. Real Property Policies.............................................................................................................................25 1. Use of Real Property...........................................................................................................................25 2. Real Property Acquisition..................................................................................................................26 3. Eligible Activities..................................................................................................................................27 4. Environmental Review Process (24 CFR Part 58)...........................................................................27 City of Santa Ana Citizen Participation Plan I September 2019 Page TOC 75A-4 EXHIBIT 1 CITIZEN PARTICIPATION PLAN As required by the U.S. Department of Housing and Urban Development (HUD) regulations found at 24 CFR 91.105, this Citizen Participation Plan sets forth the City of Santa Ana's (City) policies and procedures for providing citizens and other interested parties with opportunities to participate in an advisory role in the planning, implementation, and evaluation of the Community Development Block Grant (CDBG) HOME Investment Partnerships (HOME), and Emergency Solutions Grant (ESG) programs. The purpose of the CDBG program is the provision of decent housing, a suitable living environment, and expanded economic opportunities for low- and moderate -income residents earning less than 80 percent of the Area Median income (AMI), or in predominately low- and moderate -income neighborhoods where at least 51 percent of the households are low and moderate -income households. The purpose of the HOME program is to produce new and preserve existing affordable housing opportunities. The purpose of the ESG program is to assist individuals and families quickly regain stability in permanent housing after experiencing a housing crisis or homelessness. As a recipient of CDBG, HOME, and ESG funds, the City is required to produce the following Consolidated Plan Documents: Citizen Participation Plan - the City's policies and procedures for community participation in the planning, implementation, and evaluation of the CDBG, HOME, and ESG programs. Analysis of Impediments to Fair Housing Choice or Assessment of Fair Housing (Al or AFH) - a five-year plan completed by the City individually or as in the case of Santa Ana, as part of a local consortium of other HUD grantees pursuant to HUD guidance for the evaluation of local housing conditions, economics, policies and practices and the extent to which these factors impact the range of housing choices and opportunities available to all residents in an environment free from discrimination. Consolidated Plan - a five-year plan that documents the City's housing and community development needs, outlines strategies to address those needs and identifies proposed program accomplishments. Action Plan - an annual plan that describes specific CDBG, HOME, and ESG projects and activities that will be undertaken over the course of the program year, which runs from July 1 to June 30. City of Santa Ana Citizen Participation Plan I September 2019 Page 1 75A-5 EXHIBIT 1 • Consolidated Annual Performance and Evaluation Report (CAPER) - an annual report that evaluates the City's accomplishments and use of CDBG funds. The HUD requirements for citizen participation do not restrict the responsibility or authority of the City for the development and execution of the Consolidated Plan documents or the CDBG, HOME, and ESG programs, but rather facilitate citizen access to, and engagement with the CDBG, HOME, and ESG programs. In accordance with the regulations, the minimum annual number of public hearings before the Santa Ana City Council and Community Redevelopment and Housing Commission at which citizens may express their views concerning the Consolidated Plan Documents shall be two (2) public hearings. These public hearings shall occur at two different points during the program year, as directed by the Executive Director of Community Development. Additional public hearings and comment periods may be held in the development of the AFH or Al and the Consolidated Plan for 2020-2024 and in the event of a substantial amendment to the Citizen Participation Plan, Consolidated Plan, or Action Plan becomes necessary as described later in this document. The City, at its discretion, may conduct additional outreach, public meetings or public hearings as necessary to foster citizen access and engagement. A. Encouraging Citizen Participation The City encourages citizens to participate in the development of the Citizen Participation Plan, Consolidated Plan, AFH or Al, Action Plan, and CAPER. The City encourages participation by low- and moderate -income persons, particularly those living in slum and blighted areas (if any such areas are formally designated) and in areas where CDBG funds are proposed to be used, and by residents of predominantly low- and moderate -income neighborhoods. Low- and moderate -income neighborhoods are defined as those in which 51 percent of the residents have incomes at or below 80 percent of area median income. The City shall also take appropriate actions to encourage the participation of all its citizens, including minorities and non-English speaking persons, as well as persons with disabilities. The City shall make a concerted effort to notify and encourage the participation of citizens, local and regional institutions, the local Continuum of Care organization addressing homelessness, and public and private organizations including businesses, developers, nonprofit organizations, philanthropic organizations, community -based and faith -based organizations, broadband internet service providers, organizations engaged in narrowing the digital divide, agencies whose primary responsibilities include the management of flood prone areas, public land or water resources, emergency management agencies, state and local health service providers, social service providers, fair housing organizations, state and local governments, public housing authorities, affordable housing developers, businesses, community and faith based organizations, and other stakeholders in the amendment of the Citizen Participation Plan or the development of the Al or AFH, Consolidated Plan, or Action Plans through mailings (including electronic mailings), online postings and public notices in the newspaper. City of Santa Ana Citizen Participation Plan I September 2019 Page 2 75A-6 AMI1 1 The City may also explore alternative public involvement techniques and quantitative ways to measure efforts that encourage citizen participation in a shared vision for change in communities and neighborhoods, and the review of program performance as directed by the Executive Director of Community Development. All communication regarding the Citizen Participation Plan and the Consolidated Plan documents should be directed to: City of Santa Ana Community Development Agency Attn: Executive Director of Community Development 20 Civic Center Plaza, 6ih Floor Santa Ana, CA 92702 (714) 647-5360 B. Citizen Participation Plan The following describes the process and procedures related to the development of the Citizen Participation Plan. 1. Plan Development The City's Citizen Participation Plan development procedures are outlined below. a. Plan Considerations As a part of the Citizen Participation Plan process, and prior to the adoption of the Consolidated Plan, the City shall make available the information required by HUD. This information shall be made available to citizens, public agencies, and other interested parties. b. Plan Review and Comment The draft Citizen Participation Plan shall be made available for public review for a 30-day period. The Citizen Participation Plan shall be provided in a format accessible to persons with disabilities upon request. Such formats may include, but are not limited to those providing oral, Braille, electronic or large print versions of the plan to those visually impaired and delivering copies to those who are homebound. The Citizen Participation Plan shall encourage comment and participation by minorities and non-English speakers. Publication of the availability of the draft plan shall be in accordance with the City's adopted Limited English Proficiency (LEP) Plan. Written comments shall be accepted by the Executive Director of Community Development during the public review period. A summary of all written comments and those received during the public hearing as well as the City's responses shall be attached to the Citizen Participation Plan prior to submission to HUD. City of Santa Ana Citizen Participation Plan I September 2019 Page 3 75A-7 EXHIBIT 1 c. Public Hearing The City shall conduct a public hearing or meeting before the Community Redevelopment and Housing Commission (or a similar standing City Commission) to accept public comments on the draft Citizen Participation Plan, however final recommendations will be approved by the City Council. The City Council may approve or reject the Citizen Participation Plan, or approve the plan with modifications. d. Submittal to HUD The Citizen Participation Plan shall be approved as a stand-alone document. The City shall provide HUD with copies of the approved document, a summary of all written comments and those received during the public hearing as well as the City's responses and proof of compliance with the minimum 30-day public review and comment period requirement. A summary of any comments or views not accepted and the reasons therefore shall be included. 2. Citizen Participation Plan Amendments The City shall follow the following procedure to amend the Citizen Participation Plan, as necessary: a. Amendment Considerations The City shall amend the Citizen Participation Plan, as necessary, to ensure adequate engagement and involvement of the public in making decisions related to the programs and documents governed by 24 CFR Part 91. Formal amendment of the Citizen Participation Plan may be required should a provision of the Citizen Participation Plan be found by the City to conflict with HUD regulations. b. Public Review and Comment Amendments to the Citizen Participation Plan shall be made available for public review for a 30-day period. A public hearing shall be conducted so that citizens may express their views. Written comments shall be accepted by the Executive Director of Community Development during the public review period. A summary of all written comments and those received during the public hearing as well as the City's responses shall be attached to the amended Citizen Participation Plan prior to submission to HUD. Minor edits to the plan, such as updating contact information, will not constitute a "Substantial Amendment", and therefore, will not be released for public review and comment. Copies shall be made available following the process described in Section G of this document. City of Santa Ana Citizen Participation Plan I September 2019 Page 4 75A-8 EXHIBIT 1 c. Public Hearina The City shall conduct a public hearing to review and accept public comments on the draft amendment to the Citizen Participation Plan. d. Submittal to HUD A copy of the Citizen Participation Plan, including a summary of all written comments and those received during the public hearing as well as the City's responses and proof of compliance with the minimum 30-day public review and comment period requirement shall be submitted to HUD for their records. A summary of any comments or views not accepted and the reasons therefore shall be supplied to HUD as applicable. C. Five -Year Consolidated Plan The following paragraphs describe the policies and procedures for the development of the Five -Year Consolidated Plan. To comply with 24 CFR Part 91.105(b), the information supplied in the draft Consolidated Plan for public review shall include: The amount of assistance the City expects to receive (grant funds and program income); The range of activities that may be undertaken; and The estimated amount of funding that will benefit low- and moderate -income persons. The City shall also provide an assessment of community development and housing needs, identify short term and long-term community development objectives directed toward the provision of decent housing and the expansion of economic opportunities primarily for persons of low- and moderate -income. Additionally, the City shall attest to its compliance with the acquisition and relocation requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, and implementing regulations at 49 CFR 24, as effectuated by the City's adopted Residential Anti -Displacement and Relocation Assistance Plan, as required under Section 104(d) of the Housing and Community Development Act of 1974, as amended. Persons displaced as a result of HUD -assisted activities, whether implemented by the City or by others, shall receive relocation benefits as required under Federal Law. The City shall make this information available in the Consolidated Plan published for public review and comment. 1. Plan Development The City encourages the participation of residents and stakeholders in the development of the Consolidated Plan. The City shall implement the following procedures in the development and adoption of the Consolidated Plan: City of Santa Ana Page 5 Citizen Participation Plan I September 2019 75A-9 EXHIBIT 1 a. Plan Considerations The City will make a concerted effort to notify and encourage the participation of citizens, local and regional institutions, the local Continuum of Care organization addressing homelessness, and public and private organizations including businesses, developers, nonprofit organizations, philanthropic organizations, community -based and faith -based organizations, broadband internet service providers, organizations engaged in narrowing the digital divide, agencies whose primary responsibilities include the management of flood prone areas, public land or water resources, emergency management agencies, state and local health service providers, social service providers, fair housing organizations, state and local governments, public housing authorities, affordable housing developers, businesses, community and faith based organizations, and other stakeholders in the development of the Consolidated Plan through mailings (including electronic mailings), online postings and public notices in the newspaper. When preparing the portion of the Consolidated Plan describing the City's homeless strategy and the resources available to address the needs of homeless persons (particularly chronically homeless individuals and families, families with children, veterans and their families, and unaccompanied youth) and persons at risk of homelessness, the jurisdiction shall consult with: • The Orange County Continuum of Care (CoC); • Public and private agencies that address housing, health, social service, victim services, employment, or education needs of low-income individuals and families; homeless individuals and families, including homeless veterans; youth; and/or other persons with special needs; • Publicly funded institutions and systems of care that may discharge persons into homelessness (such as health-care facilities, mental health facilities, foster care and other youth facilities, and corrections programs and institutions); and • Business and civic leaders. When preparing the portion of the Consolidated Plan concerning lead -based paint hazards, the City shall consult with state or local health and child welfare agencies and examine existing data related to lead -based paint hazards and poisonings, including health department data on the addresses of housing units in which children have been identified as lead poisoned. When preparing the description of priority non -housing community development needs, the City shall notify adjacent units of general local government, to the extent practicable. The non -housing community development plan must be submitted to the State of California and to the County of Orange. The City shall consult with adjacent units of general local government, including local government agencies with metropolitan -wide planning responsibilities to identify solutions to problems of a regional nature. City of Santa Ana Citizen Participation Plan I September 2019 Page 6 75A-10 The City shall consult with the Housing Authority of the City of Santa Ana and the Orange County Housing Authority concerning public housing needs and planned programs and activities. As recipients of Emergency Solutions Grant (ESG) funds, the City shall consult with the Continuum of Care in determining how to allocate its ESG grant for eligible activities; in developing the performance standards for, and evaluating the outcomes of, projects and activities assisted by ESG funds; and in developing funding, policies, and procedures for the operation and administration of the Homeless Management Information System (HMIS). The City shall employ, at its discretion, a variety of methods to solicit input from these persons/service providers/agencies. These methods include, but are not limited to telephone or personal interviews, focus groups, surveys, internet-based feedback and consultation workshops. b. Plan Review and Comment The complete, draft Consolidated Plan shall be made available for public review for a 30-day period. The draft Consolidated Plan shall be provided in a format accessible to persons with disabilities upon request. Such formats may include, but are not limited to providing oral, Braille, electronic or large print versions of the plan to those visually impaired and delivering copies to those who are homebound. The City shall encourage comment and participation by minorities and non- English speakers. Publication of the availability of the draft Consolidated Plan shall be in accordance with the City's adopted LEP Plan. The City shall encourage comment and participation by low- and moderate - income residents, especially those living in low- and moderate -income neighborhoods, in areas where CDBG funds are proposed to be used and residents of public and assisted housing. Activities to encourage participation may include, but are not limited to, advertising publication of the Consolidated Plan in target areas, hosting community meetings in target areas, and making copies of the Consolidated Plan available in these neighborhoods. Copies shall be made available following the process described in Section G of this document. Written comments shall be accepted by the Executive Director of Community Development during the public review period. A summary of all written comments and those received during the public hearing as well as the City's responses shall be attached to the Consolidated Plan prior to submission to HUD. c. Public Hearina The City shall conduct a public hearing to accept public comments on the draft Consolidated Plan. Section G describes the process for publishing notice for and conducting public hearings. City of Santa Ana Citizen Participation Plan I September 2019 Page 7 75A-11 EXHIBIT 1 d. Submittal to HUD The Consolidated Plan shall be submitted to HUD with a summary of all written comments and those received during the public hearing as well as the City's responses and proof of compliance with the minimum 30-day public review and comment period requirement. A summary of any comments or views not accepted and the reasons therefore shall be supplied to HUD as applicable. The Consolidated Plan shall be submitted to HUD 45 days before the program year pursuant to regulations, or at such later date as prescribed by HUD. 2. Consolidated Plan Amendments The City shall follow the following procedure to complete substantial or minor amendments to the Consolidated Plan, as necessary: a. Amendment Considerations The City shall substantially amend the Consolidated Plan if a "substantial change" is proposed by City staff or the City Council. For the purpose of the Consolidated Plan, a "substantial change" is defined as: More than 30 percent of the most recent annual federal grant allocation is reallocated to other eligible program activities within the fiscal year. (Amended amounts will not be cumulative, that is, each amendment will stand on its own for purposes of determining the 30 percent threshold.) An activity is undertaken that was not previously included in the Consolidated Plan or subsequent annual plans The City may make minor changes to the Consolidated Plan, as needed, so long as the changes do not constitute a substantial amendment as described above. Changes to numeric accomplishment goals within an existing Strategic Plan goal shall not constitute a substantial amendment. Such minor changes to the Consolidated Plan do not require a public review and comment period or a public hearing. b. Public Review and Comment The City encourages residents and stakeholders to participate in the development of substantial amendments. Substantial Amendments to the Consolidated Plan shall be made available for public review for a 30-day period. Written comments shall be accepted by the Executive Director of Community Development or designee during public review period. A summary of the comments and the City's responses to the comments shall be attached to the Consolidated Plan Substantial Amendment. The City shall encourage participation from all residents, especially low- and moderate -income residents, minorities, non-English speakers and those with City of Santa Ana Citizen Participation Plan I September 2019 Page S 75A-12 ON WMI IQ Dal disabilities. Copies shall be made available in accordance with the process described in Section G of this document. c. Public Hearing The City shall conduct a public hearing to accept public comments on the draft Substantial Amendment to the Consolidated Plan. Section G describes the process for publishing notice for and conducting public hearings. d. Submittal to HUD A copy of the Consolidated Plan Substantial Amendment, including a summary of all written comments and those received during the public hearing as well as the City's responses and proof of compliance with the minimum 30-day public review and comment period requirement shall be submitted to HUD for their records. A summary of any comments or views not accepted and the reasons therefore shall be supplied to HUD. A copy of any minor amendments shall be submitted to HUD when required. D. Action Plan The following describes the process and procedures related to the development of the Action Plan each year: 1. Plan Development Each year, the City prepares an Action Plan listing the activities to be undertaken with Community Planning and Development (CPD) funds. The City shall implement the following procedures in the development and adoption of the Action Plan: a. Plan Considerations In addition to residents, the City will ensure that members of the public (including City staff) and private agencies that provide the following services will be consulted in the development of the Action Plan: • Health Service Providers • Social Services for: Children, Elderly, Disabled, Homeless, and Persons with AIDS • State and Local Health Agencies • Adjacent Local Governments • Housing Authority (Santa Ana and Orange County Housing Authority) b. Plan Review and Comment The draft Action Plan incorporating the City's proposed uses of CDBG, HOME, and ESG funds shall be made available for public review for a 30-day period. City of Santa Ana Citizen Participation Plan I September 2019 Page 9 75A-13 :113Mii In a manner similar to that set forth for the Consolidated Plan, the City shall encourage participation from all residents, especially low- and moderate -income residents, minorities, non-English speakers and those with disabilities. The City shall make the plan accessible to all such groups. Copies shall be made available following the process described in Section G of this document. Written comments shall be accepted during public review period by the Executive Director of Community Development. A summary of the comments and the City's responses to the comments shall be attached to the draft Action Plan. c. Public Hearina The City shall conduct two (2) public hearings during the preparation of the Action Plan: • The first public hearing will be held before the Santa Ana Community Redevelopment and Housing Commission to accept public comments on funding priorities for the upcoming year; and • The second public hearing will be held before the Santa Ana City Council to accept public comments on the draft Annual Action Plan The Community Redevelopment and Housing Commission will recommend the Action Plan to City Council for approval. City Council shall approve, approve with modifications, or reject the Action Plan. Section G describes the process for publishing notice for and conducting public hearings. d. Submittal to HUD Upon adoption of the Annual Action Plan by the City Council, staff shall submit the Action Plan to HUD. Documents related to the public participation process, including copies of public notices and a summary of all public comments received, shall be attached to Action Plan. The Action Plan shall be submitted to HUD at least 45 days before the program year pursuant to regulations, or as otherwise allowed or required by HUD. 2. Action Plan Amendments The City shall follow the following procedure to complete substantial and minor amendments to the Action Plan, as needed: a. Amendment Considerations The City shall substantially amend the Action Plan if a "substantial change" is proposed by City staff or the City Council. For the purpose of the Action Plan, a "substantial change" is defined as: Addition of a new activity not previously identified in the Action Plan, without regard to funding source; City of Santa Ana Citizen Participation Plan I September 2019 Page 10 75A-14 EXHIBIT 1 • Cancellation of an existing activity identified in the Action Plan, without regard to funding source; • A change in the purpose, scope, location or beneficiaries of an activity; or • Changes in the use of CDBG funds from one eligible activity to another eligible activity meeting the following thresholds: �Net�lncreaseor TnggejforSubstantial Decrease.:.P Amendment MinorAmen dment* Net Increase 2 30% of the most recent <30% of the most recent rant allocation grant allocation Net Decrease ? 30% of the most recent <30% of the most recent rant allocation grant allocation *(Amended amounts will not be cumulative, that is, each amendment will stand on its own for purposes of determining the 30 percent threshold.) The City may make minor changes to the Action Plan, including any change not included in the definition of a "substantial change" above, as needed, so long as the changes do not constitute a substantial amendment as described above. Such minor changes to the Action Plan do not require a public review and comment period or a public hearing. However, City Council approval of activity funding changes may be required based on the amount and City policy. b. Public Review and Comment The City encourages citizen participation in the development of substantial amendments. Substantial Amendments to the Action Plan shall be made available for public review for a 30-day period. Written comments shall be accepted during the public review period. Comments should be directed to the Executive Director of Community Development. A summary of the comments and the City's responses to the comments shall be attached to the Action Plan Substantial Amendment. The City shall encourage participation from all residents, especially low- and moderate -income residents, minorities, non-English speakers and those with disabilities. The City shall make the plan accessible to all such groups. Copies shall be made available following the process described in Section G of this document. c. Public Hearing The City shall conduct a public hearing before the Community Redevelopment and Housing Commission (or a similar standing City Commission) to review and consider the Substantial Amendment to the Action Plan. The City shall accept public comments on the Substantial Amendment to the Action Plan at the public hearing. After public comments are heard and considered, the Commission will recommend the Substantial Amendment to City Council. City Council shall approve, approve with modifications, or deny the request for a substantial City of Santa Ana Citizen Participation Plan I September 2019 Page I 1 75A-15 EXHIBIT 1 amendment to the Action Plan. Section G describes the process for publishing notice for and conducting public hearings. d. Submittal to HUD A copy of the Substantial Amendment to the Action Plan along with copies documenting the public participation process (i.e. public notices and public comments) shall be submitted to HUD for their records. Similarly, minor amendments shall be submitted to HUD. E. Consolidated Annual Performance and Evaluation Report (CAPER) The City shall implement the following procedures in the development of the Consolidated Annual Performance and Evaluation Report (CAPER): 1. Report Development The City shall develop, approve and submit a CAPER within 90 days of the conclusion of each program year. a. Report Considerations Staff shall evaluate and report the accomplishments of the previous program year for all CDBG, HOME, and ESG activities and shall provide information on program expenditures and other metrics as required by HUD. b. Review and Comment The City encourages citizen participation in the development of the CAPER. The draft CAPER shall be made available for public review for a 15-day period. Written comments will be accepted during a public review period by the Executive Director of Community Development. A summary of any written comments received, or oral comments provided during the public hearing and the City's responses to those comments shall be attached to the CAPER submission to HUD. Copies of the draft CAPER shall be made available following the process described in Section G of this document. c. Submittal to HUD Upon completion of the public review period, City staff shall submit the CAPER to HUD. Documents related to the public participation process, including copies of public notices and a summary of all public comments received, shall be attached to the CAPER. The CAPER shall be submitted to HUD within 90 days following the end of the program year pursuant to regulations. City of Santa Ana Citizen Participation Plan I September 2019 Page 12 75A-16 EXHIBIT 1 F. Analysis of Impediments or Assessment of Fair Housing (Al or AFH) The Analysis of Impediments to Fair Housing Choice (AI) or Assessment of Fair Housing (AFH) is a five-year plan completed by the City individually or as part of a local consortium of other HUD grantees pursuant to HUD guidance for the evaluation of local housing conditions, economics, policies and practices and the extent to which these factors impact the range of housing choices and opportunities available to all residents in an environment free from discrimination. As of April 2019, HUD has suspended the AFH planning framework. HUD currently requires the submission of an Al for grantees submitting Consolidated Plans for FY 2019. If HUD renews the AN planning framework, the AFH will replace the Al in the context and implementation of this section. The following describes the process and procedures related to the development of the AI or AFH. 1. Plan Development The City shall implement the following procedure in the preparation and adoption of the Al or AFH: a. Considerations As soon as feasible after the start of the public participation process for the Al or AFH, the City will make the HUD -provided data and any other supplemental information available to residents, public agencies and other interested parties by posting the data on the City's website and referencing this information in public notices. The City will make a concerted effort to notify and encourage the participation of citizens, local and regional institutions, the local Continuum of Care organization addressing homelessness, and public and private organizations including businesses, developers, nonprofit organizations, philanthropic organizations, community -based and faith -based organizations, broadband internet service providers, organizations engaged in narrowing the digital divide, agencies whose primary responsibilities include the management of flood prone areas, public land or water resources, emergency management agencies, state and local health service providers, social service providers, fair housing organizations, state and local governments, public housing authorities, affordable housing developers, businesses, community and faith based organizations, and other stakeholders in the development of the Al or AFH through mailings (including electronic mailings), online postings and public notices in the newspaper, as well as telephone or personal interviews, mail surveys, internet-based feedback and consultation workshops. b. Review and Comment The draft AI or AFH shall be made available for public review for a 30-day period. Written comments shall be accepted during public review period by the Executive Director of Community Development. A summary of the comments and the City's responses to the comments shall be attached to the Al or AFH. Copies shall be City of Santa Ana Citizen Participation Plan I September 2019 Page 13 75A-17 10AM11 is made available following the process described in Section G of this document. c. Public Hearina The Community Redevelopment and Housing Commission (or a similar standing City Commission) shall conduct a public hearing to accept public comments on the draft Al or AFH. After public comments are heard and considered by the Community Redevelopment and Housing Commission, the Commission will recommend the draft Al or AFH to City Council. The City Council shall approve or reject the Al or AFH. Section G describes the process for publishing notice for and conducting public hearings. d. Submittal to HUD Upon adoption of an Al or AFH, the City shall retain the Al in its records and annually report on the status and disposition of the Fair Housing Plan recommendations. Upon adoption of an Al or AFH, the City shall submit the Al or AFH to HUD for review and acceptance or rejection. The goals of the Al and AFH shall be incorporated into the Consolidated Plan prior to submission of the Consolidated Plan to HUD. 2. Al or AFH Amendments The City shall follow the following procedure to complete substantial amendments to AI or AFH, as needed. a. Amendment Considerations The City shall substantially amend the Al if a "substantial change" is proposed by City staff or the City Council. For the purpose of the Al, a "substantial change" is defined as the addition or deletion of Fair Housing Plan recommendations. The City shall substantially amend the AFH if a "substantial change" is proposed by City staff or the City Council or as otherwise required by HUD. An AFH that was previously accepted by HUD must be revised and submitted to HUD for review if a material change occurs. A material change is a change in circumstances in the jurisdiction of a program participant that affects the information on which the AFH is based to the extent that the analysis, the fair housing contributing factors, or the priorities and goals of the AFH no longer reflect actual circumstances. Examples include Presidentially declared disasters, under title IV of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et sec.), in the program participant's area that are of such a nature as to significantly impact the steps a program participant may need to take to affirmatively further fair housing; significant demographic changes; new significant contributing factors in the participant's jurisdiction; and civil rights findings, determinations, settlements (including Voluntary Compliance Agreements), or court orders; or, upon HUD's written notification specifying a material change that requires the revision. A revision to the AFH consists of preparing and submitting amended analyses, City of Santa Ana Page 14 Citizen Participation Plan I September 2019 75A-18 EXHIBIT 1 assessments, priorities, and goals that take into account the material change, including any new fair housing issues and contributing factors that may arise as a result of the material change. b. Public Review and Comment The City encourages residents and stakeholders to participate in the development of substantial amendments. Substantial Amendments to the AI or AFH shall be made available for public review for a 30-day period. Written comments will be accepted by the Executive Director of Community Development or designee during the public review period. A summary of the comments and the City's responses to the comments will be attached to the Consolidated Plan Substantial Amendment. The City will encourage participation from all residents, especially low- and moderate -income residents, minorities, LEP identified groups, and those with disabilities. The City will take efforts to make the plan accessible to all such groups. Copies will be made available following the process described in Section G of this document. c. Public Hearing The City shall conduct a public hearing before the Community Redevelopment and Housing Commission (or a similar standing City Commission) to accept public comments on the draft amendment to the Al or AFH. After public comments are heard and considered, the Commission will recommend the draft amendment to the City Council. City Council may approve or reject the amendment to the Al or AFH. A revised AFH must be submitted within 12 months of the onset of a material change that triggers a "Substantial Amendment," or at such later date as HUD may specify. Section G describes the process for publishing notice for and conducting public hearings. G. Public Hearings, Notification and Access The following policies and procedures outlining the public hearing process and public hearing notification apply to the development and substantial amendment of the Citizen Participation Plan, Five Year Consolidated Plan, Action Plan, CAPER, and Al or AFH. 1. Public Hearings/Meetings a. Public Hearing Process The City shall conduct a minimum of two (2) public hearings per year to obtain citizens' views and comments. These meetings shall be conducted at different times of the program year and together will cover the following topics: • Housing and Community Development Needs • Development of Proposed Activities City of Santa Ana Page 15 Citizen Participation Plan I September 2019 75A-19 EXHIBIT 1 • Review of Program Performance During a program year when the City develops an Al or AFH and Consolidated Plan, at least one public hearing shall be conducted prior to the draft Al or AFH and Consolidated Plan being published for comment. b. Public Hearing Notification Staff shall ensure adequate advance notice of all public meetings and hearings. Notices shall be printed/posted at least 14-days prior to the meeting date. Adequate noticing shall include: • Publishing a public notice in a newspaper of general circulation; and • Posting copies of notices on the City website. Notices shall include information on the topic of the meeting, including summaries when appropriate, to properly inform the public. Notices shall be published in accordance with the LEP and shall be accessible to those with disabilities. Meeting location and access is described below. 2. Documents for Public Review Staff shall ensure adequate advance notice of all public review/comment periods. Notices shall be printed / posted prior to the commencement of the public review period alerting residents of the documents for review and providing a summary of the contents of the documents to include information on the content and purpose of the document and the list of locations where copies of the entire draft document(s) may be reviewed. The public comment period for each Consolidated Plan Document and substantial amendment to each document subject to public review is listed below: Document , e.' Pub1lcCominent Period-:fs Citizen Participation Plan 30 days Consolidated Plan 30 days Action Plan 30 days CAPER 15 days Al or AFH 30 days The City shall ensure that documents are available for disabled, minority and non- English speaking residents (Spanish, Vietnamese, and Mandarin in accordance with City's LEP Plan). In addition, individuals needing a City form, notice or agenda to be translated to another language, please contact the City of Santa Ana Clerk of the Council at (714) 647-6520. Adequate noticing shall include: • Publishing a public notice in the following newspapers of general circulation: o English - Orange County Register City of Santa Ana Citizen Participation Plan I September 2019 Page 16 75A-20 EXHIBIT 1 o Spanish - La Opinion o NguoiViet- Vietnamese • Posting copies of notices on the City website; and • Posting notices at City Hall. The City shall place an adequate supply of draft copies of each document and substantial amendments to each document subject to public review at the following locations: Community Development Agency 20 Civic Center Plaza, 6t^ Floor Santa Ana, CA 92702 Office of the City Clerk 20 Civic Center Plaza, Room 809 Santa Ana, CA 92702 Santa Ana Main Public Library 26 Civic Center Plaza Santa Ana, CA 92702 Public Notices and draft documents shall also be posted to the City website at: httr)://www.sonta-ana.org/cd All printed reports and materials shall be made available in a form accessible to persons with disabilities, upon request. 3. Access to Meetings and Hearings Meetings for items that require Community Redevelopment and Housing Commission action shall be conducted in front of the Commission at 4:30 P.M. at the Santa Ana City Hall Council Chambers (22 Civic Center Plaza, Santa Ana, California, 92701). Meetings for items that require City Council action shall be conducted in front of the Santa Ana City Council at 4:30 P.M. at the Santa Ana City Hall Council Chambers (22 Civic Center Plaza, Santa Ana, California, 92701). For public meetings or hearings not requiring action by the Community Redevelopment and Housing Commission or City Council, the City shall make every effort to conduct such meetings in the low- and moderate -income target areas and at times accessible and convenient to potential and actual beneficiaries. It is the objective of the City to comply with Section 504 of the Rehabilitation Act of 1973, as amended, the Americans with Disabilities Act (ADA) of 1990 and the ADA Amendment Act of 2008, the Fair Housing Act, the Architectural Barriers Act, The LEP Plan, and the City's adopted Title VI Plan in all respects. Individuals with disabilities who need special assistance to participate in City Council meetings can contact Office of the City Clerk's Department, 20 Civic Center Plaza, Room 809, Monday through Thursday and alternate Fridays, 8:00 a.m. - 5:00 p.m., at City of Santa Ana Citizen Participation Plan I September 2019 Page 17 75A-21 EXHIBIT 1 (714) 647-6520. Requests shall be made at least 48 hours prior to the meeting to enable the City to make arrangements to assure accessibility. The City of Santa Ana will provide appropriate auxiliary aids and services whenever necessary for those individuals who have hearing, sight or speech impairments, unless to do so would result in a fundamental alteration of its programs or an undue administrative or financial burden. No surcharge will be placed on a particular individual with a disability or any group of individuals with disabilities to cover the cost of providing these auxiliary aids/services or reasonable accommodations. For information regarding the Americans with Disabilities Act, the City's ADA Transition Plan, contact the City's ADA Coordinator at (714) 647-5624, (714) 647-6745 (TTY) or mortiz@santa-ana.org. 4. Access to Consolidated Plan Documents and Records Approved Consolidated Plan Documents and any approved amendments thereto, shall be kept on file in the Community Development Agency (20 Civic Center Plaza, 61h Floor, Santa Ana, CA 92704) and online at: htto://www.sonto-ana.orci/cd Reasonable efforts shall be made to accommodate requests for documents in other languages in accordance with the City's LEP Plan. Reasonable efforts shall be made to accommodate requests for documents in an accessible format for those with disabilities. Such formats may include, but are not limited to providing oral, Braille, electronic or large print versions of the plan to those visually impaired and delivering copies to those who are homebound. Requests for information and records shall be made to the City in writing. Staff shall respond to such requests within 15 working days or as soon as possible thereafter. H. Technical Assistance Technical assistance to applicants for CDBG, HOME, and ESG funds is available from the Department of Community Development as follows: • If published, any Notice of Funding Availability (NOFA) shall provide self- explanatory application form(s) to facilitate access to CPD funds. • Staff shall answer, in writing, all written questions and answer verbally all verbal inquiries received from citizens or representative groups pertaining to the NOFA and application(s). • Staff shall conduct a project eligibility analysis to determine the eligibility of each project. In cases where only minor adjustments are needed to make proposals eligible or otherwise practical, staff shall advise the applicants on the options available and desired changes to the proposals. • Staff shall arrange for translation on as -needed basis. To request technical assistance, contact the Housing Division Manager at (714) 647- 5360. City of Santa Ana Citizen Participation Plan I September 2019 Page 18 75A-22 EXHIBIT 1 I. Comments and Complaints Citizens or the City government, as well as agencies providing services to the community, are encouraged to state or submit their comments in the development of the Consolidated Plan Documents and any amendments to the Consolidated Plan. Written and verbal comments received at public hearings or during the comment period, shall be considered and summarized, and included as an attachment to the City's final Consolidated Plan. Written comments should be addressed to: Executive Director of Community Development, Community Development Agency, 20 Civic Center Plaza, 6th Floor, Santa Ana, CA 92702. A written response shall be sent in response to written comments within 15 working days. A complaint regarding the Consolidated Planning process and Consolidated Plan amendments must be submitted in writing to the Community Development Agency. A written response shall be made to written complaints within 15 working days, acknowledging the complaint. Written complaints should be addressed to: Executive Director of Community Development, 20 Civic Center Plaza, 6th Floor, Santa Ana, CA 92702. The City shall accept written complaints provided that the complaint specifies: • The description of the objection, and supporting facts and data; and • Provide name, address, telephone number, and the date of complaint. J. Appeals Appeals concerning the Consolidated Plan Documents, statements, or recommendations of City Staff should be made to the following persons in the order presented: • Housing Division Manager • Executive Director, Community Development Agency • City Manager • City Council • Los Angeles Area Office of HUD (if concerns are not answered) K. CDBG Disaster Recovery (CDBG-DR) In the event of a federally -declared major disaster or emergency for which the City of Santa Ana is to receive and administer HUD disaster recovery assistance pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act and related Congressional Appropriations, either directly from HUD or through the State of California, the following citizen participation requirements shall apply to the development of Action Plans and Substantial Amendments to Action Plans for disaster recovery: 1. Before the City adopts the Action Plan for a disaster recovery grant or any substantial amendment to a disaster recovery grant Action Plan, the City will publish the proposed plan or amendment on the City website and will cross- reference with any additional disaster recovery websites established to provide City of Santa Ana Page 19 Citizen Participation Plan I September 2019 75A-23 EXHIBIT 1 information to the public concerning assistance that may be available. 2. The City and/or subrecipients will notify affected citizens through USPS and/or electronic mailings, press releases, public service announcements, public notice(s), and/or through social media. 3. The City will ensure that all citizens have equal access to information about the programs, including persons with disabilities and Limited English Proficiency Plan (LEP) persons. Program information will be made available in the appropriate languages for the City. 4. Subsequent to publication of the Action Plan or substantial amendment, the City will provide a reasonable opportunity of at least seven (7) days for receiving comments, or a longer period as prescribed by the Federal Register Notice governing administration of the HUD disaster recovery assistance. 5. The City will take comments via USPS mail to: Community Development Agency, Executive Director of Community Development, 20 Civic Center Plaza, 6th Floor, Santa Ana, CA 92702. 6. In the Action Plan, the City will specify criteria for determining what changes in the City's plan constitute a substantial amendment to the plan. At a minimum, the following modifications will constitute a substantial amendment: a change in program benefit or eligibility criteria; the addition or deletion of an activity; or the allocation or reallocation of a monetary threshold of more than $750,000. 7. A public website shall be established and publicized specifically for the disaster. Initially, the City's website may be used at: www.santa-ana.org. The website shall contain the Action Plan (including all amendments); each Quarterly Performance Report (QPR); procurement policies and procedures; executed contracts; status of services or goods currently being procured by the City (e.g., phase of the procurement, requirements for proposals, etc.). 8. The City will consider all written comments regarding the Action Plan or any substantial amendment. A summary of the comments and the City's response to each comment will be provided to HUD or the State with the Action Plan or substantial amendment. 9. The City will provide a timely written response to every citizen complaint. The response will be provided within 15 working days of the receipt of the complaint, to the extent practicable. 10. The City will notify HUD when it makes any plan amendment that is not substantial. HUD or the State will be notified at least five business days before the amendment becomes effective. L. Anti -Displacement and Relocation The City's Anti -displacement and Relocation Plan describes how Santa Ana will assist persons who must be temporarily relocated or permanently displaced due to the use of HUD funds. This plan takes effect whenever the City funds projects that involve the following: City of Santa Ana Citizen Participation Plan I September 2019 Page 20 75A-24 EXHIBIT 1 • Property acquisition; • Potential displacement of people from their homes and the need to relocate people (either permanently or temporarily); and • The demolition or conversion of low- and moderate -income dwelling units. Two acts apply whenever any of the above issues are present: The Uniform Relocation Assistance and Real Property Policies Act of 1970 (URA) and Section 104(d) of the Housing and Community Development Act of 1974. Each of these acts place different obligations on the City. The URA governs the processes and procedures which the City must follow to minimize the burden placed on low- and moderate -income tenants, property owners, and business owners who must move (either temporarily or permanently) as the result of a project funded in whole or in part by the CDBG, HOME, or ESG programs. The URA applies to: • Displacement that results from acquisition, demolition, or rehabilitation for HUD - assisted projects carried out by public agencies, nonprofit organizations, private developers, or others; • Real property acquisition for HUD -assisted projects (whether publicly or privately undertaken); • Creation of a permanent easement or right of way for HUD -assisted projects (whether publicly or privately undertaken); and • Work on private property during the construction of a HUD -assisted project even if the activity is temporary. Displacement occurs when a person moves as a direct result of federally assisted acquisition, demolition, conversion, or rehabilitation activities, because they are: • Required to move; or Not offered a decent, safe, sanitary and affordable unit in the project; or • Treated "unreasonably" as part of a permanent or temporary move. A person may also be considered displaced if the necessary notices are not given or provided in a timely manner and the person moves for any reason. The term displaced person means any person that moves from real property or moves their personal property from real property permanently as a direct result of one or more of the following activities: • Acquisition of, written notice of intent to acquire, or initiation of negotiations to acquire such real property, in whole or in part, for a project; • Rehabilitation or demolition of such real property for a project; and City of Santa Ana Citizen Participation Plan I September 2019 Page 21 75A-25 EXHIBIT 1 Rehabilitation, demolition, or acquisition (or written notice of intent) of all or a part of other real property on which the person conducts a business or farm operation, for a project. The City shall cause advisory and financial assistance to be available to eligible tenants (or homeowners) who meet the above definition. 1. Persons Not Eligible for Assistance A person is not eligible for relocation assistance under the provisions of the URA if any of the following occurs: • The person was evicted for serious or repeated violation of the terms and conditions of the lease or occupancy agreement, violation of applicable Federal, State, or local law, or other good cause. However, if the person was evicted only to avoid the application of URA, then that person is considered displaced and is eligible for assistance; • The person has no legal right to occupy the property under State or local law; • The City determines that the person occupied the property to obtain relocation assistance and the HUD Field Office concurs in that determination; • The person is a tenant -occupant that moved into the property after a certain date, specified in the applicable program regulation, and, before leasing and occupying the property, the City or its subrecipient provided the tenant - occupant written notice of the application for assistance, the project's impact on the person, and the fact that he or she would not qualify as a "displaced person" because of the project; • The person is a tenant -occupant of a substandard dwelling that is acquired or a tenant -occupant of a dwelling unit to which emergency repairs are undertaken and the HUD field office concurs that: o Such repairs or acquisition will benefit the tenant; o Bringing the unit up to a safe, decent, and sanitary condition is not feasible; o The tenant's new rent and average estimated monthly utility costs will not exceed the greater of: the old rent/utility costs or 30 percent of gross household income; and o The project will not impose any unreasonable change in the character or use of the property. • The person is an owner -occupant of the property who moves because of an arm's length acquisition; • The City or its subrecipient notifies the person that they will not displace him or her for the project; and • The person retains the right of use and occupancy of the real property for life following the acquisition. City of Santa Ana Citizen Participation Plan I September 2019 Page 22 75A-26 EXHIBIT 1 The City determines that the person is not displaced as a direct result of the acquisition, rehabilitation, or demolition for the project and the HUD field office concurs in the determination. 2. Anti -Displacement Policy The City will take reasonable steps to minimize displacement occurring as a result of its CDBG activities. This means that the City will: • Consider if displacement will occur as part of funding decisions and project feasibility determinations; • Assure, whenever possible that occupants of buildings to be rehabilitated are offered an opportunity to return; • Plan substantial rehabilitation projects in "stages" to minimize displacement; and • Meet all HUD notification requirements so that affected persons do not move because they have not been informed about project plans and their rights. The City seeks to minimize, to the greatest extent feasible, the displacement, whether permanently or temporarily, of persons (families, individuals, businesses, nonprofit organizations, or farms) from projects funded with CDBG involving single- or multi- family rehabilitation, acquisition, commercial rehabilitation, demolition, economic development, or capital improvement activities. Projects that the City deems beneficial but that may cause displacement may be recommended and approved for funding only if the City or its subrecipient demonstrates that such displacement is necessary and vital to the project and that they take efforts to reduce the number of persons displaced. Further, they must clearly demonstrate that the goals and anticipated accomplishments of a project outweigh the adverse effects of displacement imposed on persons who must relocate. 3. Displacement Assistance Consistent with the goals and objectives of the CDBG program, the City will take all reasonable steps necessary to minimize displacement of persons, even temporarily. If displacement occurs, the City will provide relocation assistance to all persons directly, involuntarily, and permanently displaced according to HUD regulations. If the City temporarily displaces a low- or moderate -income household, that household becomes eligible for certain relocation payments. The assistance applies to those persons residing in the residence at the time the application is processed and is based on the following procedures: • If the structure and its occupants are determined eligible for temporary relocation assistance, the owner -occupants and tenants are eligible for the City of Santa Ana Citizen Participation Plan I September 2019 Page 23 75A-27 EXHIBIT 1 actual reasonable cost (based on fair market rent) of temporary lodging facilities until the structure is determined habitable by the City's inspector; • The City must approve housing and the Lessor and Lessee must sign a rent agreement before move -in. Housing must be comparable functionally to the displacement dwelling and decent, safe, and sanitary. This does not mean that the housing must be in comparable size. The term "functionally equivalent" means that it performs the same function, has the some principal features present, and can contribute to a comparable style of living. Approved lodging accommodations include apartments and houses. The City does not reimburse "rental expenses" for living with a friend or family member; • Either the City will provide the owner -occupants and tenants a direct payment for moving expenses (to and from temporary housing) and storage costs, or the City will arrange moving and storage of furniture with a moving company. If the City makes a direct payment, complete documentation and receipts are necessary to process claims when storage costs exceed the amount assumed by the direct payment; • Damage deposits, utility hookups, telephone hookups and insurance costs are not eligible for reimbursement; and • The City may pay the cost of relocation assistance from Federal funds or funds available from other sources. 4. One -For -One Replacement Dwelling Units The City will generally avoid awarding funds for activities resulting in displacement. However, should the City fund an activity, specific documentation is required to show the replacement of all occupied and vacant dwelling units demolished or converted to another use. The City will assure that relocation assistance is provided as described in 24 CFR 570.606(b) (2). Before obligating or expending funds that will directly result in such demolition or conversion, the City will make public and submit to the HUD field office the following information in writing: • A description of the proposed assisted activity; • The general location on a map and approximate number of dwelling units by size (number of bedrooms) that will be demolished or converted to a use other than as low- and moderate -income units; • A time schedule for the commencement and completion of the demolition or conversion; • The general location on a map and approximate number of dwelling units by size (number of bedrooms) that will be provided as replacement units; • The source of funding and a time schedule for the provision of replacement dwelling units; or City of Santa Ana Citizen Participation Plan I September 2019 Page 24 75A-28 EXHIBIT 1 • The basis for concluding that each replacement dwelling unit will remain a low - and moderate -income unit for at least ten years from the date of initial occupancy. In the implementation of HUD programs, the City will take all reasonable steps necessary to minimize displacement of persons from their homes. The City will avoid funding projects that cause displacement of persons or businesses and will avoid funding any project that involves the conversion of low- and moderate -income housing to non-residential purposes. 5. Decent, Safe and Sanitary Dwelling The basic definition is found at 49 CFR 24.2(l). The term decent, safe, and sanitary dwelling means a dwelling that meets the following standards and any other housing and occupancy codes that are applicable. It will: • Be structurally sound, weather tight, and in good repair; • Contain a safe electrical wiring system adequate for lighting and other devices; • Contain a safe heating system capable of sustaining a healthful temperature for the displaced person; • Be adequate to accommodate the displaced person. There will be a separate, well lit, ventilated bathroom that provides privacy to the user and contains a toilet, sink, and a bathtub or shower, all in good working order and properly connected to appropriate sources of water and to a sewage drainage system. There should be a kitchen area that contains a fully usable sink, properly connected to hot and cold water and to a sewage drainage system, and adequate space and utility service connections for a stove and refrigerator; • Contain unobstructed egress to safe, open space at ground level; • For a mobility -impaired person, be free of any barriers that would preclude reasonable ingress, egress, or use of the dwelling by such person. This requirement will be satisfied if the displaced person elects to relocate to a dwelling that they select, and the displaced person determines that they have reasonable ingress, egress, and the use of the dwelling; and • Comply with lead -based paint requirements of 24 CFR Part 35. M. Real Property Policies The City and its subrecipients must follow specific guidelines regarding the acquisition and use of real property funded in whole or in part with HUD funds. 1. Use of Real Property City of Santa Ana Citizen Participation Plan I September 2019 Page 25 75A-29 1:*AVMII his The following standards apply to real property within the recipient's control and acquired or improved, in whole or in part, using HUD funds. These standards will apply from the date funds are first spent for the property until five years after the project is audited and closed. A recipient may not change the use of any such property (including the beneficiaries of such use) from that for which the acquisition or improvement was made unless the recipient gives affected citizens reasonable notice of, and opportunity to comment on, any such proposed change, and either: The use of such property qualifies as meeting a national objective and is not a building for the general conduct of government; • The requirements in the paragraph below are met; • If the recipient determines, after consultation with affected citizens, that it is appropriate to change the use of property to a use that does not qualify under the above paragraph, it may retain or dispose of the property. The City must be reimbursed in the amount of the current fair market value of the property less any portion attributable to expenditures of non-federal funds for the acquisition of and improvements to the property; • If the change of use occurs within five years of the project being audited and closed, income from the disposition of the real property will be returned to the City's HUD programs; and • Following the reimbursement of the federal program pursuant to the above paragraph of this section, the property is no longer subject to any federal requirements. 2. Real Property Acquisition All real property acquisition activities described in this section and funded in whole or in part with CDBG funds and all real property that must be acquired for an activity assisted with Federal funds, regardless of the actual funding source for the acquisition, are subject to the URA (as amended). Real property acquisition is any acquisition by purchase, lease, donation, or otherwise, including the acquisition of such interests as rights -of -way and permanent easements. HUD Handbook 1378 and 49 CFR Part 24 currently contains such regulations. These regulations detail a standard procedure for acquiring property and methods of determining a purchase price and outline other documents that must be provided to the City before disbursement of funds. These regulations further require the applicant to provide relocation payments and assistance to any business or residential occupant of the property whom the acquisition will displace. City of Santa Ana Citizen Participation Plan I September 2019 Page 26 75A-30 W3:IM&i 3. Eligible Activities The City, or its subrecipient may acquire real property for a project using CDBG funds where the proposed use of the acquired property will be an activity that the City can demonstrate as beneficial to low- and moderate -income persons. 4. Environmental Review Process (24 CFR Part 58) HUD requires that all real property acquisition projects be reviewed before the commitment of Federal funds to assess the impact of a project on the environment. The City will undertake this review process. The applicant should be aware, however, that this review process may delay the date by which CDBG funds may be available and, in case of serious adverse environmental impacts, may effectively stop a project. City of Santa Ana Citizen Participation Plan I September 2019 Page 27 75A-31 75A-32 REQUEST FOR COUNCIL/ HOUSING AUTHORITY ACTION [aYrY.T•I�1,I�I�4L�il.[�7731114 SEPTEMBER 17, 2019 TITLE: APPROVE AMENDED AND RESTATED AFFORDABLE HOUSING LOANS AND SUBORDINATION AGREEMENTS FOR THE REHABILITATION OF CORNERSTONE APARTMENTS (STRATEGIC PLAN NO. 4,5) CITY A.4NAGER RECOMMENDED ACTION CITY COUNCIL u CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1� Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Authorize the City Manager to execute an Amended and Restated Loan Agreement with Cornerstone Housing Partners LP (c/o Jamboree Housing Corporation) for $5,128,152 in HOME Investment Partnerships Program (HOME) funds by consolidating and replacing ten existing HOME Program loans in order to rehabilitate 126 units of existing affordable housing at 805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California, subject to non -substantive changes approved by the City Manager and City Attorney. 2. Authorize the City Manager to execute a Subordination Agreement with MUFG Union Bank, N.A., for the City's Amended and Restated HOME Loan Agreement with Cornerstone Housing Partners LP (c/o Jamboree Housing Corporation), subject to non -substantive changes approved by the City Manager and City Attorney. HOUSING AUTHORITY Authorize the Executive Director of the Housing Authority to execute an Amended and Restated Loan Agreement with Cornerstone Housing Partners LP (c/o Jamboree Housing Corporation) for $2,054,327 in Housing Successor Agency funds by consolidating and replacing thirty-three existing Housing Successor Agency loans in order to rehabilitate 126 units of existing affordable housing at 805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California, subject to non -substantive changes approved by the Executive Director and Authority General Counsel. 2. Authorize the Executive Director of the Housing Authority to execute a Subordination Agreement with MUFG Union Bank, N.A., for the Housing Authority's Amended and Restated 80A-1 Approve Affordable Housing Loans for the Rehabilitation of Cornerstone Apartments September 17, 2019 Page 2 Housing Successor Agency Loan Agreement with Cornerstone Housing Partners LP (c/o Jamboree Housing Corporation), subject to non -substantive changes approved by the Executive Director and Authority General Counsel. On November 20, 2018, the City Council and Housing Authority authorized the City Manager and Executive Director of the Housing Authority to execute a commitment letter to resubordinate the current affordable housing loans for the Cornerstone Apartments at 805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California, to tax-exempt multifamily housing bonds (tax exempt bonds) in an amount not to exceed $8,700,000 in order to substantially rehabilitate Cornerstone Apartments. The City Council and Housing Authority also authorized the City Manager and Executive Director of the Housing Authority to execute the necessary documents to level all rents onsite at the 50% Tax Credit Allocation Committee (TCAC) rents instead of the existing Health and Safety Code rents. Following this approval, staff executed and provided a commitment letter to Cornerstone Housing Partners LP c/o Jamboree Housing Corporation (Exhibit 1). Using the commitment letter as the City and Housing Authority's enforceable commitment, Jamboree Housing Corporation (Jamboree) submitted an application on January 18, 2019 for non-competitive 4% tax credits (tax-exempt bonds) to rehabilitate the Cornerstone Apartments. Specifically, the Cornerstone Apartments at 805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, in Santa Ana, California is collectively a 126-unit affordable housing project that requires substantial repair and rehabilitation (Project). The Project was originally built in 1961. For a single-family homeowner, when their home gets older and in need of repair, typically the homeowner will refinance their mortgage to take out a loan to pay for the rehabilitation work on their home. On the other hand, for a multi -family affordable housing project owner, when their project gets older and in need of repair typically the owner will do something called "resyndicate" by applying for additional 4% tax credits and obtaining tax-exempt bond proceeds to complete the rehabilitation work on their rental units. The term "resyndication" is used to describe an existing Low -Income Housing Tax Credit project that receives a new allocation of tax credits. This can only happen after the property completes the initial 15-year compliance period for their original tax credits. This resyndication involving the City and Housing Authority's existing affordable housing loans is much more complicated than simply refinancing a single-family home. The resyndication required approval by the City and Housing Authority to resubordinate existing affordable housing loans to a new senior loan in order for the senior lender to provide their loan. The City's existing affordable housing loans consists of ten (10) different HOME Investment Partnerships Program (HOME) Loan Agreements and the Housing Authority's existing affordable housing loans consists of thirty-three (33) different Housing Successor Agency Loan Agreements. For the resyndication and rehabilitation of the project, Jamboree did not receive any additional funds from the City or Housing Authority. Instead, Jamboree is actually paying off $2,204,000 of the principle balance of the Housing Authority's loans. The original loan terms were all relatively the same: 30 or 55 year term with 3% simple interest repaid through residual 80A-2 Approve Affordable Housing Loans for the Rehabilitation of Cornerstone Apartments September 17, 2019 Page 3 receipts to the City or Housing Authority depending on the source of affordable housing funds (HOME or Housing Successor Agency). Following the City and Housing Authority's approval to resubordinate our existing affordable housing loans, Jamboree received an allocation of 4% tax credits on March 20, 2019 and staff began working with Jamboree to: 1) consolidate the forty-three (43) existing affordable housing loans by the source of funds that had been provided by the City and Housing Authority to the Project; 2) identify which loans would be paid off at closing by Jamboree; 3) Amend and Restate the existing ten (10) HOME Loans; 4) Amend and Restate the existing thirty-three (33) Housing Successor Agency Loans; and 5) finalize two Subordination Agreements with MUFG Union Bank, N.A. (Union Bank) for the Amended and Restated HOME Loan and the Amended and Restated Housing Successor Agency Loan. Before discussing the Amended and Restated HOME and Housing Successor Agency Loans, it is necessary to discuss an opportunity that arose for the City and Housing Authority to receive additional funds during this process. Senior Loan Debt Increase from $8,700,000 to $11,100,000 The City and Housing Authority's original commitment on November 20, 2018 was to resubordinate the current affordable housing loans for Cornerstone Apartments to tax-exempt multifamily housing bonds in an amount not to exceed $8,700,000 in order to substantially rehabilitate the Project. As part of the original transaction, Jamboree then agreed to pay down $500,000 of the existing City and Housing Authority loans at the time of bond closing. On July 30, 2019, the City received a written request from Jamboree asking to increase the amount of debt the City would subordinate to from $8,700,000 to $11,100,000. The request explained that due to lower interest rates, a longer amortization period, and increased 2019 rents published by TCAC, the Project was able to support a larger permanent loan amount than initially anticipated. Generally, Jamboree was able to negotiate better deal terms with their senior lender than what they originally anticipated in their initial proposal to the City in October 2018. Specifically, Jamboree's original interest rate on the tax-exempt multifamily bonds was 5.75%. Since then, interest rates have decreased substantially, and their senior lender decreased their interest rate to around 4%, depending on the final closing interest rate. In addition, their senior lender was able to offer a loan product with a 40-year amortization instead of their initial 35-year amortization assumption. And lastly, in terms of revenue and cash flow, the 2019 TCAC rents increased significantly from the 2018 TCAC rents in their initial underwriting assumptions. As part of these updated terms, Jamboree has agreed to pay down $2,204,000 of the existing Housing Authority loans at the time of bond closing. This is $1,704,000 more than originally agreed upon by the City and Housing Authority. The remaining additional proceeds will then be used to pay down the Project's deferred developer fee. The request for a permanent loan in the amount of $11,100,000 assumes that the project ultimately closes at a 4% interest rate at the end of September 2019. Should the closing interest rate increase due to macroeconomic private • I . Approve Affordable Housing Loans for the Rehabilitation of Cornerstone Apartments September 17, 2019 Page 4 market activities upon which the City has no control, the amount of their loan repayment would have to be reduced accordingly. After receiving Jamboree's request, staff requested Keyser Marston Associates (KMA) to perform an analysis of Jamboree's revised proposal (Exhibit 2). Their analysis concluded that subordinating to the increased senior loan amount of $11,100,000 resulted in a greater benefit for the City and Housing Authority as well as continued to prioritize the rehabilitation needs of the Project. In this scenario, the City would benefit from both a larger loan pay down at closing as well as a higher repayment out of the Project's cash flow as a result of the lower deferred developer paid fee paid out ahead of the City's Loan. Following their analysis, KMA recommends that the City and Housing Authority agree to the revised deal terms. Amended and Restated Affordable Housing Loans As previously mentioned, staff consolidated the forty-three (43) existing affordable housing loans by the source of funds that had been provided by the City and Housing Authority to the Project (Exhibit 7). The ten (10) HOME Loans were consolidated into one set of Amended and Restated HOME Loan Documents and the thirty-three (33) Housing Successor Agency Loans were consolidated into one set of Amended and Restated Housing Successor Agency Loan Documents. Both sets of Loan Documents for each source of funds includes an Amended and Restated: • Loan Agreement • Affordability Restrictions on Transfer or Property • Deed of Trust • Promissory Note As a result, there are now two Loan Agreements for the Project: one Amended and Restated HOME Loan Agreement for $5,128,152 in HOME Program funds and one Amended and Restated Housing Successor Agency Loan Agreement for $2,054,327 in Housing Successor Agency funds. No new funds are being provided to the Project. The Amended and Restated HOME Loan Agreement is attached as Exhibit 3 and the Amended and Restated Housing Successor Agency Loan Agreement is attached as Exhibit 4. Both Loan Agreements have the following basic terms: • $7,182,479 combined principal amount: o $5,128,152 in HOME Program funds (not new funds) o $2,054,327 in Housing Successor Agency funds (not new funds) • 5% simple interest per annum; Repayment from 50% of Residual Receipts (pro-rata with payments due in connection with other financing provided by the City/Housing Authority) (after payment of operating expenses, debt service, any deferred developer fee, and partnership fees to be described in the Agreement) with the remaining 50% to be disbursed to the Developer; Approve Affordable Housing Loans for the Rehabilitation of Cornerstone Apartments September 17, 2019 Page 5 • Remaining principal and accrued interest due upon the 55th anniversary of the issuance of Certificate of Occupancy and/or final building permits or earlier upon sale, refinancing or default. On that date, the City/Housing Authority agrees to review the performance of the property and consider in good faith any reasonable request by Jamboree to modify the terms or extend the term of the City/Housing Authority Promissory Notes. Additionally, the City/Authority will receive 50% of the net proceeds received from any sale or refinancing of the Project, after payment of outstanding debt and payment in full of any deferred developer fee and establishment of any reserves and transaction costs; • Cost savings from the Project, if any, will be applied first to pay down the Loans, subject to compliance with the TCAC regulations. Regarding the two Subordination Agreements with Union Bank, the City's / Housing Authority's total loan for the Project is less than the $11.1 million loan from Union Bank. In order for Union Bank to provide their senior loan, they are requiring the City and Housing Authority to execute one Subordination Agreement each for the City and Housing Authority's two Loan Agreements that allow Union Bank to complete their underwriting and commit their private market financing. As such, the two Subordination Agreements will allow Union Bank to commit their private market financing for the rehabilitation of the Project. The Subordination Agreement for the City's Amended and Restated HOME Loan Agreement is attached as Exhibit 5 and the Subordination Agreement for the Housing Authority's Amended and Restated Housing Successor Agency Loan Agreement is attached as Exhibit 6. If the two Loan Agreements are not approved by City Council and the Housing Authority, then Jamboree will have to return their allocation of 4% tax exempt bonds and the Project will not move forward. 5% Simple Interest Instead of 3% Simple Interest Jamboree requested that the City's interest rate be increased from 3% simple interest to 5% simple interest. The issue is that because the new Limited Partnership in the resyndication is assuming an existing loan (not a new loan like a typical new construction project), for tax purposes it can be looked at as if the new Limited Partnership is assuming the loan at much more favorable loan terms than they could have obtained otherwise. If this is the case, it can be treated as income to the Partnership. The Partnership never wants to have income in these types of transactions because the Limited Partner would have to pay taxes on this income and as such this would impact/reduce the amount of tax credit equity that they would put in the deal. The test of whether or not the terms of the assumed loan are "favorable" and would trigger a need to pay income on the loan is done by looking at the proposed rate for the assumed loan and comparing it to the Applicable Federal Rate (AFR), which is the minimum market rate that the Internal Revenue Service allows for a private loan. A comparison is then conducted between how Approve Affordable Housing Loans for the Rehabilitation of Cornerstone Apartments September 17, 2019 Page 6 much interest would be paid under each scenario to ensure that the interest rate on the assumed loan is approximately equal to the interest amount one would pay over the term at the AFR rate. The tax credit investor has calculated that the interest rate needed on the assumed City and Housing Authority Loans would have to be at least 5% simple interest to be equal to the AFR and not trigger a situation where the investor would have to pay taxes on "income" as a result of the favorable financing and thereby reduce their financing/tax credit equity commitment to the project. Staff requested KMA to analyze this relatively unique request. KMA confirmed that the higher interest rate is in the City's favor even though almost all affordable housing projects have soft public loans at an interest rate in the range of 3% simple interest or less. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal # 4 Fiscal Sustainability, Objective # 1 (maintain a stable, efficient and transparent financial environment) and Goal # 5 - Community Health, Livability, Engagement & Sustainability, Objective # 3 (Facilitate diverse housing opportunities and support efforts to preserve and improve the livability of Santa Ana neighborhoods). FISCAL IMPACT The Residual Receipt payment schedule under the existing Loan Agreements call for the City Loans to be repaid at the end of a 40-year term. Under the two new Loan Agreements, the City and Housing Authority will receive approximately $2,204,000 from the resyndication at bond closing. The $2,204,000 payment will be applied to the various sources according to the table below: ` Tax Increment TI/CHFA HOME TOTAL (Fund 607) (Fund 607) (Fund 130) Outstanding Loan Balances as of September 24, 2019 $3,218,628.20 $946,667.19 $5,221,184.19 $9,386,479.58 Projected Allocation of $2,204,000 Payment $2,100,968.00 $ 0.00 $ 93,032.00 $2,204,000.00 New Loan Balances $1,107,660.20 $946,667.19 $5,128,152.19 $7,182,479.58 Due to the nature of residual payments, future revenues cannot be estimated. However, In FY 2017-18, residual repayments received by the City/Housing Authority for the existing loans were as follows: . 1 m ., Approve Affordable Housing Loans for the Rehabilitation of Cornerstone Apartments September 17, 2019 Page 7 Program Account Amount HOME 13018002-56901 $134,014.11 Tax Increment 60718002-56901 $ 84,172.36 Tax Increment/CHFA 60718002-56901 $ 24,612.54 Total $242,799.01 The above annual receipts provides the scope of the revenues to be deferred and resubordinated by the City and Housing Authority as a result of the recommended actions. During the 2018-19 fiscal year, Jamboree Housing did not make their annual residual repayment because of the resyndication and their forthcoming loan payoff of $2,204,000. The City is not forgiving any of the current debt or accrued interest, merely extending the term an additional 55 years. Jamboree is also not receiving any new funds in support of the Project. Steven A. Mendoza Executive Director Community Development Agency APPROVED AS TTO` FUNDS AND ACCOUNTS: Kathryn Dowfis, CPA Find r 3o el,�- Executive Director E.4 1,01 iv Finance and Management Services Agency Exhibits: 1. Commitment Letter to Cornerstone Housing Partners LP c/o Jamboree Housing Corporation 2. Analysis by Keyser Marston Associates 3. Amended and Restated HOME Loan Agreement 4. Amended and Restated Housing Successor Agency Loan Agreement 5. Subordination Agreement for the City's Amended and Restated HOME Loan Agreement 6. Subordination Agreement for the Housing Authority's Amended and Restated Housing Successor Agency Loan Agreement 7. List of City and Housing Authority Loans as of September 24, 2019 80A-7 INSURANCE NOT REQUIRED WORK MAY PROCEED MAYOR CLERK OF COUNCIL Miguel A. Pulido r) ITC. DEC MAYOR PRO'PEM ' L.l�1 ZO�p Michele Martinez ® U COUNCII.MEMBERS P. David Benavides (�, Vicente Sarmlento V � 0DA Iv0' Jose Solon,o �t Sal Tinalero Juan Villages November 20, 2018 CITY OF SANTA ANA 20 Civic Center Plaza • P.O. Box 1988 Santa Ana, California 92702 www.santa-ana.oro Cornerstone Housing Partners LP c/o Jamboree Housing Corporation Attn: Laura Archuleta 17701 Cowan Avenue, Suite 200 Irvine, CA 92614 A-2018-280 EXHIBIT 1 CITY MANAGER Raid Godinez 11 CITY ATTORNEY Sonia R. Carvalho CLERK OF THE COUNCIL Maria D. Huizar Re: 126 Unit Affordable Housing Apartment Project Known as Cornerstone Apartments Located at 805 - 904 South Minnie Street, Santa Ana, California Dear Ms. Archuleta, On November 20, 2018, the City of Santa Ana and the Housing Authority of the City of Santa Ana (collectively, the "City") authorized the City Manager and Executive Director of the Housing Authority to execute a commitment letter to: 1) resubordinate the current affordable housing loans for the Cornerstone Apartments at 805 - 904 South Minnie Street, Santa Ana, California ("Property") to tax-exempt multifamily bonds (Bonds) in an amount not to exceed $8,700,000 for the rehabilitation of the Property, and 2) execute the necessary documents to level all rents onsite at the 50% Tax Credit Allocation Committee ("TCAC") rents instead of the existing State of California Health and Safety Code rents. The City previously has made forty-two loans to Wakeham-Grant Apartments L.P. ("Existing Owner") in the aggregate principal and interest amount of $9,132,442 secured by deeds of trust encumbering all or portions of the Property (individually, a "City Loan" and, collectively, the "City Loans"). A description of each City Loan is set forth on Exhibit "A" attached hereto. Cornerstone Housing Partners LP (the "New Owner") desires to purchase the Property from Existing Owner, in order to obtain a new construction and permanent tax-exempt loan (the "Senior Loan") to acquire and substantially rehabilitate the Property, to obtain a seller carryback loan from Existing Owner to pay a portion of the purchase price for the Property ("Carryback Loan"), to obtain a new allocation of low income housing tax credits pursuant to Section 42 of the Internal Revenue Code ("Tax Credits") and to assume the City Loans. SANTA ANA CITY COUNCIL ksguel A Pusdo MNele Moron. Mvenle Samtlemo Jose Scbdo P. Dodd Benaddes Juan Vaegas Sal Tlmjsm Mayor Mayor Pro Tom. Ward 3 Wardt Ward Ward We'd5 Ward rmvlgv(asanla-ana.mv nArraAnezOsanraana om xaamiema�a7sanla-ana"ry ladotla(dsanG•ena ary dEena0dns6Aeen1a-snaora hipeaasr6lsama•ana av sfinaiarelalsanla-ana.mv 80A-9 EXHIBIT 1 The City now commits itself, subject to the terms of this letter, to permit the New Owner to assume the City Loans and to subordinate the lien of the deeds of trust securing the City Loans and the regulatory agreements encumbering the Property related to the City Loans to the lien of the deed of trust securing the Senior Loan (the "Assumption"), but not the Carryback Loan on the following terms and conditions: Borrower: Collateral: Assumed Loan Amount: Non -Recourse: Assumption Documents: Commitment Expiration Date: Additional Terms: Cornerstone Housing Partners LP Deed of Trust encumbering the Property subordinate to the Senior Loan, but senior to the Carryback Loan. Outstanding principal balance and accrued and unpaid interest on the City Loans, less any net proceeds from the sale of the Property to New Owner (but excluding the Carryback Loan). The City Loans shall remain non -recourse to New Owner and the partners of New Owner. The form of the assumption Agreements for the Senior Loa and Housing Authority after the Credits. November 20, 2020 n agreement and Subordination shall be approved by the City New Owner obtains their Tax The City and Authority agree to subordinate the City Loans to a maximum of $8.7 million in Bonds. The City Loans will continue to be repaid from 50% of the residual receipts generated by the Project. Residual receipts will be defined as cash flow remaining after payment of approved cash operating expenses, Bond. debt service, repayment of the deferred Developer Fee, and payment of approved Limited and General Partner asset management fees. 100% of the Project's cash flow after payment of operating expenses and Bond debt service will be allocated to repaying the deferred Developer Fee. The payment of Limited Partner asset management fees will terminate at the end of 15 years. FOOMMU1 iacua:ISI The rents may be increased at the Property up to 50% of Area Median Income. Prior to the levying of any rent increase, Jamboree will provide a minimum 60-day notice instead of the statutory 30-day notice. This Commitment contains the entire understanding between New Owner and the City with respect to the Assumption, supersedes all prior oral or written communications, and may,not be modified or waived except in writing, and signed by the party to be bound thereby. This Commitment and all Assumption documents shall be governed by California law. This Commitment is personal to New Owner and is not assignable or transferable by New Owner. The fulfillment of this Commitment is subject to the approval of various Subordination Agreements and Amendments to the Loan Agreements by City Council and the Housing Authority. If you have any questions or require any additional information regarding this Commitment, please contact Judson Brown, Housing Division Manager, by telephone at (714) 667-2241 or by e-mail at ibrown(a.santa-ana.orc. Sincerely, Raul Godi ez II City Manager City of Santa Ana Maria D. Huizar Clerk of the Council Maria Huizar Recording Secretary Steven A. Mendoza Executive Director Housing Authority of the City of Santa Ana 80A-11 80A-12 EXHIBIT 2 ADVISORS IN: Real Estate Affordable Housing To: Economic Development BERKELEY A. Jerry Keyser From: Timothy C. Kelly Debbie M. Kern David Doezema Kevin Feeney Date: Los ANOELES Kathleen H. Head James A. Rabe Subject: Gregory D. Soo-Hoo Kevin E. Engstrom Julie L. Romey Tim R. Bretz 0 KEYSER MARSTON ASSOCIATES. ADVISORS IN PUBLIC/PRIVATE REAL ESTATE DEVELOPMENT MEMORANDUM Judson Brown, Housing Division Manager City of Santa Ana Kathleen Head August 26, 2019 Cornerstone Apartments: Updated Resyndication Proposal At your request, Keyser Marston Associates, Inc. (KMA) evaluated the August 14, 2019 SAa Paul C.. Marra proposal submitted by Jamboree Housing Corporation (JHC) for the Low Income Housing Tax Credit (Tax Credit) resyndication of the 127-unit Cornerstone Apartments (Project). The purpose of the KMA analysis is to evaluate the JHC request to modify the subordination terms associated with the loans that were provided to the Project by the City of Santa Ana (City) and the Housing Authority of the City of Santa Ana (Authority). BACKGROUND STATEMENT In 2001 and 2003, the City and Authority provided 42 loans to a partnership that used the loans to fund a portion of the acquisition and rehabilitation costs associated with the Project (City Loan). As of November 2018, the City Loans were subordinated to in $3.95 million in existing Bond debt. In November 2018 the City and Authority approved the JHC resyndication proposal. As part of the resyndication, the City and Authority agreed to the following: 1. JHC is required to prepay $500,000 of the City Loan's principal balance; and 2. The remaining principal and interest balance of the City Loan is subordinated to $8.7 million in newly issued Bonds. 500 SOUTH GRAND AVENUE, SUITE 1480�- LOS ANGELES, CALIFORNIA 90071: PHONE 213.622.8095 W W W.KEYSERMARSTON.COM 80A-13 1908006.SNA:KHH 19190.017.003 EXHIBIT 2 Judson Brown, City of Santa Ana August 26, 2019 Cornerstone Apartments: Updated Resyndication Proposal Page 2 On August 14, 2019, JHC submitted a proposal to the City and Authority to modify the agreed upon terms in the following ways: 1. JHC would prepay $2,204,000 of the principal balance on the City Loan; and 2. The remaining principal and interest balance of the City Loan would be subordinated to $11.1 million in newly issued Bonds. The August 14, 2019 JHC proposal is based on the following financial assumptions: 1. The Bond amount increased by $2.4 million based on the following changes to the underwriting terms: a. The mortgage interest rate decreased from 5.75% in November 2018 to 4.0% in August 2019. b. The amortization period was increased from 35 years to 40 years. 2. The Developer Fee to be paid to JHC remains unchanged at $2,158,000. However, the Developer Fee amount to be deferred and then repaid out of Project cash flow was reduced from $1,050,432 to $296,204. ANALYSIS The KMA analysis evaluates the following: 1. The changes in the Project's development cost estimate; 2. The increase in Bond proceeds; 3. The viability of reverting to the affordable rent calculation methodology imposed by California Health and Safety Code (H&SC) Section 50053; 4. The allocation of the additional Bond proceeds; and 5. The repayment of the City Loan in nominal and net present value terms. A summary of the KMA analysis follows this memorandum. The detailed cash flow projections are presented in Appendices A and B. 1908006.SNA:KHH 19190.017.003 EXHIBIT 2 Judson Brown, City of Santa Ana August 26, 2019 Cornerstone Apartments: Updated Resyndication Proposal Page 3 Development Cost Estimate The November 2018 and August 2019 development cost estimates are summarized in the following table:' November August 14, Difference 2018 2019 Property Acquisition $17,560,001 $17,500,001 ($60,000) Hard Construction Costs 8,274,250 8,449,522 175,272 Soft Costs 2,104,688 2,605,980 501,292 Developer Fee 2,158,000 2,158,000 0 Financing Costs 1,461,965 1,594,215 132,250 Total Development Cost $31,558,904 $32,011,718 $748,814 As can be seen in the preceding table, the 1HC development cost estimate has increased by approximately $749,000. The largest cost increase is $368,000, and it is related to the JHC decision to temporarily relocate tenants while their units are being rehabilitated rather than attempting to undertake the work while the tenants remain in residence. The net Tax Credit equity being received by the Project increased by approximately $667,000 between November 2018 and August 14, 2019. The additional proceeds are being used to fund a portion of the increased development costs. Bond Proceeds Based on the interest rate reduction, the five year increase in the amortization period, and the use of 2019 Orange County household income information, the Bond proceeds to be received by the Project have increased by $2.4 million. These additional Bond funds are proposed to be used for the following purposes: 1. A $1,704,000 additional prepayment of the City Loan's principal balance will be made. This brings the total prepayment amount to $2,204,000. 'The proposed $1,704,000 million in additional City Loan principal prepayment is not included in the comparative cost estimate. The proposed additional prepayment is analyzed separately. 1908006.SNA:KHH 19190.017.003 EXHIBIT 2 Judson Brown, City of Santa Ana August 26, 2019 Cornerstone Apartments: Updated Resyndication Proposal Page 4 2. The deferred Developer Fee amount will be reduced by $806,543. Affordable Rent Standards In November 2018 the City and Authority agreed to modify the affordability covenants to allow for the use of Tax Credit rents. During the intervening period, the Bond interest rate has been reduced, the amortization period has been extended by five years, and the 2019 Orange County incomes have gone into effect. The combination of these factors increases the supportable Bond funding to $11.1 million. The estimated impact created by reverting to the H&SC Section 50053 rents along with the current underwriting standards is presented in the following table: Income Gross Rent $1,451,200 Miscellaneous Income 18,100 Vacancy & Collection Allowance @ 5% (73,500) Effective Gross Income (EGI) $1,395,900 Operating Expenses ($898,500) Stabilized Net Operating Income $497,400 Debt Service Coverage Ratio 1.15 Income Available for Debt Service $432,500 Supportable Mortgage @ 4% Interest $8,623,000 Using the current underwriting standards and the H&SC Section 50053 rents generates a supportable Bond issue of approximately $8.7 million. This is approximately $2.48 million less than the Bond supported using Tax Credit rents. In other words, the use of H&SC Section 50053 rents wipes out the increase in the supportable Bond issue that was generated by the current underwriting standards. If the City and Authority choose to revert to the H&SC Section 50053 rents, the prepayment of the City Loan will need to remain at the previously agreed upon amount of $500,000. In addition, the deferred portion of the Developer Fee will need to 1908006.SNA:KHH 19190.017.003 EXHIBIT 2 Judson Brown, City of Santa Ana August 26, 2019 Cornerstone Apartments: Updated Resyndication Proposal Page 5 increase back to approximately $1.1 million. Given that 100% of the deferred Developer Fee must be recouped prior to the commencement of any residual receipts payments, the increase in the deferred amount would postpone the repayment of the City Loan. Allocation of Additional Bond Proceeds Under the current proposal JHC will obtain $2.4 million in additional Bond funds. As proposed these funds will be allocated to reduce the amount of the Developer Fee that must be deferred, and to increase the amount that will be prepaid on the City Loan. The issue from the City and Authority perspective is how these additional funds should be allocated between the City Loan repayment and the upfront Developer Fee payment. The KMA analysis of the allocation proposed by JHC is presented in the following table: November August 14, % Share of 2018 2019 Increase Developer Fee Total Developer Fee $2,158,000 $2,158,000 (Less) Deferred Developer Fee (1,050,432) (243,889) 32% Upfront Developer Fee $1,107,568 $1,914,111 City Loan Prepayment $500,000 $2,204,000 68% As indicated in the preceding table, the approximately 68% of the increased Bond funds are being allocated to prepayment of the City Loans, while 32% of the increased Bond funds are being used to reduce the amount of Developer Fee that will be deferred. It is important to note that as the deferred amount of the Developer Fee decreases, the proceeds available to repay the City Loan increases. City Loan Repayment The outstanding principal and interest balance of the City Loan is comprised of the following components: 1908008.SNA:KHH 80A-1 19190.017.003 Judson Brown, City of Santa Ana Cornerstone Apartments: Updated Resyndication Proposal EXHIBIT 2 August 26, 2019 Page 6 Outstanding Principal Balance $6,885,972 Accrued but Unpaid Interest: Loan inception through June 27, 2018 2,246,469 June 28, 2018 through August 31, 2019 Z 243,367 Total Outstanding City Loan Balance $9,375,808 The cash flow projections for the November 2018 structure are presented in Appendix A and the flow projections for the currently proposed structure are presented in Appendix B. The results can be summarized as follows: 2018 2019 Difference Nominal Dollar Repayment Upfront Payment $500,000 $2,204,000 $1,704,000 Sum of Repayment (55 Years) 1,792,000 7,632,000 5,840,000 Total Nominal Dollar Repayment $2,292,000 $9,836,000 $7,544,000 Net Present Value of Repayment $542,000 $2,683,000 $2,141,000 Outstanding Loan Balance (Yr 55) $18,202,000 $10,902,000 ($7,300,000) CONCLUSIONS/RECOMMENDATIONS Based on the results of the preceding analysis it is KMA's conclusion that the proposed restructuring terms serve the best interest of the City, the Authority and JHC. It is therefore our recommendation that the City and the Authority should approve the transaction modifications currently being proposed by JHC. KMA also offers the following transaction structuring recommendations: 1. The City Loan should be subordinated to a maximum of $11.1 million in Bonds. 1 This amount is provided for context purposes only. The actual amount will need to be calculated on the day the Bond transaction closes. 1908006.SNA:KHH 19190.017.003 FOODINFOO Judson Brown, City of Santa Ana Cornerstone Apartments: Updated Resyndication Proposal 2. 3 4. The following should occur concurrent with the Bond closing: EXHIBIT 2 August 26, 2019 Page 7 a. The $2,204,000 City Loan prepayment should be due and payable; and b. The outstanding principal and interest balance of the City Loan should be established. The outstanding principal balance of the City Loan should continue to carry 3% simple interest. The City Loans should continue to be repaid from 50% of the residual receipts generated by the Project. a. Residual receipts should be defined as cash flow remaining after payment of approved cash operating expenses: i. Bond debt service; ii. Repayment of the $243,889 in deferred Developer Fee; and Ill. Payment of approved Limited and General Partner asset management fees which are set at $7,500 and $20,000 per year, respectively. b. To comply with IRS timing regulations, 100% of the Project's cash flow after payment of operating expenses and Bond debt service will need to be allocated to repaying the deferred Developer Fee. C. The repayment of the seller carryback loan should not be treated as a Project cost. Instead, the repayment should be derived solely from JHC's 50% share of the Project's residual receipts. 1908006.SNA:KHH 19190.017.003 80A-19 EXHIBIT 2 APPENDIX A 55-YEAR CASH FLOW PROJECTION NOVEMBER 2018 ANALYSIS 1908006.SNA:KHH 19290.017.003 Fo l i r ry m W W r m Q O "1 4l1 1l1 O o O OI O O o N w nmoa n manrQ r mm �� v O r rl Vtr f f Q e e N N N N m L m m N Op w t0 w c0 O Vf Q m n a0 m m M Y .ti ri ri H m O m aL+ W m V X o m w n m Q .� n o a m m m m o of o o i0 3 2° w m m Q m rl o m m inl n m ry Q ry N Q n m Q Q m m �n vF o o W r .. ri o m rri .+ ai ui °i Q e ry ry o o o N m m m r Q Q m r w m m > m m Q N n O Vf ei O m 0 h Q m m m 0 OI O O L m C C C a ~ a« O m rD m O Q n m IQ N 0 m Ili Q m r m m m m N VY O r C N u m l0 oioQ am ei m i � e ory ism Y v < `" « �° N ao 0 0o in m r oo m m ;� u m E � c ° m v N i0 Q° wE °c N o .. 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Box 1988 Santa Ana, California 92702 Attention: Clerk of the Council SPACE ABOVE THIS LINE FOR RECORDING USE FREE RECORDING REQUESTED [Government Code Section 6103] AMENDED AND RESTATED HOME LOAN AGREEMENT by and between the CITY OF SANTA ANA M.1 CORNERSTONE HOUSING PARTNERS LP, a California limited partnership (805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California) Dated: September 17, 2019 80A-37 EXHIBIT 3 AMENDED AND RESTATED LOAN AGREEMENT HOMEPROGRAM THIS AMENDED AND RESTATED LOAN AGREEMENT (the "Agreement") dated, for identification purposes only, as of September 17, 2019, is made and entered into by and between the City of Santa Ana, a charter city and municipal corporation (referred to herein as "City") and CORNERSTONE HOUSING PARTNERS LP, a California limited partnership, with reference to the following: RECITALS: A. City has received an allocation of funds from the United States Department of Housing and Urban Development ("HUD") under the HOME Investment Partnerships Program (the "HOME Program") (42 U.S.C. § 12701, et seq.,) to be used in accordance with applicable statutory requirements and regulations (the "HOME Regulations") (24 CFR Part 92); B. Among the purposes of the HOME Program are (1) to expand the supply of decent, safe, sanitary, and affordable housing, with primary attention to rental housing, for very low-income and low-income Americans; and (2) to provide participating jurisdictions, on a coordinated basis, with the various forms of federal housing assistance, including capital investment, mortgage insurance, rental assistance, and other federal assistance, needed (a) to promote the development of partnerships among the federal government, states and units of general local government, private industry, and nonprofit organizations able to utilize all available resources to provide more of such housing, and (b) to expand the capacity of nonprofit Community Housing Development Organizations to develop and manage decent, safe, sanitary and affordable housing; C. Developer is the owner of that certain real property located at 805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California and commonly referred to as the Cornerstone Apartments, and legally described in Exhibit A attached hereto and incorporated herein by reference ("Property"). D. The City of Santa Ana ("City") and Wakeham-Grant Apartments, L.P. (the "Original Developer") previously entered into the HOME Loan Agreements recorded in Official Records of Orange County and the Owner Participation Agreements (collectively, "HOME Loan Agreements") described in Exhibit G. E. The purpose of said HOME Loan Agreements was to assist with the rehabilitation of a 126-unit residential housing development on the Property ("Project"). F. In connection with the Original Developer's sale of the Property to Developer (the "Developer Sale"), Original Developer and Developer desire to enter into that certain Assignment and Assumption Agreement (HOME Loan) by and between the Original Developer and the Developer to effectuate the assignment of the HOME Loan Agreements to Developer (the "Assignment"), and the City has consented to such Developer Sale and Assignment. 2 EXHIBIT 3 G. In connection with the Assignment, the parties desire to amend and restate said HOME Loan Agreements in order to: restate the terms of the HOME Loan Agreements; extend the Term of the HOME Loan Agreements, and to set all affordable rents at the Project based on Tax Credit Allocation Committee ("TCAC") rents, instead of the existing State of California Health and Safety Code rents, upon the termination of the HOME Compliance Period. H. On November 20, 2018, the City Council authorized the City Manager to execute a commitment letter to resubordinate the HOME Loan Agreements for the Cornerstone Apartments to tax-exempt multifamily bonds in an amount not to exceed $8,700,000. The City Council also authorized the City Manager to level all rents onsite at the 50% TCAC rents instead of the existing Health and Safety Code rents. No new HOME Program funds are being provided to the Project. I. On September 17, 2019, the City Council authorized the resubordination of the HOME Loan Agreements for the Cornerstone Apartments to a $17,250,000 construction loan, which will be reduced to $11,100,000 in connection with the conversion of the construction loan to a permanent loan. J. The Developer has received a new allocation of 4% low-income housing tax credits in order to resyndicate and recapitalize the Project and rehabilitate the 126 affordable rental units, as is typical after the 15 year TCAC compliance period. K. This Agreement and all of its attachments shall be enforceable by City in accordance with the terms thereof. Each of this Agreement, the Affordability Restrictions on Transfer of Property, the City/HOME Loan Note and the City/HOME Deed of Trust provide a means of enforcement by the City if Developer is in breach of its obligations hereunder and thereunder, including liens on the Property, use and deed restrictions and covenants running with the land [24 CFR 92.504 (c) (13)]. NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein contained, City and Developer agree as follows: DEFINITIONS AND INTERPRETATION 1.1 Defined Terms. All capitalized terms used herein, including, without limitation, in the Recitals above and in all other Project Documents, unless otherwise expressly defined, are defined where first used in this Agreement and/or as set forth in this Article 1. "Affordable Housing" means housing operated in accordance with the requirements of 24 CFR 92.252 and the rents governed by HUD. "Affordability Restrictions on Transfer of Property" means that certain document affecting real property benefiting the City, attached hereto as Exhibit F. "Affordable Rent" means the monthly rents that are set forth in more detail in Section 7 of this Agreement. EXHIBIT 3 "Building Permit" means the building permit(s) issued by City and required for the construction, if any. "Business Day" means any Monday, Tuesday, Wednesday, Thursday or Friday on which Santa Ana City Hall is open to the public for the conduct of City affairs. "Calendar Year" means each consecutive twelve (12) month period from January 1 to December 31. "Certificate of Completion" has the meaning set forth in Article 17. "CHDO" means Community Housing Development Organization "City" means the City of Santa Ana, California, a charter city and municipal corporation. "City/HOME Loan" means the loan to be made to Developer by City from HOME funds pursuant to Article 5 of this Agreement. "City/HOME Loan Deed of Trust" means the deed of trust encumbering the Property, in the form attached hereto as Exhibit D, to be executed by Developer pursuant to Section 5.13.2 in order to secure the City/HOME Loan Note. "City/HOME Loan Note" means that certain promissory note in the original principal amount of FIVE MILLION, ONE HUNDRED, TWENTY-EIGHT THOUSAND, ONE HUNDRED AND FIFTY-TWO DOLLARS ($5,128,152), in the form attached hereto as Exhibit E, and to be executed by Developer in favor of City to evidence the obligation of Developer to repay the City/HOME Loan. "Close of Escrow" shall mean the date upon which the City/HOME Loan Deed of Trust is recorded in the Official Records of the County. "Closing Statement" means the final statement of Developer's Escrow account for the purchase and sale of the Property pursuant to the Purchase Contract. "County" means the County of Orange, California. "Developer" means CORNERSTONE HOUSING PARTNERS LP, a California limited partnership, its successors and assigns. "Developer's Representative" shall mean the President of the Managing General Partner of Developer or his/her designee. "Escrow Holder" means First American Title Insurance Company, 18500 Von Karman Avenue, Suite 600, Irvine, CA 92612. "Event of Default" has the meaning set forth in Section 20.1. EXHIBIT 3 "Executive Director" means the Executive Director of the Community Development Agency, or his/her designee. "Extremely Low Income" an adjusted income which does not exceed thirty percent (30%) of the area median income for the Orange County, California PMSA, adjusted for household size, as published by HUD.. "General Partner(s)" means the General Partners of Developer, Cornerstone Housing Partners LP, and their respective successors and assigns. "Governmental Authority" means any governmental or quasi governmental agency, board, bureau, commission, department, court, administrative tribunal or other instrumentality or authority, and any public utility. "Hazardous Materials" means flammable materials, explosives, radioactive materials, hazardous wastes, toxic substances and similar substances and materials, including all substances and materials defined as hazardous or toxic wastes, substances or materials under any applicable law, including without limitation the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et sue., and the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §§ 9601, et seq., as amended. "HOME Compliance Period" is the 15 year period applicable only to the original HOME loans provided to the Project. In cases where the initial HOME Compliance period was established for thirty (30) years, the City will follow the 15 year HOME Compliance period for HOME rehabilitation projects [24CFR 92.252 (e)]. The last HOME Compliance period from the HOME Loan Agreements will end on December 23, 2019. "HOME Program" has the meaning set forth in Recital "A" above. "HOME Regulations" has the meaning set forth in Recital "A" above. "HUD" means the United States Department of Housing and Urban Development and any successors or assigns thereof. "Improvements" means all improvements and fixtures now and hereafter comprising any portion of the Property, including, without limitation, landscaping, trees and plant materials; and offsite improvements (including, without limitation, streets, curbs, storm drains, and adjacent street lighting). "Indebtedness" of a person means (a) all indebtedness for borrowed money, (b) notes payable and drafts accepted representing extensions of credit, whether or not representing obligations for borrowed money, (c) any obligation for the purchase of property or services in excess of $10,000 in the aggregate that is (i) deferred for more than six (6) months, or (ii) evidenced by a note or similar instrument, and ( d) all recourse EXHIBIT 3 and all non -recourse indebtedness secured by any Lien on any property or asset of such person (whether or not assumed by such person). "Indemnitees" has the meaning set forth in Section 14.5. "Laws" means all statutes, laws, ordinances, regulations, orders, writs, judgments, injunctions, decrees or awards of the United States or any state, county, municipality or other Governmental Authority. "Lien" means any lien, mortgage, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any lien or security interest). "Limited Partner" means the Limited Partners of Developer pursuant to the Partnership Agreement, and their successors and assigns. "Loan Documents" means, collectively, this Agreement, the City/HOME Loan Note, the City/HOME Deed of Trust, the Affordability Restrictions on Transfer of Property, and any other agreement, document, or instrument that the City requires in connection with the execution of this Agreement or from time to time to effectuate the purposes of this Agreement. "Low Income" means an adjusted income which does not exceed eighty percent (80%) of the area median income for the Orange County, California PMSA, adjusted for household size, as published by HUD. "Median Income for the Area" means the median income for the Orange County, California PMSA as most recently determined by HUD. Also may be referred to interchangeably in the Loan Documents as "Area Median Income" or "AMP'. "Partnership Agreement" means the Amended and Restated Agreement of Limited Partnership dated September 1, 2019, as said Partnership Agreement may be amended from time to time. "Permitted Encumbrances for the Affordable Housing Restrictions" means, collectively, the Senior Loan Deed of Trust and all other title exceptions and limitations with respect to the Property hereafter approved by the Executive Director in writing. "Permitted Encumbrances for the City Loan Deed of Trust" means, collectively, the Senior Loan Deed of Trust and all other title exceptions and limitations with respect to the Property hereafter approved by the Executive Director in writing. "Project" means the acquisition and new construction -of the Property by Developer pursuant to this Agreement. EXHIBIT 3 "Project Budget" means the line -item budget for the Project attached hereto as Exhibit C, as modified from time to time in accordance with this Agreement. "Project Costs" means all costs of any nature incurred in connection with the Project in accordance with generally accepted accounting principles. "Property" means, collectively,the Properties that are located at 805 S. Minnie St, 810 S. Minnie, 815 S. Minnie St, 816 S. Minnie St., 825 S. Minnie St., 828 S. Minnie St., 835 S. Minnie St., and 904 S. Minnie St, within the City of Santa Ana, and is more fully described in the "Legal Description" of the Property attached hereto as Exhibit A and incorporated herein by reference. "Senior Lender" means MUFG Union Bank, N.A. or any other holder of the Senior Loan Note(s) or any refinancing of the Senior Loan Note(s). "Senior Loan" shall mean the senior loan being made by Senior Lender concurrent to the City Loan for payment of a portion of the acquisition and new construction costs, and shall include any subsequent loan that refinances the initial Senior Loan. "Senior Loan Deed of Trust" means the deed of trust securing the Senior Loan by encumbering the Property. "Senior Loan Documents" means, collectively, the loan agreement governing the Senior Loan, the Senior Loan Note, the Senior Loan Deed of Trust, and any other agreement, document or instrument that the Senior Lender requires in connection with the Senior Loan. "Senior Loan Note" means the promissory note evidencing the Senior Loan from Senior Lender. "Term" the terms and conditions contained herein shall remain in effect for fifty-five (55) years. The Affordability Restrictions on Transfer of Property shall also remain in effect for fifty-five (55) years. "Very Low Income" means an adjusted income which does not exceed fifty percent (50%) of the area median income for the Orange County, California PMSA, adjusted for household size, as published by HUD. 1.2 Singular and Plural Terms. Any defined term used in the plural in this Agreement or any other City Loan Document shall refer to all members of the relevant class and any defined term used in the singular shall refer to any number of the members of the relevant class. 1.3 References and Other Terms. Any reference to this Agreement or any Loan Document shall include such document both as originally executed and as it may from time to time be modified. References herein to Articles, Sections and Exhibits shall EXHIBIT 3 be construed as references to this Agreement unless a different document is named. References to subparagraphs shall be construed as references to the same Section in which the reference appears. The term "document" is used in its broadest sense and encompasses agreements, certificates, opinions, consents, instruments and other written material of every kind. The terms "including" and "include" mean "including (include) without limitation." 1.4 Exhibits Incorporated. All attachments and exhibits to this Agreement, as now existing and as the same may from time to time be modified, are incorporated herein by this reference. AMENDMENT AND RESTATEMENT This Agreement amends, restates and supersedes in their entirety the HOME Loan Agreements. SCOPE OF WORK/ PROJECT BUDGET Developer shall comply with this Section until the Certificate of Completion is issued. A "Scope of Work" for the Property is attached hereto as Exhibit B. Any change to the Scope of Work requested by the Developer, which would result in a change to the Project Budget in excess of ten percent (10%) of any individual line item or in excess of five percent (5%) of the aggregate budget, shall be subject to the prior written approval of the Executive Director. A line -item budget for the Project, including a summary statement of sources and uses of funds, is incorporated into Exhibit C (the "Project Budget"). Any material change to the Project Budget in excess of ten percent (10%) of any individual line item or in excess of five percent (5%) of the aggregate budget shall be subject to the prior written approval of the Executive Director which if not granted or denied within five (5) Business Days, shall be deemed approved; provided, however, that in all events, Developer shall at all times obtain and maintain all required permits and approvals from the City's Planning and Building Agency. Notwithstanding the foregoing, the City's approval of a change order shall not be required unless the approval of the Senior Lender is required with respect to such change order. 4. [RESERVED] 5. LOANS A. CITY LOAN: 1. Amount and Purpose. Subject to the terms and conditions of this Agreement, City agrees to make a loan of HOME funds to Developer in the principal amount of up to FIVE MILLION, ONE HUNDRED, TWENTY-EIGHT THOUSAND, ONE HUNDRED AND FIFTY-TWO DOLLARS ($5,128,152) (the "City/HOME Loan") for the EXHIBIT 3 rehabilitation of the Property. No new HOME funds are being provided to the project. The Loan consolidates nine existing HOME loans for the purpose of enabling the Developer to resyndicate and rehabilitate the Property. 2. City/HOME Note and Deed of Trust. The City/HOME Loan shall be evidenced by the City/HOME Loan Note in the form attached hereto as Exhibit E. The City Loan shall be secured by the City/HOME Loan Deed of Trust in the form attached hereto as Exhibit D. The City/HOME Deed of Trust shall be a deed of trust encumbering the Property, subordinate to the Senior Loan(s) made to Developer and the Senior Loan Documents. 3. City/HOME Loan Terms. The terms and conditions of the City/HOME Loan are as set forth in the City/HOME Loan Note which is a residual receipts note. 6. CONDITIONS TO RETAIN EXISTING LOANS Developer shall comply with this Section until the Certificate of Completion is issued. 6.1 Conditions Precedent. City's obligation to provide the Loan Amount is subject to the satisfaction, or waiver by the Executive Director, of the following conditions precedent: (a) Loan Documents. Developer shall have delivered to the Escrow Holder, signed by the authorized officer or officers of Developer, with such signature(s) acknowledged where necessary, each of the following documents: (i) This Agreement; (ii) The City/HOME Loan Note; (iii) The City/HOME Deed of Trust; and (iv) The Affordability Restrictions on Transfer of Property. (b) Title Insurance. City shall have received an LP-10 ALTA Lender's loan policy of title insurance (2006 edition), or evidence of a commitment therefore satisfactory to City, issued by First American Title Insurance Company and in form and substance satisfactory to City, together with all endorsements and binders required, naming City as the insured, in a policy amount of not less than the City/HOME Loan Amount, showing Developer as the fee owner of the Property and insuring the City/HOME Deed of Trust to be a valid lien on the Property. This Agreement, the City/HOME Loan Note, and City/HOME Deed of Trust shall be subordinate to the Senior Loan Note and Senior Loan Deed of Trust. (c) Affordability Restrictions on Transfer of Property. Developer shall have delivered to the Escrow Holder, in the form attached hereto as Exhibit F, the Affordability Restrictions on Transfer of Title pursuant to which, among other things, Developer agrees that the Property shall be used only for decent, safe, sanitary and EXHIBIT 3 affordable rental housing pursuant to the affordability requirements of Code of Federal Regulations ("CFR") section 92.252 or 92.254 and California Health and Safety Code ("H&S") sections 50052.5, as applicable. (d) Documents Recorded. This Agreement, the City/HOME Loan Deed of Trust and the Affordability Restrictions on Transfer of Property shall have been recorded in the Official Records of the County. This Agreement, and the City/HOME Loan Deed of Trust shall be subordinate to the Senior Loan Note and the Senior Loan Deed of Trust. (e) Request for Notice. For the benefit of City, Escrow Holder shall have recorded a request for notice of default of the Senior Loan (the "Request for Notice of Default"). (f) Insurance. City shall have received evidence satisfactory to the City Attorney that all of the policies of insurance required by Section 19 of this Agreement are in full force and effect. (g) Representations and Warranties. The representations and warranties of Developer contained in this Agreement and the other Loan Documents shall be correct in all material respects as of the Close of Escrow as though made on and as of that date, and if requested by the Executive Director, City shall have received a certificate to that effect signed by Developer's Representative. (h) No Default. No Event of Default by Developer shall have occurred, and no event shall have occurred which, with the giving of notice or the passage of time or both, would constitute an Event of Default by Developer under this Agreement, and if requested by the Executive Director, City shall have received a certificate to that effect signed by Developer's Representative. 6.3 Termination for Failure of Condition. If (a) any of the conditions set forth herein are not timely satisfied or waived by the Executive Director following the expiration of any applicable notice and cure period, and (b) City is not in default under this Agreement, City may terminate this Agreement without any further liability on its part by giving written notice of termination to Developer. Upon the giving of such notice, all principal, interest and other amounts owing under the City/HOME Loan Note shall be immediately due and payable, regardless of any other specified due date. 6.4 IReserved.] 6.5 [Reserved.] 6.6 IReserved.] 6.7 [Reserved.] 6.8 Other Terms and Conditions of Loan 10 EXHIBIT 3 A. The City/HOME Loan Note shall become immediately due and payable, in the event of any of the following: (1) violation of any of the use covenants and restrictions contained in this Agreement after the expiration of any applicable notice and cure periods; (2) an Event of Default by Developer which is not timely cured after expiration of any applicable notice and cure periods pursuant to the terms of this Agreement. 6.9 Closing Costs and Fees. Developer shall pay (a) all escrow fees and charges, (b) all recording fees and charges on any document recorded pursuant to this Agreement, and (c) the premium for the title insurance required hereunder. 7. AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE OF THE PROPERTY 7.1 Use Covenants and Restrictions A. Developer agrees and covenants, which covenants shall run with the land and bind Developer, its successors, its assigns and every successor in interest to the Property that Developer will make all rental units on the Property available to very low-income households (50% Area Median Income) at rents affordable to such households for fifty-five (55) years from the issuance of the Certificate of Completion. B. The Project shall consist of one -hundred, twenty-six (126) units, including one (1) on -site manager's unit. C. Rental increases shall be in conformance with federal and state law. The City shall require that the units remain affordable, with rents calculated based on assumed household size at the same income levels D. Developer must have a written lease between tenant and owner for a period of at least one year, unless a shorter period is mutually agreed upon. Leases must be consistent with the HOME Program regulations at 24 CFR section 92.209(g). 7.2 Affordability Levels/Unit Mix: All affordable rents in the Project shall be governed by the rents published annually by the California Tax Credit Allocation Committee for households at 50% Area Median Income upon the termination of the initial HOME Compliance Period, as applicable. Utility allowances must be deducted from the Maximum Gross Monthly Rent. The Housing Authority of the City of Santa Ana publishes the Utility Allowance Schedule. 7.3 Rent Increases: On an annual basis, the City shall provide Developer with the maximum allowable schedule of rents for the Property in accordance with changes in allowable rent and income tables published by the California Tax Credit Allocation 11 80A-47 07.`11 m, Committee (TCAC). In no event can Developer charge any tenant more than such amount. The City will make all best efforts to provide Developer with the maximum allowable schedule of rents within no more than 30 calendar days after the date TCAC publishes the allowable rent and income tables. 7.4 Prohibited Fees. The Developer and subsequent owner is prohibited from charging fees that are not customary, consistent with HOME Regulations 24 CFR section 92.504(c)(3)(xi). The Developer and subsequent owner can charge reasonable application fees to prospective tenants; other fees only to the extent that they are reasonable and customary for the project area; and fees for services provided to tenants, provided that these services are not mandatory. 7.5 Maintenance of the Property. Solely at Developer's expense, Developer agrees to maintain the Property in a clean and orderly condition and in good condition and repair and keep the Property free from any accumulation of debris and waste materials (reasonable wear and tear excepted). If at any time Developer fails to maintain, or cause to be maintained, the Property as required by this section, and said condition is not corrected after the expiration of a reasonable period of time not to exceed thirty (30) days from the date of written notice from the City, unless such condition cannot reasonably be cured within thirty (30) days, in which case Developer shall have such additional time as reasonably necessary to complete such cure, the City may perform the necessary maintenance and Developer shall pay all reasonable costs incurred for such maintenance. The City shall inspect the Property annually after the date of issuance of the Certificate of Completion as described in Article 17 of this Agreement. During the affordability period, the Property must meet all applicable State and local codes. The Property must be free of all health and safety defects during the affordability period. 7.6 Obligation to Refrain from Discrimination. Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, mental or physical disability, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall Developer itself or any person claiming under or through him establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing covenants shall run with the land and shall remain in effect for the term of this Agreement. 7.7 CHDO Provisions. Developer shall maintain CHDO (Community Housing Development Organization) status for the term of this Agreement and the HOME Regulatory Agreement in accordance with 24 CFR 92. Developer agrees to provide information as may be requested by the City to document its continued compliance, including but not limited to an annual board roster and certification of continued compliance. Developer will create and follow a tenant participation plan, as required in 24 CFR 92.303. 12 .O A ' 46 EXHIBIT 3 The provisions of this Section 7.7 shall not apply in the event of a foreclosure of the Property or transfer in lieu of foreclosure. In the event of a foreclosure, or acceptance of a deed in lieu of foreclosure, Senior Lender will use commercially reasonable efforts to accept bids for the Property from a qualified CHDO; provided, however, that in no event shall Senior Lender be obligated to select a qualified CHDO to be the purchaser of the Property unless, among other criteria used in Senior Lender's reasonable discretion, such qualified CHDO has offered the highest purchase price among the bidders. 8. RESERVED. 9. GENERAL PROVISIONS AND WARRANTIES As a material inducement to City to enter into this Agreement, Developer represents and warrants as follows: 9.1 Formation, Oualification and Compliance. JHC-Comerstone II, LLC, the managing general partner of Developer (a) is a limited liability company, validly existing and in good standing under the laws of the State of California, (b) has all requisite authority to conduct its business and own and lease its properties, and (c) is qualified and in good standing in every jurisdiction in which the nature of its business makes qualification necessary or where failure to qualify could have a material adverse effect on its financial condition or the performance of its obligations under the Loan Documents. Developer is in compliance with all laws applicable to its business and has obtained all approvals, licenses, exemptions and other authorizations from, and has accomplished all filings, registrations and qualifications with, any Governmental Authority that are necessary for the transaction of its business. 9.2 Execution and Performance of Loan Documents. 9.2.1 Developer has all requisite authority to execute and perform its obligations under the Loan Documents. 9.2.2 The execution and delivery of Developer of, and the performance by Developer of its obligations under, each Loan Document has been authorized by all necessary action and does not and will not: (a) require any consent or approval not heretofore obtained of any person having any interest in Developer; (b) violate any provision of, or require any consent or approval not heretofore obtained under, any articles of incorporation, by-laws or other governing document applicable to Developer; (c) result in or require the creation of any lien, claim, charge or other right of others of any kind (other than under the City Loan Documents) on or with respect to any property now or hereafter owned or leased by Developer; (d) violate any provision of any law presently in effect; 13 80A-49 EXHIBIT 3 air (e) constitute a breach or default under, or permit the acceleration of obligations owed under, any contract, loan agreement, lease or other agreement or document to which Developer is a party or by which Developer or any of its property is bound. 9.2.3 Developer is not in default, in any respect that is materially adverse to the interests of City under the Loan Documents or that would have any material adverse effect on the financial condition of Developer or the conduct of its business, under any law, contract, lease or other agreement or document described in sub- paragraph (d) or (e) of the previous subsection. 9.2.4 No approval, license, exemption or other authorization from, or filing, registration or qualification with, any Governmental Authority is required which has not been previously obtained in connection with: (a) the execution of Developer of, and the performance by Developer of its obligations under, the Loan Documents; and (b) the creation of the liens described in the Loan Documents. 9.3 Financial and Other Information. To the best of Developer's knowledge, all financial information furnished to City with respect to Developer in connection with the Loan (a) is complete and correct in all material respects as of the date of preparation thereof, (b) accurately presents the financial condition of Developer, and (c) has been prepared in accordance with generally accepted accounting principles consistently applied or in accordance with such other principles or methods as are reasonably acceptable to City. To the best of Developer's knowledge, all other documents and information furnished to City with respect to Developer, in connection with the Loans, are correct and complete in all material respects insofar as completeness is necessary to give the City accurate knowledge of the subject matter. To the best of Developer's knowledge Developer has no material liability or contingent liability not disclosed to City in writing and there is no material lien, claim, charge or other right of others of any kinds (including liens or retained security titles of conditional vendors) on any property of Developer not disclosed in such financial statements or otherwise disclosed to City in writing. 9.4 No Material Adverse Change. There has been no material adverse change in the condition, financial or otherwise, of Developer since the dates of the latest financial statements furnished to City. Since those dates, Developer has not entered into any material transaction not disclosed in such financial statements or otherwise disclosed to City in writing. 9.5 Tax Liability. Developer has filed all required federal, state and local tax returns and has paid all taxes (including interest and penalties, but subject to lawful extensions disclosed to City in writing) other than taxes being promptly and actively contested in 14 1M1 EXHIBIT 3 good faith and by appropriate proceedings. Developer is maintaining adequate reserves for tax liabilities (including contested liabilities) in accordance with generally accepted accounting principles or in accordance with such other principles or methods as are reasonably acceptable to City. 9.6 Governmental Requirements. To the best of Developer's knowledge, Developer is in compliance with all laws relating to the Property and all Governmental Authority approvals, including zoning, land use, planning requirements, and requirements arising from or relating to the adoption or amendment of, any applicable general plan, subdivision and parcel map requirement; environmental requirements, including the requirements of the California Environmental Quality Act and the National Environmental Policy Act and the preparation and approval of all required environmental impact statements and reports; use, occupancy and building permit requirements; and public utilities requirements. 9.7 Rights of Others. Developer is in compliance with all covenants, conditions, restrictions, easements, rights of way and other rights of third parties relating to the Property. 9.8 Litigation. There are no material actions or proceedings pending or, to the best of the Developer's knowledge, threatened against or affecting Developer or any property of Developer before any Governmental Authority, except as disclosed to City in writing prior to the execution of this Agreement. 9.9 Bankruptcy. To the best of Developer's knowledge, no attachments, execution proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings are pending or threatened against Developer, nor are any of such proceedings contemplated by Developer. 9.10 Information Accurate. To the best of Developer's knowledge, all information, regardless of its form, conveyed by Developer to City, by whatever means, is accurate, correct and sufficiently complete to give City true and accurate knowledge of its subject matter, and does not contain any material misrepresentation or omission. 9.11 Conflicts of Interest. No member, official or employee of the City shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to this Agreement which affects his/her personal interests or the interests of any corporation, partnership or association in which he/she has a direct or indirect financial interest. The Developer warrants that it neither has paid nor given, nor will pay or give, any third party any money or other consideration for obtaining this Agreement. 9.12 Nonliability of City Officials and Emplovees. No member, official or employee of the City shall be personally liable to the Developer in the event of any default or breach by the City or for any amount which may become due to Developer or on any obligations under the terms of this Agreement. 15 80A-51 EXHIBIT 3 9.13 No Assignment. Developer expressly acknowledges and agrees that the City has only agreed to assist the Developer as a means by which to induce the acquisition/rehabilitation/development of the Property. Accordingly, Developer further expressly acknowledges and agrees that this Agreement is a personal right of Developer that is neither negotiable, transferable, nor assignable except as set forth herein. Developer may assign some or all of its rights under this Agreement only with the prior written consent of the Executive Director (such consent not to be unreasonably withheld), except that no prior consent is necessary for an assignment by a limited partner of Developer to an affiliate, or as otherwise provided in the Deed of Trust. 9.14 Applicable Law. This Agreement shall be interpreted, governed and enforced under federal and state laws. 9.15 Third Parties. This Agreement is made for the sole benefit of Developer and the City and their successors and assigns, and no other person or persons shall have any rights or remedies under or by reason of this Agreement or any right to the exercise of any right or power of the City hereunder or arising from any default by Developer, nor shall the City owe any duty whatsoever to any claimant for labor performed or materials furnished in connection with the construction of the Property. 9.16 Control of Property. The parties acknowledge that the City has not at any time participated in any manner in the management or operation of the Property, and will not so participate at any time hereafter. 10. CONDITIONS FOR CONSTRUCTION Developer shall comply with this Section until the Certificate of Completion is issued. 10.1 Permits and Approvals. Developer shall diligently obtain all permits, including all building permits, licenses, approvals, exemptions and other authorizations of Governmental Agencies required in connection with the rehabilitation of the Property. 10.2 Commencement and Completion of Construction. The construction shall be considered complete for purposes of this Agreement only when (a) all work described has been completed and fully paid for (subject to required retainage), and (b) all work requiring inspection or certification by Governmental Authority has been completed and all requisite certificates, approvals and other necessary authorizations (including required final certificates of occupancy) have been obtained. 10.3. RESERVED. 10.4 Entry and Inspection. At all times prior to completion of the construction, upon reasonable notice, City and their agents shall have (a) the right of free access to the Property and all sites away from the Property where materials for the construction are stored, (b) the right to inspect all labor performed and materials 16 80A-52 EXHIBIT 3 furnished for the construction, and (c) the right to inspect and copy all documents pertaining to the construction. 10.5 Compliance with Section 3 Clause. Section 3 of the Housing and Urban Development Act of 1968, 12 U.S.C. 1701u, as amended by Section 915 of the Housing and Community Development Act of 1992 requires that economic opportunities generated by HUD financial assistance for housing and community development programs be targeted toward low- and very low- income persons. Whenever HUD assistance generates opportunities for employment or contracting, state and local grantees, as well as other recipients of HUD housing assistance funds must, to the greatest extent feasible, provide these opportunities to low- and very low- income persons and to businesses owned by or employing low- and very low- income persons. Section 3 applies to projects for which HUD's share of project costs exceeds $200,000 and contracts and subcontracts awarded on projects for which HUD's share or project costs exceeds $200,000 and the contract or subcontract exceeds $100,000. For purposes of this Section 3 Clause and compliance thereto, whenever the word "contractor" is used it shall mean and include, as applicable, the Developer, and its contractor and subcontractor(s), if any. The particular text to be utilized in any and all contracts of any contractor doing work covered by Section 3 shall be in substantially the form of the following, as reasonably determined by the City, or as directed by HUD or its representative, and shall be executed by the applicable contractor under penalty of perjury: "(a) The work to be performed under this contract is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 170lu ("Section 3"). The purpose of Section 3 is to ensure that employment and other economic opportunities generated by HUD assistance or HUD -assisted projects covered by Section 3, shall, to the greatest extent feasible, be directed to low- and very low-income persons [inclusive of Very Low Income Persons, Very Low Income Households, and Very Low Income Tenants served by the Project], particularly persons who are recipients of HUD assistance for housing. (b) The parties to this contract agree to comply with HUD's regulations in 24 CFR part 135, which implement Section 3. As evidenced by their execution of this contract, the parties to this contract certify that they are under no contractual or other impediment that would prevent them from complying with the part 135 regulations. (c) The contractor agrees to send to each labor organization or representative of workers with which the contractor has a collective bargaining agreement or other understanding, if any, a notice advising the labor organization or workers' representative of the contractor's commitments under this Section 3 clause, and will post copies of notices in conspicuous places at the work site where both employees and applicants for training and employment positions can see the notice. The notice shall describe the Section 3 preference, shall set forth minimum number of job titles subject to hire, availability of apprenticeship and 17 80A-53 EXHIBIT 3 training positions, the qualifications for each; and the name and location of person(s) taking applications for each of the position; and the anticipated date the work shall begin. (d) The contractor agrees to include this Section 3 clause in every subcontract subject to compliance with regulations in 24 CFR part 135, and agrees to take appropriate action, as provided in an applicable provision of the subcontract or in this Section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24 CFR part 135. The contractor will not subcontract with any subcontractor where the contractor has notice or knowledge that the subcontractor has been found in violation of the regulations in 24 CFR part 135. (e) The contractor will certify that any vacant employment positions, including training positions, that are filled (a) after the contractor is selected but before the contract is executed, and (b) with persons other than those to whom the regulations of 24 CFR part 135 require employment opportunities to be directed, were not filled to circumvent the contractor's obligations under 24 CFR part 135. (0 Noncompliance with HUD's regulations in 24 CFR part 135 may result in sanctions, termination of this contract for default, and debarment or suspension from future HUD assisted contracts." After the foregoing Section 3 Clause, there shall be a signature block for the contractor, as applicable, the following text shall be included immediately above the signature block: "The contractor/provider by his/her signature affixed hereto declares under penalty of perjury that contractor has read the requirements of the Section 3 Clause and accepts all its requirements contained therein for all of his/her operations related to this contract." To the extent applicable, the Developer shall comply and/or cause compliance with Section 3 Clause requirements for the Project. For example, when and if Developer or its contractor(s)/subcontractor(s) hire(s) full time employees, rather than volunteer labor or materials, Section 3 is applicable and all disclosure and reporting requirements apply. 10.6 Construction Information. From time to time during the course of the construction, within ten (10) Business Days following City's written demand therefore, Developer shall furnish requested reports of project costs, progress schedules and contractors' costs breakdowns for the construction, itemized as to trade description and item, showing the name of the contractor(s) and/or subcontractor(s), and including such indirect costs as real estate taxes, legal and accounting fees, insurance, architects' and engineers' fees, loan fees, interest during construction and contractors' overhead. 10.7 Protection Against Liens. Developer shall diligently file a valid Notice of Completion upon completion of the construction, diligently file a notice of cessation in the event of a cessation of labor on the construction for a period of thirty (30) days or more, and take all actions reasonably required to prevent the assertion of claims 18 EXHIBIT 3 of lien against the Property. In the event that any claim of lien is asserted against the property or any stop notice or claim is asserted against the City by any person furnishing labor or materials to the Property, Developer shall immediately give written notice of the same to City and shall, promptly and in any event within ten (10) Business Days after written demand therefor, (a) pay and discharge the same, (b) effect the release thereof by delivering to City a surety bond complying with the requirement of applicable laws for such release, or (c) take such other action as City may reasonably require to release City from any obligation or liability with respect to such stop notice or claim. 10.8 General Contractors who are Related Parties to the Developer. If the Project is developed with general contractors who are Related Parties to the Developer, the Developer must be audited to the subcontractor level by an outside auditing firm approved by the City. The Developer shall pay for the audit to the subcontractor level by an outside auditing firm. 11. FEDERAL (HOME PROGRAM) COVENANTS 11.1 CHDO. Jamboree Housing Corporation, the sole member and manager of the managing general partner of Developer, represents and warrants that it qualifies and is in good standing as a Community Housing Development Organization under the HOME Program. Developer hereby covenants and agrees to maintain such status throughout the term of this Agreement, and to provide the Agency and City with written documentation necessary to demonstrate maintenance of said status on an annual basis. 11.2 Oualification as Affordable Housing. As more particularly provided in the Affordability Restrictions on Transfer of Property, Developer shall use, manage and operate the Property in accordance with the requirements of 24 CFR 92.252 so as to qualify the housing on the Property as Affordable Housing with affordable rents. 11.3 Tenant and Participant Protection. Developer shall comply with the requirements of 24 CFR 92.253. 11.4 Local Preference. Subject to compliance with the HOME Regulations and applicable California and federal fair housing laws, local preference for Santa Ana residents and workers in tenant selection shall be a requirement of the Project. Subject to applicable laws and regulations governing nondiscrimination and preferences in housing occupancy required by HUD or the State of California, as well as the City of Santa Ana Affordable Housing Funds Policies and Procedures, the Developer shall give preference in leasing units in the following order of priority: 1. First priority shall be given to persons who have been permanently displaced or face permanent displacement from housing in Santa Ana as a result of any of the following: a. A redevelopment project undertaken pursuant to California's Community Redevelopment Law (Health & Safety Code Sections 33000, et seq.) -- applicable only to projects funded by the Low and Moderate Income Housing Asset Fund. 19 80A-55 EXHIBIT 3 b. Ellis Act, owner -occupancy, or removal permit eviction; c. Earthquake, fire, flood, or other natural disaster; d. Cancellation of a Housing Choice Voucher HAP Contract by property owner; or e. Governmental Action, such as Code Enforcement. 2. Second priority shall be given to persons who are either: a. Residents of Santa Ana and/or b. Working in Santa Ana at least 32 hours per week for at least the last 6 months. 11.5 Handicapped Accessibility. Developer shall comply with (a) Section 504 of the Rehabilitation Act of 1973, and implementing regulations at 24 CFR 8C governing accessibility of projects assisted under the HOME Program; and (b) the Americans with Disabilities Act of 1990, and implementing regulations at 28 CFR 35-36 in order to provide handicapped accessibility to the extent readily achievable. 11.6 Use of Debarred. Suspended, or Ineligible Participants. Developer shall comply with the provisions of 24 CFR 24 relating to the employment, engagement of services, awarding of contracts, or funding of any contractor or subcontractor during any period of debarment, suspension, or placement in ineligibility status. 11.7 Maintenance of Drug -Free Workplace. Developer shall certify that Developer will provide a drug -free workplace in accordance with 24 CFR 84.13. 11.8 Lead -Based Paint. Developer shall comply with the requirements of the Lead -Based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846) and implementing regulations at 24 CFR 35, as applicable. 11.9 Affirmative Marketing. Developer shall implement and perform such affirmative marketing procedures and requirements for the Property (24 CFR 92.351) in compliance with the City's adopted Program. 11.10 Equal Opportunity and Fair Housing. Developer shall carry out the construction and perform its obligations under this Agreement in compliance with all of the state and federal laws and regulations regarding equal opportunity and fair housing described in 24 CFR 92.350. 11.11 Property Standards. Developer shall cause the Property to meet the housing quality standards set forth in 24 CFR 882.109, as well as all applicable local, state and federal codes and ordinances, including zoning ordinances. Developer shall also cause the Property to meet the current edition of the Model Energy Code published by the Council of American Building Officials. 20 .• •. EXHIBIT 3 11.12 Displacement and Relocation. Developer acknowledges and agrees that, pursuant to 24 CFR 92.253 and consistent with the other goals and objectives of this part, City must ensure that it has taken all reasonable steps to minimize the displacement of persons as a result of the Project. Furthermore, to the extent feasible, residential tenants must be provided a reasonable opportunity to lease and occupy a suitable, decent, safe, sanitary and affordable dwelling unit on the Property upon completion of the construction. Developer agrees to cooperate fully and completely with City in meeting the requirements of 24 CFR 92.253 and shall take all actions and measures reasonably required by the Executive Director in connection therewith. All applicable state guidelines must also be followed. (a) Developer acknowledges and agrees to hire a Relocation Consultant to provide relocation services, pursuant to the Uniform Relocation Act and Real Property Acquisition Policies Act of 1970 ("URA") and 24 CFR 92.253. (b) The City, Developer, and Relocation Consultant will meet periodically during the relocation to provide updates and review tenant files, including at Project approval and prior to final benefit calculations. The Developer and Relocation Consultant shall carry out activity in compliance with URA and the City's Acquisition and Relocation Policy and Procedures Manual ("Manual'). (c) The Developer and Relocation Consultant shall maintain accurate records and files pertaining to the temporary and permanent relocation of tenants, in accordance with URA and the City's Manual. (d) The Developer and Relocation Consultant shall provide all relocation and tenant files to the City once relocation is complete at the Project. 11.13 Other Program Requirements. Developer shall carry out each activity in compliance with all federal laws and regulations described in subpart H of 24 CFR 92, except that Developer does not assume City's responsibilities for environmental review in 24 CFR 92.352 or the intergovernmental review process in 24 CFR 92.359. 11.14 Request for Disbursements of Funds. Notwithstanding anything contained in this Agreement to the contrary, Developer may not request disbursements of funds under this Agreement until the funds are needed for payment of eligible costs (such funds shall be used solely towards the acquisition and construction of the Property). The amount of each request shall be limited to the amount needed. 11.15 Eligible Costs. Developer shall use HOME Funds to pay costs defined as "eligible costs" pursuant to 24 CFR 92.206. 21 80A-57 0:cuRIM 11.16 Records and Reports. Developer shall maintain and from time to time submit to City such records, reports and information as the Executive Director may reasonably require in order to permit City to meet the record keeping and reporting requirements required of it pursuant to 24 CFR 92.508. 11.17 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Developer shall comply with the requirements and standards of 2 CFR 200. 11.18 Conflict of Interest. Developer shall comply with and be bound by the conflict of interest provisions set forth at 24 CFR 570.611, as well as state regulations pertaining to conflict of interest. 11.19 Monitoring. Developer shall allow the City to conduct periodic inspections of the HOME assisted units on the Property as required by the Program after the date of construction completion, with reasonable advance written notice. Developer shall cure any defects or deficiencies found by the City while conducting such inspections within two weeks of written notice thereof, or such longer period as is reasonable within the sole discretion of the City. 11.20 Recertification of Tenant Income. (A) Developer shall take all necessary steps to review the income of all tenants prior to renting to them, as well as reviewing current tenants on an annual basis, in accordance with HOME regulations and guidelines. Every fifth (51) year, Developer shall require new original income documents to be submitted by tenants. Tenants in HOME assisted units whose incomes no longer comply with federal income guidelines shall have their rents adjusted in accordance with federal HOME guidelines (24 CFR 92.252-92.253). (B) HOME assisted units continue to qualify as affordable housing despite a temporary non-compliance caused by increases in the incomes of existing tenants if actions satisfactory to HUD are being taken to ensure that all vacancies are filled in accordance with this section until the non-compliance is corrected. 11.21 Other HOME Program Requirements. Developer shall comply with all other applicable federal regulations and requirements of the HOME Program. 11.22 Controlling Covenants. If there is a discrepancy between State and Federal law with regard to any of the aforementioned covenants, the more stringent shall apply. 11.23 Faith Based Activities. To the extent applicable to the Project, in accordance with 24 CFR 92.257, Developer will comply with the restrictions on the use of HOME funds for faith based activities as set forth in Section 92.257. 22 EXHIBIT 3 12. MAINTENANCE, MANAGEMENT, OPERATION, PRESERVATION AND REPAIR OF PROPERTY 12.1 Maintenance. Developer shall maintain the Property (and all abutting grounds, sidewalks, roads, parking and landscape areas which Developer is otherwise required to maintain) in good condition and repair; shall operate the Property in a businesslike manner; shall prudently preserve and protect its own as well as the City's interests in connection with the Property; shall not commit or permit any waste or deterioration of the Property (except for normal wear and tear); shall not abandon any portion of the Property or leave the Property unguarded or unprotected; and shall not otherwise act, or fail to act, in such a way as to unreasonably increase the risk of any damage to the Property or of any other impairment of City's interests under the Loan Documents. Without limiting the generality of the foregoing, and except as otherwise agreed by City in writing from time to time, Developer shall promptly and faithfully perform and observe each of the following provisions: 12.1.1 Alterations and Repair. Developer shall not remove, demolish or materially alter any Improvement without City's prior consent, except to make non- structural repairs which preserve or increase the Property's value, and shall promptly restore, in a good and professional manner, any Improvement (or other aspect or portion of the Property) that is damaged or destroyed from any cause. 12.2 Compliance. Developer shall comply with all laws and requirements of Governmental Authority (including, without limitation, all requirements relating to the obtaining of Governmental Authority approvals), all Governmental Authority approvals and all rights of third parties, relating to Developer, the Property or Developer's business thereon. 12.3 Taxes and Impositions. Developer shall pay, prior to delinquency, all of the following (collectively, the "Impositions"): (a) all general and special real property taxes and assessments imposed on the Property; (b) all other taxes and assessments and charges of every kind that are assessed upon the Property (or upon the owner and/or operator of the Property) and that create or may create a lien upon the Property (or upon any personal property or fixtures used in connection with the Property), including, without limitation, non -governmental levies and assessments pursuant to applicable covenants, conditions or restrictions; and (c) all license fees, taxes and assessments imposed on City (other than City's income or franchise taxes) which are measured by or based upon (in whole or in part) the amount of the obligations secured by the Property. If permitted by law, Developer may pay any Imposition in installments (together with any accrued interest). 12.1.3.1 Right to Contest. Developer shall not be required to pay any Imposition so long as (a) its validity is being actively contested in good faith and by appropriate proceedings, (b) Developer has demonstrated to City's reasonable satisfaction that leaving such Imposition unpaid pending the outcome of such proceedings could not result in conveyance of the Property in satisfaction of such Imposition or otherwise impair City's interests under the Loan Documents, and (c) Developer has furnished City 23 80A-59 EXHIBIT 3 with a bond or other security satisfactory in an amount not less than 100% of the applicable claim (including interest and penalties). 12.1.3.2 Evidence of Payment. Upon demand by City from time to time, Developer shall deliver to City, within thirty (30) days following the due date of any Imposition, evidence of payment reasonably satisfactory to City. 12.1.3.3 Books and Records. Developer shall maintain complete books of account and other records reflecting its operations (in connection with any other businesses as well as with respect to the Property), in accordance with generally accepted accounting principles applied on a consistent basis or in accordance with such other principles or methods as are reasonably acceptable to City, in accordance with 24 CFR 92.508. 12.4 Project Operating Account. Subject to the requirements of the Senior Lender, Developer must promptly deposit all project income directly into a segregated depository account established exclusively for the Project ("Project Operating Account"). Withdrawals from this account may be made only in accordance with the provisions of this Agreement and the approved Project Budget, as it may be revised from time to time with City approval. Prior to the repayment of the City/HOME Loan in full, Developer may make withdrawals from this account solely for the payment of project expenses (including, without limitation, funding reserves and the making of debt service payments), project fees and permitted distributions to the partners of the Developer. Withdrawals from this account for other purposes may be made only with the prior written approval of the City. 12.5 Replacement Reserve Account. Developer must establish or cause to be established a segregated interest -bearing replacement reserve depository account ("Replacement Reserve Account") no later than the date of the Senior Loan converts from a construction loan to a permanent loan. Developer must make monthly deposits from project income into the Replacement Reserve in the amount of one -twelfth (1/12) $500 per unit per year (the $500 is an annual fee paid on a monthly basis). Developer may withdraw funds from the Replacement Reserve Account solely to fund capital improvements for the Project, such as replacing or repairing structural elements, furniture, fixtures or equipment of the Project that are reasonably required to preserve the Project. Developer may not withdraw funds from the Replacement Reserve Account for any other purpose without the prior written approval of the City. 13. NONDISCRINIINATION COVENANTS 13.1 Obligation to Refrain from Discrimination. Developer covenants and agrees that: A. In Use of Property. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, mental or physical disability, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall Developer or any person claiming under or through it, establish or 24 FOODIA .1 0:cu:11W, permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendors of the Property. B. In Affordable Housing Restrictions. The foregoing covenant shall (a) be included in the Affordability Restrictions on Transfer of Property, (b) run with the land, and (c) remain effective for the term of the contract (for 55 years). C. In Employment. In construction of the Property, Developer shall not discriminate against any employee or applicant because of race, color, creed, religion, sex, marital status, mental or physical disability, national origin, or ancestry. Developer shall take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, creed, religion, sex, marital status, national origin, or ancestry. D. In all Contracts. Developer shall cause the foregoing covenants to be inserted in all contracts for any work covered by this Agreement so that such provisions will be binding upon each contractor and subcontractor for the benefit of City, provided that the foregoing covenant shall not apply to contracts or subcontracts for standard commercial supplies or raw materials. 14. ENVIRONMENTAL MATTERS 14.1 Representation and Warranty. Except as disclosed in writing to the City including the environmental site assessments prepared on behalf of Developer and delivered to the City, Developer has no knowledge (a) of the presence on, under or about the Property, now or in the past, of any Hazardous Materials in violation of applicable law, or of the transportation to or from the Property of any Hazardous Materials, (b) that asbestos or polychlorinated biphenyls (PCBs) are contained in or stored on the Property, or (c) that there are any underground storage tanks located in, on or under the Property. 14.2 Compliance with Environmental Laws. Developer shall (a) comply with all environmental laws and environmental permits applicable to the Construction of the Property, (b) immediately pay or cause to be paid all costs and expenses incurred by reason of such compliance, (c) keep the Property free and clear of any environmental claims or liens imposed pursuant to any environmental law, and (d) obtain and renew all environmental permits required for ownership or use of the Property. 14.3 Presence of Hazardous Materials. Developer shall not, and shall not permit anyone else to, generate, use, treat, store, handle, release, or dispose of Hazardous Materials on the Property, or transport or permit the transportation of Hazardous Materials to or from the Property except for de minimis quantities used at the Property in compliance with all applicable environmental laws and required in connection with the routine construction, operation and maintenance of the Property. 14.4 Notice of Environmental Matters. Developer shall immediately advise City in writing of any of the following: (a) any pending or threatened environmental 25 80A-61 claim against Developer or the Property, (b) any condition or occurrence that (i) results in noncompliance with any applicable environmental law, (ii) could reasonably be anticipated to cause the Property to be subject to any restrictions on the ownership, occupancy, use or transferability of the Property under any environmental law, or (iii) could reasonably be anticipated to form the basis of an environmental claim against the Property or Developer. 14.5 Environmental Indemnification by the Developer. Developer agrees to defend, indemnify and hold harmless the City and their respective officers, directors, employees and agents (collectively the "lndemnitees ") from and against any and all obligations (including removal and remediation), losses, claims (including third party claims), suits, judgments, liabilities, penalties, damages (including consequential and punitive damages), costs and expenses (including consultants, and attorneys' fees) of whatever kind or nature whatsoever that may at any time be incurred by, imposed on, or asserted against the hidemnitees directly or indirectly based on, or arising or resulting from the actual or alleged presence of Hazardous Materials on the Property other than arising from the gross negligence, willful misconduct and/or illegal actions of any Indemnitee. 15. OTHER AFFIRMATIVE COVENANTS While any obligation of Developer under the City/HOME Loan Noteor Deed of Trust remain outstanding, the following provisions shall apply, except to the extent that Executive Director otherwise consents in writing: 15.1 Existence. Developer's Managing General Partner shall maintain its existence in good standing under the laws of the State of California, and Developer shall provide documentation of such status annually to the City. 15.2 Protection of Lien. Developer shall maintain the lien of the City Deed of Trust as a valid second priority deed of trust on the Property and take all actions, and execute and deliver to City all documents, reasonably required by City from time to time in connection therewith. 15.3 Notice of Certain Matters. Developer shall give notice to City, within ten (10) days of Developer's learning thereof, of each of the following: (a) any filed litigation or claim affecting or relating to the Property and involving an amount in excess of $5,000; and any litigation or claim that might subject Developer or any general partner to liability in excess of $5,000, whether covered by insurance or not; (b) any material dispute between Developer and a Governmental Authority relating to the Property, the adverse determination of which might materially affect the Property; 26 FOODYNOIN EXHIBIT 3 (c) any change in Developer's principal place of business; (d) any aspect of the Improvements that is not in substantial conformity with the plans or code; (e) any Event of Default or event which, with the giving of notice or the passage of time or both, would constitute an Event of Default; (f) any material default by Developer or any other party under any Senior Loan document, or the receipt by Developer of any notice of default under any Senior Loan document; (g) the creation or imposition of any mechanics' or materialmans' lien or other lien against the Property which might materially affect the Property; and/or (h) any material adverse change in the financial condition of Developer. 15.4 Further Assurances. Developer shall execute and acknowledge (or cause to be executed and acknowledged) and deliver to City all documents, and take all actions, reasonably required by City from time to time to confirm the rights created or now or hereafter intended to be created under the Loan Documents; to protect and further the validity, priority and enforceability of the City Deed of Trust; to subject to the Deed of Trust any property intended by the terms of any Loan Document(s) to be covered by the City Deed of Trust or otherwise to carry out the purposes of the Loan Documents and the transactions contemplated thereunder. Notwithstanding anything to the contrary set forth herein, the Developer shall have no obligation to execute any document, or take any action, which would (i) change a material term of any Loan Document, (ii) change or impair any material right of Developer and/or (iii) increase the liability of Developer or any partner thereof. 15.5 Annual Financial Statements. Developer shall deliver to City, within one hundred twenty (120) days after the end of each Calendar Year following issuance of a Certificate of Completion, (a) a certified public accountant reviewed balance sheet for Developer as of the end of such Calendar Year and a certified public accountant reviewed statement of profit and loss for Developer and for Developer's operations in connection with the Property for such Calendar Year, together with all supporting schedules, (b) a certificate of such certified public accountant that such documents were reviewed by such certified public accountant in accordance with generally accepted accounting principles and otherwise comply with generally accepted accounting principles review requirements, and (c) a certificate of Developer's Managing General Partner that such documents: (i) were prepared in accordance with generally accepted accounting principles applied on a consistent basis or in accordance with such other principles or methods as are reasonably acceptable to City, (ii) fairly present Developer's financial condition, (iii) show all material liabilities, direct and contingent, and (iv) fairly present the results of Developer's operations. Developer shall also provide the City with any other annual audit reports issued by other monitoring agencies upon written request. 27 80A-63 EXHIBIT 3 15.6 Audits and Access to Records. Developer agrees that City, the U.S. Department of Housing and Urban Development, the Comptroller General of the United States or any of their authorized representatives shall have the right of access, upon reasonable notice, to any books, documents, papers, or other records of Developer which are pertinent to this Agreement in order to make audits, examinations, abstracts, excerpts or transcripts. Developer will maintain all books and records pertaining to this Agreement for a period of not less than five (5) years after all matters pertaining to this Agreement (i.e., audit, disputes or litigation) are resolved in accordance with applicable federal or state laws, regulations or policies, and when a period of affordability or recapture applies to Developer's activities, for a period of not less than five (5) years after the affordability period ends. 16. OTHER NEGATIVE COVENANTS While any obligation of Developer under the City Note or City Deed of Trust remain outstanding, the following provisions shall apply, except to the extent that Executive Director otherwise consents in writing: 16.1 Default on Senior Loan. Developer shall not default on any of the Senior Loan documents, provided however, that Developer shall have such period as is provided in the Senior Loan Documents during which to effectuate a cure. 16.2 Sale or Lease of Property. Unless and until Developer has received a Certificate of Completion for the construction from City, Developer shall not sell, lease, sublease or otherwise transfer all or any part of the Property or any interest therein without the prior written consent of the Executive Director, which consent may be withheld in the Executive Director's reasonable discretion. In connection with the foregoing consent requirements, Developer acknowledges that City relied upon Developer's particular expertise in entering into this Agreement and continues to rely on such expertise to ensure the satisfactory completion of the construction. Notwithstanding anything to the contrary contained herein, a "transfer" shall not include (i) a transfer of any general partner's interest in Developer when made in connection with the exercise by the Developer's limited partner (the "Limited Partner") of its rights upon a default by a general partner under the Developer's Partnership Agreement or upon a general partner's withdrawal in violation of the Partnership Agreement, so long as the removal and substitution of the defaulting general partner is made within thirty (30) days of such default or, if such removal and substitution cannot reasonably be completed within thirty (30) days, so long as the Limited Partner commences to take action to remove and substitute the general partner with a reasonable period and thereafter diligently proceeds to complete such substitution; (ii) any transfer of the Property to the managing general partner of Developer pursuant to the right of first refusal or to the general partners of Developer pursuant to the purchase option, as provided for in the Partnership Agreement; (iii) any transfer of the Limited Partner's interest in accordance with the Partnership Agreement; and (iv) any sale, transfer or other disposition of an interest in a limited partner of the Developer. EXHIBIT 3 17. CERTIFICATE OF COMPLETION Upon satisfactory completion of the construction and upon the request of Developer, or at its own election, the City of Santa Ana shall issue a Certificate of Completion. Such Certificate of Completion shall be, and shall so state, conclusive determination of satisfactory completion of the construction. If City declines to furnish a Certificate of Completion after written request from Developer, the Executive Director shall, within thirty (30) days after receipt of the request, provide Developer with a written statement of the reasons therefore. The statement shall contain a description of the action Developer must take to obtain a Certificate of Completion. If the reason therefore is that the Developer has not completed a minor portion of the Construction, City may, in its sole and absolute discretion, issue the Certificate of Completion upon the posting with City of a bond or other form of security acceptable to the Executive Director in the amount of the fair value of the uncompleted work. A Certificate of Completion is not evidence of compliance with or satisfaction of the Loan Documents or any obligation of Developer to any other party whatsoever, including any holder of a mortgage or deed of trust. A Certificate of Completion is not "notice of completion" referred to in Section 3093 of the California Civil Code. 18. INDEMNIFICATION 18.1 Nonliability, of City. Developer acknowledges and agrees that: (a) The relationship between Developer and City is and shall remain solely that of borrower and lender, City neither undertakes nor assumes any responsibility to review, inspect, supervise, approve (other than for aesthetics) or inform Developer of any matter in connection with the construction, including matters relating to: (i) the performance of the construction work, (ii) architects, contractors, subcontractors and materialmen, or the workmanship of or materials used by any of them, or (iii) the progress of the construction; and Developer shall rely entirely on its own judgment with respect to such matters and acknowledges that any review, inspection, supervision, approval or information supplied to Developer by City in connection with such matters is solely for the protection of City and that neither Developer nor any third party is entitled to rely on it; (b) Notwithstanding any other provision of any Loan Document: (i) the City is not a partner, joint venture, alter -ego, manager, controlling person or other business associate or participant of any kind of Developer and City does not intend to ever assume any such status; (ii) City's activities in connection with the Loan(s) shall not be "outside the scope of the activities of a lender of money" within the meaning of California Civil Code Section 3434, as modified or recodifred from time to time, and City does not intend to ever assume any responsibility to any person for the quality or safety of the Property; and (iii) City shall not be deemed responsible for or a participant in any acts, omissions or decisions of Developer; MIM • (c) City shall not be directly or indirectly liable or responsible for any loss or injury of any kind to any person or property resulting from any construction on, or occupancy or use of, the Property, whether arising from: (i) any defect in any building, grading, landscaping or other onsite or offsite improvement; (ii) any act or omission of Developer or any of Developer's agents, employees, independent contractors, licensees or invitees; or (iii) any accident on the Property or any fire or other casualty or hazard thereon; and (d) By accepting or approving anything required to be performed or given to City under the Loan Documents, including any certificate, financial statement, survey, appraisal or insurance policy, City shall not be deemed to have warranted or represented the sufficiency or legal effect of the same, and no such acceptance or approval shall constitute a warranty or representation by City to anyone. 18.2 Indemnity. Developer shall defend (by counsel reasonably satisfactory to City), indemnify and save and hold harmless the Indemnitees from and against all claims, damages, demands, actions, losses, liabilities, costs and expenses (including, without limitation, reasonable attorneys' fees and court costs) arising from or relating to (i) a breach of this Agreement by Developer; (ii) the making of the Loan(s); (iii) a claim, demand or cause of action that any person has or asserts against Developer; (iv) any act or omission of Developer, any contractor, subcontractor or material supplier, engineer, architect or other person with respect to the Property; or (vi) the ownership, occupancy or use of the Property. Notwithstanding the foregoing, Developer shall not be obligated to indemnify City with respect to the consequences of any act of illegal conduct, gross negligence or willful misconduct of City. Developer's obligations under this Section shall survive the cancellation of the City/HOME Loan Note, release and reconveyance of the City Deed of Trust, issuance of the Certificate of Completion, and termination of this Agreement. 18.2.1 Nothwithstanding the foregoing, neither Developer, nor any of its partners, shall be personally liable for any indemnification obligation hereunder which would result as the repayment of principal and/or interest under the Loan. 18.3 Reimbursement of City. Developer shall reimburse City immediately upon written demand for all costs reasonably incurred by City (including the reasonable fees and expenses of attorneys, accountants, appraisers and other consultants, whether the same are independent contractors or employees of City) in connection with the enforcement of the Loan Documents and all related matters including all claims, demands, causes of action, liabilities, losses, commissions and other costs against which City is indemnified under the Loan Documents. Such reimbursement obligations shall bear interest from the date occurring twenty (20) days after City gives written demand to Developer and shall be secured by the City Deed of Trust. Such reimbursement obligations shall survive the cancellation of the City/HOME Loan Note, release and reconveyance of the City Deed of Trust, issuance of a Certificate of Completion, and termination of this Agreement 19. INSURANCE, CASUALTY AND CONDEMNATION 30 FOODINT111, EXHIBIT 3 19.1 Policies Required. While any obligation of Developer under the Loan Documents remains outstanding, Developer shall maintain at Developer's sole expense, with insurers either (i) admitted in California or (ii) are not admitted to California but have an A.M. Best Rating of "A" or above and reasonably approved by the City, the following policies of insurance in form and substance reasonably satisfactory to the City Attorney: (a) worker's compensation insurance and any other insurance required by law in connection with the construction; (b) prior to commencement and following completion of the construction, fire and hazard "all risk" insurance covering 100% of the replacement cost of the Improvements in the event of fire, lightning, windstorm, vandalism, malicious mischief and all other risks normally covered by "all risk" coverage policies in the area where the Property is located (including loss by flood if the Property is in an area designated as subject to the danger of flood); (c) upon commencement of the construction and at all times prior to completion of the construction, builder's risk -all risk insurance covering 100% of the replacement cost of all Improvements (including offsite materials) during the course of construction in the event of fire, lightning, windstorm, vandalism, earthquake, malicious mischief and all other risks normally covered by "all risk" coverage policies in the area where the Property is located (including loss by flood if the Property is in an area designated as subject to the danger of flood); (d) public liability insurance in the amount of $1,000,000 for "single occurrence'; (e) property damage insurance in amounts reasonably required by City from time to time, and in no event less than $1,000,000; and (1) any other insurance reasonably required by City. All such insurance shall provide that it may not be canceled or materially modified without thirty (30) days (ten (10) days for nonpayment of premium) prior written notice to City. The policies required under subparagraphs (b) and (c) shall include a "lender's loss payable endorsement" in form and substance satisfactory to City, showing the City as encumbrance. The City shall be named as an additional insured(s) in the policies required under subparagraphs (d) and (e) with primary coverage. Certificates of insurance for the above policies (and/or original policies, if required by City) shall be delivered within ten (10) days after demand therefore, and prior to start of any construction work. All policies insuring against damage to the Improvements shall contain an agreed value clause sufficient to eliminate any risk of co-insurance. No less than ten (10) days prior to the expiration of each policy, Developer shall deliver to City evidence of renewal or replacement of such policy reasonably satisfactory to City Attorney. 19.2 RESERVED. 31 80A-67 EXHIBIT 3 19.3 Claims and Proceedings. Developer shall give City immediate notice of any material casualty to any portion of the Property, whether or not covered by insurance, and of the initiation or threatened initiation of any proceeding for the condemnation or other taking for public or quasi -public use of any portion of the Property (collectively, "Condemnation"), and shall provide City with copies of all documents which pertain to any such casualty or Condemnation. Developer shall take all action reasonably required by City in connection therewith to protect the interests of Developer and/or City, and City shall be entitled (without regard to the adequacy of its security) to participate in any action, claim, adjustment or proceeding and to be represented therein by counsel of its choice. Developer shall not settle, adjust, or compromise any claim, action, adjustment or proceeding without prior written approval, which approval shall not be unreasonably withheld or delayed. 19.4 Delivery of Proceeds to City. In the event that, notwithstanding the "lender's loss payable endorsement" requirement set forth above, if the proceeds from any casualty insurance is in excess of $500,000, Developer shall, subject to any superior rights of the Senior Lender, deliver such proceeds to the City immediately upon receipt. 19.5 Application of Casualty Insurance Proceeds. Subject to the rights of the Senior Lender, any proceeds collected (the "Proceeds") under any casualty insurance policy described in this Agreement shall be disbursed to Developer as provided below, but only upon fulfillment of each of the following conditions (the "Restoration Conditions") within ninety (90) days (unless extended by mutual agreement of Developer and City) following the occurrence of the damage for which the Proceeds are collected: (a) Developer shall demonstrate to City's reasonable satisfaction that the Proceeds (together with amounts deposited by Developer pursuant to subparagraph (b)) will be adequate to repair the Improvements and to restore the fair market value of the Property, within two years (or such longer time period reasonably determined by City), to at least the value it had immediately prior to sustaining the damage. Such demonstration shall include delivery to City of (i) plans and specifications reasonably satisfactory to City, and (ii) a construction contract in form and content, and with a contractor, reasonably satisfactory to City. (b) To the extent that the Proceeds are insufficient to accomplish the restoration required above, Developer shall deliver to City (the "Shortfall Funds") in the amount of such shortfall, which funds shall be assigned to City as security for Developer's obligation hereunder and held and disbursed in the same manner as the Proceeds. (c) Developer shall execute such documents as City reasonably requires to evidence and secure Developer's obligation to use all amounts disbursed for the diligent restoration of the Property. (d) No Event of Default shall remain uncured. EXHIBIT 3 19.6 Failure to Satisfy Conditions. In the event that Developer fails to fulfill the Restoration Conditions within ninety (90) days (unless extended pursuant to Section 19.5) following the date on which the damage occurs, the Proceeds shall be applied by City against any obligations to City that are secured by a lien on the Property, and the selection of which such obligations to apply the Proceeds against shall be made by City in their sole and absolute discretion, subject to the rights of the Senior Lender. 19.7 Reserved. 19.8 Condemnation; Treatment of Compensation. Subject to any superior rights of Senior Lender, Developer hereby assigns to the City, as security for all obligations to City secured by a lien on the Property, all amounts payable to Developer in connection with any Condemnation, and any proceeds of any related settlement (collectively, "Compensation"). Subject to any superior rights of Senior Lender, Developer shall deliver such remaining Compensation to City immediately upon receipt. If the taking results in a loss of the Property to an extent that, in the reasonable opinion of City, renders or is likely to render the Property not economically viable or if, in City's reasonable judgment Developer's security is otherwise impaired, City may apply the Compensation received due to judgment or settlement in connection with any condemnation or other taking to reduce the unpaid obligations secured in such order as City may determine, and without any adjustment in the amount or due dates of payments due under the Note. If so applied, any award in excess of the unpaid balance of the Note and other sums due to City shall be paid to Developer or Developer's assignee. City shall have no obligation to take any action in connection with any actual or threatened condemnation or other proceeding. 19.8.1 Notwithstanding the foregoing, as long as the value of City's liens are not impaired, any condemnation proceeds may be used by the Borrower for repair and/or restoration of the Project. 19.9Waiver of Subrogation. Developer hereby waives all rights to recover against the City (or any officer, employee, agent or representative of the City) for any loss incurred by Developer from any cause insured against or required by any Loan Document, to be insured against; provided, however, that this waiver of subrogation shall not be effective with respect to any insurance policy if the coverage thereunder would be materially reduced or impaired as a result. Developer shall use its best efforts to obtain only policies which permit the foregoing waiver of subrogation. 20. DEFAULTS AND REMEDIES 20.1 Events of Default. The occurrence of any of the following, whatever the reason therefore, shall constitute an Event of Default by Developer: 33 80A-69 EXHIBIT 3 (a) Developer fails to make any payment of principal or interest under the City/HOME Loan Note when due, and such failure is not cured within fifteen (15) Business Days after Developer's receipt of written notice that such payment was not received when due; (b) Developer fails to perform any other obligation for the payment of money under any Loan Document, and such failure is not cured within fifteen (15) Business Days after Developer's receipt of written notice that such obligation was not performed when due; (c) Developer fails to perform any obligation (other than the obligations described in subparagraphs (a) and (b) above) under any Loan Document, and such failure is not cured within thirty (30) days after Developer's receipt of written notice that such obligation was not performed; provided that, if cure cannot reasonably be effected within such thirty (30)-day period, such failure shall not be an Event of Default so long as Developer (in any event, within ten (10) days after receipt of such notice) commences to cure, and thereafter diligently (in any event within ninety (90) days after receipt of such notice) prosecutes such cure to completion; (d) Any representation or warranty in any Loan Document proves to have been incorrect in any material respect when made; (e) Reserved; (f) Work on the construction ceases for ninety (90) consecutive days for any reason (other than governmental orders, decrees or regulations, acts of God or any other deity, strikes or other causes beyond Developer's reasonable control), provided that the same do not, in the aggregate and in the City's reasonable judgment, threaten to delay the completion of the construction beyond the required completion date set forth in this Agreement; (g) Developer is enjoined or otherwise prohibited by any Governmental Authority from constructing and/or occupying the improvements and such injunction or prohibition continues unstayed for ninety (90) days or more for any reason; (h) Developer is dissolved, liquidated or terminated, or all or substantially all of the assets of Developer are sold or otherwise transferred without the Executive Director's prior written consent; or (i) Developer is the subject of an order for relief by a bankruptcy court, or is unable or admits its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors; or Developer applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or any part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of Developer and the appointment continues undischarged or unstayed for ninety (90) days; or Developer institutes or consents to any bankruptcy, 34 FOODIM11 IM insolvency, reorganization, arrangement, readjustment of debt, dissolution, custodianship, conservatorship, liquidation, rehabilitation or similar proceeding relating to it or any part of its property; or any similar proceeding is instituted without the consent of Developer and continues undismissed or unstayed for ninety (90) days; or any judgment, writ, warrant of attachment or execution, or similar process is issued or levied against any property of Developer and is not released, vacated or fully bonded within ninety (90) days after its issue or levy. (j) Any of the Senior Loan documents is amended, supplemented or otherwise modified without City's prior written consent, which consent shall not be unreasonably withheld, to the extent the City's consent is required pursuant to any subordination agreement between the City and the Senior Lender. 20.2 Remedies Upon Default. Upon the occurrence and during the continuance of any Event of Default, City may, at its option and in its absolute discretion, do any or all of the following: (a) By written notice to Developer, declare the principal of all amounts owing under the Loan Documents, together with all accrued interest and other amounts owing in connection therewith, to be immediately due and payable, regardless of any other specified due date; provided that any Event of Default described in Section 20.1 shall automatically, without notice or other action on City's part, cause all such amounts to be immediately due and payable; (b) In its own right or by a court -appointed receiver, take possession of the Property, enter into contracts for and otherwise proceed with the completion of the construction by expenditure of its own funds; (c) Exercise any of its rights under the Loan Documents and any rights provided by law, including, without limitation, the right to seek specific performance and the right to foreclose on any security and exercise any other rights with respect to any security, all in such order and manner as City elects in its sole and absolute discretion; and, (d) Suspend or terminate the award of HOME funds if Developer fails to comply with any term of that award. 20.3 Cumulative Remedies: No Waiver. City's rights and remedies under the Loan Documents are cumulative and in addition to all rights and remedies provided by law. The exercise by City of any right or remedy shall not constitute a cure or waiver of any default, nor invalidate any notice of default or any act done pursuant to any such notice, nor prejudice the City in the exercise of any other right or remedy. No waiver of any default shall be implied from any omission by City to take action on account of such default if such default persists or is repeated. No waiver of any default shall affect any default other than the default expressly waived, and any such waiver shall be operative only for the time and to the extent stated. No waiver of any provision of any Loan Document shall be construed as a waiver of any subsequent breach of the same provision. 35 80A-71 EXHIBIT 3 City's consent to or approval of any act by Developer requiring further consent or approval shall not be deemed to waive or render unnecessary City's consent to or approval of any subsequent act. The City's acceptance of the late performance of any obligation shall not constitute a waiver by City of the right to require prompt performance of all further obligations; City's acceptance of any performance following the sending or filing of any notice of default shall not constitute a waiver of either party's right to proceed with the exercise of its remedies for any unfulfilled obligations; and City's acceptance of any partial performance shall not constitute a waiver by City of any rights. 20.4 Nonrecourse Liability. Neither Developer, nor any partner of Developer, shall have any personal liability under this Agreement, or the attached Note and Deed of Trust, and any judgment, decree or order for the payment of money obtained in any action to enforce the obligation of Developer to repay the loan evidenced by such documents shall be enforceable against Developer only to the extent of Developer's interest in the Property. 21. MISCELLANEOUS 21.1 Obligations Unconditional and Independent. Notwithstanding the existence at any time of any obligation or liability of City to Developer, or any other claim by developer against City, in connection with the Loan or otherwise, Developer hereby waives any right it might otherwise have (a) to offset any such obligation, liability or claim against Developer's obligations under the Loan Documents, or (b) to claim that the existence of any such outstanding obligation, liability or claim excuses the nonperformance by Developer of any of its obligations under the Loan Documents. 21.2 Notices. All notices, demands, approvals and other communications provided for in the Loan Documents shall be in writing and be delivered to the appropriate party by personal service or U.S. mail at its address as follows: If to Developer: CORNERSTONE HOUSING PARTNERS LP c/o Jamboree Housing Corporation 17701 Cowan Avenue, Suite 200 Irvine, CA 92614 Attn: President With a copy to Limited Partner: Alliant ALP 2019 c/o Alliant Asset Management Company, LLC 21600 Oxnard Street, Suite 1200 Woodland Hills, CA 91367 Attn: General Counsel If to City: City of Santa Ana Executive Director (CDA) 20 Civic Center Plaza (M-26) P.O. Box 1988 Santa Ana, California 92702 36 80A-72 EXHIBIT 3 With a copy to: City Attorney City of Santa Ana 20 Civic Center Plaza, 7th Floor (M-29) Santa Ana, California 92702 Addresses for notice may be changed as required by written notice to all other parties. All notices personally served shall be effective when actually received. All notices mailed shall be effective three (3) days after deposit in the U.S. Mail, postage prepaid. The foregoing notwithstanding, the non -receipt of any notice as the result of a change of address of which the sending party was not notified or as the result of a refusal to accept delivery shall be deemed receipt of such notice. 21.3 Survival of Renresentations and Warranties. All representations and warranties in the Loan Documents shall survive the making of the Loan described herein and have been or will be relied on by City notwithstanding any investigation made by either party. 21.4 No Third Parties Benefited. This Agreement is made for the purpose of setting forth rights and obligations of Developer and the City, and no other person shall have any rights hereunder or by reason hereof. 21.5 Binding Effect, This Agreement shall bind, and shall inure to the benefit of, Developer and City and their respective successors and assigns. 21.6 Prior Agreements; Amendments; Consents. This Agreement (together with the other Loan Documents) contains the entire agreement between the City and Developer with respect to the Loan and the Property, and all prior negotiations, understandings and agreements are superseded by this Agreement and such other Loan Documents. No modification of any Loan Document (including waivers of rights and conditions) shall be effective unless in writing and signed by the party against whom enforcement of such modification is sought, and then only in the specific instance and for the specific purpose given. 21.7 Governing Law. All of the Loan Documents shall be governed by, and construed and enforced in accordance with, the laws of the State of California and Federal law, whichever is more stringent. Developer irrevocably and unconditionally submits to the jurisdiction of the Superior Court of the State of California for the County of Orange or the United States District Court of the Central District of California, as City may deem appropriate, in connection with any legal action or proceeding arising out of or relating to this Agreement or the Loan Documents. Assuming proper service of process, Developer also waives any objection regarding personal or in rem jurisdiction or venue. 21.8 Severability of Provisions. No provision of any Loan Document that is held to be unenforceable or invalid shall affect the remaining provisions, and to this end all provisions of the Loan Documents are hereby declared to be severable. 37 80A-73 EXHIBIT 3 21.9 Headings. Article and section headings are included in the Loan Documents for convenience of reference only and shall not be used in construing the Loan Documents. 21.10 Conflicts. In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, this Agreement, unless otherwise expressly provided, shall prevail; provided however that, with respect to any matter addressed in both such documents, the fact that one document provides for greater, lesser or different rights or obligations than the other shall not be deemed a conflict unless the applicable provisions are inconsistent and could not be simultaneously enforced or performed. 21.11 Time of the Essence. Time is of the essence under this Agreement and in the performance of every term, covenant, and obligation contained herein. 21.12 Conflict of Interest. No member, official or employee of the City shall have any direct or indirect interest in this Agreement, nor participate in any decision relating to this Agreement which is prohibited by law. 21.13 Warranty Against Payment of Consideration. Developer warrants that it has not paid or given, and will not pay or give, any third person any money or other consideration for obtaining this Agreement. 21.14 Nonliability of City Officials and Employees. No member, official or employee of City shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by City or for any amount which may become due to Developer or successor, or on any obligation under the terms of this Agreement. 21.15 Plans and Data. As additional collateral for the Loan, Developer hereby grants to the City a security interest in all plans and data concerning the Property, subject to the rights of any Senior Lender. Such right of City shall be subject to any right of the preparer of the plans to their use. 21.16 Authority to Enter Agreement. Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify the City fully, including reasonable costs and attorney's fees, for any injuries or damages to City in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. 21. 17 City's Acknowledgement and Consent to Sale and Assignment. The City hereby consents to the above -described Developer Sale and the assignment and assumption of Original Developer's rights and obligations under the Assignment to Developer, as set forth in the Assignment. EXHIBIT 3 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date set forth at the beginning of this Agreement. ATTEST: THE CITY OF SANTA ANA Daisy Gomez Kristine Ridge Clerk of the Council City Manager APPROVED AS TO FORM Sonia R. Carvalho RECOMMENDED FOR APPROVAL: Steven A. Mendoza Executive Director Community Development Agency (Signatures continue on following page) 39 80A-75 EXHIBIT 3 DEVELOPER: CORNERSTONE HOUSING PARTNERS LP, a California limited partnership By: HIC-Cornerstone 11, LLC, a California limited liability company, its Managing General Partner By: Jamboree Housing Corporation, a California non-profit public benefit corporation, its Managing Member By: Name: A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 40 EXHIBIT 3 STATE OF CALIFORNIA COUNTY OF On before me, notary public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature_ (SEAL) 41 80A-77 1000WIM EXHIBITS A. Legal Description B. Scope of Work C. Project Budget D. City/HOME Loan Deed of Trust E. City/HOME Loan Note F. Affordability Restrictions on Transfer of Property G. HOME Loan Agreements 42 FOODIAWOO EXHIBIT 3 Exhibit A.* Legal Description EXHIBIT 3 Legal Description The Land referred to herein below is situated in the City of Santa Ana, County of Orange, State of California, and is described as follows: PARCEL ONE: LOTS 7 THROUGH 13 INCLUSIVE OF TRACT 3547 IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 138, PAGES 32 AND 33 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY. PARCEL TWO: PARCEL 1 OF "LOT MERGER NO. 2019-08" RECORDED AUGUST 02, 2019 AS INSTRUMENT NO. 2019000282886 OF OFFICIAL RECORDS. PARCEL THREE: PARCEL 1 OF "LOT MERGER NO. 2019-10" RECORDED AUGUST 02, 2019 AS INSTRUMENT NO. 2019000282887 OF OFFICIAL RECORDS. For conveyancing purposes only: APN 404-033-01 (Affects portion of Parcel Two) APN: 404-033-02 (Affects portion of Parcel Two) APN: 404-032-01 (Affects portion of Parcel Three) APN: 404-032-02 (Affects portion of Parcel Three) APN: 404-031-03 (Affects Lots 8 and 9 of Parcel One) APN: 404-031-01 (Affects Lots 12 and 13 of Parcel One) APN: 404-031-04 (Affects Lot 7 of Parcel One) APN: 404-031-02 (Affects Lots 10 and 11 of Parcel One) Fi M i EXHIBIT 3 Exhibit Be. Scope of Work ... EXHIBIT 3 Scope of Work —Cornerstone Apartments Cornerstone Apartments is a multifamily affordable housing development that consists of 126 one- and two -bedroom units. The project is located at 805-904 S. Minnie Street, Santa Ana, California. There are eight separate two story buildings that were originally constructed in 1961. The last substantial renovation was in 2003. The buildings are two-story walkups with wood framing and a stucco exterior. There are currently 179 parking spaces on -site, with at least 46 of them being tuck -under spaces. The project is slated to receive approximately 6.3 million dollars' worth of rehabilitation work. This rehabilitation work is expected to increase the useful life of the property as well as improve the living conditions of current residents. There are several major items included in this work. Eight of 126 current units will be converted into full ADA compliant accessible units. This work will involve demolition of existing walls, abatement, installation of insulation, and electrical panel upgrades. The scope of work is meant to increase unit size space and reconfigure the layout so that it is ADA compliant. There will also be ADA sitework in terms of parking and path of travel. The current scope of work will repave designated areas for ADA accessibility and create ADA markers, signs, and bumpers. One of the major issues identified at the property was the lack of parking for residents. To address this, the project will be installing a car lift system to increase the parking capacity onsite. This car lift system will be located on existing parking spaces at the 810/816 and 828/904 apartments. The car lift system is being manufactured by Klaus Multiparking and will be a standalone two-story structure with a puzzle system. The car lift system will add 30 additional stalls to the project. There will also be the installation of photovoltaic panels on top of a carport structure adjacent to the car lifts, and on top of the adjacent roof. These PV panels will help residents save on their energy costs. There will also be the installation of a solar thermal hot water system. Exterior work will also include the recoating of all elevated deck areas, new silicone roofs, general exterior repairs, and a seismic retrofit of the tuck under parking. The seismic retrofit will install shear panels that are meant to better reinforce the soft story created by the tuck under parking. The existing windows will be replaced with new vinyl dual glazed retrofit windows. The exterior of the buildings will also be repainted. Interior work will include the installation of new Energy Star appliances, bathroom fixtures, maple shaker cabinets and countertops, new blinds, wall heaters, LEED light fixtures, and other general repairs. New acoustic dampening flooring will be installed on the second story units. FOODIX46Y EXHIBIT 3 Exhibit Co. Project Budget ... EXHIBIT 3 Cornerstone Sources & Uses City of Santa Ana Pre-Dev Preforms 08/28/19 175.121 OR ELIGIBLE ELIGIBLE NOT TOTAL USES OF FUNDS• • •N REHAB COST HISTORIC Land at$1,475,410 Per Acre or$33.87 Per SF 2,700,000 0 0 0 0 2,700.000 2114R9 Basting Structure 14.800,000 14,800,000 0 0 0 0 117,460 Other Acquisition Costs 1 1 0 0 0 0 0 6,332,483 Hard Cost Residential 7,295,020 57,897 6,332,483 0 0 6,332,483 0 50,268 Site Improvements 0 0 0 0 0 0 0 General Conditions, Profit & Overhead 14.00% 886.547 0 886,647 0 886,647 0 7,036 GC Bond/Insurance/Letter of Credit 1.20% 75,990 0 75,990 0 76,990 0 603 Hard Cost Contingency 10.00% 729,502 0 729,502 0 729,502 0 6,790 Construction Interest (4%)al Perm. Rate +Obp 4.00% 586,496 0 311,418 0 311,418 275,078 4,665 Bridge Interest at 10.00% 23,845 0 0 0 0 23,845 189 Construction Loan Fees 86,250 0 86,260 0 86,260 0 686 Permanent Loan Fees 119,350 0 0 0 119,350 947 0 Bridge Loan Fees 119 0 0 119 1 119 0 4%Related Costs/Cast of Issuance 288,275 0 275,000 0 276,000 2,288 13,276 Accounting & Audit 20,000 0 20,000 0 20,000 169 -cF Appraisal / Market Study 20.000 0 20,000 0 20,000 0 169 Architecture(Arohitect, Landscape Architect) 570,000 0 670,000 0 570,000 0 4,524 Civil Engineering 245,000 0 246,000 0 246,000 0 1,944 Construction Manager 125,000 0 125,000 0 126,000 0 992 Consultants (CM, Goo, LEED, Utilities, exc.) 260,000 0 260,000 0 260,000 0 2,063 Environmental (EIR, Phase I, Asbestos, exc.) 50,000 0 60,000 0 60,000 0 397 Financial Advisor/ Syndication Consultant 0 0 0 0 0 0 0 Furnishings 75,000 0 75,000 0 76,000 0 695 Additional (City Repayment) 0 0 0 0 0 0 0 Lease -up & Marketing Expenses 100,000 0 0 0 0 100,000 794 Legal 200,000 0 180,000 0 180,000 20,000 1,687 MHSA Construction Period Fees 0 0 0 0 0 0 0 363,880 Operating& Debt Service Reserve (3-mo's/deb,3 363,880 0 0 0 0 2,888 Other (Admin, Repro. & Reimb.) 15.000 0 16,000 0 16,000 119 _ 0 Other (6enI lgapections) 25,000 0 26,000 0 25,000 0 198 Other -Katerra CM fees 150,000 0 160,000 0 150,000 0 1,190 Insurance 112,329 127,709 0 0 112,329 127,709' 0 0 112,329 127,709 0 0 892 1,014 Permit Fees Property Taxes 38,400 0 38,400 0 38,400 0 305 Relocation 518,000 0 518,000 0 618,000 0 4,111 Allowance- PV I Solar Thermal installation 75.000 0 76,000 0 76,000 0 696 Soft Cost Contingency 9.79% 329,542 0 329,642 0 329,642 0 2,615 54,000 Tax Credit Fees (App., Mon., & Res.) 56,000 0 2,000 0 2,000 444 Tide & Recording 45,000 0 __ 12,260 0 32,250 357 12760 Developer Overhead 0 0 0 0 0 0 0 1,834,300 Developer Fee 2,158,000 323,700 0 2.158.000 0 17,127 F ' • - I Uno e N 7f J Q K 0 LL a W J LL aw.. z h N• Z Z ., Z W aw p W o N Q ¢Z N U n U Q Z o } 0 N _ h Q N Z U OZ n f,F Z W N w W W az P N w U �.2 a r J Q U F V Z f w P OZw O. U N F Z N y w W N w moo._ e N Q N N LL 0 00 w OK Z w W 0 N w 0 O 0 O LL Z U W m LL O F _ O' Z Z N W F U• Z W U K _ a w W w n a K O F-. O H Z O. H - u U N Z Y J � >. 7 N d O O O O O O O O O i0O ONI IJ O C 0' OO ' 0' OOI ' O d I0' v IU d I Z r O OIO o '. IH O �O �� QiOI O Q J c ��I c f II K ; . � :-.. _J Y Q N m O O V is O �m �U J FOODYMOR \ k F | §/ 2LU .0 / � ) 21 E Q. ) o _ f0 !2!2{ )UE ���}` !—E �k\ d c; ,!,a � ( § 5 ( ( k # f! _/k ` | i/ _ ` I- \k!()\ )$/l))7 ' �«/,1.;— })\)0 )!!!/! 13 \k0-a2 ;� Cl) F- m x W • • • EXHIBIT 3 Exhibit D9. City/HOME Loan Deed of Trust EXHIBIT 3 FREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383 When Recorded Mail to: City of Santa Ana Clerk of the Council 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, California 92702 Attention: Clerk of the Council AMENDED AND RESTATED CITY HOME DEED OF TRUST AND ASSIGNMENT OF RENTS (805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California) THIS AMENDED AND RESTATED CITY HOME DEED OF TRUST AND ASSIGNMENT OF RENTS (this "City Deed of Trust") made this 17 day of September, 2019 by CORNERSTONE HOUSING PARTNERS LP, a California limited partnership (the "Trustor"), AmeriNat, a Minnesota corporation (the "Trustee"), and the City of Santa Ana, a charter city and municipal corporation (the "Beneficiary"). Wakeham-Grant Apartments, L.P. (the "Original Trustor") and the Beneficiary previously entered into the Released Deeds of Trust (as defined below). In connection with the Original Trustor's sale of the Property (as defined below) to Trustor (the "Sale"), Original Trustor and Trustor desire to enter into that certain Assignment and Assumption Agreement (HOME Loan), dated as of the date hereof, by and between the Original Trustor and Trustor to effectuate the assignment of the HOME Loan Agreements (as defined in the Agreement) to Trustor (the "Assignment"), and the Beneficiary has consented to such Sale and Assignment. In connection with the Assignment, the Beneficiary and Trustor desire to amend and restate the Released Deeds of Trust, as set forth in this City Deed of Trust. Trustor, in consideration of the promises herein recited and the trust herein created, irrevocably grants, transfers, conveys and assigns to Trustee, in trust, with power of sale, the property located in the City of Santa Ana, County of Orange, State of California, described in the attached Exhibit A and more commonly known as 805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California (the "Property"); TOGETHER with all the improvements now or hereafter erected on the Property, and all easements, rights, appurtenances and all fixtures now or hereafter attached to the Property, F46111MOT EXHIBIT 3 all of which, including replacements and additions thereto, shall be deemed to be and remain a part of the Property covered by this City Deed of Trust; TOGETHER with the right, power and authority during the continuance of these Trusts, to collect the rents, issues, and profits of the Property, reserving unto the Trustor the right, prior to any default by Trustor in payment of the indebtedness secured by this City Deed of Trust or in the performance of any agreement under this City Deed of Trust, to collect and retain these rents, issues and profits as they become due and payable; and, TOGETHER with all articles of personal property or fixtures now or hereafter attached to or used in and about the building or buildings now erected, or hereafter to be erected, on the Property which are necessary to the complete and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or famished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to said building or buildings in any manner; and all of the foregoing, together with the Property, is herein referred to as the "Security"; To have and to hold the Security together with acquittances to the Trustee, its successors and assigns forever; TO SECURE to the Beneficiary (a) the repayment of the sums evidenced by an amended and restated promissory note to the Beneficiary executed by Trustor of even date herewith in the principal amount of FIVE MILLION, ONE HUNDRED, TWENTY-EIGHT THOUSAND, ONE HUNDRED AND FIFTY-TWO DOLLARS ($5,128,152) (the "City Loan Note"); (b) the performance of the covenants and agreements of Borrower contained in the Agreement (as hereinafter defined); and (c) the payment of all other sums, with interest thereon, advanced in accordance herewith to protect the security of this City Deed of Trust; and the performance of the covenants and agreements of Trustor contained herein. TRUSTOR AND THE BENEFICIARY COVENANT AND AGREE AS FOLLOWS: 1. The Loan Agreement. This City Deed of Trust is executed and delivered, along with the City Loan Note and the Amended and Restated Loan Agreement, to benefit the Property. A copy of said Amended and Restated Loan Agreement is on file as a public record with the Beneficiary and is incorporated herein by reference (the "Agreement'). Trustor acknowledges that but for the execution of this City Deed of Trust, the Beneficiary would not enter into the Agreement or City Loan Note secured by this City Deed of Trust. 2. Trustees Estate. Trustor is lawfully seized of the estate hereby conveyed and has the right to grant and convey the Security; that except as disclosed on the Title Policy insuring this City Deed of Trust, the Security is not encumbered except for obligations secured by deeds of trust, or any other security agreement, to secure financing or refinancing for the purchase and rehabilitation of the Property. EXHIBIT 3 3. Repayment of the Loan. Trustor will promptly repay, when due, the principal and interest, as required by the City Loan Note secured by this City Deed of Trust. 4. Subordination. This obligation secured by this City Deed of Trust shall be subordinated to the Senior Loan. 5. Prior Mortgages and Deeds of Trust; Charges; Liens. Trustor shall perform all of Trustor's obligations under any mortgage, deed of trust or other security agreement with a lien which has priority over this Instrument, including Trustor's covenants to make payments when due (subject to an applicable notice and cure provisions). Trustor will pay all taxes, assessments and other charges, fines and impositions attributable to the Security which may attain a priority over this City Deed of Trust, by Trustor making any payment, when due, directly to the payee thereof Trustor will promptly fiurrish to the Beneficiary all notices of amounts due under this paragraph, and in the event Trustor makes payment directly, Trustor will promptly discharge any lien which has priority over this City Deed of Trust; provided that Trustor will not be required to discharge the lien of this CityDeed of Trust securing any senior lender or any other lien described in this paragraph so long as Trustor will agree in writing to the payment of the obligation secured by such lien in a manner acceptable to the Beneficiary, or will, in good faith, contest such lien by, or defend enforcement of such lien in, legal proceedings which operate to prevent the enforcement of the lien or forfeiture of the Security or any part thereof. 6. Hazard Insurance. Trustor will keep the Security insured by such insurance policies in such amounts and for such periods as called for in the Agreement. All insurance policies and renewals thereof will include a standard mortgagee clause with standard lender's endorsement in favor of the holder of any senior lender and the Beneficiary as their interests may appear and in a form acceptable to the Beneficiary. The Beneficiary shall have the right to hold, or cause its designated agent to hold, the policies and renewals thereof, and Trustor shall promptly famish to the Beneficiary, or its designated agent, the original insurance policies or certificates of insurance, all renewal notices and all receipts of paid premiums. In the event of loss, Trustor will give prompt notice to the insurance carrier and the Beneficiary or its designated agent. The Beneficiary, or its designated agent, may make proof of loss if not made promptly by Trustor. The Beneficiary shall receive 30 days (10 days for nonpayment of premium) advance notice of cancellation of any insurance policies required under this Section. Unless the Beneficiary and Trustor otherwise agree in writing, insurance proceeds, subject to the rights of any senior lender, will be applied to restoration or repair of the Security damaged, provided such restoration or repair is economically feasible and the security of this City Deed of Trust is not thereby impaired. If such restoration or repair is not economically feasible or if the security of this City Deed of Trust would be impaired, again, subject to the rights of any senior lender, the insurance proceeds will be used to repay the loan secured by this City Deed of Trust, with the excess, if any, paid to Trustor. If the Security is abandoned by Trustor, or if Trustor fails to respond to the Beneficiary, or its designated agent within 30 days from the date notice is mailed by either of them to Trustor that the insurance carrier offers OO M EXHIBIT 3 to settle a claim for insurance benefits, the Beneficiary, or its designated agent, is authorized to collect and apply the insurance proceeds at the Beneficiary's option either to restoration or repair of the Security or to repay the loan. If the Security is acquired by the Beneficiary, all right, title and interest of Trustor in and to any insurance policy and in and to the proceeds thereof resulting from damage to the Security prior to the sale or acquisition will pass to the Beneficiary to the extent of the sums secured by this City Deed of Trust immediately prior to such sale or acquisition subject to the rights of any senior lender. 7. Preservation and Maintenance of Security. Trustor will keep the Security in good repair and will not commit waste or permit impairment or deterioration of the Security. 8. Protection of the Beneficiarv's Security. If Trustor fails to perform the covenants and agreements contained in this City Deed of Trust or if any action or proceeding is commenced which materially affects the Beneficiary's interest in the Security, including, but not limited to, default under the City Deed of Trust securing any senior lender, eminent domain, insolvency, code enforcement, or arrangements or proceedings involving a bankrupt or decedent, then the Beneficiary, at the Beneficiary's option, upon notice to Trustor, may make such appearances, disburse such sums and take such action as it determines necessary to protect the Beneficiary's interest, including, but not limited to, disbursement of reasonable attorneys' fees and entry upon the Security to make repairs. Any amounts disbursed by the Beneficiary pursuant to this paragraph, with interest thereon, will become an indebtedness of Trustor secured by this City Deed of Trust. Unless Trustor and the Beneficiary agree to other terms of payment, such amount will be payable upon notice from the Beneficiary to Trustor requesting payment thereof, and will bear interest from the date of disbursement at the rate payable from time to time on outstanding principal under the City Loan Note unless payment of interest at such rate would be contrary to applicable law, in which event such amounts will bear interest at the highest rate permissible under applicable law. Nothing contained in this paragraph will require the Beneficiary to insure any expense or take any action hereunder. 9. Inspection. The Beneficiary may make, or cause to be made, reasonable entries upon and inspections of the Security during normal business hours; provided that the Beneficiary will give Truster reasonable prior written notice of inspection. 10. Forbearance by the Beneficiary Not a Waiver. Any forbearance by the Beneficiary in exercising any right or remedy will not be a waiver of the exercise of any such right or remedy. The procurement of insurance or the payment of taxes or other liens or charges by the Beneficiary will not be a waiver of the Beneficiary's right to accelerate the maturity of the indebtedness secured by this City Deed of Trust. 11. Remedies Cumulative. All remedies provided in this City Deed of Trust are distinct and cumulative to any other right or remedy under this City Deed of Trust or any other 4 0:cu1M document, or afforded by law or equity, and may be exercised concurrently, independently or successively. 12. Successors and Assigns Bound. The covenants and agreements herein contained shall bind, and the rights hereunder shall inure to, the respective successors and assigns of the Beneficiary and Trustor subject to the provisions of this City Deed of Trust. 13. Joint and Several Liability. All covenants and agreements of Trustor shall be joint and several. 14. Notice. Except for any notice required under applicable law to be given in another manner, (a) any notice to Trustor provided for in this City Deed of Trust will be given by certified mail, return receipt requested, addressed to Trustor at 17701 Cowan Avenue, Suite 200, Irvine, CA 92614, Attn: President, with a copy to Union Bank, (b) any notice to the Beneficiary will be given by certified mail, return receipt requested, to the Beneficiary at 20 Civic Center Plaza, P.O. Box 1988, Santa Ana, California 92702, Attention: Executive Director (CDA), or at such other address as the Beneficiary may designate by notice to Trustor as provided above, and (c) to Trustee at 8121 E. Florence Avenue, Downey, California 90240. Notice shall be effective as of the date received as shown on the return receipt. 15. Governing Law. This City Deed of Trust shall be governed by the laws of the State of California. 16. Severability. In the event that any provision or clause of this City Deed of Trust or the City Loan Note conflicts with applicable law, such conflict will not affect other provisions of this City Deed of Trust or the City Loan Note which can be given effect without the conflicting provision, and to this end the provisions of the City Deed of Trust and the City Loan Note are declared to be severable. 17. Cautions. The captions and headings in this City Deed of Trust are for convenience only and are not to be used to interpret or define the provisions hereof. 18. Default in Foreclosure; Remedies. Upon Trustor's breach of any covenant or agreement of Trustor in this City Deed of Trust or the City Loan Note secured by this City Deed of Trust, including, but not limited to, the covenants to pay, when due, any sums secured by this City Deed of Trust, the Beneficiary may declare all sums secured by this City Deed of Trust immediately due and payable by delivering to Trustor notice thereof specifying: (1) The breach; (2) the action required to cure such breach; (3) a date not less than 30 days from the date the notice is received by Trustor as shown on the return receipt, by which such breach is to be cured provided, however, that if such default is not reasonable susceptible to being cured within 30 days, Trustor shall have a reasonable period to cure the defect so long as Trustor is diligently prosecuting the cure to completion; and (4) that failure to cure such breach on or before the date specified in the notice may result in acceleration of the sums secured by this City Deed of Trust and sale of the Security. The notice will also inform Trustor of Tmstor's right to reinstate after acceleration and the right to bring a court action to assert the non-existence of default or any other defense of Trustor to acceleration and sale. EXHIBIT 3 The City Note contains additional cure periods granted to Trustor's limited partner and no event of default shall have occurred until and unless the Trustor's limited partner fails to cure such breach during such cure period. If the breach is not cured on or before the date specified in the notice or such longer period as provided above or in the City Loan Note or the Agreement, the Beneficiary, at the Beneficiary's option, may: (a) declare all of the sums secured by this City Deed of Trust to be immediately due and payable without fiuther demand and may invoke the power of sale and any other remedies permitted by California law; or (b) either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the Security and take possession thereof (or any part thereof) and of any of the Security, in its own name or in the name of the Trustee, and do any acts which it deems necessary or desirable to preserve the value or marketability of the Property, or part thereof or interest therein, increase the income therefrom or protect the security thereof. The entering upon and taking possession of the Security shall not cure or waive any breach hereunder or invalidate any act done in response to such breach and, notwithstanding the continuance in possession of the Security, the Beneficiary shall be entitled to exercise every right provided for in this City Deed of Trust, or by law upon occurrence of any uncured breach, including the right to exercise the power of sale; (i) commence an action to foreclose this City Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof, (ii) deliver to the Trustee a written declaration of default and demand for sale, pursuant to the provisions for notice of sale found at California Civil Code Sections 2924, et seq., as amended from time to time; or (iii) exercise all other rights and remedies provided herein, in the instruments by which Trustor acquires title to any Security, or in any other document or agreement now or hereafter evidencing, creating or securing all or any portion of the obligations secured hereby, or provided by law. Notwithstanding anything to the contrary herein, Beneficiary hereby agrees that any cure of any default made or tendered by Trustor's limited partner shall be deemed to be a cure by Trustor and shall be accepted or rejected on the same basis as if made or tendered by Trustor. The Beneficiary shall be entitled to collect all reasonable costs and expenses incurred in pursuing the remedies provided in this paragraph, including, but not limited to, reasonable attorneys' fees. 19. Trustor's Right to Reinstate. Notwithstanding the Beneficiary's acceleration of the sums secured by this City Deed of Trust, Trustor will have the right to have any proceedings begun by the Beneficiary to enforce this City Deed of Trust discontinued at any time prior to 5 days before sale of the Security pursuant to the power of sale contained in this City Deed of Trust or at any time prior to entry of a judgment enforcing this City Deed of Trust if. (a) Trustor pays the Beneficiary all sums which would be then due under this City Deed of Trust and no acceleration under the City Loan Note has occurred; (b) Trustor cures all breaches of any other covenants or agreements of Trustor contained in this City Deed of Trust and the Affordability Restrictions on Transfer of Property; (c) Trustor pays all 6 1 ., EXHIBIT 3 reasonable expenses incurred by the Beneficiary and the Trustee in enforcing the covenants and agreements of Trustor contained in this City Deed of Trust and the Affordability Restrictions, and in enforcing the Beneficiary's and the Trustee's remedies, including, but not limited to, reasonable attorneys' fees; and (d) Trustor takes such action as the Beneficiary may reasonably require to assure that the lien of this City Deed of Trust, the Beneficiary's interest in the Security and Trustor's obligation to pay the sums secured by this City Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this City Deed of Trust and the obligations secured hereby will remain in full force and effect as if no acceleration had occurred. 20. Acceptance by Trustee. Trustee accepts this Trust when this City Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party to this City Deed of Trust of pending sale under any other deed of trust or any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 21. Reconveyance. Upon payment or forgiveness of all sums secured by this City Deed of Trust, the Beneficiary will request the Trustee to reconvey the Security and will surrender this City Deed of Trust and the City Loan Note to the Trustee. The Trustee will reconvey the Security without warranty and without charge to the person or persons legally entitled thereto. Such person or persons will pay all costs of recordation, if any. 22. Substitute Trustee. The Beneficiary, at the Beneficiary's option, may from time to time remove the Trustee and appoint a successor trustee to any Trustee appointed hereunder. The successor trustee will succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law. 23. Request for Notice. Trustor requests that copies of the notice of default and notice of sale be sent to Trustee at the address set forth in Section 14 above. 24. Nonrecourse Liabilitv. Neither Trustor nor any partner of Trustor shall have any personal liability under the Agreement, City Loan Note, and this City Deed of Trust and any judgment, decree or order for payment of money obtained in any action to enforce the obligation of Trustor to repay the loan evidenced by such documents shall be enforceable against Trustor only to the extent of Trustor's interest in the Property. 25. Extended Use Agreement. Beneficiary acknowledges that Trustor and the California Tax Credit Allocation Committee have or intend to enter into an extended use agreement. Beneficiary acknowledges and agrees that, in the event of a foreclosure of its interest under this City Deed of Trust or delivery by Trustor of a deed in lieu thereof (collectively, a "Foreclosure"), the following rule contained in Section 42(h)(6)(E)(ii) of the Code shall apply: For a period of three (3) years from the date of Foreclosure, with respect to any unit that had been regulated by the extended use agreement, (i) none of the eligible tenants occupying those units at the time of Foreclosure may be evicted or their tenancy terminated EXHIBIT 3 (other than for good cause, including but not limited to, the tenants' ineligibility pursuant to Section 42 of the Code), (ii) nor may any rent be increased except as otherwise permitted under Section 42 of the Code. 26. Amendment and Restatement. This City Deed of Trust amends, restates and supersedes in their entirety those certain City HOME Deeds of Trust and Assignment of Rents described in the attached Exhibit B (collectively, "Released Deeds of Trust"). LFOOMMOT46 EXHIBIT 3 IN WITNESS WHEREOF, Trustor has executed this City Deed of Trust as of the date first written above. DEVELOPER CORNERSTONE HOUSING PARTNERS LP, a California limited partnership By: JHC-Cornerstone II, LLC, a California limited liability company, its Managing General Partner By: Jamboree Housing Corporation, a California non-profit public benefit corporation, its Managing Member By: Name: Title: EXHIBIT 3 A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF On , before me, notary public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. W=SS my hand and official seal. Signature_ (SEAL) 80A-100 EXHIBIT 3 A. Legal Description B. Released Deeds of Trust 80A-101 EXHIBIT 3 EXHIBIT A Legal Description 12 80A-102 EXHIBIT 3 Legal Description The Land referred to herein below is situated in the City of Santa Ana, County of Orange, State of California, and is described as follows: PARCEL ONE: LOTS 7 THROUGH 13 INCLUSIVE OF TRACT 3547 IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 138, PAGES 32 AND 33 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY. PARCEL TWO: PARCEL 1 OF "LOT MERGER NO. 2019-08" RECORDED AUGUST 02, 2019 AS INSTRUMENT NO. 2019000282886 OF OFFICIAL RECORDS. PARCEL THREE: PARCEL 1 OF "LOT MERGER NO. 2019-10" RECORDED AUGUST 02, 2019 AS INSTRUMENT NO. 2019000282887 OF OFFICIAL RECORDS. For conveyancing purposes only: APN 404-033-01 (Affects portion of Parcel Two) APN: 404-033-02 (Affects portion of Parcel Two) APN: 404-032-01 (Affects portion of Parcel Three) APN: 404-032-02 (Affects portion of Parcel Three) APN: 404-031-03 (Affects Lots 8 and 9 of Parcel One) APN: 404-031-01 (Affects Lots 12 and 13 of Parcel One) APN: 404-031-04 (Affects Lot 7 of Parcel One) APN: 404-031-02 (Affects Lots 10 and 11 of Parcel One) 80A-103 EXHIBIT B Released Deeds of Trust 80A-104 i X NO F m L U Y d L L L 0 �D eo 7 e0 N e0 O D\ U L R N ttl N L ., y� U ttl W •. ^ IS .°a m0 .ro bpA A GIs a0i U �z VOi O[�N.LO.. tOi� C� yO N N OqQ '.C.Q O W p C C� �ON W W 6M9 O WCA yb.-1 ON W W 69 _ h 0 .CA � C COE 'Or°vj Oo O UE OrN Li+tl' Lmr0 O° Om11 UE9y O OY ¢ d �N OL❑ ¢ rd ISQ .T. 'O r0.. a. O T b M M y y V V V a 7 O O O F o N 0 N 0 N O N N N y d d A [r] z y M y M y V1 « W « W W YO 2 ❑ S q � q N M rn � O � a a a ^ N rn 80A-105 'E c_ 'E g s s O O N 00 00 N N O N w C V C d w y d R Oq C'. M U1� A �itl :•' E O. by C N-• �� tOtl� .. '� ;: °= E o m .°• c, z E .E• A Z z R a 0 aEi ° R❑ " o U a �'? z R 2 ° E a Q o° z pL 7 F N y yt0 „Y O� a V CRvvvyR 'n « U f] c N N b OF ..«�h �° a U CRvvvyV' •E U r R N l� OF y Vn G � w R '^ m Ca rU c w ,-. R V1 n`o — c No 0.. °Q y U O WC5 vw ° _aT Vw° •.L ci 'vOL rGi O R R t�J ° R O « d O O R R U° R O « U NN � 'O tea. .-Ci `�N U�La «Q A �x'D ECG NON u.fl Ca«Q N cvi?O«Q .Ri .`C 7 � C � O O � N O O O O N O N i�1 N M N N N A G �d C O O M J p O n U N � U y � A 69 O° O O y y 2 y y 2 y F c F c a ° A c O c a, ao $ o a v �n N 80A-106 EXHIBIT 3 Exhibit Ee. City/HOME Loan Note 80A-107 EXHIBIT 3 AMENDED AND RESTATED CITY HOME LOAN NOTE SECURED BY SUBORDINATED DEED OF TRUST TO THE CITY OF SANTA ANA, CALIFORNIA (805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California) $5,128,152 1. Principal Amount of Loan September 17, 2019 Santa Ana, California For value received, CORNERSTONE HOUSING PARTNERS LP, a California limited partnership (`Borrower") promises to pay to the order of THE CITY OF SANTA ANA ("City"), at 20 Civic Center Plaza, 6a' Floor, Santa Ana, California 92701, or at such other place as the City may from time to time designate in writing, or to the assignee of the City, the principal sum of FIVE MILLION, ONE HUNDRED, TWENTY-EIGHT THOUSAND, ONE HUNDRED AND FIFTY-TWO DOLLARS ($5,128,152) or so much thereof as shall be disbursed hereunder, with five percent simple interest (5%) commencing on September 17, 2019. City and Wakeham-Grant Apartments, L.P., a California limited partnership ("Original Borrower") previously entered into the HOME Loan Agreements (as defined in the Loan Agreement) , pertaining to the acquisition and rehabilitation of certain real property described in the Loan Agreement as the "Property," located at 805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California, commonly referred to as the Cornerstone Apartments, and the operation of the Property as affordable housing for very -low income households, and the Original Borrower previously entered into the City HOME Loan Notes, in favor of the City (collectively, the "Original Notes") described in Exhibit A. The Original Notes referenced in the "Interest Secured" column in Exhibit A are hereby amended and restated in their entirety by this Note. In connection with the Original Borrower's Sale of the Property to Borrower, Original Borrower and Borrower desire to enter into that certain Assignment and Assumption Agreement (HOME Loan), dated as of the date hereof, by and between the Original Borrower and Borrower to effectuate the assignment of the HOME Loan Agreements to Borrower (the "Assignment"), and the City has consented to such Sale and Assignment. This Amended and Restated City HOME Loan Note (this "Note") is made pursuant to, entitled to the benefits of and referred to as the City/HOME Loan Note in the Amended and Restated Loan Agreement ("Loan Agreement"); that certain "Amended and Restated Affordability Restrictions on Transfer of Property" between Borrower and City, dated on or about the date hereof (the "City Affordability Restrictions on Transfer of Property"); and that certain subordinated Amended and Restated City HOME Deed of Trust and Assignment of Rents between Borrower and City, dated on or about the date hereof (the "City Deed of Trust"). This F1 1: EXHIBIT 3 Note, the Loan Agreement, the Affordability Restrictions on Transfer of Title, and the Deed of Trust are sometimes collectively referred to herein, collectively, as the "Loan Documents." The Loan Documents and the rights and responsibilities inure to the benefit of the City. Any capitalized term which is not otherwise defined herein shall have the meaning ascribed to such term in the Loan Agreement. 2. Definitions. For the purpose of calculating the payments to be made by Borrower to City pursuant to this Note, the following terms shall have the following respective meanings: "Acquisition Costs" shall mean the costs and expenses of Borrower to acquire the Property, as set forth in the Project Budget attached to the Loan Agreement. "City Loan" shall mean the loan evidenced by this Note. "City's Percentage" with reference to the Residual Receipts, shall mean 50% or the prorated percentage of the total amount of funds contributed after CORNERSTONE HOUSING PARTNERS LP, retains fifty percent of the Residual Receipts, whichever is less, of the City's share of the total Residual Receipts from the Property as further described in Section 5 hereof. If other lenders to the Property are also repaid from Residual Receipts, City's Percentage shall be reduced proportionally to the ratio that the original principal amount of the Loan bears to the original principal amount of all loans being repaid from Residual Receipts multiplied by 50%. "Calendar Year" means each consecutive twelve (12) month period from January 1 to December 31. "Closing Costs" shall mean: (i) In the case of a Sale, reasonable brokerage commissions payable to a broker as a result of the Sale, which shall not in any event exceed the customary amount charged -for similar transactions in the immediate market place, costs of title insurance premiums, documentary stamp taxes, escrow fees, recording charges, loan repayment charges and other costs reasonably incurred with respect to the Property, in each case actually paid by Borrower as a condition of the Sale. GO In the case of a Refinancing, the reasonable and necessary costs of consummating such Refinancing, including, without limitation, loan fees, loan repayment charges, costs of title insurance premiums, escrow fees, recording fees, attorneys' fees and costs of Lender required repairs or reserves. "Gross Revenues" shall mean all revenues and receipts of every kind actually received by Borrower from operating the Property, and all parts thereof, including, but not limited to, income from both cash and credit transactions, rental from leased and/or subleased spaces and 80A-109 EXHIBIT 3 parking fees and charges (but not including security deposits and other tenant deposits, except to the extent such deposits are forfeited to the Borrower under the tenant's lease). Gross Revenues does not include any insurance proceeds other than any rental interruption insurance proceeds. Any credit consideration shall be included in Gross Revenues at the time cash proceeds (principal, interest and/or other) are received. Borrower shall establish and maintain accounts for the Gross Revenues (the "'Project Accounts") that are segregated from revenues and income received by Borrower from all other projects. Gross Revenues shall also include all interest earned on the Project Accounts to the extent interest is released from the Project Accounts. Gross Revenues do not include the proceeds of any loans or capital contributions made to Borrower, Refinancing Proceeds or Sale Proceeds. "Operating Expenses" shall mean the sum of the following: (i) payments of principal and interest and all other charges relating to the Senior Loan(s), exclusively including required payments under the MUFG Union Bank, N.A. loan(any additional loans to the project must be approved by the City); GO a property management fee no greater than 8% of gross rents; (iii) Owner Partnership Management and Asset Management Fees not to exceed 5% of gross rents; (iv) Deposits into required reserves required by any lender or Borrower's Partnership Agreement; (v) all other actual, reasonable cash operating costs and expenses, calculated on an annual basis, that are directly attributable to managing and operating the Property and the Borrower, including, without limiting the generality of the foregoing, the following: costs and expenses for real and personal property taxes, special assessments or similar charges; water, fuel, electricity and other utilities; heating, ventilation and air conditioning expenses; labor; supplies; tools; equipment; insurance; advertising and marketing; accounting and legal fees; brokerage commissions and other leasing expenses; reasonable reserves for all anticipated expenses as approved by the City; and other such items constituting operation, maintenance and repair costs actually paid by the Borrower, subject to the following conditions: (a) Depreciation and amortization expenses shall not be considered Operating Expenses, except as otherwise provided herein. (b) Reserved. (c) Any expenses, compensation or fees paid to any affiliate of Borrower shall only be included as Operating Expenses to the extent they are not in excess of the reasonable expenses, compensation or fees which would be payable to unrelated third parties in arms -length transactions for similar services in the Santa Ana, California area. 3 80A-110 EXHIBIT 3 (vi) Any other expenses necessary to meet senior lender requirements and requirements of Borrower's limited partner, or its assignee, as set forth in Borrower's Agreement of Limited Partnership (the "Partnership Agreement"), including, without limitation, repayment of any loans to the Borrower by a partner or tax credit recapture or deficiency payments. (vii) Deferred Developer Fees. (viii) A social services administrative fee. "Project" shall mean the acquisition and rehabilitation of the Property by Borrower pursuant to the Loan Agreement. "Property" shall mean the real property located at 805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California, and commonly referred to as the Cornerstone Apartments, described in the City Deed of Trust. "Refinancing" shall mean changing the then existing financing on the Property by, without limitation, modifying final maturity date of the existing Senior Loan, increasing the stated maximum principal amount of the existing Senior Loan, paying off the existing Senior Loan in full and obtaining new Senior Loan. "Refinancing Proceeds" shall be disbursed as set forth in Section 7 hereof. "Residual Receipts" shall mean the Gross Revenues from the Property, for each year, less deductions for Operating Expenses from the Property, applicable to each such year to the extent not already deducted as an Operating Expense. "Sale" shall mean any transfer, assignment, conveyance or lease (other than to a tenant for occupancy or a transaction set forth in Section 15(c) hereof) of the Property or any portion thereof, or any interest therein by the Borrower, and includes any transfer, assignment or sale of any partnership interest in the Borrower by an individual or entity which is a general partner in the Borrower, or any interest by any individual or entity which holds an interest in any such general partner in the Borrower, which brings the cumulative total of all such direct and indirect transfers, assignments and sales during the term of this Note to more than forty-nine percent (49%) of the ownership interests in the Borrower, and any such transfer, assignment or sale of a direct or indirect partnership interest thereafter. Sale includes a sale in condemnation or under threat thereof. Sale does not include dedications and grants of easements to public and private utility companies of the kind customary in real estate development, nor transfers of Limited Partnership interests or transfers of General Partner interests caused by the removal of the General Partner pursuant to the terms of the Partnership Agreement. "Sale Proceeds" shall be disbursed as set forth in Section 8 hereof. 2 80A-111 EXHIBIT 3 "Senior Loan" shall mean the senior loan being made by MUFG Union Bank, N.A., concurrent to the City Loan for payment of a portion of the Acquisition and Rehabilitation Costs, and shall include any subsequent loan that refinances the initial Senior Loan. "Term" the term for repayment of this Note shall mean fifty-five (55) years from the date of recording. 3. Loan Repavment. Borrower shall make payments to the City as provided in Sections 5 (Residual Receipts), 7 (Refinancing Proceeds), 8 (Sale Proceeds) and 10 (Accelerated Loan Repayment). 4. Operating Capital Improvement Loan. If the replacement reserve account ("reserves") is depleted due to unforeseen repairs and the General Partner makes a loan to the Partnership, the reserves must be fully funded to their original level prior to repayment of said loan. Such loan shall be repaid with net cash flow prior to the residual receipt split. The outstanding loan balance will be reflected in the annual report. 5. Annual Loan Repayment. a. After any deferred Developer Fee has been paid, as set forth hereinabove, the Borrower shall thereafter make a loan payment to the City annually, in the amount of the lesser of the outstanding balance due under this Note or the City's Percentage of the Residual Receipts, as provided in this Section 5. b. Within one hundred twenty (120) days after the year in which the rehabilitation of the Project is completed, and on or before the 120th day of each Calendar Year thereafter, the Borrower shall submit to the City a detailed statement of Gross Revenues and Operating Expenses attributable to the Property for the applicable Calendar Year, along with a computation of the amount of the Residual Receipts applicable to such Calendar Year with which to make a City Loan payment then due. c. Except as otherwise provided in Section 4, the Borrower shall pay to the City fifty percent (50%) of the Residual Receipts as payment of principal and interest under its loan. The remaining amount of the Residual Receipts shall remain with the Borrower to be used by Borrower as determined by the General Partners of Borrower, including, without limitation, for distribution to the partners of the Borrower. d. The Residual Receipts payment shall be made not later than one hundred fifty (150) days after the close of the Calendar Year. Such payment shall be applied first to any accrued but unpaid interest, if any, then to reduce the principal balance of the loans. 6. Reserved. 5 80A-112 EXHIBIT 3 7. Loan Renavment from Refinancing Proceeds. The Borrower shall make a loan payment to the City from every Refinancing that occurs during the term of this Note not to exceed the outstanding balance of principal and interest on this Note, to the extent of the City's Percentage of the Refinancing Proceeds (if any), as follows: the cash proceeds from such Refinancing shall be applied first to pay Closing Costs; next, the amount necessary to pay in full all amounts owing on the Senior Loan; next to pay any amounts due to the Limited Partner pursuant to the Partnership Agreement; next, the Borrower shall pay to the City fifty percent (50%) of the then remaining unapplied Refinancing Proceeds not to exceed the outstanding balance on this Note. The remaining Refinancing proceeds shall remain with Borrower to be used by Borrower as determined by the General Partners of Borrower, including, without limitation, for distribution to the partners of the Borrower. Such payment shall be due within 30 days of the date of such Refinancing, and shall be applied first to any accrued but unpaid interest, then to reduce the principal balance of the Loans. The City shall not be required to reconvey the lien of the Deed of Trust if Sale Proceeds are insufficient to repay the City Loan in full. 8. Loan Repayment from Sale Proceeds. The Borrower shall make a loan payment, not to exceed the outstanding balance of principal and interest on this Note, to the City from any Sale that occurs during the term of the City Loan, to the extent of the City's Percentage of the Sale Proceeds, as follows: gross sale proceeds are applied first to pay Closing Costs, next to pay in full all amounts owing on the Senior Loan; next the Borrower shall pay to the City fifty percent (50%) of the then remaining unapplied Sale Proceeds, not to exceed the outstanding amount of principal and interest due on this Note. This fifty percent (50%) represents the total payment due under the City Note. The remaining Sale Proceeds shall remain with Borrower. Such payment shall be due on the date of such Sale, and shall be applied first to any accrued but unpaid interest, then to reduce the principal balance of the Loans. The City shall not be required to reconvey the lien of the Deed of Trust if Sale Proceeds are insufficient to repay the City Loan in full. 9. Buy Out Option. Prior to the initial disbursement under this Note, the Borrower shall grant to the City a Right of First Refusal (subject to any purchase option and/or right for first refusal granted to one or more of the general partners of the Borrower) (the "City Right of First Refusal") to acquire the Property if Borrower desires to transfer the Property to an entity which is not affiliated with one or more of Borrower's general partners. The City Right of First Refusal shall be in form and substance acceptable to the City and the Limited Partner and shall comply with all applicable Tax Credit requirements. 3 80A-113 EXHIBIT 3 10. Accelerated Loan Payment. The full principal amount outstanding plus accrued but unpaid interest thereon, shall be due and payable on the earlier to occur of the following: a. Sale or Refinancing of the Property as provided further in Section 15 hereof; unless: (i) in the case of a Sale in which the City's Percentage of the Sale Proceeds are insufficient to repay in full the City Loan, the City approves such sale -and the purchaser assumes the balance of the City Loan in accordance with the terms of this Note; or (ii) in the case of a Refinancing in which the City's Percentage of the Refinancing Proceeds are insufficient to repay in full the City Loan, the City approves such Refinancing and the Borrower remains obligated pursuant to the terms of this Note. or b. if an Event of Default occurs pursuant to Section 16 hereof. c. The date that is fifty five (55) years after the date of execution of this Note. 11. Prepayment Borrower may prepay the outstanding principal balance under this Note, in whole or in part, together with any accrued but unpaid interest, if any, and other sums owed to the City under this Note, if any, at any time without penalty. 12. Lawful Money. Principal and interest are payable in lawful money of the United States of America. 13. Application of Payments; Late Charges. a. Any payments received by the City pursuant to the terms hereof shall be applied first to sums, other than principal and interest, due the City pursuant to this Note, next to the payment of all interest accrued to the date of such payment, and the balance, if any, to the payment of principal. b. If any payment is not received by the City within ten (10) days following the due date thereof, then in addition to the remedies conferred upon the City pursuant to this Note and the other Loan Documents, (i) a late charge of four percent (4%) of the amount due and unpaid will be added to the delinquent amount to compensate the City for the expense of handling the delinquency and (ii) the amount due and unpaid, excluding the late charge, shall bear interest at ten percent (10%) per annum, computed from the date on which the amount was due and payable until paid. Without prejudice to the rights of the City hereunder or under any of the other Loan Documents, Borrower shall indemnify the City against, and shall pay the City on 7 80A-114 EXHIBIT 3 demand, any expense or loss which it may sustain or incur as a result of the failure by Borrower to pay when due any installment of interest and/or principal, fees, or other amounts payable to the City under this Note or any other Loan Document, to the extent that any such expense or loss is not recovered pursuant to such foregoing provisions. A certificate of the City setting forth the basis for the determination of the amounts necessary to indemnify the City in respect of such expenses or direct loss, submitted to Borrower by the City, shall be conclusive and binding for all purposes except as immediately corrected by Borrower notice to City. 14. Securi This Note is secured by the City Deed of Trust. 15. Acceleration by Reason of Transfer or Financing. a. In order to induce City to make the loan evidenced hereby, Borrower agrees that in the event of any transfer of the Property without the prior written consent of City (other than a transfer resulting from a foreclosure, or conveyance by deed in lieu of foreclosure, by the holder of the Senior Loan Deed of Trust), City shall have the absolute right at its option, upon at least 30 days' prior written notice to Borrower, to declare all sums secured hereby immediately due and payable. Such consent will not be unreasonably withheld. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. City may grant or deny such consent in its reasonable discretion and, if consent should be given, any such transfer shall be subject to this Section 12, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein. Such assumption shall release Borrower from all liability thereunder from and after the date of such assumption. b. As used herein, "transfer" includes the Sale, agreement to sell, transfer or conveyance of the Property, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment land sale contract or similar instrument affecting all or a portion of the Property, or the lease of all or substantially all of the Property. "Transfer' shall not include the leasing of individual residential units on the Property, so long as Borrower complies with the provisions of the Loan Agreement and the Affordable Housing Restrictions relating to such leasing activity, nor shall it include a conveyance of the Property to a limited partnership in which the general partner of Borrower or an affiliate is a general partner, or to a corporation that is wholly owned by the Borrower and that is formed for the sole purpose of owning and operating the Property, or the sale back to the Borrower. In the event of any Refinancing or partial Refinancing in an amount in excess of the balance of the Senior Loan, without the prior written consent of City (which consent City may grant or deny in its sole discretion), then the entire outstanding balance of the City Loan together with all accrued and unpaid interest, shall be repaid to the City at the time of each Refinancing or partial Refinancing. 9 80A-115 EXHIBIT 3 c. For the avoidance of doubt, a "transfer" shall not include (i) a transfer of any general partner's interest in Borrower when made in connection with the exercise by the Borrower's limited partner (the "Limited Partner") of its rights upon a default by a general partner under the Borrower's Partnership Agreement or upon a general partner's withdrawal in violation of the Partnership Agreement, so long as the removal and substitution of the defaulting general partner is made within thirty (30) days of such default or, if such removal and substitution cannot reasonably be completed within thirty (30) days, so long as the Limited Partner commences to take action to remove and substitute the general partner with a reasonable period and thereafter diligently proceeds to complete such substitution; (ii) any transfer of the Property to the managing general partner of Borrower pursuant to the right of first refusal or to the general partners of Borrower pursuant to the purchase option, as provided for in the Purchase Option and Right of First Refusal Agreement between Borrower and its general partner; (iii) any transfer of the Limited Partner's interest in accordance with the Partnership Agreement; and (iv) any sale, transfer or other disposition of an interest in a limited partner of the Borrower. 16. Event of Default. Subject to the provisions of Sections 23 and 25 hereof, the occurrence of any of the following shall be deemed to be an event of default ("Event of Default") hereunder: (a) failure by Borrower to make any payments provided for herein, and if such default is not made good within fifteen (15) days of written notice to Borrower of such default; or (b) failure by Borrower to perform any covenant or agreement in the Deed of Trust, the Loan Agreement, or the Affordability Restrictions on Transfer of Property within thirty (30) days after written demand therefor by City (or, in the event that more than thirty (30) days is reasonably required to cure such default, should Borrower fail to promptly commence such cure, and diligently and continuously prosecute same to completion). Notwithstanding the foregoing, if Borrower fails to cure such breach during the time set forth herein for such cure, City shall provide written notice of such failure to Limited Partner and no Event of Default shall be deemed to occur unless Limited Partner fails to cure such breach within 30 days following delivery of such notice; provided, however, if in order to cure such breach Limited Partner determines that it must remove the General Partner pursuant to the terms of the Partnership Agreement, then no Event of Default shall occur until 30 days following the effective date of such removal. 17. Remedies. Upon the occurrence and during the continuance of an Event of Default, after any applicable notice has been provided and the expiration of any applicable cure period therefore, City may declare all sums evidenced hereby immediately due and payable by delivery to the Trustee named in the City Deed of Trust securing this Note, and to Borrower, written declaration of default and demand for sale, and written notice of default and of election to cause the Property to be sold, which notice Trustee shall cause to be duly filed for record and City may foreclose on the City Deed of Trust. City shall also deposit with Trustee the Deed of Trust, this Note and all documents evidencing expenditures secured thereby and evidenced hereby. No delay or 80A-116 EXHIBIT 3 omission on the part of the City in exercising any right under this Note or under any of the other Loan Documents shall operate as a waiver of such right. 18. Attorneys' Fees. If this City Loan Note is not paid when due or if any Event of Default occurs, Borrower promises to pay all costs of enforcement and collection, including but not limited to, reasonable attorneys' fees, whether or not any action or proceeding is brought to enforce the provisions hereof. 19. Severability. Every provision of this Note is intended to be severable. In the event any term or provision hereof is declared by a court of competent jurisdiction, to be illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable. 20. Number and Gender. In this Note the singular shall include the plural and the masculine shall include the feminine and neuter gender, and vice versa, if the context so requires. 21. Non -recourse. The City Loan is a nonrecourse obligation of the Borrower. Neither Borrower nor any other party, including Borrower's partners, shall have any personal liability for repayment of the City Loan or for any other amounts under any of the documentation evidencing, securing or describing the City Loan. The sole recourse of City under this Note and the Deed of Trust for repayment of the City Loan and for such other amounts arising therefrom shall be the exercise of its rights against the Property and related security thereunder. 22. Subordination. It is hereby expressly agreed and acknowledged by Borrower and City that the City Deed of Trust is a subordinate deed of trust, and that this Note is subject and subordinate to the Senior Loan Deed of Trust held by MUFG Union Bank, N.A.. 23. Reserved. 24. Reserved. 25. Force Mal cure. 10 80A-117 EXHIBIT 3 Notwithstanding specific provisions of this Note, performance hereunder shall not be deemed to be in default where delays or defaults are due to: war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; acts of God or other deities; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor or supplier; acts of the other party; acts or failure to act of the City or any other public or governmental City or entity (except that any act or failure to act of City shall not excuse performance by City); or any other causes beyond the reasonable control or without the fault of the parry claiming an extension of time to perform. An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time the party claiming such extension gives notice to the other party, provided notice by the party claiming such extension is given within thirty (30) days after the commencement of the cause. Times of performance under this Note may also be extended in writing by the City and the Borrower. 26. Assignments. The City, and the assignee of the City, shall have the right to assign this Note and the City Deed of Trust securing this Note, without any further act of Borrower. The assignee shall give notice to Borrower as soon as practicable after such assignment. 26. Amendment and Restatement. This Note amends, restates and supersedes in their entirety the Original Notes. On or before the date hereof, the City shall surrender and deliver to Original Borrower the Original Notes. 11 80A-118 EXHIBIT 3 This Note is hereby agreed to and executed on the date first set forth above. "BORROWER" CORNERSTONE HOUSING PARTNERS LP, a California limited partnership By: JHC-Cornerstone II, LLC, a California limited liability company, its Managing General Partner By: Jamboree Housing Corporation, a California non-profit public benefit corporation, its Managing Member By: _ Name: Title: 12 80A-119 EXHIBIT 3 EXHIBIT A. City HOME Loan Notes (the "Original Notes") 13 80A-120 c) m 2 X w M YG w ra h x U L t L O O O b c0 N V O e0 00 � N N O O y W N N O O N W N N p O OACN �� y Aw id 00c N �� a�i R� N OAC^ 00 oUviCa° OWW 0 Hti00 aEi G L' t Q 00 �+ b W �" Uz° t " U L ra .--�'Y N M .0 r A ♦+ ra W t°d M A °:o NE=V ��odw-. v t o ua o•S •o o�.N.omw s o Sao-o Rc'o200EQE"2•=c mW a'°'o`1yo.cpE'�Rygc A ❑ ^U y ocm v O 0 y U w O : 0 N N c E O D U U O Y R O N y O O O a o 0 0 F o N 0 N 0 N O N N N m a w 0 x O y N 69 fA 69 F e H e F e W O o �+ W Q o d w v o d v d v d v d N M M N L N A a R a A a ^ N M 80A-121 t r 'E c C C t O O N 00 00 r y em0 R_ E N ry S d L E N O « N tmV N yEy. N t�tl 00 y R ,V N W := m E o.E& td W C N Q" L.A '-' L y t�tl W A °' E o.a C N -c L.E •� L ,v N id °= m E o.? �ci O A A2� O C oVTd� zV W O' zC, OEOEO Z2 0w W mo.EA EE.E c m A� yo.cA aL�.c ❑ A "«� yo tq E E,c c 7 b b O O � N O O O O O N N M N i�t N N N C G O O �O V 69 69 N F c m y mVi F c 4j S3 N 00 V N O V L a v �n N 80A-122 EXHIBIT 3 Exhibit Fo. Affordability Restrictions on Transfer of Property 80A-123 EXHIBIT 3 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City of Santa Ana Clerk of the Council 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, California 92702 Attention: Clerk of the Council SPACE ABOVE THIS LINE FOR RECORDING USE FREE RECORDING REQUESTED [Government Code Section 6103] AMENDED AND RESTATED AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California) THESE AFFORDABLE HOUSING RESTRICTIONS ON TRANSFER OF PROPERTY (the "Restrictions") are entered into as of September 17, 2019, by and among and CORNERSTONE HOUSING PARTNERS LP, a California limited partnership (referred to herein as the "Developer"), and the City of Santa Ana, a charter city and municipal corporation (the "City"). RECITALS: A. Developer is the owner of that certain real property located at 805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California and commonly referred to as the Cornerstone Apartments, and legally described in Exhibit A attached hereto and incorporated herein by reference ("Property"). B. For the purpose of providing one -hundred, twenty-six (126) units of housing, one hundred twenty-five (125) of which will be affordable to very -low income households ("Assisted Units"), Wakeham-Grant Apartments, L.P. (the "Original Developer") and the City previously entered into the HOME Loan Agreements (as defined in the Loan Agreement) and the Affordability Restrictions on Transfer of Property (collectively, the "Original Restrictions") described in Exhibit B. C. In connection with the Original Developer's sale of the Property to Developer (the "Sale"), Original Developer and Developer desire to enter into that certain Assignment and Assumption Agreement (HOME Loan), dated as of the date hereof, by and between the Original Developer and the Developer to effectuate the assignment of the HOME Loan Agreements to Developer (the "Assignment"), and the City has consented to such Sale and Assignment. D. The City and Developer have entered into that certain Amended and Restated Loan Agreement, dated on or about the date hereof (the "Loan Agreement") to which these 80A-124 EXHIBIT 3 Restrictions are attached as Exhibit G, which, along with all of its attachments, is incorporated herein by this reference (any capitalized term that is not otherwise defined in these Restrictions shall have the meaning ascribed to such term in the Loan Agreement). E. In connection with the Assignment, the City and Developer desire to amend and restate the Original Restrictions. F. The Loan Agreement provides, among other things, for the use of the Property for affordable housing with all Assisted Units being restricted to Very -Low Income households, at Affordable Rent(s). G. The Loan Agreement contains certain provisions relating to the use of the Property. NOW, THEREFORE, CITY AND DEVELOPER COVENANT AND AGREE AS FOLLOWS: 1. The Restrictions amend, restate and supersede in their entirety the Original Restrictions. Developer covenants and agrees (for itself, its successors, its assigns, and every successor in interest to the Property or any part thereof) that Developer, such successors, and such assigns shall use the Property exclusively to provide affordable housing of Very -Low Income households, as provided in these Restrictions and in the Loan Agreement. 2. Developer, for itself and its successors and assigns, hereby covenants and agrees that all of the apartments in the Property (less one manager's unit) (the "Units") shall be rented exclusively, at Affordable Rent, to Very -Low Income households to the extent provided for herein. Area median income levels and Affordable Rents are subject to adjustment from time to time as provided in Section 3 below. 3. AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE OF THE PROPERTY 3.1 Use Covenants and Restrictions A. Developer agrees and covenants, which covenants shall run with the land and bind Developer, its successors, its assigns and every successor in interest to the Property that Developer will make all rental units on the Property available to very low-income households at rents affordable to such households for fifty-five (55) years from the issuance of the Certificate of Completion. The City permits the Developer to limit the eligibility and/or give preference to a particular segment of the population in accordance with 24 CFR 92.253(d). B. The Project shall consist of one -hundred, twenty-six (126) units, including one (1) on -site manager's unit(s). The HOME assisted units shall be floating. C. Rental increases shall be in conformance with federal and state law 2of14 80A-125 EXHIBIT 3 D. Developer must have a written lease between tenant and owner for a period of at least one year, unless a shorter period is mutually agreed upon. Leases must be consistent with the HOME Program regulations at 24 CFR section 92.209(g). 3.2 Affordability Levels/Unit Mix: All affordable rents in the Project shall be governed by the rents published annually by the California Tax Credit Allocation Committee for households at 50% Area Median Income upon the termination of the initial HOME Compliance Period, as applicable (as defined in the Loan Agreement). Utility allowances must be deducted from the Maximum Gross Monthly Rent. The Housing Authority of the City of Santa Ana publishes the Utility Allowance Schedule. 3.3 Rent Increases: On an annual basis, the City shall provide Developer with the maximum allowable schedule of rents for the Property in accordance with changes in allowable rent and income tables published by the California Tax Credit Allocation Committee (TCAC). In no event can Developer charge any tenant more than such amount. The City will make all best efforts to provide Developer with the maximum allowable schedule of rents within no more than 30 calendar days after the date TCAC publishes the allowable rent and income tables. 3.4 CHDO Provisions. Developer shall maintain CHDO (Community Housing Development Organization) status for the term of this Agreement and the HOME Regulatory Agreement in accordance with 24 CFR 92. Developer agrees to provide information as may be requested by the City to document its continued compliance, including but not limited to an annual board roster and certification of continued compliance. The provisions of this Section 3.4 shall not apply in the event of a foreclosure of the Property or transfer in lieu of foreclosure. In the event of a foreclosure, or acceptance of a deed in lieu of foreclosure, Senior Lender will use commercially reasonable efforts to accept bids for the Property from a qualified CHDO; provided, however, that in no event shall Senior Lender be obligated to select a qualified CHDO to be the purchaser of the Property unless, among other criteria used in Senior Lender's reasonable discretion, such qualified CHDO has offered the highest purchase price among the bidders. 4. Developer, its successors and assigns shall not charge rents for the Units in excess of the amounts set forth herein, as adjusted on the basis of the revised schedules of area median incomes issued from time -to -time by HUD. The City shall notify Developer in writing of the adjusted allowable maximum incomes and rents. 5. Developer shall adopt and include as part of its Management Plan (described in Section 11 below), written tenant selection policies and criteria for the Units, that meet the following requirements: (a) Are consistent with the purpose of providing housing for Very -Low Income households; 3of14 80A-126 EXHIBIT 3 (b) Are reasonably related to program eligibility and the applicants' ability to perform the obligations of the lease; (c) Give reasonable consideration to the housing needs of households that would have a preference under 42 CFR §906.211 (Federal selection preferences for admission to Public Housing); (d) Provide for: (i) The selection of tenants from a written waiting list in the chronological order of their application, insofar as is practicable; and (ii) The prompt written notification to any rejected applicant of the grounds for any rejection; (e) Subject to compliance with the HOME Regulations and applicable California and federal fair housing laws, local preference for Santa Ana residents and workers in tenant selection shall be a requirement of the Project. Subject to applicable laws and regulations governing nondiscrimination and preferences in housing occupancy required by HUD or the State of California, as well as the City of Santa Ana Affordable Housing Funds Policies and Procedures, the Developer shall give preference in leasing units in the following order of priority: 1. First priority shall be given to persons who have been permanently displaced or face permanent displacement from housing in Santa Ana as a result of any of the following: a. A redevelopment project undertaken pursuant to California's Community Redevelopment Law (Health & Safety Code Sections 33000, et seq.) -- applicable only to projects funded by the Low and Moderate Income Housing Asset Fund. b. Ellis Act, owner -occupancy, or removal permit eviction; c. Earthquake, fire, flood, or other natural disaster; d. Cancellation of a Housing Choice Voucher HAP Contract by property owner; or e. Governmental Action, such as Code Enforcement. 2. Second priority shall be given to persons who are either: a. Residents of Santa Ana and/or b. Working in Santa Ana at least 32 hours per week for at least the last 6 months. 4of14 80A-127 EXHIBIT 3 (f) Carry out the Affirmative Marketing procedures of the City of Santa Ana, which are designed to provide information and otherwise attract eligible persons from all racial, ethnic and gender groups in the housing market area to the units. Developer shall cooperate with the City to effectuate this provision prior to the initial renting, or upon occurrence of a vacancy, and the re -renting of any Restricted Units (24 CFR 92.351). 6. Developer, its successors and assigns, shall not refuse to lease a unit to a holder of a rental voucher under 24 CFR part 887 (Housing Choice Voucher Program) or to a holder of a comparable document evidencing participation in a HOME tenant -based assistance program because of the status of the prospective tenant as a holder of such certificate of family participation, rental voucher, or comparable HOME tenant -based assistance document. Total rents charged to the tenant for the tenant's share of rent shall not exceed the allowable rents as described above. 7. Any lease of any of the units must be for not less than one year, unless by mutual agreement between the tenant and the Developer. Should the tenant and Developer agree to a term of less than one year, said agreement shall be expressed in some type of written form, signed by the tenant, and maintained in the tenant's rental file held by the Developer. The lease may not contain any of the following provisions (in which references to "owner" shall mean the Developer, its successors or assigns): (a) Agreement by the tenant to be sued, to admit guilt, or to a judgment in favor of the owner in a lawsuit brought in connection with the lease; (b) Agreement by the tenant that the owner may take, hold, or sell personal property of household members without notice to the tenant and a court decision on the rights of the parties. This prohibition, however, does not apply to an agreement by the tenant concerning disposition of personal property remaining in the housing Unit after the tenant has moved out of the Unit. The owner may dispose of this personal property in accordance with state law; (c) Agreement by the tenant not to hold the owner or the owner's agent legally responsible for any action or failure to act, whether intentional or negligent; (d) Agreement of the tenant that the owner may institute a lawsuit without notice to the tenant; (e) Agreement by the tenant that the owner may evict the tenant or household members without instituting a civil court proceeding in which the tenant has the opportunity to present a defense, or before a court decision on the rights of the parties; (f) Agreement by the tenant to waive any right to a trial by jury; (g) Agreement by the tenant to waive the tenant's right to appeal, or to otherwise challenge in court, a court decision in connection with the lease; and 5of14 80A-128 EXHIBIT 3 (h) Agreement by the tenant to pay attorney's fees or other legal costs even if the tenant wins in a court proceeding by the owner against the tenant. The tenant, however, may be obligated to pay costs if the tenant loses. 8. Developer, its successors or assigns, must adhere to state law requirements with regard to termination of tenancy. 9. Developer shall maintain the improvements on the Property in compliance with all applicable housing quality standards [24CFR 92.504 (c)(6)] and state and local code requirements (California Health and Safety Code section 33418), and shall keep the Property free from any unreasonable accumulation of debris or waste materials. Developer shall also maintain in a healthy condition any landscaping planted on the Property. 10. Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, there shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, mental or physical disability, marital status, national origin or ancestry in the sale, lease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property, as required by the Title VI of the Civil Rights Act of 1964, the Fair Housing Act (42 U.S.C. 3601-20) and all implementing regulations, and the Age Discrimination Act of 1975, and all implementing regulations. 11. Not later than five (5) business days prior to the execution of the documents, Developer shall submit to the Executive Director a Management Plan in a form that is acceptable to the Executive Director, including, but not limited to, the components listed below. Approval of the Management Plan must be obtained from the Executive Director not later than the time for the Closing. Developer shall manage the Assisted Units in accordance with the approved Management Plan, including such amendments as may be approved in writing from time to time by the Executive Director, for the term of the income and rent restrictions contained in these Restrictions. The components of the Management Plan shall include: (a) Management Agent. Developer shall submit the name and qualifications of the proposed Management Agent. The Executive Director shall approve or disapprove the proposed Management Agent in writing based on the experience and qualifications of the Management Agent. (b) Management Agreement. Developer shall submit a copy of the proposed management agreement specifying the amount of the management fee, and the relationship and division of responsibilities between Developer and Management Agent. (c) Annual Budget and Projected Cash Flows. Prior to the Closing, and annually thereafter not later than ninety (90) days after the close of each calendar year thereafter until the Loan is repaid in full, Developer shall submit a projected operating 6of14 80A-129 EXHIBIT 3 budget and cash flow to the Executive Director. The budget and cash flow shall be in a form that is acceptable to the Executive Director. (d) Tenant Selection Policies. Developer shall include in the Management Plan the tenant selection policies in accordance with Section 5, above. 12. If at any time the City determines that the units are not being managed or maintained in accordance with the approved Management Plan, the City shall send the Developer a detailed description of the management deficiencies (a "Deficiency Notice"). If the deficiencies set forth in the Deficiency Notice are not cured within thirty (30) days (or such longer period as may be reasonably required to cure the deficiency), with the exception of HOME regulations that require a shorter period, the Executive Director may require Developer to change management practices or to terminate the management contract and designate and retain a different management agent. The management agreement shall provide that it is subject to termination by Developer without penalty, upon thirty (30) days prior written notice, at the direction of the Executive Director upon failure to cure a Deficiency Notice within the time period specified above. Within ten (10) days following a direction of the Executive Director to replace the management agent in accordance with the terms hereof, the Developer shall select another management agent or make other arrangements satisfactory to the Executive Director or designee for continuing management of the units. 13. The covenants established in these Restrictions and any amendments hereto approved by the City and Developer shall, without regard to technical classification and designation, be binding for the benefit and in favor of the City and their respective successors and assigns. These Restrictions shall remain in effect for fifty-five (55) years. In its discretion, the City may defer repayment of the HOME Loan or the City may agree to such reasonable modifications to the requirements of these Restrictions, as they may determine are necessary for the continued maintenance and operation of the Assisted Units. The covenants against discrimination shall remain in effect for the period of these Restrictions. 14. Developer shall not request disbursement of HOME funds until the funds are needed to pay eligible costs. The City shall have the right to disapprove any request if the City determines the request is for an ineligible item or is otherwise not in compliance with or inconsistent with the Loan Agreement and these Restrictions [24 CFR 92.504 (c)(10A. 15. Developer shall prepare, maintain and submit to the City, as appropriate, the following records and reports in compliance with 24 CFR 92.504 (c) (12): a. Annual Reports. Developer shall file with the City an Annual Report (herein referred to as the "Annual Report") within one hundred twenty (120) days following the end of each calendar year, commencing with the end of the calendar year (or portion thereof) in which the Real Estate Closing occurs. The Annual Report shall contain a certification by Developer as to such information as the City Executive Director may then require, including, but not limited to, the following: 7of14 80A-130 (1) The fiscal condition of the Project, including the Annual Budget and Project Cash Flow report required by Section 10 (c) of the Affordable Housing Restrictions which shall include a financial statement for the previous calendar year that includes a balance sheet and a profit and loss statement indicating any surplus or deficit in operating accounts; a detailed itemized listing of income and expenses; and the amounts of any fiscal reserves. Such Annual Budget and financial statement shall be prepared in accordance with generally accepted accounting practices. The City Executive Director may require that the financial statement be audited at Developer's expense by an independent certified public accountant acceptable to the Executive Director. (2) Any substantial physical defects in the Project, including a description of any major repair or maintenance work undertaken or needed in the previous and current years. Such statement shall describe what steps Developer has taken in order to maintain the Project in a safe and sanitary condition in accordance with applicable housing and building codes and the property standards set forth in 24 CFR 92.251. (3) The occupancy of the units indicating the income of each current resident and the current rents charged each resident and whether those rents include utilities, including records that demonstrate that the Project meets the requirements of 24 CFR 92.253 for tenant and participant protection under the HOME Program. (4) General management performance, including tenant relations and other relevant information. (5) Records that demonstrate that the units meet the affordability requirements of 24 CFR 92.252, 50052.5 and 50053(b)(1) of the California Health and Safety Code, for the required period of affordability according to section 33334.3 of the California Health and Safety Code. (6) Evidence of a currently paid hazard insurance policy in accordance with the requirements of Section 6 of the City/HOME Deed of Trust, with a loss payable endorsement naming the City as a loss payee(s) together with other approved lenders (as their interests may appear), with a "Replacement Cost Endorsement" in amount sufficient to prevent Developer or City from becoming. a co-insurer under the terms of the policy, but in any event in an amount not less than 100% of the then full replacement cost, to be determined at least once annually and subject to reasonable approval by the Executive Director. (7) Evidence of a currently paid liability insurance policy, naming the City as additional insured and in a form approved by the City Attorney with coverage as described in the Loan Agreement. (8) Termite reports pertaining to the Property every fifth (5a`) year. (9) Such other information as may be reasonably required by the Executive Director or his/her designee. b. Records and Audits. During the HOME Compliance Period, Developer 8of14 80A-131 EXHIBIT 3 shall maintain the following general program records, and make them available for inspection by the City, the State or HUD: (1) records which demonstrate that the project meets the property standard specified in 24 CFR 92.251; (2) records, for each HOME Assisted Unit, which demonstrates that the project meets the requirements of 24 CFR 92.252. (3) records which demonstrate compliance with the tenant and participant protections, as specified in 24 Section 29.253; (4) records which demonstrate compliance with the Equal Opportunity and Fair Housing requirements outlined in these Restrictions, including: (A) data on the extent to which each racial and ethnic group and single head of household (by gender of head of household) have applied for, participated in, or benefited from, any program or activity funded in whole or in part with HOME funds; (13) documentation of actions undertaken to meet the equal opportunity requirements of 24 CFR 92.350, which implements Section 3 of the Housing Development Act of 1968, as amended (12 U.S.C. 1701u); (C) documentation and data on the steps taken to implement Developer's outreach programs to minority -owned and women -owned businesses to meet the minority outreach requirements of 24 CFR 92.350; (5) documentation of the steps taken to carry out an affirmative marketing program in accordance with 24 CFR 92.351, if applicable; (6) if applicable, records which demonstrate compliance with the requirements relating to relocation of displaced persons, as described in 24 CFR 92.353. At a minimum, these shall include project occupancy lists identifying the name and address of all persons occupying the project property up until the date of the Real Estate Closing (i.e., the date on which Developer obtained site control); (7) records concerning lead -based paint in accordance with 24 CFR 92.355; (8) if applicable, records which support any requests for waivers of the conflict of interest prohibition as stated in 24 CFR 92.356; (9) records of certifications of contractor qualifications as they relate to the debarment and suspension requirement as stated in 24 CFR 92.357 and 24 CFR Part 24; and 9of14 80A-132 IWN:I 1 0.11 (10) any other reports issued by other monitoring agencies. C. All records pertaining to each calendar year of HOME funds must be retained for the most recent five year period, except that for rental housing projects, records may be retained for five years after the project completion date; except that records of individual tenant income verifications, project rents and project inspections must be retained for the most recent five year period, until five years after the affordability period terminates (24 CFR 92.508). Developer shall cooperate with the City to retain all books and records relevant to the Loan Agreement for a minimum of five years after the expiration of the Loan Agreement and any and all amendments hereto, or for five years after the conclusion or resolution of any and all audits or litigation relevant to the Loan Agreement, whichever is later. The City, the State, the Office of the Auditor General of HUD, and/or their representatives shall have unrestricted reasonable access to all locations, books, and records for the purpose of monitoring, auditing, or otherwise examining said locations, books, and records with or without prior notice. d. If so directed by the City, the State or HUD upon termination of the Loan Agreement, Developer shall cause all records, accounts, documentation and all other materials relevant to the work to be delivered to the City, the State or HUD, as depository. e. All records, accounts, documentation and other materials relevant to the Project shall be accessible at any time to the authorized representatives of the City, the State or HUD, on reasonable prior notice, for the purpose of examination or audit. f. Pursuant to 24 CFR Part 44, the City shall perform an annual audit at the close of each calendar year in which these Restrictions are in effect. Developer shall reasonably cooperate with City in performing such audit. 16. If an event of default occurs under the terms of these Restrictions, prior to exercising any remedies hereunder, City shall give Developer written notice of such default. If the default is reasonably capable of being cured within thirty (30) days, Developer shall have such period to effect a cure prior to exercise of remedies by the City under these Restrictions. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Developer (i) initiates corrective action within said period, and (ii) diligently, continually, and in good faith works to effect a cure as soon as possible, then Developer shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by City. The City is a beneficiary of the terms and provisions of these Restrictions and the covenants herein, both for and in their own right and for the purposes of protecting the interests of the community and other parties, public or private, for whose benefit these Restrictions and the covenants running with the land have been provided. Upon the occurrence of an event of default and the expiration of the notice and cure period specified above, the City shall have the right to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which they or any other beneficiaries of these Restrictions and covenants are entitled. 10 of 14 80A-133 EXHIBIT 3 17. The covenants and agreements contained herein shall run with the land and not be personal obligations of Developer. Upon the sale, conveyance or other transfer of the Property (a "Transfer") and the assumption of the obligations hereunder by a transferee, Developer's liability for performance shall be terminated as to any obligation to be performed hereunder after the date of such Transfer. 18. The Loan Agreement and all of its attachments shall be enforceable by City in accordance with the terms thereof. Each of the Loan Agreement, the Affordability Restrictions on Transfer of Property, the City/HOME Loan Note and the City/HOME Deed of Trust provide a means of enforcement by the City if Developer is in breach of its obligations hereunder and thereunder, including liens on the Property, use and deed restrictions and covenants running with the land [24 CFR 92.504 (c) (13)]. 11 of 14 80A-134 EXHIBIT 3 IN WITNESS WHEREOF, the parties hereto have caused these Amended and Restated Affordability Restrictions on Transfer of Property to be executed on the date set forth hereinabove. ATTEST: Daisy Gomez Clerk of the Council APPROVED AS TO FORM Sonia R. Carvalho City Attorney By: Ryan O. Hodge Assistant City Attorney THE CITY OF SANTA ANA Kristine Ridge City Manager RECOMMENDED FOR APPROVAL: Steven A. Mendoza Executive Director Community Development Agency {Signatures continue on followingpage) 12 of 14 80A-135 DEVELOPER: CORNERSTONE HOUSING PARTNERS LP, a California limited partnership By: JHC-Cornerstone II, LLC, a California limited liability company, its Managing General Partner By: Jamboree Housing Corporation, a California non-profit public benefit corporation, its Managing Member By: _ Name: Title: A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF On , before me, a notary public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WIl NESS my hand and official seal. Signature (SEAL) 13 of 14 80A-136 EXHIBIT 3 EXHIBITS A. Legal Description B. Affordability Restrictions on Transfer of Property (the "Original Restrictions") 14 of 14 80A-137 EXHIBIT 3 Legal Description The Land referred to herein below is situated in the City of Santa Ana, County of Orange, State of California, and is described as follows: PARCEL ONE: LOTS 7 THROUGH 13 INCLUSIVE OF TRACT 3547 IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 138, PAGES 32 AND 33 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY. PARCEL TWO: PARCEL 1 OF "LOT MERGER NO. 2019-08" RECORDED AUGUST 02, 2019 AS INSTRUMENT NO. 2019000282886 OF OFFICIAL RECORDS. PARCEL THREE: PARCEL 1 OF "LOT MERGER NO. 2019-10" RECORDED AUGUST 02, 2019 AS INSTRUMENT NO. 2019000282887 OF OFFICIAL RECORDS. For conveyancing purposes only: APN 404-033-01 (Affects portion of Parcel Two) APN: 404-033-02 (Affects portion of Parcel Two) APN: 404-032-01 (Affects portion of Parcel Three) APN: 404-032-02 (Affects portion of Parcel Three) APN: 404-031-03 (Affects Lots 8 and 9 of Parcel One) APN: 404-031-01 (Affects Lots 12 and 13 of Parcel One) APN: 404-031-04 (Affects Lot 7 of Parcel One) APN: 404-031-02 (Affects Lots 10 and 11 of Parcel One) 80A-138 CM H m X W s k W w d •_ .ccs •_F G G G o co 0 0 0 0 0 C` b V M l� � 00 H pMp O O N N N C O U N b0 N N N N N N .G O O U H C m E o m � ttl C A C A G td C tV C A G ti 0 0 0 0 0 0 Q U U U U U U c c c c c c 0 U U V V U U w o v v v aCi E E E E aCi E aCi E ° ¢ ¢ ¢ a ¢ ¢ zH o+ a. a a C. oat°. o P. a a a N M V � N 80A-139 EXHIBIT 3 Exhibit Go. HOME Loan Agreements 80A-140 M H m X W wi w u v m d y c C d 9 O y � � v � o E o � y G � N F d L Q C F: � F A z 0 L� 0 E E E u 0 0 O c � £ E m � E E e m h a s a 80A-141 80A-142 EXHIBIT 4 FREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 6103 & 27383 When Recorded Mail to: City of Santa Ana Clerk of the Council 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, California 92702 Attention: Clerk of the Council SPACE ABOVE THIS LINE FOR RECORDING USE FREE RECORDING REQUESTED [Government Code Section 6103] AMENDED AND RESTATED HOUSING SUCCESSOR AGENCY LOAN AGREEMENT by and between the HOUSING AUTHORITY OF THE CITY OF SANTA ANA SERVING AS THE HOUSING SUCCESSOR AGENCY TO THE FORMER COMMUNITY REDEVELOPMENT AGENCY M CORNERSTONE HOUSING PARTNERS LP, a California limited partnership (805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California) Dated: September 17, 2019 80A-143 EXHIBIT 4 AMENDED AND RESTATED HOUSING SUCCESSOR AGENCY LOAN AGREEMENT THIS AMENDED AND RESTATED LOAN AGREEMENT (this "Agreement") dated, for identification purposes only, as of September 17, 2019, is made and entered into by and between the Housing Authority of the City of Santa Ana serving as the Housing Successor Agency to the former Community Redevelopment Agency, a public body, corporate and politic ("Housing Successor Agency" or "Agency") and CORNERSTONE HOUSING PARTNERS LP, a Califomia limited partnership, with reference to the following: RECITALS: A. Developer is the owner of that certain real property located at 805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California and commonly referred to as the Cornerstone Apartments, and legally described in Exhibit A attached hereto and incorporated herein by reference ("Property"). B. The Community Redevelopment Agency of the City of Santa Ana ("CRA") and Wakeham-Grant Apartments, L.P. (the "Original Developer") previously entered into the Tax Increment Loan Agreements recorded in Official Records of Orange County and the Owner Participation Agreements (collectively, "Housing Successor Agency Loan Agreements") described in Exhibit G. C. The purpose of said Housing Successor Agency Loan Agreements was to assist with the rehabilitation of a 126-unit residential housing development on the Property ("Project'). D. The CRA was established as a redevelopment agency that was previously organized and existing under the California Community Redevelopment Law, Health and Safety Code sections 33000, et seq., and previously authorized to transact business and exercise powers of a redevelopment agency pursuant to action of the City Council of the City of Santa Ana ("Agency"). E. Assembly Bill xl 26 added Parts 1.8 and 1.85 to Division 24 of the Health and Safety Code ("Dissolution Act'), which laws caused the dissolution and wind down of all redevelopment agencies as of and on February 1, 2012. F. The CPA is now a dissolved redevelopment agency pursuant to the Dissolution Act. G. By a resolution considered and approved by the City Council at an open public meeting, the Agency chose to become and serve as the successor agency to the dissolved CRA under the Dissolution Act, as of February 1, 2012. H. By another resolution considered and approved by the City Council at an open public meeting on January 9, 2012, pursuant to section 34176 of the Dissolution Act, the Housing Authority of the City of Santa Ana (CA093) ("Housing Authority") accepted 2 80A-144 EXHIBIT 4 and assumed the housing assets and functions of the CRA. Therefore, as of February 1, 2012, the Housing Authority became and serves as the Housing Successor Agency of the former CRA pursuant to the Dissolution Act. I. The housing assets that transferred from the CRA to the Housing Authority include real property, contracts, leases, books and records, the loan portfolio, buildings, equipment, encumbered funds, and the Low and Moderate Income Housing Asset Fund, collectively referred to as Housing Assets pursuant to section 34176 of the Dissolution Act. J. Accordingly, the Housing Authority, acting as the Housing Successor Agency, now has all "rights, powers, assets, liabilities, duties and obligations" relating to the Housing Assets, obligations, and functions of the former CRA pursuant to section 34181 of the Dissolution Act. K. In connection with the Original Developer's sale of the Property to Developer (the "Developer Sale"), Original Developer and Developer desire to enter into that certain Assignment and Assumption Agreement (Housing Successor Agency Loan) by and between the Original Developer and the Developer to effectuate the assignment of the Housing Successor Agency Loan Agreements to Developer (the "Assignment"), and the Agency has consented to such Developer Sale and Assignment. L. In connection with the Assignment, the parties desire to amend and restate said Housing Successor Agency Loan Agreements in order to: restate the terms of the Housing Successor Agency Loan Agreements; extend the Term of the Housing Successor Agency Loan Agreements, and to set all affordable rents at the Project based on Tax Credit Allocation Committee ("TCAC") rents, instead of the existing State of California Health and Safety Code rents. M. On November 20, 2018, the Housing Authority authorized the Executive Director of the Housing Authority to execute a commitment letter to resubordinate the Housing Successor Agency Loan Agreements for the Cornerstone Apartments to tax- exempt multifamily bonds in an amount not to exceed $8,700,000. The Housing Authority also authorized the Executive Director to level all rents onsite at the 50% TCAC rents instead of the existing Health and Safety Code rents. No new Housing Successor Agency funds are being provided to the Project. N. On September 17, 2019, the Housing Authority authorized the reubordination of the Housing Successor Agency Loan Agreements for the Cornerstone Apartments to a $17,250,000 construction loan, which will be reduced to $11,100,000 in connection with the conversion of the construction loan to a permanent loan. O. The Developer has received a new allocation of 4% low-income housing tax credits in order to resyndicate and recapitalize the Project and rehabilitate the 126 affordable rental units, as is typical after the 15 year TCAC compliance period. P. This Agreement and all of its attachments shall be enforceable by Agency in accordance with the terms thereof. Each of this Agreement, the Affordability Restrictions on Transfer of Property, the Housing Successor Agency Loan Note and the 3 80A-145 F: VA 111P-31�! Housing Successor Agency Deed of Trust provide a means of enforcement by the Agency if Developer is in breach of its obligations hereunder and thereunder, including liens on the Property, use and deed restrictions and covenants running with the land [24 CFR 92.504 (c) (13)]. NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein contained, Agency and Developer agree as follows: DEFINITIONS AND INTERPRETATION 1.1 Defined Terms. All capitalized terms used herein, including, without limitation, in the Recitals above and in all other Project Documents, unless otherwise expressly defined, are defined where first used in this Agreement and/or as set forth in this Article 1. "Agency" means the Housing Authority of the City of Santa Ana serving as the Housing Successor Agency to the former Community Redevelopment Agency, a public body, corporate and politic. "Affordable Housing" means housing operated in accordance with the requirements of 24 CFR 92.252 and the rents governed by HUD. "Affordability Restrictions on Transfer of Property" means that certain document affecting real property benefiting the Agency, attached hereto as Exhibit F. "Affordable Rent" means the monthly rents that are set forth in more detail in Section 7 of this Agreement. 'Building Permit' means the building permit(s) issued by the City of Santa Ana and required for the construction, if any. "Business Day" means any Monday, Tuesday, Wednesday, Thursday or Friday on which Santa Ana City Hall is open to the public for the conduct of Agency affairs. "Calendar Year" means each consecutive twelve (12) month period from January 1 to December 31. "Certificate of Completion" has the meaning set forth in Article 17. "City" means the City of Santa Ana, California, a charter city and municipal corporation. "Housing Successor Agency Loan" means the loan to be made to Developer by Agency from Housing Successor Agency funds pursuant to Article 5 of this Agreement. 80A-146 EXHIBIT 4 "Housing Successor Agency Loan Deed of Trust" means the deed of trust encumbering the Property, in the form attached hereto as Exhibit D, to be executed by Developer pursuant to Section 5.13.2 in order to secure the Housing Successor Agency Loan Note. "Housing Successor Agency Loan Note" means that certain promissory note in the original principal amount of TWO MILLION, FIFTY-FOUR THOUSAND, THREE HUNDRED AND TWENTY-SEVEN DOLLARS ($2,054,327), in the form attached hereto as Exhibit E, and to be executed by Developer in favor of Agency to evidence the obligation of Developer to repay the Housing Successor Agency Loan "Close of Escrow" shall mean the date upon which the Housing Successor Agency Loan Deed of Trust is recorded in the Official Records of the County. "Closing Statement" means the final statement of Developer's Escrow account for the purchase and sale of the Property pursuant to the Purchase Contract. "County" means the County of Orange, California. "Developer" means CORNERSTONE HOUSING PARTNERS LP, a California limited partnership, its successors and assigns. "Developer's Representative" shall mean the President of the Managing General Partner of Developer or his/her designee. "Escrow Holder" means First American Title Insurance Company, 18500 Von Karman Avenue, Suite 600, Irvine, CA 92612. "Event of Default" has the meaning set forth in Section 20.1. "Executive Director" means the Executive Director of the Community Development Agency, or his/her designee. "Extremely Low Income" an adjusted income which does not exceed thirty percent (30%) of the area median income for the Orange County, California PMSA, adjusted for household size, as published by HUD. "General Partner(s)" means the General Partners of Developer, Cornerstone Housing Partners LP, and their respective successors and assigns. "Governmental Authority" means any governmental or quasi governmental agency, board, bureau, commission, department, court, administrative tribunal or other instrumentality or authority, and any public utility. "Hazardous Materials" means flammable materials, explosives, radioactive materials, hazardous wastes, toxic substances and similar substances and materials, including all substances and materials defined as hazardous or toxic wastes, 80A-147 EXHIBIT 4 substances or materials under any applicable law, including without limitation the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et sue., and the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §§ 9601, et seq., as amended. "HUD" means the United States Department of Housing and Urban Development and any successors or assigns thereof. "Improvements" means all improvements and fixtures now and hereafter comprising any portion of the Property, including, without limitation, landscaping, trees and plant materials; and offsite improvements (including, without limitation, streets, curbs, storm drains, and adjacent street lighting). "Indebtedness" of a person means (a) all indebtedness for borrowed money, (b) notes payable and drafts accepted representing extensions of credit, whether or not representing obligations for borrowed money, (c) any obligation for the purchase of property or services in excess of $10,000 in the aggregate that is (i) deferred for more than six (6) months, or (ii) evidenced by a note or similar instrument, and ( d) all recourse and all non -recourse indebtedness secured by any Lien on any property or asset of such person (whether or not assumed by such person). "Indemnitees" has the meaning set forth in Section 14.5. "Laws" means all statutes, laws, ordinances, regulations, orders, writs, judgments, injunctions, decrees or awards of the United States or any state, county, municipality or other Governmental Authority. "Lien" means any lien, mortgage, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any lien or security interest). "Limited Partner" means the Limited Partners of Developer pursuant to the Partnership Agreement, and their successors and assigns. "Loan Documents" means, collectively, this Agreement, the Housing Successor Agency Loan Note, the Housing Successor Agency Loan Deed of Trust, the Affordability Restrictions on Transfer of Property, and any other agreement, document, or instrument that the Agency requires in connection with the execution of this Agreement or from time to time to effectuate the purposes of this Agreement. "Low Income" means an adjusted income which does not exceed eighty percent (80%) of the area median income for the Orange County, California PMSA, adjusted for household size, as published by HUD. .4 I � ' 46 EXHIBIT 4 "Median Income for the Area" means the median income for the Orange County, California PMSA as most recently determined by HUD. Also may be referred to interchangeably in the Loan Documents as "Area Median Income" or "AMI". "Partnership Agreement" means the Amended and Restated Agreement of Limited Partnership dated September 1, 2019, as said Partnership Agreement may be amended from time to time. "Permitted Encumbrances for the Affordable Housing Restrictions" means, collectively, the Senior Loan Deed of Trust and all other title exceptions and limitations with respect to the Property hereafter approved by the Executive Director in writing. "Permitted Encumbrances for the Agency Loan Deed of Trust" means, collectively, the Senior Loan Deed of Trust and all other title exceptions and limitations with respect to the Property hereafter approved by the Executive Director in writing. "Project" means the acquisition and new construction of the Property by Developer pursuant to this Agreement. "Project Budget" means the line -item budget for the Project attached hereto as Exhibit C, as modified from time to time in accordance with this Agreement. "Project Costs" means all costs of any nature incurred in connection with the Project in accordance with generally accepted accounting principles. "Property" means, collectively,the Properties that are located at 805 S. Minnie St, 815 S. Minnie St, 816 S. Minnie St., 825 S. Minnie St., 828 S. Minnie St., 835 S. Minnie St., and 904 S. Minnie St, within the City of Santa Ana, and is more fully described in the "Legal Description" of the Property attached hereto as Exhibit A and incorporated herein by reference. "Senior Lender" means MUFG Union Bank, N.A. or any other holder of the Senior Loan Note(s) or any refinancing of the Senior Loan Note(s). "Senior Loan" shall mean the senior loan being made by Senior Lender concurrent to the Housing Successor Agency Loan for payment of a portion of the acquisition and new construction costs, and shall include any subsequent loan that refinances the initial Senior Loan. "Senior Loan Deed of Trust" means the deed of trust securing the Senior Loan by encumbering the Property. "Senior Loan Documents" means, collectively, the loan agreement 80A-149 EXHIBIT 4 governing the Senior Loan, the Senior Loan Note, the Senior Loan Deed of Trust, and any other agreement, document or instrument that the Senior Lender requires in connection with the Senior Loan. "Senior Loan Note" means the promissory note evidencing the Senior Loan from Senior Lender. "Term" the terms and conditions contained herein shall remain in effect for fifty-five (55) years. The Affordability Restrictions on Transfer of Property shall also remain in effect for fifty-five (55) years. "Very Low Income" means an adjusted income which does not exceed fifty percent (50%) of the area median income for the Orange County, California PMSA, adjusted for household size, as published by HUD. 1.2 Singular and Plural Terms. Any defined term used in the plural in this Agreement or any other Loan Document shall refer to all members of the relevant class and any defined term used in the singular shall refer to any number of the members of the relevant class. 1.3 References and Other Terms. Any reference to this Agreement or any Loan Document shall include such document both as originally executed and as it may from time to time be modified. References herein to Articles, Sections and Exhibits shall be construed as references to this Agreement unless a different document is named. References to subparagraphs shall be construed as references to the same Section in which the reference appears. The term "document' is used in its broadest sense and encompasses agreements, certificates, opinions, consents, instruments and other written material of every kind. The terms "including" and "include" mean "including (include) without limitation." 1.4 Exhibits Incorporated. All attachments and exhibits to this Agreement, as now existing and as the same may from time to time be modified, are incorporated herein by this reference. 2. AMENDMENT AND RESTATEMENT This Agreement amends, restates and supersedes in their entirety the Housing Successor Agency Loan Agreements. 3. SCOPE OF WORK/ PROJECT BUDGET Developer shall comply with this Section until the Certificate of Completion is issued. A "Scope of Work" for the Property is attached hereto as Exhibit B. Any change to the Scope of Work requested by the Developer, which would result in a change to the Project Budget in excess of ten percent (10%) of any individual line item or in 80A-150 EXHIBIT 4 excess of five percent (5%) of the aggregate budget, shall be subject to the prior written approval of the Executive Director. A line -item budget for the Project, including a summary statement of sources and uses of funds, is incorporated into Exhibit C (the "Project Budget"). Any material change to the Project Budget in excess of ten percent (10%) of any individual line item or in excess of five percent (5%) of the aggregate budget shall be subject to the prior written approval of the Executive Director which if not granted or denied within five (5) Business Days, shall be deemed approved; provided, however, that in all events, Developer shall at all times obtain and maintain all required permits and approvals from the City's Planning and Building Agency. Notwithstanding the foregoing, the Agency's approval of a change order shall not be required unless the approval of the Senior Lender is required with respect to such change order. 4. [RESERVED] 5. LOANS A. AGENCY LOAN: 1. Amount and Purpose. Subject to the terms and conditions of this Agreement, Agency agrees to make a loan of Housing Successor Agency funds to Developer in the principal amount of up to TWO MILLION, FIFTY-FOUR THOUSAND, THREE HUNDRED AND TWENTY-SEVEN DOLLARS ($2,054,327) (the "Housing Successor Agency Loan") for the rehabilitation of the Property. No new Housing Successor Agency funds are being provided to the project. The Loan consolidates ten existing Housing Successor Agency loans for the purpose of enabling the Developer to resyndicate and rehabilitate the Property. 2. Housing Successor Agency Note and Deed of Trust. The Housing Successor Agency Loan shall be evidenced by the Housing Successor Agency Loan Note in the form attached hereto as Exhibit E. The Housing Successor Agency Loan shall be secured by the Housing Successor Agency Loan Deed of Trust in the form attached hereto as Exhibit D. The Housing Successor Agency Loan Deed of Trust shall be a deed of trust encumbering the Property, subordinate to the Senior Loan(s) made to Developer and the Senior Loan Documents. 3. Housing Successor Agency Loan Terms. The terms and conditions of the Housing Successor Agency Loan are as set forth in the Housing Successor Agency Loan Note which is a residual receipts note. 6. CONDITIONS TO RETAIN EXISTING LOANS Developer shall comply with this Section until the Certificate of Completion is issued. 6.1 Conditions Precedent. Agency's obligation to provide the Loan Amount is subject to the satisfaction, or waiver by the Executive Director, of the following conditions precedent: 80A-151 EXHIBIT 4 (a) Loan Documents. Developer shall have delivered to the Escrow Holder, signed by the authorized officer or officers of Developer, with such signature(s) acknowledged where necessary, each of the following documents: (i) This Agreement; (ii) The Housing Successor Agency Loan Note; (iii) The Housing Successor Agency Loan Deed of Trust; and (iv) The Affordability Restrictions on Transfer of Property. (b) Title Insurance. Agency shall have received an LP-10 ALTA Lender's loan policy of title insurance (2006 edition), or evidence of a commitment therefore satisfactory to Agency, issued by First American Title Insurance Company and in form and substance satisfactory to Agency, together with all endorsements and binders required, naming Agency as the insured, in a policy amount of not less than the Housing Successor Agency Loan Amount, showing Developer as the fee owner of the Property and insuring the Housing Successor Agency Loan Deed of Trust to be a valid lien on the Property. This Agreement, the Housing Successor Agency Loan Note, and Housing Successor Agency Loan Deed of Trust shall be subordinate to the Senior Loan Note and Senior Loan Deed of Trust. (c) Affordability Restrictions on Transfer of Property. Developer shall have delivered to the Escrow Holder, in the form attached hereto as Exhibit F, the Affordability Restrictions on Transfer of Title pursuant to which, among other things, Developer agrees that the Property shall be used only for decent, safe, sanitary and affordable rental housing pursuant to the affordability requirements of Code of Federal Regulations ("CFR') section 92.252 or 92.254 and California Health and Safety Code ("H&S") sections 50052.5, as applicable. (d) Documents Recorded. This Agreement, the Housing Successor Agency Loan Deed of Trust and the Affordability Restrictions on Transfer of Property shall have been recorded in the Official Records of the County. This Agreement, and the Housing Successor Agency Loan Deed of Trust shall be subordinate to the Senior Loan Note and the Senior Loan Deed of Trust. (e) Request for Notice. For the benefit of Agency, Escrow Holder shall have recorded a request for notice of default of the Senior Loan (the "Request for Notice of Default"). (f) Insurance. Agency shall have received evidence satisfactory to the Agency Attorney that all of the policies of insurance required by Section 19 of this Agreement are in full force and effect. (g) Representations and Warranties. The representations and 10 80A-152 EXHIBIT 4 warranties of Developer contained in this Agreement and the other Loan Documents shall be correct in all material respects as of the Close of Escrow as though made on and as of that date, and if requested by the Executive Director, Agency shall have received a certificate to that effect signed by Developer's Representative. (h) No Default. No Event of Default by Developer shall have occurred, and no event shall have occurred which, with the giving of notice or the passage of time or both, would constitute an Event of Default by Developer under this Agreement, and if requested by the Executive Director, Agency shall have received a certificate to that effect signed by Developer's Representative. 6.3 Termination for Failure of Condition. If (a) any of the conditions set forth herein are not timely satisfied or waived by the Executive Director following the expiration of any applicable notice and cure period, and (b) Agency is not in default under this Agreement, Agency may terminate this Agreement without any further liability on its part by giving written notice of termination to Developer. Upon the giving of such notice, all principal, interest and other amounts owing under the Housing Successor Agency Loan Note shall be immediately due and payable, regardless of any other specified due date. 6.4 [Reserved.] 6.5 [Reserved.] 6.6 [Reserved.] 6.7 [Reserved.] 6.8 Other Terms and Conditions of Loan. A. The Housing Successor Agency Loan Note shall become immediately due and payable, in the event of any of the following: (1) violation of any of the use covenants and restrictions contained in this Agreement after the expiration of any applicable notice and cure periods; (2) an Event of Default by Developer which is not timely cured after expiration of any applicable notice and cure periods pursuant to the terms of this Agreement. 6.9 Closing Costs and Fees. Developer shall pay (a) all escrow fees and charges, (b) all recording fees and charges on any document recorded pursuant to this Agreement, and (c) the premium for the title insurance required hereunder. 7. AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE OF THE PROPERTY 11 80A-153 EXHIBIT 4 7.1 Use Covenants and Restrictions. A. Developer agrees and covenants, which covenants shall run with the land and bind Developer, its successors, its assigns and every successor in interest to the Property that Developer will make all rental units on the Property available to very low-income households (50% Area Median Income) at rents affordable to such households for fifty-five (55) years from the issuance of the Certificate of Completion. B. The Project shall consist of one -hundred, twenty-six (126) units, including one (1) on -site manager's unit. C. Rental increases shall be in conformance with federal and state law. The Agency shall require that the units remain affordable, with rents calculated based on assumed household size at the same income levels D. Developer must have a written lease between tenant and owner for a period of at least one year, unless a shorter period is mutually agreed upon. 7.2 Affordability Levels/Unit Mix: All affordable rents in the Project shall be governed by the rents published annually by the California Tax Credit Allocation Committee for households at 50% Area Median Income. Utility allowances must be deducted from the Maximum Gross Monthly Rent. The Housing Authority of the City of Santa Ana publishes the Utility Allowance Schedule. 7.3 Rent Increases: On an annual basis, the Agency shall provide Developer with the maximum allowable schedule of rents for the Property in accordance with changes in allowable rent and income tables published by the California Tax Credit Allocation Committee (TCAC). In no event can Developer charge any tenant more than such amount. The Agency will make all best efforts to provide Developer with the maximum allowable schedule of rents within no more than 30 calendar days after the date TCAC publishes the allowable rent and income tables. 7.4 Prohibited Fees. The Developer and subsequent owner is prohibited from charging fees that are not customary. The Developer and subsequent owner can charge reasonable application fees to prospective tenants; other fees only to the extent that they are reasonable and customary for the project area; and fees for services provided to tenants, provided that these services are not mandatory. 7.5 Maintenance of the Property. Solely at Developer's expense, Developer agrees to maintain the Property in a clean and orderly condition and in good condition and repair and keep the Property free from any accumulation of debris and waste materials (reasonable wear and tear excepted). If at any time Developer fails to maintain, or cause to be maintained, the Property as required by this section, and said condition is not corrected after the expiration of a reasonable period of time not to exceed thirty (30) days from the date of written notice from the Agency, unless such condition cannot reasonably be cured within thirty (30) days, in which case Developer shall have such additional time as reasonably necessary to complete such cure, the Agency may perform the necessary maintenance and 12 80A-154 EXHIBIT 4 Developer shall pay all reasonable costs incurred for such maintenance. The Agency shall inspect the Property annually after the date of issuance of the Certificate of Completion as described in Article 17 of this Agreement. During the affordability period, the Property must meet all applicable State and local codes. The Property must be free of all health and safety defects during the affordability period. 7.6 Obligation to Refrain from Discrimination. Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, mental or physical disability, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall Developer itself or any person claiming under or through him establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing covenants shall run with the land and shall remain in effect for the term of this Agreement. 8. RESERVED. 9. GENERAL PROVISIONS AND WARRANTIES As a material inducement to Agency to enter into this Agreement, Developer represents and warrants as follows: 9.1 Formation. Qualification and Compliance. JHC-Cornerstone 11, LLC, the managing general partner of Developer (a) is a limited liability company, validly existing and in good standing under the laws of the State of California, (b) has all requisite authority to conduct its business and own and lease its properties, and (c) is qualified and in good standing in every jurisdiction in which the nature of its business makes qualification necessary or where failure to qualify could have a material adverse effect on its financial condition or the performance of its obligations under the Loan Documents. Developer is in compliance with all laws applicable to its business and has obtained all approvals, licenses, exemptions and other authorizations from, and has accomplished all filings, registrations and qualifications with, any Governmental Authority that are necessary for the transaction of its business. 9.2 Execution and Performance of Loan Documents. 9.2.1 Developer has all requisite authority to execute and perform its obligations under the Loan Documents. 9.2.2 The execution and delivery of Developer of, and the performance by Developer of its obligations under, each Loan Document has been authorized by all necessary action and does not and will not: (a) require any consent or approval not heretofore obtained of any person having any interest in Developer; 13 80A-155 I_*:1;113INJ (b) violate any provision of, or require any consent or approval not heretofore obtained under, any articles of incorporation, by-laws or other governing document applicable to Developer; (c) result in or require the creation of any lien, claim, charge or other right of others of any kind (other than under the Housing Successor Agency Loan Documents) on or with respect to any property now or hereafter owned or leased by Developer; (d) violate any provision of any law presently in effect; or (e) constitute a breach or default under, or permit the acceleration of obligations owed under, any contract, loan agreement, lease or other agreement or document to which Developer is a party or by which Developer or any of its property is bound. 9.2.3 Developer is not in default, in any respect that is materially adverse to the interests of Agency under the Loan Documents or that would have any material adverse effect on the financial condition of Developer or the conduct of its business, under any law, contract, lease or other agreement or document described in sub- paragraph (d) or (e) of the previous subsection. 9.2.4 No approval, license, exemption or other authorization from, or filing, registration or qualification with, any Governmental Authority is required which has not been previously obtained in connection with: (a) the execution of Developer of, and the performance by Developer of its obligations under, the Loan Documents; and (b) the creation of the liens described in the Loan Documents. 9.3 Financial and Other Information. To the best of Developer's knowledge, all financial information furnished to Agency with respect to Developer in connection with the Loan (a) is complete and correct in all material respects as of the date of preparation thereof, (b) accurately presents the financial condition of Developer, and (c) has been prepared in accordance with generally accepted accounting principles consistently applied or in accordance with such other principles or methods as are reasonably acceptable to Agency. To the best of Developer's knowledge, all other documents and information furnished to Agency with respect to Developer, in connection with the Loans, are correct and complete in all material respects insofar as completeness is necessary to give the Agency accurate knowledge of the subject matter. To the best of Developer's knowledge Developer has no material liability or contingent liability not disclosed to Agency in writing and there is no material lien, claim, charge or other right of others of any kinds (including liens or retained security titles of conditional vendors) on any property of Developer not disclosed in such financial statements or otherwise disclosed to Agency in writing. 14 80A-156 EXHIBIT 4 9.4 No Material Adverse Change. There has been no material adverse change in the condition, financial or otherwise, of Developer since the dates of the latest financial statements furnished to Agency. Since those dates, Developer has not entered into any material transaction not disclosed in such financial statements or otherwise disclosed to Agency in writing. 9.5 Tax Liability. Developer has filed all required federal, state and local tax returns and has paid all taxes (including interest and penalties, but subject to lawful extensions disclosed to Agency in writing) other than taxes being promptly and actively contested in good faith and by appropriate proceedings. Developer is maintaining adequate reserves for tax liabilities (including contested liabilities) in accordance with generally accepted accounting principles or in accordance with such other principles or methods as are reasonably acceptable to Agency. 9.6 Governmental Requirements. To the best of Developer's knowledge, Developer is in compliance with all laws relating to the Property and all Governmental Authority approvals, including zoning, land use, planning requirements, and requirements arising from or relating to the adoption or amendment of, any applicable general plan, subdivision and parcel map requirement; environmental requirements, including the requirements of the California Environmental Quality Act and the National Environmental Policy Act and the preparation and approval of all required environmental impact statements and reports; use, occupancy and building permit requirements; and public utilities requirements. 9.7 Ri2hts of Others. Developer is in compliance with all covenants, conditions, restrictions, easements, rights of way and other rights of third parties relating to the Property. 9.8 Litigation. There are no material actions or proceedings pending or, to the best of the Developer's knowledge, threatened against or affecting Developer or any property of Developer before any Governmental Authority, except as disclosed to Agency in writing prior to the execution of this Agreement. 9.9 Bankruptcy. To the best of Developer's knowledge, no attachments, execution proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings are pending or threatened against Developer, nor are any of such proceedings contemplated by Developer. 9.10 Information Accurate. To the best of Developer's knowledge, all information, regardless of its form, conveyed by Developer to Agency, by whatever means, is accurate, correct and sufficiently complete to give Agency true and accurate knowledge of its subject matter, and does not contain any material misrepresentation or omission. 9.11 Conflicts of Interest. No member, official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to this Agreement which affects his/her personal interests or the interests of any corporation, partnership or association in 15 80A-157 EXHIBIT 4 which he/she has a direct or indirect financial interest. The Developer warrants that it neither has paid nor given, nor will pay or give, any third party any money or other consideration for obtaining this Agreement. 9.12 Nonliability of Agency Officials and Employees. No member, official or employee of the Agency shall be personally liable to the Developer in the event of any default or breach by the Agency or for any amount which may become due to Developer or on any obligations under the terms of this Agreement. 9.13 No Assignment. Developer expressly acknowledges and agrees that the Agency has only agreed to assist the Developer as a means by which to induce the acquisition/rehabilitation/development of the Property. Accordingly, Developer further expressly acknowledges and agrees that this Agreement is a personal right of Developer that is neither negotiable, transferable, nor assignable except as set forth herein. Developer may assign some or all of its rights under this Agreement only with the prior written consent of the Executive Director (such consent not to be unreasonably withheld), except that no prior consent is necessary for an assignment by a limited partner of Developer to an affiliate, or as otherwise provided in the Deed of Trust. 9.14 Applicable Law. This Agreement shall be interpreted, governed and enforced under federal and state laws. 9.15 Third Parties. This Agreement is made for the sole benefit of Developer and the Agency and their successors and assigns, and no other person or persons shall have any rights or remedies under or by reason of this Agreement or any right to the exercise of any right or power of the Agency hereunder or arising from any default by Developer, nor shall the Agency owe any duty whatsoever to any claimant for labor performed or materials famished in connection with the construction of the Property. 9.16 Control of Property. The parties acknowledge that the Agency has not at any time participated in any manner in the management or operation of the Property, and will not so participate at any time hereafter. 10. CONDITIONS FOR CONSTRUCTION Developer shall comply with this Section until the Certificate of Completion is issued. 10.1 Permits and Approvals. Developer shall diligently obtain all permits, including all building permits, licenses, approvals, exemptions and other authorizations of Governmental Agencies required in connection with the rehabilitation of the Property. 10.2 Commencement and Completion of Construction. The construction shall be considered complete for purposes of this Agreement only when (a) all work described has been completed and fully paid for (subject to required retainage), and (b) all work requiring inspection or certification by Governmental Authority has been completed and all requisite certificates, approvals and 16 80A-158 EXHIBIT 4 other necessary authorizations (including required final certificates of occupancy) have been obtained. 10.3. RESERVED. 10.4 Entry and Inspection. At all times prior to completion of the construction, upon reasonable notice, Agency and their agents shall have (a) the right of free access to the Property and all sites away from the Property where materials for the construction are stored, (b) the right to inspect all labor performed and materials furnished for the construction, and (c) the right to inspect and copy all documents pertaining to the construction. 10.5 Compliance with Section 3 Clause. Section 3 of the Housing and Urban Development Act of 1968, 12 U.S.C. 1701u, as amended by Section 915 of the Housing and Community Development Act of 1992 requires that economic opportunities generated by HUD financial assistance for housing and community development programs be targeted toward low- and very low- income persons. Whenever HUD assistance generates opportunities for employment or contracting, state and local grantees, as well as other recipients of HUD housing assistance funds must, to the greatest extent feasible, provide these opportunities to low- and very low- income persons and to businesses owned by or employing low- and very low- income persons. Section 3 applies to projects for which HUD's share of project costs exceeds $200,000 and contracts and subcontracts awarded on projects for which HUD's share or project costs exceeds $200,000 and the contract or subcontract exceeds $100,000. For purposes of this Section 3 Clause and compliance thereto, whenever the word "contractor" is used it shall mean and include, as applicable, the Developer, and its contractor and subcontractor(s), if any. The particular text to be utilized in any and all contracts of any contractor doing work covered by Section 3 shall be in substantially the form of the following, as reasonably determined by the Agency, or as directed by HUD or its representative, and shall be executed by the applicable contractor under penalty of perjury: "(a) The work to be performed under this contract is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701 u ("Section 3"). The purpose of Section 3 is to ensure that employment and other economic opportunities generated by HUD assistance or HUD -assisted projects covered by Section 3, shall, to the greatest extent feasible, be directed to low- and very low-income persons [inclusive of Very Low Income Persons, Very Low Income Households, and Very Low Income Tenants served by the Project], particularly persons who are recipients of HUD assistance for housing. (b) The parties to this contract agree to comply with HUD's regulations in 24 CFR part 135, which implement Section 3. As evidenced by their execution of this contract, the parties to this contract certify that they are under no contractual or other impediment that would prevent them from complying with the part 135 regulations. 17 80A-159 EXHIBIT 4 (c) The contractor agrees to send to each labor organization or representative of workers with which the contractor has a collective bargaining agreement or other understanding, if any, a notice advising the labor organization or workers' representative of the contractor's commitments under this Section 3 clause, and will post copies of notices in conspicuous places at the work site where both employees and applicants for training and employment positions can see the notice. The notice shall describe the Section 3 preference, shall set forth minimum number of job titles subject to hire, availability of apprenticeship and training positions, the qualifications for each; and the name and location of person(s) taking applications for each of the position; and the anticipated date the work shall begin. (d) The contractor agrees to include this Section 3 clause in every subcontract subject to compliance with regulations in 24 CFR part 135, and agrees to take appropriate action, as provided in an applicable provision of the subcontract or in this Section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24 CFR part 135. The contractor will not subcontract with any subcontractor where the contractor has notice or knowledge that the subcontractor has been found in violation of the regulations in 24 CFR part 135. (e) The contractor will certify that any vacant employment positions, including training positions, that are filled (a) after the contractor is selected but before the contract is executed, and (b) with persons other than those to whom the regulations of 24 CFR part 135 require employment opportunities to be directed, were not filled to circumvent the contractor's obligations under 24 CFR part 135. (f) Noncompliance with HUD's regulations in 24 CFR part 135 may result in sanctions, termination of this contract for default, and debarment or suspension from future HUD assisted contracts." After the foregoing Section 3 Clause, there shall be a signature block for the contractor, as applicable, the following text shall be included immediately above the signature block: "The contractor/provider by his/her signature affixed hereto declares under penalty of perjury that contractor has read the requirements of the Section 3 Clause and accepts all its requirements contained therein for all of his/her operations related to this contract." To the extent applicable, the Developer shall comply and/or cause compliance with Section 3 Clause requirements for the Project. For example, when and if Developer or its contractor(s)/subcontractor(s) hire(s) full time employees, rather than volunteer labor or materials, Section 3 is applicable and all disclosure and reporting requirements apply. 10.6 Construction Information. From time to time during the course of the construction, within ten (10) Business Days following Agency's written demand therefore, Developer shall furnish requested reports of project costs, progress schedules 18 80A-160 L:1:IIZAWZ! and contractors' costs breakdowns for the construction, itemized as to trade description and item, showing the name of the contractor(s) and/or subcontractor(s), and including such indirect costs as real estate taxes, legal and accounting fees, insurance, architects' and engineers' fees, loan fees, interest during construction and contractors' overhead. 10.7 Protection Against Liens. Developer shall diligently file a valid Notice of Completion upon completion of the construction, diligently file a notice of cessation in the event of a cessation of labor on the construction for a period of thirty (30) days or more, and take all actions reasonably required to prevent the assertion of claims of lien against the Property. In the event that any claim of lien is asserted against the property or any stop notice or claim is asserted against the Agency by any person furnishing labor or materials to the Property, Developer shall immediately give written notice of the same to Agency and shall, promptly and in any event within ten (10) Business Days after written demand therefor, (a) pay and discharge the same, (b) effect the release thereof by delivering to Agency a surety bond complying with the requirement of applicable laws for such release, or (c) take such other action as Agency may reasonably require to release Agency from any obligation or liability with respect to such stop notice or claim. 10.8 General Contractors who are Related Parties to the Developer. If the Project is developed with general contractors who are Related Parties to the Developer, the Developer must be audited to the subcontractor level by an outside auditing firm approved by the Agency. The Developer shall pay for the audit to the subcontractor level by an outside auditing firm. 11. OTHER COVENANTS 11.1 Local Preference. Subject to compliance with applicable California and federal fair housing laws, local preference for Santa Ana residents and workers in tenant selection shall be a requirement of the Project. Subject to applicable laws and regulations governing nondiscrimination and preferences in housing occupancy required by HUD or the State of California, as well as the City of Santa Ana Affordable Housing Funds Policies and Procedures, the Developer shall give preference in leasing units in the following order of priority: 1. First priority shall be given to persons who have been permanently displaced or face permanent displacement from housing in Santa Ana as a result of any of the following: a. A redevelopment project undertaken pursuant to California's Community Redevelopment Law (Health & Safety Code Sections 33000, et seq.) -- applicable only to projects funded by the Low and Moderate Income Housing Asset Fund. b. Ellis Act, owner -occupancy, or removal permit eviction; c. Earthquake, fire, flood, or other natural disaster; 19 80A-161 ARM": W d. Cancellation of a Housing Choice Voucher HAP Contract by property owner; or e. Governmental Action, such as Code Enforcement. 2. Second priority shall be given to persons who are either: a. Residents of Santa Ana and/or b. Working in Santa Ana at least 32 hours per week for at least the last 6 months. 12. MAINTENANCE, MANAGEMENT, OPERATION, PRESERVATION AND REPAIR OF PROPERTY 12.1 Maintenance. Developer shall maintain the Property (and all abutting grounds, sidewalks, roads, parking and landscape areas which Developer is otherwise required to maintain) in good condition and repair; shall operate the Property in a businesslike manner; shall prudently preserve and protect its own as well as the Agency's interests in connection with the Property; shall not commit or permit any waste or deterioration of the Property (except for normal wear and tear); shall not abandon any portion of the Property or leave the Property unguarded or unprotected; and shall not otherwise act, or fail to act, in such a way as to unreasonably increase the risk of any damage to the Property or of any other impairment of Agency's interests under the Loan Documents. Without limiting the generality of the foregoing, and except as otherwise agreed by Agency in writing from time to time, Developer shall promptly and faithfully perform and observe each of the following provisions: 12.1.1 Alterations and Repair. Developer shall not remove, demolish or materially alter any Improvement without Agency's prior consent, except to make non- structural repairs which preserve or increase the Property's value, and shall promptly restore, in a good and professional manner, any Improvement (or other aspect or portion of the Property) that is damaged or destroyed from any cause. 12.2 Compliance. Developer shall comply with all laws and requirements of Governmental Authority (including, without limitation, all requirements relating to the obtaining of Governmental Authority approvals), all Governmental Authority approvals and all rights of third parties, relating to Developer, the Property or Developer's business thereon. 12.3 Taxes and Impositions. Developer shall pay, prior to delinquency, all of the following (collectively, the "Impositions"): (a) all general and special real property taxes and assessments imposed on the Property; (b) all other taxes and assessments and charges of every kind that are assessed upon the Property (or upon the owner and/or operator of the Property) and that create or may create a lien upon the Property (or upon any personal property or fixtures used in connection with the Property), including, without limitation, non -governmental levies and assessments pursuant to applicable covenants, conditions or restrictions; and (c) all license fees, taxes and assessments imposed on Agency (other than Agency's income or franchise taxes) which 20 80A-162 EXHIBIT 4 are measured by or based upon (in whole or in part) the amount of the obligations secured by the Property. If permitted by law, Developer may pay any Imposition in installments (together with any accrued interest). 12.1.3.1 Right to Contest. Developer shall not be required to pay any Imposition so long as (a) its validity is being actively contested in good faith and by appropriate proceedings, (b) Developer has demonstrated to Agency's reasonable satisfaction that leaving such Imposition unpaid pending the outcome of such proceedings could not result in conveyance of the Property in satisfaction of such Imposition or otherwise impair Agency's interests under the Loan Documents, and (c) Developer has furnished Agency with a bond or other security satisfactory in an amount not less than 100% of the applicable claim (including interest and penalties). 12.1.3.2 Evidence of Payment. Upon demand by Agency from time to time, Developer shall deliver to Agency, within thirty (30) days following the due date of any Imposition, evidence of payment reasonably satisfactory to Agency. 12.1.3.3 Books and Records. Developer shall maintain complete books of account and other records reflecting its operations (in connection with any other businesses as well as with respect to the Property), in accordance with generally accepted accounting principles applied on a consistent basis or in accordance with such other principles or methods as are reasonably acceptable to Agency, in accordance with 24 CFR 92.508. 12.4 Project Operating Account. Subject to the requirements of the Senior Lender, Developer must promptly deposit all project income directly into a segregated depository account established exclusively for the Project ("Project Operating Account"). Withdrawals from this account may be made only in accordance with the provisions of this Agreement and the approved Project Budget, as it may be revised from time to time with Agency approval. Prior to the repayment of the Housing Successor Agency Loan in full, Developer may make withdrawals from this account solely for the payment of project expenses (including, without limitation, funding reserves and the making of debt service payments), project fees and permitted distributions to the partners of the Developer. Withdrawals from this account for other purposes may be made only with the prior written approval of the Agency. 12.5 Replacement Reserve Account. Developer must establish or cause to be established a segregated interest -bearing replacement reserve depository account ("Replacement Reserve Account") no later than the date of the Senior Loan converts from a construction loan to a permanent loan. Developer must make monthly deposits from project income into the Replacement Reserve in the amount of one -twelfth (1/12) $500 per unit per year (the $500 is an annual fee paid on a monthly basis). Developer may withdraw funds from the Replacement Reserve Account solely to fund capital improvements for the Project, such as replacing or repairing structural elements, furniture, fixtures or equipment of the Project that are reasonably required to preserve the Project. Developer may not withdraw funds from the Replacement Reserve Account for any other purpose without the prior written approval of the Agency. 21 80A-163 EXHIBIT 4 13. NONDISCRIMINATION COVENANTS 13.1 Obligation to Refrain from Discrimination. Developer covenants and agrees that: A. In Use of Property. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, mental or physical disability, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall Developer or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendors of the Property. B. In Affordable Housing Restrictions. The foregoing covenant shall (a) be included in the Affordability Restrictions on Transfer of Property, (b) run with the land, and (c) remain effective for the term of the contract (for 55 years). C. In Employment. In construction of the Property, Developer shall not discriminate against any employee or applicant because of race, color, creed, religion, sex, marital status, mental or physical disability, national origin, or ancestry. Developer shall take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, creed, religion, sex, marital status, national origin, or ancestry. D. In all Contracts. Developer shall cause the foregoing covenants to be inserted in all contracts for any work covered by this Agreement so that such provisions will be binding upon each contractor and subcontractor for the benefit of Agency, provided that the foregoing covenant shall not apply to contracts or subcontracts for standard commercial supplies or raw materials. 14. ENVIRONMENTAL MATTERS 14.1 Representation and Warranty. Except as disclosed in writing to the Agency including the environmental site assessments prepared on behalf of Developer and delivered to the Agency, Developer has no knowledge (a) of the presence on, under or about the Property, now or in the past, of any Hazardous Materials in violation of applicable law, or of the transportation to or from the Property of any Hazardous Materials, (b) that asbestos or polychlorinated biphenyls (PCBs) are contained in or stored on the Property, or (c) that there are any underground storage tanks located in, on or under the Property. 14.2 Compliance with Environmental Laws. Developer shall (a) comply with all environmental laws and environmental permits applicable to the Construction of the Property, (b) immediately pay or cause to be paid all costs and expenses incurred by reason of such compliance, (c) keep the Property free and clear of any environmental 22 80A-164 EXHIBIT 4 claims or liens imposed pursuant to any environmental law, and (d) obtain and renew all environmental permits required for ownership or use of the Property. 14.3 Presence of Hazardous Materials. Developer shall not, and shall not permit anyone else to, generate, use, treat, store, handle, release, or dispose of Hazardous Materials on the Property, or transport or permit the transportation of Hazardous Materials to or from the Property except for de minimis quantities used at the Property in compliance with all applicable environmental laws and required in connection with the routine construction, operation and maintenance of the Property. 14.4 Notice of Environmental Matters. Developer shall immediately advise Agency in writing of any of the following: (a) any pending or threatened environmental claim against Developer or the Property, (b) any condition or occurrence that (i) results in noncompliance with any applicable environmental law, (ii) could reasonably be anticipated to cause the Property to be subject to any restrictions on the ownership, occupancy, use or transferability of the Property under any environmental law, or (iii) could reasonably be anticipated to form the basis of an environmental claim against the Property or Developer. 14.5 Environmental Indemnification by the Developer. Developer agrees to defend, indemnify and hold harmless the Agency and their respective officers, directors, employees and agents (collectively the "Indemnitees") from and against any and all obligations (including removal and remediation), losses, claims (including third party claims), suits, judgments, liabilities, penalties, damages (including consequential and punitive damages), costs and expenses (including consultants, and attorneys' fees) of whatever kind or nature whatsoever that may at any time be incurred by, imposed on, or asserted against the Indemnitees directly or indirectly based on, or arising or resulting from the actual or alleged presence of Hazardous Materials on the Property other than arising from the gross negligence, willful misconduct and/or illegal actions of any Indemnitee. 15. OTHER AFFIRMATIVE COVENANTS While any obligation of Developer under the Housing Successor Agency Loan Note or Housing Successor Agency Loan Deed of Trust remain outstanding, the following provisions shall apply, except to the extent that Executive Director otherwise consents in writing: 15.1 Existence. Developer's Managing General Partner shall maintain its existence in good standing under the laws of the State of California, and Developer shall provide documentation of such status annually to the Agency. 15.2 Protection of Lien. Developer shall maintain the lien of the Agency Deed of Trust as a valid second priority deed of trust on the Property and take all actions, and execute and deliver to Agency all documents, reasonably required by Agency from time to time in connection therewith. 23 80A-165 EXHIBIT 4 15.3 Notice of Certain Matters. Developer shall give notice to Agency, within ten (10) days of Developer's learning thereof, of each of the following: (a) any filed litigation or claim affecting or relating to the Property and involving an amount in excess of $5,000; and any litigation or claim that might subject Developer or any general partner to liability in excess of $5,000, whether covered by insurance or not; (b) any material dispute between Developer and a Governmental Authority relating to the Property, the adverse determination of which might materially affect the Property; (c) any change in Developer's principal place of business; (d) any aspect of the Improvements that is not in substantial conformity with the plans or code; (e) any Event of Default or event which, with the giving of notice or the passage of time or both, would constitute an Event of Default; (f) any material default by Developer or any other party under any Senior Loan document, or the receipt by Developer of any notice of default under any Senior Loan document; (g) the creation or imposition of any mechanics' or materialmans' lien or other lien against the Property which might materially affect the Property; and/or (h) any material adverse change in the financial condition of Developer. 15.4 Further Assurances. Developer shall execute and acknowledge (or cause to be executed and acknowledged) and deliver to Agency all documents, and take all actions, reasonably required by Agency from time to time to confirm the rights created or now or hereafter intended to be created under the Loan Documents; to protect and further the validity, priority and enforceability of the Agency Deed of Trust; to subject to the Deed of Trust any property intended by the terms of any Loan Document(s) to be covered by the Agency Deed of Trust or otherwise to carry out the purposes of the Loan Documents and the transactions contemplated thereunder. Notwithstanding anything to the contrary set forth herein, the Developer shall have no obligation to execute any document, or take any action, which would (i) change a material term of any Loan Document, (ii) change or impair any material right of Developer and/or (iii) increase the liability of Developer or any partner thereof. 15.5 Annual Financial Statements. Developer shall deliver to Agency, within one hundred twenty (120) days after the end of each Calendar Year following issuance of 24 80A-166 EXHIBIT 4 a Certificate of Completion, (a) a certified public accountant reviewed balance sheet for Developer as of the end of such Calendar Year and a certified public accountant reviewed statement of profit and loss for Developer and for Developer's operations in connection with the Property for such Calendar Year, together with all supporting schedules, (b) a certificate of such certified public accountant that such documents were reviewed by such certified public accountant in accordance with generally accepted accounting principles and otherwise comply with generally accepted accounting principles review requirements, and (c) a certificate of Developer's Managing General Partner that such documents: (i) were prepared in accordance with generally accepted accounting principles applied on a consistent basis or in accordance with such other principles or methods as are reasonably acceptable to Agency, (ii) fairly present Developer's financial condition, (iii) show all material liabilities, direct and contingent, and (iv) fairly present the results of Developer's operations. Developer shall also provide the Agency with any other annual audit reports issued by other monitoring agencies upon written request. 15.6 Audits and Access to Records. Developer agrees that Agency, the U.S. Department of Housing and Urban Development, the Comptroller General of the United States or any of their authorized representatives shall have the right of access, upon reasonable notice, to any books, documents, papers, or other records of Developer which are pertinent to this Agreement in order to make audits, examinations, abstracts, excerpts or transcripts. Developer will maintain all books and records pertaining to this Agreement for a period of not less than five (5) years after all matters pertaining to this Agreement (i.e., audit, disputes or litigation) are resolved in accordance with applicable federal or state laws, regulations or policies, and when a period of affordability or recapture applies to Developer's activities, for a period of not less than five (5) years after the affordability period ends. 16. OTHER NEGATIVE COVENANTS While any obligation of Developer under the Housing Successor Agency Loan Note or Housing Successor Agency Loan Deed of Trust remain outstanding, the following provisions shall apply, except to the extent that Executive Director otherwise consents in writing: 16.1 Default on Senior Loan. Developer shall not default on any of the Senior Loan documents, provided however, that Developer shall have such period as is provided in the Senior Loan Documents during which to effectuate a cure. 16.2 Sale or Lease of Property. Unless and until Developer has received a Certificate of Completion for the construction from Agency, Developer shall not sell, lease, sublease or otherwise transfer all or any part of the Property or any interest therein without the prior written consent of the Executive Director, which consent may be withheld in the Executive Director's reasonable discretion. In connection with the foregoing consent requirements, Developer acknowledges that Agency relied upon Developer's particular expertise in entering into this Agreement and continues to rely on such expertise to ensure the satisfactory completion of the construction. 25 80A-167 EXHIBIT 4 Notwithstanding anything to the contrary contained herein, a "transfer" shall not include (i) a transfer of any general partner's interest in Developer when made in connection with the exercise by the Developer's limited partner (the "Limited Partner") of its rights upon a default by a general partner under the Developer's Partnership Agreement or upon a general partner's withdrawal in violation of the Partnership Agreement, so long as the removal and substitution of the defaulting general partner is made within thirty (30) days of such default or, if such removal and substitution cannot reasonably be completed within thirty (30) days, so long as the Limited Partner commences to take action to remove and substitute the general partner with a reasonable period and thereafter diligently proceeds to complete such substitution; (ii) any transfer of the Property to the managing general partner of Developer pursuant to the right of first refusal or to the general partners of Developer pursuant to the purchase option, as provided for in the Partnership Agreement; (iii) any transfer of the Limited Partner's interest in accordance with the Partnership Agreement; and (iv) any sale, transfer or other disposition of an interest in a limited partner of the Developer. 17. CERTIFICATE OF COMPLETION Upon satisfactory completion of the construction and upon the request of Developer, or at its own election, the City of Santa Ana shall issue a Certificate of Completion. Such Certificate of Completion shall be, and shall so state, conclusive determination of satisfactory completion of the construction. If City declines to furnish a Certificate of Completion after written request from Developer, the Executive Director shall, within thirty (30) days after receipt of the request, provide Developer with a written statement of the reasons therefore. The statement shall contain a description of the action Developer must take to obtain a Certificate of Completion. If the reason therefore is that the Developer has not completed a minor portion of the Construction, City may, in its sole and absolute discretion, issue the Certificate of Completion upon the posting with City of a bond or other form of security acceptable to the Executive Director in the amount of the fair value of the uncompleted work. A Certificate of Completion is not evidence of compliance with or satisfaction of the Loan Documents or any obligation of Developer to any other party whatsoever, including any holder of a mortgage or deed of trust. A Certificate of Completion is not "notice of completion" referred to in Section 3093 of the California Civil Code. 18. INDEMNIFICATION 18.1 Nonliability. of Agency. Developer acknowledges and agrees that: (a) The relationship between Developer and Agency is and shall remain solely that of borrower and lender, Agency neither undertakes nor assumes any responsibility to review, inspect, supervise, approve (other than for aesthetics) or inform Developer of any matter in connection with the construction, including matters relating to: (i) the performance of the construction work, (ii) architects, contractors, subcontractors and materialmen, or the workmanship of or materials used by any of them, 26 80A-168 EXHIBIT 4 or (iii) the progress of the construction; and Developer shall rely entirely on its own judgment with respect to such matters and acknowledges that any review, inspection, supervision, approval or information supplied to Developer by Agency in connection with such matters is solely for the protection of Agency and that neither Developer nor any third party is entitled to rely on it; (b) Notwithstanding any other provision of any Loan Document: (i) the Agency is not a partner, joint venture, alter -ego, manager, controlling person or other business associate or participant of any kind of Developer and Agency does not intend to ever assume any such status; (ii) Agency's activities in connection with the Loan(s) shall not be "outside the scope of the activities of a lender of money" within the meaning of California Civil Code Section 3434, as modified or recodified from time to time, and Agency does not intend to ever assume any responsibility to any person for the quality or safety of the Property; and (iii) Agency shall not be deemed responsible for or a participant in any acts, omissions or decisions of Developer; (c) Agency shall not be directly or indirectly liable or responsible for any loss or injury of any kind to any person or property resulting from any construction on, or occupancy or use of, the Property, whether arising from: (i) any defect in any building, grading, landscaping or other onsite or offsite improvement; (ii) any act or omission of Developer or any of Developer's agents, employees, independent contractors, licensees or invitees; or (iii) any accident on the Property or any fire or other casualty or hazard thereon; and (d) By accepting or approving anything required to be performed or given to Agency under the Loan Documents, including any certificate, financial statement, survey, appraisal or insurance policy, Agency shall not be deemed to have warranted or represented the sufficiency or legal effect of the same, and no such acceptance or approval shall constitute a warranty or representation by Agency to anyone. 18.2 Indemnity. Developer shall defend (by counsel reasonably satisfactory to Agency), indemnify and save and hold harmless the hidemnitees from and against all claims, damages, demands, actions, losses, liabilities, costs and expenses (including, without limitation, reasonable attorneys' fees and court costs) arising from or relating to (i) a breach of this Agreement by Developer; (ii) the making of the Loan(s); (iii) a claim, demand or cause of action that any person has or asserts against Developer; (iv) any act or omission of Developer, any contractor, subcontractor or material supplier, engineer, architect or other person with respect to the Property; or (vi) the ownership, occupancy or use of the Property. Notwithstanding the foregoing, Developer shall not be obligated to indemnify Agency with respect to the consequences of any act of illegal conduct, gross negligence or willful misconduct of Agency. Developer's obligations under this Section shall survive the cancellation of the Housing Successor Agency Loan Note, release and reconveyance of the Housing Successor Agency Loan Deed of Trust, issuance of the Certificate of Completion, and termination of this Agreement. 18.2.1 Nothwithstanding the foregoing, neither Developer, nor any of its partners, shall be personally liable for any indemnification obligation hereunder 27 80A-169 EXHIBIT 4 which would result as the repayment of principal and/or interest under the Loan. 18.3 Reimbursement of Agency. Developer shall reimburse Agency immediately upon written demand for all costs reasonably incurred by Agency (including the reasonable fees and expenses of attorneys, accountants, appraisers and other consultants, whether the same are independent contractors or employees of Agency) in connection with the enforcement of the Loan Documents and all related matters including all claims, demands, causes of action, liabilities, losses, commissions and other costs against which Agency is indemnified under the Loan Documents. Such reimbursement obligations shall bear interest from the date occurring twenty (20) days after Agency gives written demand to Developer and shall be secured by the Housing Successor Agency Loan Deed of Trust. Such reimbursement obligations shall survive the cancellation of the Housing Successor Agency Loan Note, release and reconveyance of the Housing Successor Agency Loan Deed of Trust, issuance of a Certificate of Completion, and termination of this Agreement 19. INSURANCE, CASUALTY AND CONDEMNATION 19.1 Policies Required. While any obligation of Developer under the Loan Documents remains outstanding, Developer shall maintain at Developer's sole expense, with insurers either (i) admitted in California or (ii) are not admitted to California but have an A.M. Best Rating of "A" or above and reasonably approved by the Agency, the following policies of insurance in form and substance reasonably satisfactory to the Agency Attorney: (a) worker's compensation insurance and any other insurance required by law in connection with the construction; (b) prior to commencement and following completion of the construction, fire and hazard "all risk" insurance covering 100% of the replacement cost of the Improvements in the event of fire, lightning, windstorm, vandalism, malicious mischief and all other risks normally covered by "all risk" coverage policies in the area where the Property is located (including loss by flood if the Property is in an area designated as subject to the danger of flood); (c) upon commencement of the construction and at all times prior to completion of the construction, builder's risk -all risk insurance covering 100% of the replacement cost of all Improvements (including offsite materials) during the course of construction in the event of fire, lightning, windstorm, vandalism, earthquake, malicious mischief and all other risks normally covered by "all risk" coverage policies in the area where the Property is located (including loss by flood if the Property is in an area designated as subject to the danger of flood); (d) public liability insurance in the amount of $1,000,000 for "single occurrence"; (e) property damage insurance in amounts reasonably 28 80A-170 EXHIBIT 4 required by Agency from time to time, and in no event less than $1,000,000; and (0 any other insurance reasonably required by Agency. All such insurance shall provide that it may not be canceled or materially modified without thirty (30) days (ten (10) days for nonpayment of premium) prior written notice to Agency. The policies required under subparagraphs (b) and (c) shall include a "lender's loss payable endorsement" in form and substance satisfactory to Agency, showing the Agency as encumbrance. The Agency shall be named as an additional insured(s) in the policies required under subparagraphs (d) and (e) with primary coverage. Certificates of insurance for the above policies (and/or original policies, if required by Agency) shall be delivered within ten (10) days after demand therefore, and prior to start of any construction work. All policies insuring against damage to the Improvements shall contain an agreed value clause sufficient to eliminate any risk of co-insurance. No less than ten (10) days prior to the expiration of each policy, Developer shall deliver to Agency evidence of renewal or replacement of such policy reasonably satisfactory to Agency Attorney. 19.2 RESERVED. 19.3 Claims and Proceedings. Developer shall give Agency immediate notice of any material casualty to any portion of the Property, whether or not covered by insurance, and of the initiation or threatened initiation of any proceeding for the condemnation or other taking for public or quasi -public use of any portion of the Property (collectively, "Condemnation"), and shall provide Agency with copies of all documents which pertain to any such casualty or Condemnation. Developer shall take all action reasonably required by Agency in connection therewith to protect the interests of Developer and/or Agency, and Agency shall be entitled (without regard to the adequacy of its security) to participate in any action, claim, adjustment or proceeding and to be represented therein by counsel of its choice. Developer shall not settle, adjust, or compromise any claim, action, adjustment or proceeding without prior written approval, which approval shall not be unreasonably withheld or delayed. 19.4 Delivery of Proceeds to Agency. In the event that, notwithstanding the "lender's loss payable endorsement" requirement set forth above, if the proceeds from any casualty insurance is in excess of $500,000, Developer shall, subject to any superior rights of the Senior Lender, deliver such proceeds to the Agency immediately upon receipt. 19.5 Application of Casualty Insurance Proceeds. Subject to the rights of the Senior Lender, any proceeds collected (the "Proceeds") under any casualty insurance policy described in this Agreement shall be disbursed to Developer as provided below, but only upon fulfillment of each of the following conditions (the "Restoration Conditions") within ninety (90) days (unless extended by mutual agreement of Developer and Agency) following the occurrence of the damage for which the Proceeds are collected: (a) Developer shall demonstrate to Agency's reasonable 29 80A-171 EXHIBIT 4 satisfaction that the Proceeds (together with amounts deposited by Developer pursuant to subparagraph (b)) will be adequate to repair the Improvements and to restore the fair market value of the Property, within two years (or such longer time period reasonably determined by Agency), to at least the value it had immediately prior to sustaining the damage. Such demonstration shall include delivery to Agency of (i) plans and specifications reasonably satisfactory to Agency, and (ii) a construction contract in form and content, and with a contractor, reasonably satisfactory to Agency. (b) To the extent that the Proceeds are insufficient to accomplish the restoration required above, Developer shall deliver to Agency (the "Shortfall Funds") in the amount of such shortfall, which funds shall be assigned to Agency as security for Developer's obligation hereunder and held and disbursed in the same manner as the Proceeds. (c) Developer shall execute such documents as Agency reasonably requires to evidence and secure Developer's obligation to use all amounts disbursed for the diligent restoration of the Property. (d) No Event of Default shall remain uncured. 19.6 Failure to Satisfv Conditions. In the event that Developer fails to fulfill the Restoration Conditions within ninety (90) days (unless extended pursuant to Section 19.5) following the date on which the damage occurs, the Proceeds shall be applied by Agency against any obligations to Agency that are secured by a lien on the Property, and the selection of which such obligations to apply the Proceeds against shall be made by Agency in their sole and absolute discretion, subject to the rights of the Senior Lender. 19.7 Reserved. 19.8 Condemnation, Treatment of Compensation. Subject to any superior rights of Senior Lender, Developer hereby assigns to the Agency, as security for all obligations to Agency secured by a lien on the Property, all amounts payable to Developer in connection with any Condemnation, and any proceeds of any related settlement (collectively, "Compensation"). Subject to any superior rights of Senior Lender, Developer shall deliver such remaining Compensation to Agency immediately upon receipt. If the taking results in a loss of the Property to an extent that, in the reasonable opinion of Agency, renders or is likely to render the Property not economically viable or if, in Agency's reasonable judgment Developer's security is otherwise impaired, Agency may apply the Compensation received due to judgment or settlement in connection with any condemnation or other taking to reduce the unpaid obligations secured in such order as Agency may determine, and without any adjustment in the amount or due dates of payments due under the Note. If so applied, any award in excess of the unpaid balance of the Note and other sums due to 30 80A-172 EXHIBIT 4 Agency shall be paid to Developer or Developer's assignee. Agency shall have no obligation to take any action in connection with any actual or threatened condemnation or other proceeding. 19.8.1 Notwithstanding the foregoing, as long as the value of Agency's liens are not impaired, any condemnation proceeds may be used by the Borrower for repair and/or restoration of the Project. 19.9Waiver of Subrogation. Developer hereby waives all rights to recover against the Agency (or any officer, employee, agent or representative of the Agency) for any loss incurred by Developer from any cause insured against or required by any Loan Document, to be insured against; provided, however, that this waiver of subrogation shall not be effective with respect to any insurance policy if the coverage thereunder would be materially reduced or impaired as a result. Developer shall use its best efforts to obtain only policies which permit the foregoing waiver of subrogation. 20. DEFAULTS AND REMEDIES 20.1 Events of Default. The occurrence of any of the following, whatever the reason therefore, shall constitute an Event of Default by Developer: (a) Developer fails to make any payment of principal or interest under the Housing Successor Agency Loan Note when due, and such failure is not cured within fifteen (15) Business Days after Developer's receipt of written notice that such payment was not received when due; (b) Developer fails to perform any other obligation for the payment of money under any Loan Document, and such failure is not cured within fifteen (15) Business Days after Developer's receipt of written notice that such obligation was not performed when due; (c) Developer fails to perform any obligation (other than the obligations described in subparagraphs (a) and (b) above) under any Loan Document, and such failure is not cured within thirty (30) days after Developer's receipt of written notice that such obligation was not performed; provided that, if cure cannot reasonably be effected within such thirty (30)-day period, such failure shall not be an Event of Default so long as Developer (in any event, within ten (10) days after receipt of such notice) commences to cure, and thereafter diligently (in any event within ninety (90) days after receipt of such notice) prosecutes such cure to completion; (d) Any representation or warranty in any Loan Document proves to have been incorrect in any material respect when made; (e) Reserved; (f) Work on the construction ceases for ninety (90) consecutive days for any reason (other than governmental orders, decrees or regulations, acts of God or any other deity, strikes or other causes beyond Developer's 31 80A-173 OAVOMIN. WE! reasonable control), provided that the same do not, in the aggregate and in the Agency's reasonable judgment, threaten to delay the completion of the construction beyond the required completion date set forth in this Agreement; (g) Developer is enjoined or otherwise prohibited by any Governmental Authority from constructing and/or occupying the improvements and such injunction or prohibition continues unstayed for ninety (90) days or more for any reason; (h) Developer is dissolved, liquidated or terminated, or all or substantially all of the assets of Developer are sold or otherwise transferred without the Executive Director's prior written consent; or (i) Developer is the subject of an order for relief by a bankruptcy court, or is unable or admits its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors; or Developer applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or any part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of Developer and the appointment continues undischarged or unstayed for ninety (90) days; or Developer institutes or consents to any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, custodianship, conservatorship, liquidation, rehabilitation or similar proceeding relating to it or any part of its property; or any similar proceeding is instituted without the consent of Developer and continues undismissed or unstayed for ninety (90) days; or any judgment, writ, warrant of attachment or execution, or similar process is issued or levied against any property of Developer and is not released, vacated or fully bonded within ninety (90) days after its issue or levy. (j) Any of the Senior Loan documents is amended, supplemented or otherwise modified without Agency's prior written consent, which consent shall not be unreasonably withheld, to the extent the Agency's consent is required pursuant to any subordination agreement between the Agency and the Senior Lender. 20.2 Remedies Upon Default. Upon the occurrence and during the continuance of any Event of Default, Agency may, at its option and in its absolute discretion, do any or all of the following: (a) By written notice to Developer, declare the principal of all amounts owing under the Loan Documents, together with all accrued interest and other amounts owing in connection therewith, to be immediately due and payable, regardless of any other specified due date; provided that any Event of Default described in Section 20.1 shall automatically, without notice or other action on Agency's part, cause all such amounts to be immediately due and payable; (b) In its own right or by a court -appointed receiver, take 32 80A-174 EXHIBIT 4 possession of the Property, enter into contracts for and otherwise proceed with the completion of the construction by expenditure of its own funds; (c) Exercise any of its rights under the Loan Documents and any rights provided by law, including, without limitation, the right to seek specific performance and the right to foreclose on any security and exercise any other rights with respect to any security, all in such order and manner as Agency elects in its sole and absolute discretion; and, 20.3 Cumulative Remedies: No Waiver. Agency's rights and remedies under the Loan Documents are cumulative and in addition to all rights and remedies provided by law. The exercise by Agency of any right or remedy shall not constitute a cure or waiver of any default, nor invalidate any notice of default or any act done pursuant to any such notice, nor prejudice the Agency in the exercise of any other right or remedy. No waiver of any default shall be implied from any omission by Agency to take action on account of such default if such default persists or is repeated. No waiver of any default shall affect any default other than the default expressly waived, and any such waiver shall be operative only for the time and to the extent stated. No waiver of any provision of any Loan Document shall be construed as a waiver of any subsequent breach of the same provision. Agency's consent to or approval of any act by Developer requiring further consent or approval shall not be deemed to waive or render unnecessary Agency's consent to or approval of any subsequent act. The Agency's acceptance of the late performance of any obligation shall not constitute a waiver by Agency of the right to require prompt performance of all further obligations; Agency's acceptance of any performance following the sending or filing of any notice of default shall not constitute a waiver of either party's right to proceed with the exercise of its remedies for any unfulfilled obligations; and Agency's acceptance of any partial performance shall not constitute a waiver by Agency of any rights. 20.4 Nonrecourse Liability. Neither Developer, nor any partner of Developer, shall have any personal liability under this Agreement, or the attached Note and Deed of Trust, and any judgment, decree or order for the payment of money obtained in any action to enforce the obligation of Developer to repay the loan evidenced by such documents shall be enforceable against Developer only to the extent of Developer's interest in the Property. 21. NUSCELLANEOUS 21.1 Obligations Unconditional and Independent. Notwithstanding the existence at any time of any obligation or liability of Agency to Developer, or any other claim by developer against Agency, in connection with the Loan or otherwise, Developer hereby waives any right it might otherwise have (a) to offset any such obligation, liability or claim against Developer's obligations under the Loan Documents, or (b) to claim that the existence of any such outstanding obligation, liability or claim excuses the nonperformance by Developer of any of its obligations under the Loan Documents. 21.2 Notices. All notices, demands, approvals and other communications provided for in the Loan Documents shall be in writing and be delivered to the appropriate party by personal service or U.S. mail at its address as follows: 33 80A-175 EXHIBIT 4 If to Developer: CORNERSTONE HOUSING PARTNERS LP c/o Jamboree Housing Corporation 17701 Cowan Avenue, Suite 200 Irvine, CA 92614 Attn: President With a copy to Limited Partner: Alliant ALP 2019 c/o Alliant Asset Management Company, LLC 21600 Oxnard Street, Suite 1200 Woodland Hills, CA 91367 Attn: General Counsel If to Agency: Housing Authority of the City of Santa Ana Executive Director (CDA) 20 Civic Center Plaza (M-26) P.O. Box 1988 Santa Ana, California 92702 With a copy to: Agency Attorney City of Santa Ana 20 Civic Center Plaza, 7th Floor (M-29) Santa Ana, California 92702 Addresses for notice may be changed as required by written notice to all other parties. All notices personally served shall be effective when actually received. All notices mailed shall be effective three (3) days after deposit in the U.S. Mail, postage prepaid. The foregoing notwithstanding, the non -receipt of any notice as the result of a change of address of which the sending party was not notified or as the result of a refusal to accept delivery shall be deemed receipt of such notice. 21.3 Survival of Representations and Warranties. All representations and warranties in the Loan Documents shall survive the making of the Loan described herein and have been or will be relied on by Agency notwithstanding any investigation made by either party. 21.4 No Third Parties Benefited. This Agreement is made for the purpose of setting forth rights and obligations of Developer and the Agency, and no other person shall have any rights hereunder or by reason hereof. 21.5 Binding Effect. This Agreement shall bind, and shall inure to the benefit of, Developer and Agency and their respective successors and assigns. 21.6 Prior Agreements, Amendments, Consents. This Agreement (together with the other Loan Documents) contains the entire agreement between the Agency and Developer with respect to the Loan and the Property, and all prior negotiations, understandings and agreements are superseded by this Agreement and such other Loan 34 80A-176 EXHIBIT 4 Documents. No modification of any Loan Document (including waivers of rights and conditions) shall be effective unless in writing and signed by the party against whom enforcement of such modification is sought, and then only in the specific instance and for the specific purpose given. 21.7 Governing Law. All of the Loan Documents shall be governed by, and construed and enforced in accordance with, the laws of the State of California and Federal law, whichever is more stringent. Developer irrevocably and unconditionally submits to the jurisdiction of the Superior Court of the State of California for the County of Orange or the United States District Court of the Central District of California, as Agency may deem appropriate, in connection with any legal action or proceeding arising out of or relating to this Agreement or the Loan Documents. Assuming proper service of process, Developer also waives any objection regarding personal or in rem jurisdiction or venue. 21.8 Severability of Provisions. No provision of any Loan Document that is held to be unenforceable or invalid shall affect the remaining provisions, and to this end all provisions of the Loan Documents are hereby declared to be severable. 21.9 Headings. Article and section headings are included in the Loan Documents for convenience of reference only and shall not be used in construing the Loan Documents. 21.10 Conflicts. In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, this Agreement, unless otherwise expressly provided, shall prevail; provided however that, with respect to any matter addressed in both such documents, the fact that one document provides for greater, lesser or different rights or obligations than the other shall not be deemed a conflict unless the applicable provisions are inconsistent and could not be simultaneously enforced or performed. 21.11 Time of the Essence. Time is of the essence under this Agreement and in the performance of every term, covenant, and obligation contained herein. 21.12 Conflict of Interest. No member, official or employee of the Agency shall have any direct or indirect interest in this Agreement, nor participate in any decision relating to this Agreement which is prohibited by law. 21.13 Warranty Against Payment of Consideration. Developer warrants that it has not paid or given, and will not pay or give, any third person any money or other consideration for obtaining this Agreement. 21.14 Nonliability of Agency Officials and Employees. No member, official or employee of Agency shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by Agency or for any amount which may become due to Developer or successor, or on any obligation under the terms of this Agreement. 35 80A-177 EXHIBIT 4 21.15 Plans and Data. As additional collateral for the Loan, Developer hereby grants to the Agency a security interest in all plans and data concerning the Property, subject to the rights of any Senior Lender. Such right of Agency shall be subject to any right of the preparer of the plans to their use. 21.16 Authority to Enter Agreement. Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify the Agency fully, including reasonable costs and attorney's fees, for any injuries or damages to Agency in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. 21. 17 Agency's Acknowledgement and Consent to Sale and Assignment. The Agency hereby consents to the above -described Developer Sale and the assignment and assumption of Original Developer's rights and obligations under the Assignment to Developer, as set forth in the Assignment. 36 80A-178 EXHIBIT 4 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date set forth at the beginning of this Agreement. ATTEST: Daisy Gomez Recording Secretary APPROVED AS TO FORM Sonia R. Carvalho THE HOUSING AUTHORITY OF THE CITY OF SANTA ANA Steven A. Mendoza Executive Director (Signatures conlinue on following page) 37 80A-179 EXHIBIT 4 DEVELOPER: CORNERSTONE HOUSING PARTNERS LP, a California limited partnership By: HIC-Cornerstone 11, LLC, a California limited liability company, its Managing General Partner By: Jamboree Rousing Corporation, a California non-profit public benefit corporation, its Managing Member By: _ Name: Title: a/L. A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document, ELO ,: 1 ffloe EXHIBIT 4 STATE OF CALIFORNIA COUNTY OF On before me, 1 a notary public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature _ (SEAL) 39 80A-181 EXHIBIT 4 EXHIBITS A. Legal Description B. Scope of Work C. Project Budget D. Housing Successor Agency Loan Deed of Trust E. Housing Successor Agency Loan Note F. Affordability Restrictions on Transfer of Property G. Housing Successor Agency Loan Agreements 40 80A-182 EXHIBIT 4 Exhibit Ae. Legal Description 80A-183 W3:11.111W1! Legal Description The Land referred to herein below is situated in the City of Santa Ana, County of Orange, State of California, and is described as follows: PARCEL ONE: LOTS 7 THROUGH 13 INCLUSIVE OF TRACT 3547 IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 138, PAGES 32 AND 33 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY. PARCEL TWO: PARCEL 1 OF "LOT MERGER NO. 2019-08" RECORDED AUGUST 02, 2019 AS INSTRUMENT NO. 2019000282886 OF OFFICIAL RECORDS. PARCEL THREE: PARCEL 1 OF "LOT MERGER NO. 2019-10" RECORDED AUGUST 02, 2019 AS INSTRUMENT NO. 2019000282887 OF OFFICIAL RECORDS. For conveyancing purposes only: APN 404-033-01 (Affects portion of Parcel Two) APN: 404-033-02 (Affects portion of Parcel Two) APN: 404-032-01 (Affects portion of Parcel Three) APN: 404-032-02 (Affects portion of Parcel Three) APN: 404-031-03 (Affects Lots 8 and 9 of Parcel One) APN: 404-031-01 (Affects Lots 12 and 13 of Parcel One) APN: 404-031-04 (Affects Lot 7 of Parcel One) APN: 404-031-02 (Affects Lots 10 and 11 of Parcel One) EXHIBIT 4 Exhibit Be. Scope of Work 80A-185 EXHIBIT 4 Scope of Work —Cornerstone Apartments Cornerstone Apartments is a multifamily affordable housing development that consists of 126 one- and two -bedroom units. The project is located at 80S-904 S. Minnie Street, Santa Ana, California. There are eight separate two story buildings that were originally constructed in 1961. The last substantial renovation was in 2003. The buildings are two-story walkups with wood framing and a stucco exterior. There are currently 179 parking spaces on -site, with at least 46 of them being tuck -under spaces. The project is slated to receive approximately 6.3 million dollars' worth of rehabilitation work. This rehabilitation work is expected to increase the useful life of the property as well as improve the living conditions of current residents. There are several major items included in this work. Eight of 126 current units will be converted into full ADA compliant accessible units. This work will involve demolition of existing walls, abatement, installation of insulation, and electrical panel upgrades. The scope of work is meant to increase unit size space and reconfigure the layout so that it is ADA compliant. There will alsc be ADA sitework in terms of parking and path of travel. The current scope of work will repave designated areas for ADA accessibility and create ADA markers, signs, and bumpers. One of the major issues identified at the property was the lack of parking for residents. To address this, the project will be installing a car lift system to increase the parking capacity onsite. This car lift system will be located on existing parking spaces at the 810/816 and 828/904 apartments. The car lift system is being manufactured by Klaus Multiparking and will be a standalone two-story structure with a puzzle system. The car lift system will add 30 additional stalls to the project. There will also be the installation of photovoltaic panels on top of a carport structure adjacent to the car lifts, and on top of the adjacent roof. These PV panels will help residents save on their energy costs. There will also be the installation of a solar thermal hot water system. Exterior work will also include the recoating of all elevated deck areas, new silicone roofs, general exterior repairs, and a seismic retrofit of the tuck under parking. The seismic retrofit will install shear panels that are meant to better reinforce the soft story created by the tuck under parking. The existing windows will be replaced with new vinyl dual glazed retrofit windows. The exterior of the buildings will also be repainted. Interior work will include the installation of new Energy Star appliances, bathroom fixtures, maple shaker cabinets and countertops, new blinds, wall heaters, LEED light fixtures, and other general repairs. New acoustic dampening flooring will be installed on the second story units. FOOTITMOOT19 -Mcu:3M, Exhibit Co. Project Budget 80A-187 EXHIBIT 4 Cornerstone Sources & Uses City of Santa Ana Pre-Dev Profonna 08/28/19 175,121 NEW OR ELIGIBLE ELIGIBLE NOT TOTAL USES OF FUNDS• • •N REHAB COST HISTORIC Land at$1,475,410 Per Acre or$33.87 Per SF 2,700.000 0 0 0 0 2.700,000 21,429 Existing Structure 14,800.000 14,800,000 0 0 0 0 117,460 Other Acquisition Costs 1 1 0 0 0 0 0 6,332,483 Hard Cost Residential 7,295,020 57,897 6,332,483 0 0 6,332,483 0 60,258 Site Improvements 0 0 0 0 0 0 0 General Conditions, Profit & Overhead 14.00% 886,547 0 886,547 0 886,647 0 7,036 GC Bond/Insurance/Letter of Credit 1.20% 75,990 0 75,990 0 76,9g0 0 603 Hard Cost Contingency 10.00% 729,502 0 729,502 0 729,602 0 5,790 275.078 Construction Interest (4%) at Perm. Rate +0bp 4.00% 586,496 0 311,418 0 311,418 4,655 Bridge Interest at 10.00% 23,845 0 0 0 0 23,845 189 Construction Loan Fees 86,250 0 86,260 0 86,260 0 685 Permanent Loan Fees 119,350 0 0 0 119,390 947 0 Bridge Loan Fees 119 0 119 0 119 0 1 13,275 4%Related Costs/ Cost of Issuance 288,275 0 275,000 0 276,000 2,288 Accounting & Audit 20,000 0 26,000 0 20,000 159 0 Appraisal / Market Study 20,000 0 20,000 0 20,000 0 159 Architecture (Architect, Landscape Architect) 570,000 0 570,000 0 670,000 0 4,624 Civil Engineering 245,000 0 246,000 0 246,000 0 1,944 Construction Manager 125,000 0 126,000 0 126,000 0 992 Consultants (CM, Goo, LEED, Utilities, exc.) 260.000 0 260,000 0 260,000 0 2,063 Environmental (EIR, Phase I, Asbestos, exc.) 50,000 0 60,000 0 60,000 0 397 Financial Advisor! Syndication Consultant 0 0 0 0 0 0 0 Furnishings 75.000 0 75,000 0 75,000 0 695 Additional (City Repayment) 0 0 0 0 0 0 0 Lease -up & Marketing Expenses 100,000 0 0 0 0 100,000 794 Legal 200,000 0 180,000 0 180,000 20,000 1,687 MHSA Construction Period Fees 0 0 0 0 0 0 0 363,880 Operating& Debt Service Reserve (3-mo's/debj 3 363,860 0 0 0 0 2,888 Other (Admin, Repro. & Reimb.) 15,000 25,000 0 0 16,000 26,000 0 0 16,000 26,000 0 0 119 198 Other(Be kInspections) - Other-Katerra CM fees 150.000 0 150,000 0 160,000 0 1,190 Insurance 112.329 127.709 0 0 112,329 127,709 0 0 112,329 127,709 0 0 892 1,014 Permit Fees Property Taxes 38,400 0 38,400 0 38,400 0 305 Relocation 518,000 0 618,000 0 618,000 0 4,111 Allowance -PV/ Solar Thermal installation 75,000 0 76,000 0 76,000 0 695 Soft Cost Contingency 9.79% 329,542 0 329,542 0 329,642 0 2,616 2,000 54.000 Tax Credit Fees (App., Mon., & Res.) 56,000 0 0 2,000 444 Title & Recording 45.000 0 _ 32,250 0 32,260 12,7 00 357 Developer Overhead 0 0 0 0 0 0 Develo er Fee 2,168,000 323,700 _ __0 1,834,300 0 2.168,000 0 17,127 'a. F— m 2 X W U� e° N � N O J LL QN .. z r N Z Z Q W Qrc J W N, Q 2 m y ' O J O . Z y ° K 2 U m Q 2 J W _ 0 . N r O Z U O Z r r Z W � • K W W a Z O w } U F Z Q P 3 . r O J J J Q Y r JOr 2 Q O Z m ry 20 r Z N N n. W a N LL 0 00 ,O O rc Z O w m N LL 0 00 O O Z � W m LL O z 2 Z J W r U K w > a Q 0 O G r O r Z O. r - n U W Z 7 J Y � > J N F• • 1 • ' t N 101 O O e 10 e O O �CIOi p eN mO� OO�W fJlQ fool 6 d 1V !C I i ❑ EI I X N w J W n T N Z Y,_ IT I LW N m 0 80A-190 i i OW` W O W ZO >t.� >wz>L- W 0 0 o z z `o Z o c Z c o w � waYU oa w'm wv�U 'o m to m Ep S C N O N C t w Uc� � y C yU'c�Lv a o � E ¢�nQSF QmQSf N OO OO c oo o a � i0 OO OO LL a LL �p L W v H W E o N C = p C O o 'm?y7 N m m O C O m C E G C O wO m p CN�v��C 'gyUp O —aRc�p O .2_ pa m C eg C `yJ E m J D. = d Q J C y m E m J O J 4_ � d Q J 80A-191 80A-193 Face Exhibit Do. Housing Successor Agency Loan Deed of Trust 80A-194 EXHIBIT 4 FREE RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383 When Recorded Mail to: City of Santa Ana Clerk of the Council 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, California 92702 Attention: Clerk of the Council AMENDED AND RESTATED HOUSING SUCCESSOR AGENCY DEED OF TRUST AND ASSIGNMENT OF RENTS (805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California) THIS AMENDED AND RESTATED HOUSING SUCCESSOR AGENCY DEED OF TRUST AND ASSIGNMENT OF RENTS (this "Agency Deed of Trust") made this 17 day of September, 2019 by CORNERSTONE HOUSING PARTNERS LP, a California limited partnership (the "Trustor"), AmeriNat, a Minnesota corporation (the "Trustee"), and the Housing Authority of the City of Santa Ana, a public body, corporate and politic (the "Beneficiary"). Wakeham-Grant Apartments, L.P. (the "Original Trustor") and the Beneficiary previously entered into the Released Deeds of Trust (as defined below). In connection with the Original Trustor's sale of the Property (as defined below) to Trustor (the "Sale"), Original Trustor and Trustor desire to enter into that certain Assignment and Assumption Agreement (Housing Successor Agency Loan), dated as of the date hereof, by and between the Original Trustor and Trustor to effectuate the assignment of the Housing Successor Agency Loan Agreements (as defined in the Agreement) to Trustor (the "Assignment"), and the Beneficiary has consented to such Sale and Assignment. In connection with the Assignment, the Beneficiary and Trustor desire to amend and restate the Released Deeds of Trust, as set forth in this Agency Deed of Trust. Trustor, in consideration of the promises herein recited and the trust herein created, irrevocably grants, transfers, conveys and assigns to Trustee, in trust, with power of sale, the property located in the City of Santa Ana, County of Orange, State of California, described in the attached Exhibit A and more commonly known as 805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California (the "Property"); TOGETHER with all the improvements now or hereafter erected on the Property, and all easements, rights, appurtenances and all fixtures now or hereafter attached to the Property, 80A-195 EXHIBIT 4 all of which, including replacements and additions thereto, shall be deemed to be and remain a part of the Property covered by this Agency Deed of Trust; TOGETHER with the right, power and authority during the continuance of these Trusts, to collect the rents, issues, and profits of the Property, reserving unto the Trustor the right, prior to any default by Trustor in payment of the indebtedness secured by this Agency Deed of Trust or in the performance of any agreement under this Agency Deed of Trust, to collect and retain these rents, issues and profits as they become due and payable; and, TOGETHER with all articles of personal property or fixtures now or hereafter attached to or used in and about the building or buildings now erected, or hereafter to be erected, on the Property which are necessary to the complete and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or famished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to said building or buildings in any manner; and all of the foregoing, together with the Property, is herein referred to as the "Security"; To have and to hold the Security together with acquittances to the Trustee, its successors and assigns forever; TO SECURE to the Beneficiary (a) the repayment of the sums evidenced by an amended and restated promissory note to the Beneficiary executed by Trustor of even date herewith in the principal amount ofTWO MILLION, FIFTY-FOUR THOUSAND, THREE HUNDRED AND TWENTY-SEVEN DOLLARS ($2,054,327) (the "Agency Loan Note"); (b) the performance of the covenants and agreements of Borrower contained in the Agreement (as hereinafter defined); and (c) the payment of all other sums, with interest thereon, advanced in accordance herewith to protect the security of this Agency Deed of Trust; and the performance of the covenants and agreements of Trustor contained herein. TRUSTOR AND THE BENEFICIARY COVENANT AND AGREE AS FOLLOWS: 1. The Loan Agreement. This Agency Deed of Trust is executed and delivered, along with the Agency Loan Note and the Amended and Restated Loan Agreement, to benefit the Property. A copy of said Amended and Restated Loan Agreement is on file as a public record with the Beneficiary and is incorporated herein by reference (the "Agreement"). Trustor acknowledges that but for the execution of this Agency Deed of Trust, the Beneficiary would not enter into the Agreement or Agency Loan Note secured by this Agency Deed of Trust. 2. Trustor's Estate. Trustor is lawfully seized of the estate hereby conveyed and has the right to grant and convey the Security; that except as disclosed on the Title Policy insuring this Agency Deed of Trust, the Security is not encumbered except for obligations 80A-196 EXHIBIT 4 secured by deeds of trust, or any other security agreement, to secure financing or refinancing for the purchase and rehabilitation of the Property. 3. Repayment of the Loan. Trustor will promptly repay, when due, the principal and interest, as required by the Agency Loan Note secured by this Agency Deed of Trust. 4. Subordination. This obligation secured by this Agency Deed of Trust shall be subordinated to the Senior Loan. 5. Prior Mortgages and Deeds of Trust; Charges; Liens. Trustor shall perform all of Trustor's obligations under any mortgage, deed of trust or other security agreement with a lien which has priority over this Instrument, including Trustor's covenants to make payments when due (subject to an applicable notice and cure provisions). Trustor will pay all taxes, assessments and other charges, fines and impositions attributable to the Security which may attain a priority over this Agency Deed of Trust, by Trustor making any payment, when due, directly to the payee thereof. Trustor will promptly furnish to the Beneficiary all notices of amounts due under this paragraph, and in the event Trustor makes payment directly, Trustor will promptly discharge any lien which has priority over this Agency Deed of Trust; provided that Trustor will not be required to discharge the lien of this Agency Deed of Trust securing any senior lender or any other lien described in this paragraph so long as Trustor will agree in writing to the payment of the obligation secured by such lien in a manner acceptable to the Beneficiary, or will, in good faith, contest such lien by, or defend enforcement of such lien in, legal proceedings which operate to prevent the enforcement of the lien or forfeiture of the Security or any part thereof. 6. Hazard Insurance. Trustor will keep the Security insured by such insurance policies in such amounts and for such periods as called for in the Agreement. All insurance policies and renewals thereof will include a standard mortgagee clause with standard lender's endorsement in favor of the holder of any senior lender and the Beneficiary as their interests may appear and in a form acceptable to the Beneficiary. The Beneficiary shall have the right to hold, or cause its designated agent to hold, the policies and renewals thereof, and Trustor shall promptly furnish to the Beneficiary, or its designated agent, the original insurance policies or certificates of insurance, all renewal notices and all receipts of paid premiums. In the event of loss, Trustor will give prompt notice to the insurance carrier and the Beneficiary or its designated agent. The Beneficiary, or its designated agent, may make proof of loss if not made promptly by Trustor. The Beneficiary shall receive 30 days (10 days for nonpayment of premium) advance notice of cancellation of any insurance policies required under this Section. Unless the Beneficiary and Trustor otherwise agree in writing, insurance proceeds, subject to the rights of any senior lender, will be applied to restoration or repair of the Security damaged, provided such restoration or repair is economically feasible and the security of this Agency Deed of Trust is not thereby impaired. If such restoration or repair is not economically feasible or if the security of this Agency Deed of Trust would be impaired, again, subject to the rights of any senior lender, the insurance proceeds will be used to repay the loan secured by this Agency Deed of Trust, with the excess, if any, paid to Trustor. If the 80A-197 EXHIBIT 4 Security is abandoned by Trustor, or if Trustor fails to respond to the Beneficiary, or its designated agent within 30 days from the date notice is mailed by either of them to Trustor that the insurance carrier offers to settle a claim for insurance benefits, the Beneficiary, or its designated agent, is authorized to collect and apply the insurance proceeds at the Beneficiary's option either to restoration or repair of the Security or to repay the loan. If the Security is acquired by the Beneficiary, all right, title and interest of Trustor in and to any insurance policy and in and to the proceeds thereof resulting from damage to the Security prior to the sale or acquisition will pass to the Beneficiary to the extent of the sums secured by this Agency Deed of Trust immediately prior to such sale or acquisition subject to the rights of any senior lender. 7. Preservation and Maintenance of Security. Trustor will keep the Security in good repair and will not commit waste or permit impairment or deterioration of the Security. 8. Protection of the Beneficiary's Security. If Trustor fails to perform the covenants and agreements contained in this Agency Deed of Trust or if any action or proceeding is commenced which materially affects the Beneficiary's interest in the Security, including, but not limited to, default under the Agency Deed of Trust securing any senior lender, eminent domain, insolvency, code enforcement, or arrangements or proceedings involving a bankrupt or decedent, then the Beneficiary, at the Beneficiary's option, upon notice to Trustor, may make such appearances, disburse such sums and take such action as it determines necessary to protect the Beneficiary's interest, including, but not limited to, disbursement of reasonable attorneys' fees and entry upon the Security to make repairs. Any amounts disbursed by the Beneficiary pursuant to this paragraph, with interest thereon, will become an indebtedness of Trustor secured by this Agency Deed of Trust. Unless Trustor and the Beneficiary agree to other terms of payment, such amount will be payable upon notice from the Beneficiary to Trustor requesting payment thereof, and will bear interest from the date of disbursement at the rate payable from time to time on outstanding principal under the Agency Loan Note unless payment of interest at such rate would be contrary to applicable law, in which event such amounts will bear interest at the highest rate permissible under applicable law. Nothing contained in this paragraph will require the Beneficiary to insure any expense or take any action hereunder. 9. Inspection. The Beneficiary may make, or cause to be made, reasonable entries upon and inspections of the Security during normal business hours; provided that the Beneficiary will give Trustor reasonable prior written notice of inspection. 10. Forbearance by the Beneficiary Not a Waiver. Any forbearance by the Beneficiary in exercising any right or remedy will not be a waiver of the exercise of any such right or remedy. The procurement of insurance or the payment of taxes or other liens or charges by the Beneficiary will not be a waiver of the Beneficiary's right to accelerate the maturity of the indebtedness secured by this Agency Deed of Trust. EXHIBIT 4 11. Remedies Cumulative. All remedies provided in this Agency Deed of Trust are distinct and cumulative to any other right or remedy under this Agency Deed of Trust or any other document, or afforded by law or equity, and may be exercised concurrently, independently or successively. 12. Successors and Assiens Bound. The covenants and agreements herein contained shall bind, and the rights hereunder shall inure to, the respective successors and assigns of the Beneficiary and Trustor subject to the provisions of this Agency Deed of Trust. 13. Joint and Several Liability. All covenants and agreements of Trustor shall be joint and several. 14. Notice. Except for any notice required under applicable law to be given in another manner, (a) any notice to Trustor provided for in this Agency Deed of Trust will be given by certified mail, return receipt requested, addressed to Trustor at 17701 Cowan Avenue, Suite 200, Irvine, CA 92614, Attn: President, with a copy to Union Bank, (b) any notice to the Beneficiary will be given by certified mail, return receipt requested, to the Beneficiary at 20 Civic Center Plaza, P.O. Box 1988, Santa Ana, California 92702, Attention: Executive Director (CDA), or at such other address as the Beneficiary may designate by notice to Trustor as provided above, and (c) to Trustee at 8121 E. Florence Avenue, Downey, California 90240. Notice shall be effective as of the date received as shown on the return receipt. 15. Governing Law. This Agency Deed of Trust shall be governed by the laws of the State of California. 16. Severability. In the event that any provision or clause of this Agency Deed of Trust or the Agency Loan Note conflicts with applicable law, such conflict will not affect other provisions of this Agency Deed of Trust or the Agency Loan Note which can be given effect without the conflicting provision, and to this end the provisions of the Agency Deed of Trust and the Agency Loan Note are declared to be severable. 17. Captions. The captions and headings in this Agency Deed of Trust are for convenience only and are not to be used to interpret or define the provisions hereof. 18. Default in Foreclosure: Remedies. Upon Trustor's breach of any covenant or agreement of Trustor in this Agency Deed of Trust or the Agency Loan Note secured by this Agency Deed of Trust, including, but not limited to, the covenants to pay, when due, any sums secured by this Agency Deed of Trust, the Beneficiary may declare all sums secured by this Agency Deed of Trust immediately due and payable by delivering to Trustor notice thereof specifying: (1) The breach; (2) the action required to cure such breach; (3) a date not less than 30 days from the date the notice is received by Trustor as shown on the return receipt, by which such breach is to be cured provided, however, that if such default is not reasonable susceptible to being cured within 30 days, Trustor shall have a reasonable period to cure the defect so long as Trustor is diligently prosecuting the cure to completion; and (4) that failure to cure such breach on or before the date specified in the notice may result in acceleration of 80A-199 EXHIBIT 4 the sums secured by this Agency Deed of Trust and sale of the Security. The notice will also inform Tmstor of Trustor's right to reinstate after acceleration and the right to bring a court action to assert the non-existence of default or any other defense of Truster to acceleration and sale. The Agency LoanNote contains additional cure periods granted to Truster's limited partner and no event of default shall have occurred until and unless the Trustor's limited partner fails to cure such breach during such cure period. If the breach is not cured on or before the date specified in the notice or such longer period as provided above or in the Agency Loan Note or the Agreement, the Beneficiary, at the Beneficiary's option, may: (a) declare all of the sums secured by this Agency Deed of Trust to be immediately due and payable without further demand and may invoke the power of sale and any other remedies permitted by California law; or (b) either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the Security and take possession thereof (or any part thereof) and of any of the Security, in its own name or in the name of the Trustee, and do any acts which it deems necessary or desirable to preserve the value or marketability of the Property, or part thereof or interest therein, increase the income therefrom or protect the security thereof. The entering upon and taking possession of the Security shall not cure or waive any breach hereunder or invalidate any act done in response to such breach and, notwithstanding the continuance in possession of the Security, the Beneficiary shall be entitled to exercise every right provided for in this Agency Deed of Trust, or by law upon occurrence of any uncured breach, including the right to exercise the power of sale; (i) commence an action to foreclose this Agency Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof, (ii) deliver to the Trustee a written declaration of default and demand for sale, pursuant to the provisions for notice of sale found at California Civil Code Sections 2924, et sue., as amended from time to time; or (iii) exercise all other rights and remedies provided herein, in the instruments by which Truster acquires title to any Security, or in any other document or agreement now or hereafter evidencing, creating or securing all or any portion of the obligations secured hereby, or provided by law. Notwithstanding anything to the contrary herein, Beneficiary hereby agrees that any cure of any default made or tendered by Truster's limited partner shall be deemed to be a cure by Truster and shall be accepted or rejected on the same basis as if made or tendered by Trustor. The Beneficiary shall be entitled to collect all reasonable costs and expenses incurred in pursuing the remedies provided in this paragraph, including, but not limited to, reasonable attorneys' fees. - 19. Trustor's Right to Reinstate. Notwithstanding the Beneficiary's acceleration of the sums secured by this Agency Deed of Trust, Truster will have the right to have any proceedings begun by the Beneficiary to enforce this Agency Deed of Trust discontinued at any time prior to 5 days before sale of the Security pursuant to the power of sale contained in this Agency Deed of Trust or at any time prior to entry of a judgment enforcing this Agency 6 80A-200 LW:117-IM Deed of Trust if: (a) Trustor pays the Beneficiary all sums which would be then due under this Agency Deed of Trust and no acceleration under the Agency Loan Note has occurred; (b) Trustor cures all breaches of any other covenants or agreements of Trustor contained in this Agency Deed of Trust and the Affordability Restrictions on Transfer of Property; (c) Trustor pays all reasonable expenses incurred by the Beneficiary and the Trustee in enforcing the covenants and agreements of Trustor contained in this Agency Deed of Trust and the Affordability Restrictions, and in enforcing the Beneficiary's and the Trustee's remedies, including, but not limited to, reasonable attorneys' fees; and (d) Trustor takes such action as the Beneficiary may reasonably require to assure that the lien of this Agency Deed of Trust, the Beneficiary's interest in the Security and Trustor's obligation to pay the sums secured by Us Agency Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this Agency Deed of Trust and the obligations secured hereby will remain in full force and effect as if no acceleration had occurred. 20. Acceptance by Trustee. Trustee accepts this Trust when this Agency Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party to this Agency Deed of Trust ofpending sale under any other deed of trust or any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 21. Reconvevance. Upon payment or forgiveness of all sums secured by this Agency Deed of Trust, the Beneficiary will request the Trustee to reconvey the Security and will surrender this Agency Deed of Trust and the Agency Loan Note to the Trustee. The Trustee will reconvey the Security without warranty and without charge to the person or persons legally entitled thereto. Such person or persons will pay all costs of recordation, if any. 22. Substitute Trustee. The Beneficiary, at the Beneficiary's option, may from time to time remove the Trustee and appoint a successor trustee to any Trustee appointed hereunder. The successor trustee will succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law. 23. Request for Notice. Trustor requests that copies of the notice of default and notice of sale be sent to Trustee at the address set forth in Section 14 above. 24. Nonrecourse Liability. Neither Trustor nor any partner of Trustor shall have any personal liability under the Agreement, Agency Loan Note, and this Agency Deed of Trust and any judgment, decree or order for payment of money obtained in any action to enforce the obligation of Trustor to repay the loan evidenced by such documents shall be enforceable against Trustor only to the extent of Trustor's interest in the Property. 25. Extended Use Agreement. Beneficiary acknowledges that Trustor and the California Tax Credit Allocation Committee have or intend to enter into an extended use agreement. Beneficiary acknowledges and agrees that, in the event of a foreclosure of its interest under this Agency Deed of Trust or delivery by Trustor of a deed in lieu thereof 80A-201 WAMMINdrIl (collectively, a "Foreclosure"), the following rule contained in Section 42(h)(6)(E)(ii) of the Code shall apply: For a period of three (3) years from the date of Foreclosure, with respect to any unit that had been regulated by the extended use agreement, (i) none of the eligible tenants occupying those units at the time of Foreclosure may be evicted or their tenancy terminated (other than for good cause, including but not limited to, the tenants' ineligibility pursuant to Section 42 of the Code), (ii) nor may any rent be increased except as otherwise permitted under Section 42 of the Code. 26. Amendment and Restatement. This Agency Deed of Trust amends, restates and supersedes in their entirety those certain Agency Deeds of Trust and Assignment of Rents described in the attached Exhibit B (collectively, "Released Deeds of Trust"). 80A-202 EXHIBIT 4 IN WITNESS WHEREOF, Trustor has executed this Agency Deed of Trust as of the date first written above. DEVELOPER CORNERSTONE HOUSING PARTNERS LP, a California limited partnership By: JHC-Cornerstone II, LLC, a California limited liability company, its Managing General Partner By: Jamboree Housing Corporation, a California non-profit public benefit corporation, its Managing Member By: _ Name: Title: 80A-203 EXHIBIT 4 A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF m before me, notary public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature _ (SEAL) 80A-204 EXHIBIT 4 A. Legal Description B. Released Deeds of Trust EXHIBITS 80A-205 EXHIBIT 4 EXHIBIT A Legal Description 12 80A-206 EXHIBIT 4 Legal Description The Land referred to herein below is situated in the City of Santa Ana, County of Orange, State of California, and is described as follows: PARCEL ONE: LOTS 7 THROUGH 13 INCLUSIVE OF TRACT 3547 IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 138, PAGES 32 AND 33 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY. PARCEL TWO: PARCEL 1 OF "LOT MERGER NO. 2019-08" RECORDED AUGUST 02, 2019 AS INSTRUMENT NO. 2019000282886 OF OFFICIAL RECORDS. PARCEL THREE: PARCEL 1 OF "LOT MERGER NO. 2019-10" RECORDED AUGUST 02, 2019 AS INSTRUMENT NO. 2019000282887 OF OFFICIAL RECORDS. For conveyancing purposes only: APN 404-033-01 (Affects portion of Parcel Two) APN: 404-033-02 (Affects portion of Parcel Two) APN: 404-032-01 (Affects portion of Parcel Three) APN: 404-032-02 (Affects portion of Parcel Three) APN: 404-031-03 (Affects Lots 8 and 9 of Parcel One) APN: 404-031-01 (Affects Lots 12 and 13 of Parcel One) APN: 404-031-04 (Affects Lot 7 of Parcel One) APN: 404-031-02 (Affects Lots 10 and 11 of Parcel One) 80A-207 EXHIBIT 4 EXHIBIT B Released Deeds of Trust ,:1 1: � ` u b N d d N h N W 00 00 op O M OO 00 d b0�A'C 'QUO r N r�� PC •o a� cn" '� � ^' z a s .�s�' •`c° s u � � d� 'o y v .n � •°'o o r -� 'c o s o Ymo�`uvd02a�Q'«°va„o.c mvEmm'o Avg d C .�t°..COQq Ll.°. ain A $fLU c. 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M V •N+ M y .N. M V .-. M U r� .� ra (N+1 N M M M M M M O ti 80A-218 EXHIBIT 4 Exhibit E9. Housing Successor Agency Loan Note 80A-219 EXHIBIT 4 AMENDED AND RESTATED HOUSING SUCCESSOR AGENCY LOAN NOTE SECURED BY SUBORDINATED DEED OF TRUST TO THE HOSUING AUTHORITY OF THE CITY OF SANTA ANA, CALIFORNIA (805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California) $2,054,327 1. Principal Amount of Loan September 17, 2019 Santa Ana, California For value received, CORNERSTONE HOUSING PARTNERS LP, a California limited partnership ("Borrower") promises to pay to the order of THE HOUSING AUTHORITY OF THE CITY OF SANTA ANA, AS THE HOUSING SUCCESSOR AGENCY TO THE FORMER COMMUNITY REDEVELOPMENT AGENCY ("Agency"), at 20 Civic Center Plaza, 6a' Floor, Santa Ana, California 92701, or at such other place as the Agency may from time to time designate in writing, or to the assignee of the Agency, the principal sum of TWO MILLION, FIFTY-FOUR THOUSAND, THREE HUNDRED AND TWENTY-SEVEN DOLLARS ($2,054,327) or so much thereof as shall be disbursed hereunder, with five percent simple interest (5%) commencing on September 17, 2019. Agency and Wakeham-Grant Apartments, L.P., a California limited partnership ("Original Borrower") previously entered into the Housing Successor Agency Loan Agreements (as defined in the Loan Agreement) , pertaining to the acquisition and rehabilitation of certain real property described in the Loan Agreement as the 'Property," located at 805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California, commonly referred to as the Cornerstone Apartments, and the operation of the Property as affordable housing for very -low income households, and the Original Borrower previously entered into the Housing Successor Agency Loan Notes, in favor of the Community Redevelopment Agency of the City of Santa Ana ("CRA") (collectively, the "Original Notes") described in Exhibit A. The Original Notes referenced in the "Interest Secured" column in Exhibit A are hereby amended and restated in their entirety by this Note. In connection with the Original Borrower's Sale of the Property to Borrower, Original Borrower and Borrower desire to enter into that certain Assignment and Assumption Agreement (Housing Successor Agency Loan), dated as of the date hereof, by and between the Original Borrower and Borrower to effectuate the assignment of the Housing Successor Agency Loan Agreements to Borrower (the "Assignment"), and the Agency has consented to such Sale and Assignment. This Amended and Restated Housing Successor Agency Loan Note (this "Note") is made pursuant to, entitled to the benefits of and referred to as the Housing Successor Agency Loan Note in the Amended and Restated Loan Agreement ("Loan Agreement"); that certain 80A-220 EXHIBIT 4 "Amended and Restated Affordability Restrictions on Transfer of Property" between Borrower and Agency, dated on or about the date hereof (the "Agency Affordability Restrictions on Transfer of Property"); and that certain subordinated Amended and Restated Housing Successor Agency Deed of Trust and Assignment of Rents between Borrower and Agency, dated on or about the date hereof (the "Agency Deed of Trust"). This Note, the Loan Agreement, the Affordability Restrictions on Transfer of Title, and the Agency Deed of Trust are sometimes collectively referred to herein, collectively, as the "Loan Documents." The Loan Documents and the rights and responsibilities inure to the benefit of the Agency. Any capitalized term which is not otherwise defined herein shall have the meaning ascribed to such term in the Loan Agreement. 2. Definitions. For the purpose of calculating the payments to be made by Borrower to Agency pursuant to this Note, the following terms shall have the following respective meanings: "Acquisition Costs" shall mean the costs and expenses of Borrower to acquire the Property, as set forth in the Project Budget attached to the Loan Agreement. "Agency Loan" shall mean the loan evidenced by this Note. "Agency's Percentage" with reference to the Residual Receipts, shall mean 50% or the prorated percentage of the total amount of funds contributed after CORNERSTONE HOUSING PARTNERS LP, retains fifty percent of the Residual Receipts, whichever is less, of the Agency's share of the total Residual Receipts from the Property as further described in Section 5 hereof. If other lenders to the Property are also repaid from Residual Receipts, Agency's Percentage shall be reduced proportionally to the ratio that the original principal amount of the Loan bears to the original principal amount of all loans being repaid from Residual Receipts multiplied by 50%. "Calendar Year" means each consecutive twelve (12) month period from January 1 to December 31. "Closing Costs" shall mean: (i) In the case of a Sale, reasonable brokerage commissions payable to a broker as a result of the Sale, which shall not in any event exceed the customary amount charged -for similar transactions in the immediate market place, costs of title insurance premiums, documentary stamp taxes, escrow fees, recording charges, loan repayment charges and other costs reasonably incurred with respect to the Property, in each case actually paid by Borrower as a condition of the Sale. (ii) In the case of a Refinancing, the reasonable and necessary costs of 80A-221 EXHIBIT 4 consummating such Refinancing, including, without limitation, loan fees, loan repayment charges, costs of title insurance premiums, escrow fees, recording fees, attorneys' fees and costs of Lender required repairs or reserves. "Gross Revenues" shall mean all revenues and receipts of every kind actually received by Borrower from operating the Property, and all parts thereof, including, but not limited to, income from both cash and credit transactions, rental from leased and/or subleased spaces and parking fees and charges (but not including security deposits and other tenant deposits, except to the extent such deposits are forfeited to the Borrower under the tenant's lease). Gross Revenues does not include any insurance proceeds other than any rental interruption insurance proceeds. Any credit consideration shall be included in Gross Revenues at the time cash proceeds (principal, interest and/or other) are received. Borrower shall establish and maintain accounts for the Gross Revenues (the "'Project Accounts") that are segregated from revenues and income received by Borrower from all other projects. Gross Revenues shall also include all interest earned on the Project Accounts to the extent interest is released from the Project Accounts. Gross Revenues do not include the proceeds of any loans or capital contributions made to Borrower, Refinancing Proceeds or Sale Proceeds. "Operating Expenses" shall mean the sum of the following: (i) payments of principal and interest and all other charges relating to the Senior Loan(s), exclusively including required payments under the MUFG Union Bank, N.A. loan(any additional loans to the project must be approved by the Agency); a property management fee no greater than 8% of gross rents; (iii) Owner Partnership Management and Asset Management Fees not to exceed 5% of gross rents; (iv) Deposits into required reserves required by any lender or Borrower's Partnership Agreement; (v) all other actual, reasonable cash operating costs and expenses, calculated on an annual basis, that are directly attributable to managing and operating the Property and the Borrower, including, without limiting the generality of the foregoing, the following: costs and expenses for real and personal property taxes, special assessments or similar charges; water, fuel, electricity and other utilities; heating, ventilation and air conditioning expenses; labor; supplies; tools; equipment; insurance; advertising and marketing; accounting and legal fees; brokerage commissions and other leasing expenses; reasonable reserves for all anticipated expenses as approved by the Agency; and other such items constituting operation, maintenance and repair costs actually paid by the Borrower, subject to the following conditions: (a) Depreciation and amortization expenses shall not be considered Operating Expenses, except as otherwise provided herein. 3 80A-222 EXHIBIT 4 (b) Reserved. (c) Any expenses, compensation or fees paid to any affiliate of Borrower shall only be included as Operating Expenses to the extent they are not in excess of the reasonable expenses, compensation or fees which would be payable to unrelated third parties in arms -length transactions for similar services in the Santa Ana, California area. (vi) Any other expenses necessary to meet senior lender requirements and requirements of Borrower's limited partner, or its assignee, as set forth in Borrower's Agreement of Limited Partnership (the "Partnership Agreement"), including, without limitation, repayment of any loans to the Borrower by a partner or tax credit recapture or deficiency payments. (vii) Deferred Developer Fees. (viii) A social services administrative fee. "Project" shall mean the acquisition and rehabilitation of the Property by Borrower pursuant to the Loan Agreement. "Property" shall mean the real property located at 805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California, and commonly referred to as the Cornerstone Apartments, described in the Agency Deed of Trust. "Refinancing" shall mean changing the then existing financing on the Property by, without limitation, modifying final maturity date of the existing Senior Loan, increasing the stated maximum principal amount of the existing Senior Loan, paying off the existing Senior Loan in full and obtaining new Senior Loan. "Refinancing Proceeds" shall be disbursed as set forth in Section 7 hereof. "Residual Receipts" shall mean the Gross Revenues from the Property, for each year, less deductions for Operating Expenses from the Property, applicable to each such year to the extent not already deducted as an Operating Expense. "Sale" shall mean any transfer, assignment, conveyance or lease (other than to a tenant for occupancy or a transaction set forth in Section 15(c) hereof) of the Property or any portion thereof, or any interest therein by the Borrower, and includes any transfer, assignment or sale of any partnership interest in the Borrower by an individual or entity which is a general partner in the Borrower, or any interest by any individual or entity which holds an interest in any such general partner in the Borrower, which brings the cumulative total of all such direct and indirect transfers, assignments and sales during the term of this Note to more than forty-nine percent (49%) of the ownership interests in the Borrower, and any such transfer, assignment or sale of a direct or indirect partnership interest thereafter. Sale includes a sale in condemnation or under 80A-223 EXHIBIT 4 threat thereof. Sale does not include dedications and grants of easements to public and private utility companies of the kind customary in real estate development, nor transfers of Limited Partnership interests or transfers of General Partner interests caused by the removal of the General Partner pursuant to the terns of the Partnership Agreement. "Sale Proceeds" shall be disbursed as set forth in Section 8 hereof. "Senior Loan" shall mean the senior loan being made by MUFG Union Bank, N.A., concurrent to the Agency Loan for payment of a portion of the Acquisition and Rehabilitation Costs, and shall include any subsequent loan that refinances the initial Senior Loan. "Term" the term for repayment of this Note shall mean fifty-five (55) years from the date of recording. 3. Loan Repavment. Borrower shall make payments to the Agency as provided in Sections 5 (Residual Receipts), 7 (Refinancing Proceeds), 8 (Sale Proceeds) and 10 (Accelerated Loan Repayment). 4. Operating Capital Improvement Loan. If the replacement reserve account ("reserves") is depleted due to unforeseen repairs and the General Partner makes a loan to the Partnership, the reserves must be fully funded to their original level prior to repayment of said loan. Such loan shall be repaid with net cash flow prior to the residual receipt split. The outstanding loan balance will be reflected in the annual report. 5. Annual Loan Repavment. a. After any deferred Developer Fee has been paid, as set forth hereinabove, the Borrower shall thereafter make a loan payment to the Agency annually, in the amount of the lesser of the outstanding balance due under this Note or the Agency's Percentage of the Residual Receipts, as provided in this Section 5. b. Within one hundred twenty (120) days after the year in which the rehabilitation of the Project is completed, and on or before the 120th day of each Calendar Year thereafter, the Borrower shall submit to the Agency a detailed statement of Gross Revenues and Operating Expenses attributable to the Property for the applicable Calendar Year, along with a computation of the amount of the Residual Receipts applicable to such Calendar Year with which to make a Agency Loan payment then due. c. Except as otherwise provided in Section 4, the Borrower shall pay to the Agency fifty percent (50%) of the Residual Receipts as payment of principal and interest under its loan. The remaining amount of the Residual Receipts shall remain with the Borrower to be used by W1 80A-224 EXHIBIT 4 Borrower as determined by the General Partners of Borrower, including, without limitation, for distribution to the partners of the Borrower. d. The Residual Receipts payment shall be made not later than one hundred fifty (150) days after the close of the Calendar Year. Such payment shall be applied first to any accrued but unpaid interest, if any, then to reduce the principal balance of the loans. 6. Reserved. 7. Loan Repayment from Refinancin¢ Proceeds. The Borrower shall make a loan payment to the Agency from every Refinancing that occurs during the tern of this Note not to exceed the outstanding balance of principal and interest on this Note, to the extent of the Agency's Percentage of the Refinancing Proceeds (if any), as follows: the cash proceeds from such Refinancing shall be applied first to pay Closing Costs; next, the amount necessary to pay in full all amounts owing on the Senior Loan; ; next to pay any amounts due to the Limited Partner pursuant to the Partnership Agreement; next to pay any amounts due to the Limited Partner pursuant to the Partnership Agreement; next, the Borrower shall pay to the Agency fifty percent (50%) of the then remaining unapplied Refinancing Proceeds not to exceed the outstanding balance on this Note. The remaining Refinancing proceeds shall remain with Borrower to be used by Borrower as determined by the General Partners of Borrower, including, without limitation, for distribution to the partners of the Borrower. Such payment shall be due within 30 days of the date of such Refinancing, and shall be applied first to any accrued but unpaid interest, then to reduce the principal balance of the Loans. The Agency shall not be required to reconvey the lien of the Agency Deed of Trust if Sale Proceeds are insufficient to repay the Agency Loan in full. 8. Loan Repayment from Sale Proceeds. The Borrower shall make a loan payment, not to exceed the outstanding balance of principal and interest on this Note, to the Agency from any Sale that occurs during the term of the Agency Loan, to the extent of the Agency's Percentage of the Sale Proceeds, as follows: gross sale proceeds are applied first to pay Closing Costs, next to pay in full all amounts owing on the Senior Loan; next the Borrower shall pay to the Agency fifty percent (50%) of the then remaining unapplied Sale Proceeds, not to exceed the outstanding amount of principal and interest due on this Note. This fifty percent (50%) represents the total payment due under this Note. The remaining Sale Proceeds shall remain with Borrower. Such payment shall be due on the date of such Sale, and shall be applied first to any accrued but unpaid interest, then to reduce the principal balance of the Loans. The Agency shall not be required to reconvey the lien of the Agency Deed of Trust if Sale Proceeds are insufficient to repay the Agency Loan in full. 9. Buy Out Option. 0 80A-225 EXHIBIT 4 Prior to the initial disbursement under this Note, the Borrower shall grant to the Agency a Right of First Refusal (subject to any purchase option and/or right for first refusal granted to one or more of the general partners of the Borrower) (the "Agency Right of First Refusal") to acquire the Property if Borrower desires to transfer the Property to an entity which is not affiliated with one or more of Borrower's general partners. The Agency Right of First Refusal shall be in form and substance acceptable to the Agency and the Limited Partner and shall comply with all applicable Tax Credit requirements. 10. Accelerated Loan Payment. The full principal amount outstanding plus accrued but unpaid interest thereon, shall be due and payable on the earlier to occur of the following: a. Sale or Refinancing of the Property as provided further in Section 15 hereof; unless: (i) in the case of a Sale in which the Agency's Percentage of the Sale Proceeds are insufficient to repay in full the Agency Loan, the Agency approves such sale -and the purchaser assumes the balance of the Agency Loan in accordance with the terms of this Note; or (ii) in the case of a Refinancing in which the Agency's Percentage of the Refinancing Proceeds are insufficient to repay in full the Agency Loan, the Agency approves such Refinancing and the Borrower remains obligated pursuant to the terms of this Note. b. if an Event of Default occurs pursuant to Section 16 hereof. or c. The date that is fifty five (55) years after the date of execution of this Note. 11. Prepayment Borrower may prepay the outstanding principal balance under this Note, in whole or in part, together with any accrued but unpaid interest, if any, and other sums owed to the Agency under this Note, if any, at any time without penalty. 12. Lawful Money. Principal and interest are payable in lawful money of the United States of America. 13. Application of Payments; Late Charges. a. Any payments received by the Agency pursuant to the terms hereof shall be applied first to sums, other than principal and interest, due the Agency pursuant to this Note, next to the payment of all interest accrued to the date of such payment, and the balance, if any, to the payment of principal. 80A-226 EXHIBIT 4 b. If any payment is not received by the Agency within ten (10) days following the due date thereof, then in addition to the remedies conferred upon the Agency pursuant to this Note and the other Loan Documents, (i) a late charge of four percent (4%) of the amount due and unpaid will be added to the delinquent amount to compensate the Agency for the expense of handling the delinquency and (ii) the amount due and unpaid, excluding the late charge, shall bear interest at ten percent (10%) per annum, computed from the date on which the amount was due and payable until paid. Without prejudice to the rights of the Agency hereunder or under any of the other Loan Documents, Borrower shall indemnify the Agency against, and shall pay the Agency on demand, any expense or loss which it may sustain or incur as a result of the failure by Borrower to pay when due any installment of interest and/or principal, fees, or other amounts payable to the Agency under this Note or any other Loan Document, to the extent that any such expense or loss is not recovered pursuant to such foregoing provisions. A certificate of the Agency setting forth the basis for the determination of the amounts necessary to indemnify the Agency in respect of such expenses or direct loss, submitted to Borrower by the Agency, shall be conclusive and binding for all purposes except as immediately corrected by Borrower notice to Agency. 14. Securi This Note is secured by the Agency Deed of Trust. 15. Acceleration by Reason of Transfer or Financing. a. In order to induce Agency to make the loan evidenced hereby, Borrower agrees that in the event of any transfer of the Property without the prior written consent of Agency (other than a transfer resulting from a foreclosure, or conveyance by deed in lieu of foreclosure, by the holder of the Senior Loan Deed of Trust), Agency shall have the absolute right at its option, upon at least 30 days' prior written notice to Borrower, to declare all sums secured hereby immediately due and payable. Such consent will not be unreasonably withheld. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. Agency may grant or deny such consent in its reasonable discretion and, if consent should be given, any such transfer shall be subject to this Section 12, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein. Such assumption shall release Borrower from all liability thereunder from and after the date of such assumption. b. As used herein, "transfer" includes the Sale, agreement to sell, transfer or conveyance of the Property, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment land sale contract or similar instrument affecting all or a portion of the Property, or the lease of all or substantially all of the Property. "Transfer" shall not include the leasing of individual residential units on the Property, so long as Borrower complies with the provisions of the Loan Agreement and the Affordable Housing Restrictions relating to such leasing activity, nor shall it include a E 80A-227 EXHIBIT 4 conveyance of the Property to a limited partnership in which the general partner of Borrower or an affiliate is a general partner, or to a corporation that is wholly owned by the Borrower and that is formed for the sole purpose of owning and operating the Property, or the sale back to the Borrower. In the event of any Refinancing or partial Refinancing in an amount in excess of the balance of the Senior Loan, without the prior written consent of Agency (which consent Agency may grant or deny in its sole discretion), then the entire outstanding balance of the Agency Loan together with all accrued and unpaid interest, shall be repaid to the Agency at the time of each Refinancing or partial Refinancing. c. For the avoidance of doubt, a "transfer" shall not include (i) a transfer of any general partner's interest in Borrower when made in connection with the exercise by the Borrower's limited partner (the "Limited Partner") of its rights upon a default by a general partner under the Borrower's Partnership Agreement or upon a general partner's withdrawal in violation of the Partnership Agreement, so long as the removal and substitution of the defaulting general partner is made within thirty (30) days of such default or, if such removal and substitution cannot reasonably be completed within thirty (30) days, so long as the Limited Partner commences to take action to remove and substitute the general partner with a reasonable period and thereafter diligently proceeds to complete such substitution; (ii) any transfer of the Property to the managing general partner of Borrower or affiliates thereof pursuant to the right of first refusal or to the general partners of Borrower or affiliates thereof pursuant to the purchase option, as provided for in the Purchase Option and Right of First Refusal Agreement between Borrower and its general partner; (iii) any transfer of the Limited Partner's interest in accordance with the Partnership Agreement; and (iv) any sale, transfer or other disposition of an interest in a limited partner of the Borrower. 16. Event of Default. Subject to the provisions of Sections 23 and 25 hereof, the occurrence of any of the following shall be deemed to be an event of default ('Event of Default") hereunder: (a) failure by Borrower to make any payments provided for herein, and if such default is not made good within fifteen (15) days of written notice to Borrower of such default; or (b) failure by Borrower to perform any covenant or agreement in the Agency Deed of Trust, the Loan Agreement, or the Affordability Restrictions on Transfer of Property within thirty (30) days after written demand therefor by Agency (or, in the event that more than thirty (30) days is reasonably required to cure such default, should Borrower fail to promptly commence such cure, and diligently and continuously prosecute same to completion). Notwithstanding the foregoing, if Borrower fails to cure such breach during the time set forth herein for such cure, Agency shall provide written notice of such failure to Limited Partner and no Event of Default shall be deemed to occur unless Limited Partner fails to cure such breach within 30 days following delivery of such notice; provided, however, if in order to cure such breach Limited Partner determines that it must remove the General Partner pursuant to the terms of the Partnership Agreement, then no Event of Default shall occur until 30 days following the effective date of such removal. 80A-228 EXHIBIT 4 17. Remedies. Upon the occurrence and during the continuance of an Event of Default, after any applicable notice has been provided and the expiration of any applicable cure period therefore, Agency may declare all sums evidenced hereby immediately due and payable by delivery to the Trustee named in the Agency Deed of Trust securing this Note, and to Borrower, written declaration of default and demand for sale, and written notice of default and of election to cause the Property to be sold, which notice Trustee shall cause to be duly filed for record and Agency may foreclose on the Agency Deed of Trust. Agency shall also deposit with Trustee the Agency Deed of Trust, this Note and all documents evidencing expenditures secured thereby and evidenced hereby. No delay or omission on the part of the Agency in exercising any right under this Note or under any of the other Loan Documents shall operate as a waiver of such right. 18. Attorneys' Fees. If this Agency Loan Note is not paid when due or if any Event of Default occurs, Borrower promises to pay all costs of enforcement and collection, including but not limited to, reasonable attorneys' fees, whether or not any action or proceeding is brought to enforce the provisions hereof. 19. Severability. Every provision of this Note is intended to be severable. In the event any term or provision hereof is declared by a court of competent jurisdiction, to be illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable. 20. Number and Gender. In this Note the singular shall include the plural and the masculine shall include the feminine and neuter gender, and vice versa, if the context so requires. 21. Non -recourse. The Agency Loan is a nonrecourse obligation of the Borrower. Neither Borrower nor any other party, including Borrower's partners, shall have any personal liability for repayment of the Agency Loan or for any other amounts under any of the documentation evidencing, securing or describing the Agency Loan. The sole recourse of Agency under this Note and the Agency Deed of Trust for repayment of the Agency Loan and for such other amounts arising therefrom shall be the exercise of its rights against the Property and related security thereunder. 10 80A-229 EXHIBIT 4 22. Subordination. It is hereby expressly agreed and acknowledged by Borrower and Agency that the Agency Deed of Trust is a subordinate deed of trust, and that this Note is subject and subordinate to the Senior Loan Deed of Trust held by MUFG Union Bank, N.A.. 23. Reserved. 24. Reserved. 25. Force Maieure. Notwithstanding specific provisions of this Note, performance hereunder shall not be deemed to be in default where delays or defaults are due to: war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; acts of God or other deities; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor or supplier; acts of the other party; acts or failure to act of the Agency or any other public or governmental Agency or entity (except that any act or failure to act of Agency shall not excuse performance by Agency); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time the party claiming such extension gives notice to the other party, provided notice by the party claiming such extension is given within thirty (30) days after the commencement of the cause. Times of performance under this Note may also be extended in writing by the Agency and the Borrower. 26. Assignments. The Agency, and the assignee of the Agency, shall have the right to assign this Note and the Agency Deed of Trust securing this Note, without any further act of Borrower. The assignee shall give notice to Borrower as soon as practicable after such assignment. 26. Amendment and Restatement. This Note amends, restates and supersedes in their entirety the Original Notes. On or before the date hereof, the Agency shall surrender and deliver to Original Borrower the Original Notes. 11 80A-230 EXHIBIT 4 This Note is hereby agreed to and executed on the date first set forth above. "BORROWER" CORNERSTONE HOUSING PARTNERS LP, a California limited partnership By: JHC-Cornerstone II, LLC, a California limited liability company, its Managing General Partner By: Jamboree Housing Corporation, a California non-profit public benefit corporation, its Managing Member By: _ Name: Title: 12 80A-231 EXHIBIT 4 EXHIBIT A. Housing Successor Agency Loan Notes (the "Original Notes") 13 80A-232 ) k ) \ k a ! ! ! « §[!> (! ()} 22\§U _ ;w-® / )G)\{\ _ )})\)&/�{I)§!§ 8�0 \3§m); §±(%ƒ§3~a�i{f °G)«§%!* f } )))}]§ � ( ! ( , k ) \ \ ~ ~ ~ / ) } j \ � )\\ ) ■ 80A- 22 N � L L C L O C 0O0 OMO M 00 00 00 p O W � vi C« O W N O G« d C � �° •C C C W N O a. 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El- ._ 0 o cam. •- c c o°° H o o c v3 D o w .E•o ° >^O 00 C O N 00 •`y O - N *� o v. •"T' C•�04 d d N z Q •O m m U N C A id N O N O a�i O m W C Q ❑ 'fl v V N w of ❑ m �. w '.t6..» u v .� z A £° E E F. v �, s. w sus o T w "mEc.E3°oQm5. cmivEc.5' ��Avdo.a F EU°QQ � FEU°QE R ::�QOOAS �v� �SaU a F EUQQ 0 o o a o o c o 0 0 O N N O N N M O V O V O O O N N \ N Cr N to M 0 c c c c w v y� °J y y M y •-- N G � W q �' .O w � W �. •� C y G y N •O N N N CJ da C].E o m �Q ma 0.5 m•o f�.E m V'1 E QSz°Oa a a. 0. .0 N 80A-240 d v G L t t v1 afn .n'O 'O ��Z�E�OWO ON yN N Ad°dF LTW 000 ° 000 E '= W �, '- ^' ':• �n A c o v o ro� o F o c« es a Q� •`° .. °' 'o d'O ^ fr M .Z O (] L O N ro T C N .C44 N Cro R El N ° .^ 0 m t°Eaci❑ro E mo0 F U Q Q .. uoi Ov m v RIQCa«Q� a�q u �v] m SCl.0 P. :: V tea. '% NtOV U.D a0. CC Ca« M � b p O O O O O O N M ? O N N N O N 01 O M N M M O N M .° m •O m •L ° ro C ro O ro O W tom., C p p h N N ° h 6M9 N 69 cz 0 W W O W O y m c N F c y E L 5. O d O d p a•Oi m m v v v 7 v, Q 0 .E y v v d3 aS ai aS _o a N N M M 80A-241 m 2 X W N N N d N 'E G •E G 'E C 'C C E C a0 t W s o v a o a rn vi v� in rn � oo eo �n 0 �n 0 �n 0 �n 0 o vi vi o M vi vi o M 00 0o eo eo 0o eo eo 00 00 o 0 0 0 o c o 'E •E '� .E o o> � •� a E 'E v '_ m M a v '_ m v+ � U � s�'�s Q ao m�U c'o Q z amp �ww "o gx vww moucL dw o _ z z cOi •�-� D. � CmL d � •--� C « _T •�-• O � C « _T '�-' N � C « _T .'G-• N a+ 'O O « O � C O .L O N� ❑ U ... O o� E E y v O ... o E E y O❑ U ... o E a c o o l" .• c A R c� A c .w o m y E o z E o anQ s E o aoQ L E o opQ a°i.� F U Q F V Q F U Q Q F E U Q Q o v o 0 0 ry N N N N N N N N N N M O1 O M N M N 01 N f�1 N M N O � p � ro 'on 'COC oq ;on y 0 H O O 'Q 3.5 'O O A O y m vi O O � y 2 2 y tom. v E E O C W O wp N O d 'O 9 Q 69 VJ Q Q .E Q C Mi E Ri V ^ M V a a a Q Q Q M N M M M M M M 80A-242 EXHIBIT 4 Exhibit Fo. Affordability Restrictions on Transfer of Property 80A-243 EXHIBIT 4 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City of Santa Ana Clerk of the Council 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, California 92702 Attention: Clerk of the Council SPACE ABOVE THIS LINE FOR RECORDING USE FREE RECORDING REQUESTED [Government Code Section 6103] AMENDED AND RESTATED AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California) THESE AFFORDABLE HOUSING RESTRICTIONS ON TRANSFER OF PROPERTY (these "Restrictions") are entered into as of September 17, 2019, by and among and CORNERSTONE HOUSING PARTNERS LP, a California limited partnership (referred to herein as the "Developer"), and the Housing Authority of the City of Santa Ana, a public body, corporate and politic (the "Agency"). RECITALS: A. Developer is the owner of that certain real property located at 805, 810, 815, 816, 825, 828, 835, and 904 S. Minnie Street, Santa Ana, California and commonly referred to as the Cornerstone Apartments, and legally described in Exhibit A attached hereto and incorporated herein by reference ("Property"). B. For the purpose of providing one -hundred, twenty-six (126) units of housing, one hundred twenty-five (125) of which will be affordable to very -low income households ("Assisted Units"), Wakeham-Grant Apartments, L.P. (the "Original Developer") and the Agency previously entered into the Housing Successor Agency Loan Agreements (as defined in the Loan Agreement) and the Affordability Restrictions on Transfer of Property (collectively, the "Original Restrictions") described in Exhibit B. C. In connection with the Original Developer's sale of the Property to Developer (the "Sale"), Original Developer and Developer desire to enter into that certain Assignment and Assumption Agreement (Agency Loan), dated as of the date hereof, by and between the Original Developer and the Developer to effectuate the assignment of the Agency Loan Agreements to Developer (the "Assignment"), and the Agency has consented to such Sale and Assignment. D. The Agency and Developer have entered into that certain Amended and Restated Loan Agreement, dated on or about the date hereof (the "Loan Agreement") to 80A-244 EXHIBIT 4 which these Restrictions are attached as Exhibit G, which, along with all of its attachments, is incorporated herein by this reference (any capitalized term that is not otherwise defined in these Restrictions shall have the meaning ascribed to such term in the Loan Agreement). E. In connection with the Assignment, the Agency and Developer desire to amend and restate the Original Restrictions. F. The Loan Agreement provides, among other things, for the use of the Property for affordable housing with all Assisted Units being restricted to Very -Low Income households, at Affordable Rent(s). G. The Loan Agreement contains certain provisions relating to the use of the Property. NOW, THEREFORE, AGENCY AND DEVELOPER COVENANT AND AGREE AS FOLLOWS: 1. The Restrictions amend, restate and supersede in their entirety the Original Restrictions. Developer covenants and agrees (for itself, its successors, its assigns, and every successor in interest to the Property or any part thereof) that Developer, such successors, and such assigns shall use the Property exclusively to provide affordable housing of Very -Low Income households, as provided in these Restrictions and in the Loan Agreement. 2. Developer, for itself and its successors and assigns, hereby covenants and agrees that all of the apartments in the Property (less one manager's unit) (the "Units") shall be rented exclusively, at Affordable Rent, to Very -Low Income households to the extent provided for herein. Area median income levels and Affordable Rents are subject to adjustment from time to time as provided in Section 3 below. 3. AFFORDABILITY REQUIREMENTS, USE AND MAINTENANCE OF THE PROPERTY 3.1 Use Covenants and Restrictions A. Developer agrees and covenants, which covenants shall run with the land and bind Developer, its successors, its assigns and every successor in interest to the Property that Developer will make all rental units on the Property available to very low-income households at rents affordable to such households for fifty-five (55) years from the issuance of the Certificate of Completion. The Agency permits the Developer to limit the eligibility and/or give preference to a particular segment of the population in accordance with 24 CFR 92.253(d) B. The Project shall consist of one -hundred, twenty-six (126) units, including one (1) on -site manager's unit(s). C. Rental increases shall be in conformance with federal and state law. 2of11 80A-245 Wci D. Developer must have a written lease between tenant and owner for a period of at least one year, unless a shorter period is mutually agreed upon. 3.2 Affordability Levels[UDit Mix: All affordable rents in the Project shall be governed by the rents published annually by the California Tax Credit Allocation Committee for households at 50% Area Median Income (as defined in the Loan Agreement). Utility allowances must be deducted from the Maximum Gross Monthly Rent. The Housing Authority of the City of Santa Ana publishes the Utility Allowance Schedule. 3.3 Rent Increases: On an annual basis, the Agency shall provide Developer with the maximum allowable schedule of rents for the Property in accordance with changes in allowable rent and income tables published by the California Tax Credit Allocation Committee (TCAC). In no event can Developer charge any tenant more than such amount. The Agency will make all best efforts to provide Developer with the maximum allowable schedule of rents within no more than 30 calendar days after the date TCAC publishes the allowable rent and income tables. 4. Developer, its successors and assigns shall not charge rents for the Units in excess of the amounts set forth herein, as adjusted on the basis of the revised schedules of area median incomes issued from time -to -time by HUD. The Agency shall notify Developer in writing of the adjusted allowable maximum incomes and rents. 5. Developer shall adopt and include as part of its Management Plan (described in Section 11 below), written tenant selection policies and criteria for the Units, that meet the following requirements: (a) Are consistent with the purpose of providing housing for Very -Low Income households; (b) Are reasonably related to program eligibility and the applicants' ability to perform the obligations of the lease; (c) Provide for: (i) The selection of tenants from a written waiting list in the chronological order of their application, insofar as is practicable; and (h) The prompt written notification to any rejected applicant of the grounds for any rejection; (d) Subject to compliance with applicable California and federal fair housing laws, local preference for Santa Ana residents and workers in tenant selection shall be a requirement of the Project. Subject to applicable laws and regulations governing nondiscrimination and preferences in housing occupancy required by HUD or the State of California, as well as the City of Santa Ana Affordable Housing Funds Policies and 3ofII 80A-246 EXHIBIT 4 Procedures, the Developer shall give preference in leasing units in the following order of priority: 1. First priority shall be given to persons who have been permanently displaced or face permanent displacement from housing in Santa Ana as a result of any of the following: a. A redevelopment project undertaken pursuant to California's Community Redevelopment Law (Health & Safety Code Sections 33000, et seq.) -- applicable only to projects funded by the Low and Moderate Income Housing Asset Fund. b. Ellis Act, owner -occupancy, or removal permit eviction; c. Earthquake, fire, flood, or other natural disaster; d. Cancellation of a Housing Choice Voucher HAP Contract by property owner; or e. Governmental Action, such as Code Enforcement. 2. Second priority shall be given to persons who are either: a. Residents of Santa Ana and/or b. Working in Santa Ana at least 32 hours per week for at least the last 6 months. (e) Carry out the Affirmative Marketing procedures of the City of Santa Ana, which are designed to provide information and otherwise attract eligible persons from all racial, ethnic and gender groups in the housing market area to the units. Developer shall cooperate with the Agency to effectuate this provision prior to the initial renting, or upon occurrence of a vacancy, and the re -renting of any Restricted Units 24 CFR 92.3511. 6. Developer, its successors and assigns, shall not refuse to lease a unit to a holder of a rental voucher under 24 CFR part 887 (Housing Choice Voucher Program) or to a holder of a comparable document evidencing participation in a HOME tenant -based assistance program because of the status of the prospective tenant as a holder of such certificate of family participation, rental voucher, or comparable HOME tenant -based rental assistance document. Total rents charged to the tenant for the tenant's share of rent shall not exceed the allowable rents as described above. 7. Any lease of any of the units must be for not less than one year, unless by mutual agreement between the tenant and the Developer. Should the tenant and Developer agree to a term of less than one year, said agreement shall be expressed in some type of written form, signed by the tenant, and maintained in the tenant's rental file held by the Developer. The lease may not contain any of the following provisions (in which 4of11 80A-247 EXHIBIT 4 references to "owner" shall mean the Developer, its successors or assigns): (a) Agreement by the tenant to be sued, to admit guilt, or to a judgment in favor of the owner in a lawsuit brought in connection with the lease; (b) Agreement by the tenant that the owner may take, hold, or sell personal property of household members without notice to the tenant and a court decision on the rights of the parties. This prohibition, however, does not apply to an agreement by the tenant concerning disposition of personal property remaining in the housing Unit after the tenant has moved out of the Unit. The owner may dispose of this personal property in accordance with state law; (c) Agreement by the tenant not to hold the owner or the owner's agent legally responsible for any action or failure to act, whether intentional or negligent; (d) Agreement of the tenant that the owner may institute a lawsuit without notice to the tenant; (e) Agreement by the tenant that the owner may evict the tenant or household members without instituting a civil court proceeding in which the tenant has the opportunity to present a defense, or before a court decision on the rights of the parties; (f) Agreement by the tenant to waive any right to a trial by jury; (g) Agreement by the tenant to waive the tenant's right to appeal, or to otherwise challenge in court, a court decision in connection with the lease; and (h) Agreement by the tenant to pay attorney's fees or other legal costs even if the tenant wins in a court proceeding by the owner against the tenant. The tenant, however, may be obligated to pay costs if the tenant loses. 8. Developer, its successors or assigns, must adhere to state law requirements with regard to termination of tenancy. 9. Developer shall maintain the improvements on the Property in compliance with all applicable housing quality standards [24CFR 92.504 (c)(6)] and state and local code requirements (California Health and Safety Code section 33418), and shall keep the Property free from any unreasonable accumulation of debris or waste materials. Developer shall also maintain in a healthy condition any landscaping planted on the Property. 10. Developer covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, there shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, mental or physical disability, marital status, national origin or ancestry in the sale, lease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the 5of11 80A-248 EXHIBIT 4 selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property, as required by the Title VI of the Civil Rights Act of 1964, the Fair Housing Act (42 U.S.C. 3601-20) and all implementing regulations, and the Age Discrimination Act of 1975, and all implementing regulations. 11. Not later than five (5) business days prior to the execution of the documents, Developer shall submit to the Executive Director a Management Plan in a form that is acceptable to the Executive Director, including, but not limited to, the components listed below. Approval of the Management Plan must be obtained from the Executive Director not later than the time for the Closing. Developer shall manage the Assisted Units in accordance with the approved Management Plan, including such amendments as may be approved in writing from time to time by the Executive Director, for the term of the income and rent restrictions contained in these Restrictions. The components of the Management Plan shall include: (a) Management Agent. Developer shall submit the name and qualifications of the proposed Management Agent. The Executive Director shall approve or disapprove the proposed Management Agent in writing based on the experience and qualifications of the Management Agent. (b) Management Agreement. Developer shall submit a copy of the proposed management agreement specifying the amount of the management fee, and the relationship and division of responsibilities between Developer and Management Agent. (c) Annual Budget and Projected Cash Flows. Prior to the Closing, and annually thereafter not later than ninety (90) days after the close of each calendar year thereafter until the Loan is repaid in full, Developer shall submit a projected operating budget and cash flow to the Executive Director. The budget and cash flow shall be in a form that is acceptable to the Executive Director. (d) Tenant Selection Policies. Developer shall include in the Management Plan the tenant selection policies in accordance with Section 5, above. 12. If at any time the Agency determines that the units are not being managed or maintained in accordance with the approved Management Plan, the Agency shall send the Developer a detailed description of the management deficiencies (a "Deficiency Notice"). If the deficiencies set forth in the Deficiency Notice are not cured within thirty (30) days (or such longer period as may be reasonably required to cure the deficiency), the Executive Director may require Developer to change management practices or to terminate the management contract and designate and retain a different management agent. The management agreement shall provide that it is subject to termination by Developer without penalty, upon thirty (30) days prior written notice, at the direction of the Executive Director upon failure to cure a Deficiency Notice within the time period specified above. Within ten (10) days following a direction of the Executive Director to replace the management agent in accordance with the terms hereof, the Developer shall select another management agent or make other arrangements satisfactory to the Executive Director or designee for continuing management of the units. 6of11 80A-249 i AMMIM. . 13. The covenants established in these Restrictions and any amendments hereto approved by the Agency and Developer shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency and their respective successors and assigns. These Restrictions shall remain in effect for fifty-five (55) years. hi its discretion, the Agency may defer repayment of the Agency Loan or the Agency may agree to such reasonable modifications to the requirements of these Restrictions, as they may determine are necessary for the continued maintenance and operation of the Assisted Units. The covenants against discrimination shall remain in effect for the period of these Restrictions. 14. Developer shall not request disbursement of Agency funds until the funds are needed to pay eligible costs. The Agency shall have the right to disapprove any request if the Agency determines the request is for an ineligible item or is otherwise not in compliance with or inconsistent with the Loan Agreement and these Restrictions [24 CFR 92.504 (c)(10)]. 15. [RESERVED] 16. If an event of default occurs under the terms of these Restrictions, prior to exercising any remedies hereunder, Agency shall give Developer written notice of such default. If the default is reasonably capable of being cured within thirty (30) days, Developer shall have such period to effect a cure prior to exercise of remedies by the Agency under these Restrictions. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Developer (i) initiates corrective action within said period, and (ii) diligently, continually, and in good faith works to effect a cure as soon as possible, then Developer shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Agency. The Agency is a beneficiary of the terms and provisions of these Restrictions and the covenants herein, both for and in their own right and for the purposes of protecting the interests of the community and other parties, public or private, for whose benefit these Restrictions and the covenants running with the land have been provided. Upon the occurrence of an event of default and the expiration of the notice and cure period specified above, the Agency shall have the right to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which they or any other beneficiaries of these Restrictions and covenants are entitled. 17. The covenants and agreements contained herein shall run with the land and not be personal obligations of Developer. Upon the sale, conveyance or other transfer of the Property (a "Transfer") and the assumption of the obligations hereunder by a transferee, Developer's liability for performance shall be terminated as to any obligation to be performed hereunder after the date of such Transfer. is. The Loan Agreement and all of its attachments shall be enforceable by Agency in accordance with the terms thereof. Each of the Loan Agreement, these Restrictions, the Housing Successor Agency Loan Note and the Housing Successor Agency Loan Deed of Trust provide a means of enforcement by the Agency if Developer 7of11 80A-250 EXHIBIT 4 is in breach of its obligations hereunder and thereunder, including liens on the Property, use and deed restrictions and covenants running with the land. 8of11 80A-251 EXHIBIT 4 IN WITNESS WHEREOF, the parties hereto have caused these Amended and Restated Affordability Restrictions on Transfer of Property to be executed on the date set forth hereinabove. ATTEST: Daisy Gomez Recording Secretary APPROVED AS TO FORM Sonia R. Carvalho General Counsel By: Ryan O. Hodge Assistant Agency Attorney THE HOUSING. AUTHORITY OF THE CITY OF SANTA ANA Steven A. Mendoza Executive Director (Signatures continue on following page) 9of11 80A-252 EXHIBIT 4 DEVELOPER: CORNERSTONE HOUSING PARTNERS LP, a California limited partnership By: JHC-Cornerstone II, LLC, a California limited liability company, its Managing General Partner By: Jamboree Housing Corporation, a California non-profit public benefit corporation, its Managing Member By: _ Name: Title: A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF On , before me, a notary public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (SEAL) 10 of 11 80A-253 EXHIBITS A. Legal Description B. Affordability Restrictions on Transfer of Property (the "Original Restrictions") 11 of 11 80A-254 03:11:3li1 Legal Description The Land referred to herein below is situated in the City of Santa Ana, County of Orange, State of California, and is described as follows: PARCEL ONE: LOTS 7 THROUGH 13 INCLUSIVE OF TRACT 3547 IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 138, PAGES 32 AND 33 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY. PARCEL TWO: PARCEL 1 OF "LOT MERGER NO. 2019-08" RECORDED AUGUST 02, 2019 AS INSTRUMENT NO. 2019000282886 OF OFFICIAL RECORDS. PARCEL THREE: PARCEL 1 OF "LOT MERGER NO. 2019-10" RECORDED AUGUST 02, 2019 AS INSTRUMENT NO. 2019000282887 OF OFFICIAL RECORDS. For conveyancing purposes only: APN 404-033-01 (Affects portion of Parcel Two) APN: 404-033-02 (Affects portion of Parcel Two) APN: 404-032-01 (Affects portion of Parcel Three) APN: 404-032-02 (Affects portion of Parcel Three) APN: 404-031-03 (Affects Lots 8 and 9 of Parcel One) APN: 404-031-01 (Affects Lots 12 and 13 of Parcel One) APN: 404-031-04 (Affects Lot 7 of Parcel One) APN: 404-031-02 (Affects Lots 10 and 11 of Parcel One) 80A-255 v m x w = o0 0o C o0 00 C o0 0o C o0 0o C o0 0o C L � � GO 00 L 00 00 s 00 00 S 00 00 s 00 00 � � � O v1 vl of YJ' Vf v1 y'J vl u1 ~J' v1 N 0 00 V] 0O0 o0 V] eO0 eN 0 V1 0O0 eN0 V] 000 eN0 V] W eN0 V] oM0 V1 O � L } 0 0 E � N O U L b0 O 9 U N N N N N N N O R M h h M M M M C m e A o � p Ci o d o E i U C ai p 0 O C C R Y R C Q o o U Q Q v ^= u c'iy R v ^O a+ U L O O mR R C a�i C U C m aEi Q CC CG fn Q Q R V1 Q Q a a �— U U U U a ✓.i � U A A R N Q Q a A iU. o. in 80A-256 EXHIBIT 4 Exhibit G 90 Housing Successor Agency Loan Agreements 80A-257 _• d O� O 7 Q w o0 00 0o eo eo ee o0 0o eo i. y a �" � ti O O O O O O O O V O � O O O •+ O O p M O y C N N N N N N G u E ► d Q y O o 0 0 0 0 0 0 0 0 � t0.1 A O M o0 00 N M O 00 00 O c C4 0 0 0 a d O n O = aEi ea A c o P. c o c 0. •-1 „ E „ .. ❑ E O Y_ b0 Ottl N ryii y_ cn O N N N N N o. N 80A-258 N 'c N " U " N .E U U U N U 0 U U c c _ 2 .E .E i4 N y Ci N G y G y y y y y u G N U r g N N N N N N O O O O M 0o eo e0 ao e0 00 ao T � 01 � 00 O O O O O O O O O O O O O O O O O O O O O O O O ZZ O H1 N N N oo N �G N N o0 N �O N v C E N E v c v E d o a c ¢ v e o 0 • o w tb 6 fn y y C C d« O 'O bD C C O V o9 a v O N M M M M M M M M M M t6 A tV A N t� A tC A R A a A N N 80A-259 d C C C_ C C_ G C ccC v w ccC v v v �C_+ v v ccC_ v �C+ v ccC v v v m M M M N O M N N O N W Oi CO W G1 W W CO W W M W W C 1p a Boa n o c�o.a aaa o 0 0 v o o O 0 0 0 0 0 0 0 0 o 0 0 0 0 0 0 0 0 0 N N N N N N N O N N N O O O O O O N N N N N N O N O 00 N N N o0 N C U � O E � � d O o ¢ o t y E m CL wi E y E v y E o v A c �.3 E = A p] E o A c �.3 E m a � eu ¢ a a � A `o E m - o E c ?o = c E c .E .aP .2 y � m Q a 0 .°.l v y '- O N V' r-7 td a. s.7 tO a. 1, F a , o N o a. 0 o a , N - N m 80A-260 p N p N O O � pp 00 !n 00 � 00 � W W W o0 00 00 r rn N O\ O O O� VVVYYV V� O� O� Gi T q O O O O O O O O O O O O O p O O O O N O N O O O O O O O O O O N N N N N N N N N (OV O O M � 00 00 M M M V O C N C v E E m� en v o ¢ O .2 Q E o a.o T E v ¢a w¢ cn ¢ a° A¢ m o^ m ^ td a W R a C. w p W w o W y td oP- tE 60. A oC. R oA" A oCW y. P. N N N N m O M M M m M v 80A-261 o o o o O O O M V O N O b T � q O O N p O O O O O O N O N O N O N N M L C 4 N E O U_ °tb Q O � � a E d c 3 L a m t. o'59 c Q m Q N .2 ` L Qa. y iQ m S2 m tLC oa A oa. t0 oa. � o a a a a M H M M M 80A-262 EXHIBIT 5 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Davis Wright Tremalne LLP 865 S. Figueroa Street Suite 2400 Los Angeles, CA 90017 Attn: Nancy B. Clapp, Esq. SUBORDINATION AGREEMENT (CITY HOME LOAN) NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR RIGHTS UNDER CERTAIN AGREEMENTS RELATING TO CERTAIN REAL PROPERTY BECOMING SUBJECT TO, AND OF LOWER PRIORITY THAN, THE LIEN OF A SECURITY INTEREST. THIS SUBORDINATION AGREEMENT (this "Agreement"), made as of the 111 day of September, 2019, by and between the CITY OF SANTA ANA ("Subordinating Party"), whose address is 20 Civic Center Plaza, Santa Ana, California 92701, and MUFG UNION BANK, N.A. ("Bank"), in Its capacity as agent for the CALIFORNIA MUNICIPAL FINANCE AUTHORITY ("Governmental Lender"), whose address Is MUFG Union Bank, N.A., Loan Administration Department, 3151 E. Imperial Highway, 1st Floor, Brea, California 92821, Attention: Manager, is made with reference to the following facts: A. Unless expressly defined herein, all capitalized terms used herein shall have the meanings ascribed to them in Appendix I or Exhibit B attached hereto and made a part hereof. B. Borrower is the owner (or, concurrently with the recording of this Agreement, will be the owner) of the Property, which Property Is more particularly described in Exhibit A attached hereto and made a part hereof. C. Borrower and Subordinating Party have heretofore entered Into or, concurrently herewith, are entering into, those certain loan documents more particularly described in Exhibit B attached hereto (collectively, "Subordinating Party's Loan Documents"), pursuant to the terms of which Subordinating Party shall make to Borrower a Five Million One Hundred Twenty -One Thousand Seven Hundred Thirty - One and 32r100v' Dollar ($5,121,731.32) loan ("Subordinating Party's Loan") which Subordinating Party's Loan is secured by, among other things, that certain Amended and Restated City HOME Deed of Trust and Assignment of Rents ("Subordinating Party's Deed of Trust") dated , 2019, executed by Borrower for the benefit of Subordinating Party, and recorded substantially concurrently herewith in the Official Records of Orange County, California (the "Official Records"), and encumbering the Property and all Improvements to be constructed thereon and that certain Amended and Restated Affordability Restrictions on Transfer of Property (the "Restrictions") dated , 2019, and recorded substantially concurrently herewith in the Official Records, pursuant to the terms of which Borrower agreed, among other things, for Itself and Its successors and assigns, to operate the Project as a low income apartment project in accordance with the terms and conditions set forth therein. Subordinating Parry's Deed of Trust and Sections 3.4 and 18 of the Restrictions are sometimes hereinafter collectively referred to as "Subordinating Party's Security Documents". D. Concurrently herewith, Borrower, Governmental Lender and Bank are entering into the Borrower Loan Agreement, pursuant to the terms of which Governmental Lender shall make to Borrower the Borrower Loan to cover a portion of the cost of constructing the Improvements and certain other costs related thereto, which Borrower Loan is evidenced by the Borrower Note, made by Borrower to the order 4825.9439-0424v3 0096250-000020 80A-263 EXHIBIT 5 of Governmental Lender, and secured by, among other things, the Deed of Trust, executed by Borrower for the benefit of Governmental Lender and Bank, and encumbering the Property and all Improvements to be constructed thereon. The Borrower Loan Agreement, the Borrower Note, the Deed of Trust and all other documents evidencing, securing or pertaining to the Borrower Loan are sometimes hereinafter collectively referred to as the "Borrower Loan Documents". All right, title and Interest of Governmental Lender with respect to the Borrower Loan and the Borrower Loan Documents have been assigned to Bank. E. As a condition precedent to Governmental Lender's and Bank's making the Borrower Loan, Governmental Lender and Bank requires that the Deed of Trust shall unconditionally be and remain at all Umes a lien or charge upon the Project which is prior and superior to the liens or charges of Subordinating Part's Security Documents (but not to the Restrictions, other than Sections 3.4 and 18 of the Restrictions). NOW, THEREFORE, in consideration of Governmental Lender's and Bank's making the Borrower Loan to Borrower, and In consideration of the mutual promises and agreements hereinafter contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce Governmental Lender and Bank to make the Borrower Loan to Borrower, the parties to this Agreement do hereby agree as follows: 1. SUBORDINATION OF SUBORDINATING PARTY'S SECURITY DOCUMENTS. The Deed of Trust, and any and all renewals or extensions thereof and all amendments and modifications hereafter made thereto, and any and all disbursements made by Governmental Lender to or for the account or benefit of Borrower the repayment of which Is secured thereunder, shall unconditionally be and remain at all times a lien or charge against the Project that is prior and superior to the liens or charges of Subordinating Parry's Security Documents (but not to the Restrictions, other than Sections 3.4 and 18 of the Restrictions), to the same extent and purpose as though Subordinating Party's Security Documents had been executed and recorded subsequent to the recording of the Deed of Trust and the making of each disbursement or advance made by Governmental Lender to Borrower the repayment of which Is secured by the Deed of Trust, regardless of whether Borrower, at the time of any such disbursement or advance, may have been in default under the Borrower Loan Agreement, the Deed of Trust, or any of the other the Borrower Loan Documents and regardless of whether Governmental Lender was obligated to make any such disbursement or advance. Notwithstanding the foregoing, Governmental Lender and Bank shall not amend or modify the terms of the Borrower Loan and/or the Borrower Loan Documents without the prior written consent of the Subordinating Party if such amendment or modification has the effect of: (1) increasing or decreasing the amount of the Borrower Loan, except in the case of sums advanced by Governmental Lender or Bank in exercising their rights and remedies under the Borrower Loan Documents or as otherwise provided in Paragraph 2 of this Agreement; (ii) Increasing the annual interest rate(s), including the default rate, above the rate(s) described in the Borrower Note; (Ili) modifying the maturity date to be sooner than the stated maturity date of the Borrower Note; or (iv) having a materially adverse effect on Subordinating Party. For the avoidance of doubt, the Restrictions, except Sections 3.4 and 18 of the Restrictions, shall at all times be prior and superior to the Deed of Trust 2. ALL DISBURSEMENTS UNDER THE BORROWER LOAN SECURED BY THE DEED OF TRUST. Notwithstanding anything to the contrary set forth in the Borrower Loan Agreement or any other agreement among Governmental Lender, Bank and Borrower with respect to the disbursement of all or any portions of the proceeds of the Borrower Loan, any and all disbursements made by Governmental Lender to or for the account or benefit of Borrower or the Project in connection with the following, whether or not Governmental Lender is obligated to make such disbursements pursuant to the Borrower Loan Documents: (a) any costs or expenses Incurred in complying with any laws, rules, regulations, or statutes or any directives of any governmental agencies or authorities having or exercising jurisdiction over the Project; (b) any sums advanced to pay for the cost of completing the construction of the Project, Project cost overruns and/or to lease -up and stabilize the Project made by Governmental Lender or Bank; and (c) any sums advanced by Governmental Lender or Bank for the payment of real estate taxes or assessments or insurance premiums, or any other sums advanced or obligations Incurred by Governmental Lender or Bank in connection with the protection or preservation of any security given to Governmental Lender or Bank with respect to the Borrower Loan, Including, without IlmitaUon, interest thereon shall be deemed to be, and In all events shall be, secured by the Deed of Trust and, as so secured, and regardless of whether Borrower -2- 4825-9439-0424v3 0096250-000020 80A-264 EXHIBIT 5 at the time of any such disbursements may have been In default under the Borrower Loan Documents and regardless of whether Governmental Lender or Bankwere obligated to make any such disbursements, shall be and remain a lien or charge against the Project that is unconditionally prior and superior to the lien and effect of Subordinating Party's Security Documents. 3. APPLICATION OF PAYMENTS UNDER SUBORDINATING PARTY'S LOAN. Until such time as all amounts outstanding under the Borrower Loan have been indefeasibly paid in.full, prior to the occurrence of an Event of Default (as such term is defined In the Borrower Loan Documents), Subordinating Party shall be entitled to receive and retain payments made pursuant to and in accordance with the Subordinating Party's Loan Documents; provided, however, that no such payment is made more than ninety (90) days in advance of Its scheduled due date. Upon the occurrence of an Event of Default under the Borrower Loan Documents, after Subordinating Party receives notice of such Event of Default from Bank with written Instructions directing Subordinating Party not to accept payments from Borrower on account of the Subordinating Party's Loan (Including, but not limited to, principal, Interest, additional interest, late payment charges, default Interest, attorneys' fees, or any other sums secured by Subordinating Party's Deed of Trust), all amounts (including, without limitation, all insurance proceeds and condemnation awards) received by Subordinating Party from, or for the account of, Borrower under Subordinating Party's Loan shall be immediately remitted to Bank at the address set forth above to be applied by Governmental Lender in reduction of amounts outstanding under the Borrower Loan, in such amounts and in such order as Bank shall determine. In the event that any payment is made to Subordinating Party which Is not permitted under this Agreement, such payment shall be held by Subordinating Party in trust for the benefit of Governmental Lender and Bank and shall be paid immediately to Bank for application to the payment of all of indebtedness and obligations remaining unpaid under the Borrower Loan. If Subordinating Party receives written notice from Bank that the Event of Default which gave rise to the Subordinating Parry's obligation not to accept payments has been cured, waived, or otherwise suspended by Bank, the restrictions on payment to Subordinating Party in this Section 3 shall terminate, and Bank shall have no right to any subsequent payments made to Subordinating Party by Borrower prior to Subordinating Parry's receipt of a new notice from Bank of an Event of Default in accordance with this Section 3. Without limiting the complete subordination of the Subordinating Party's Loan to the payment In full of the Borrower Loan, in any bankruptcy, insolvency, receivership or similar proceeding, upon any payment or distribution to creditors, Governmental Lender and Bank shall be paid in full first in cash before the Subordinating Party shall be entitled.to receive any payment or other distribution on account of or in respect to the Subordinating Party's Loan and, until the entire Borrower Loan is paid in full in cash, any payment or distribution to which the Subordinating Party will be entitled but for this Agreement (whether In cash, property or other assets) shall be paid to Bank. 4. . SUBORDINATION TO MODIFICATION OF BORROWER LOAN. If Governmental Lender and Bank extend or otherwise modify the terms of the Borrower Loan (including any amendment or modification which requires the Subordinating Parry's prior written consent pursuant to Paragraph 1 and for which Subordinating Party has granted such consent), Subordinating Party, upon 20 days' prior notice to Subordinating Party, shall execute a new subordination agreement, in the form of this Agreement, confirming Subordinating Party's subordination of the effect of Subordinating Party's Security Documents against the Project to the lien or charge of the Deed of Trust. In the event that consent from the Subordinating Party is not required hereunder or such consent has been obtained, the execution of such new subordination agreement, however, shall not be a condition to the effectiveness of the subordination of Subordinating Party's Security Documents against the Project to the lien or charge of the Deed of Trust, which subordination shall be automatic. 5. SUBORDINATING PARTY'S RIGHT TO CURE DEFAULTS. Upon the occurrence of an Event of Default, Bank shall: (a) concurrently with notifying Borrower of the occurrence of such event of default, notify Subordinating Party at its address set forth above of the occurrence of such event of default; (b) permit Subordinating Party to cure or correct (provided that such event of default is curable) any such event of default within thirty (30) calendar days after receipt of such notice ("Subordinating Party Cure Period"); provided, however, that Governmental Lender and Bank have the continuing right to commence to pursue their respective remedies under the Borrower Loan Documents on account of such default during the Subordinating Party Cure Period, including but not limited to the right to accelerate the Borrower Loan, -3- 4825-9439-0424v.3 0096250-000020 80A-265 EXHIBIT 5 record a notice of default and to obtain a receiver; provided further, that If the cure Is completed during the Subordinating Party Cure Period, Governmental Lender and Bank will rescind any notice of default after reimbursement of all of its costs incurred In connection with the default, including, without limitation, attorneys' fees and court costs; and (c) accept all payments and all acts done by Subordinating Party on behalf of Borrower within the Subordinating Party's Cure Period as though the same had been timely done and performed by Borrower, so that such acts and payments shall fully and totally cure and correct all such defaults, breaches, failures or refusals for all purposes. Subordinating Party shall not be subrogated to the rights of Governmental Lender or Bank under the Borrower Loan Documents by reason of Subordinating Party having cured any default under the Borrower Loan Documents; however, Governmental Lender and Bank acknowledge that, to the extent so provided in the Subordinating Party's Security Documents, amounts advanced or expended by Subordinating Party to cure an event In default under the Borrower Loan Documents may be added to and become a party of the Subordinating Parry's Loan. In the event that an Event of Default occurs and Bank has recorded a notice of default, then for the period from the date of recordation of the notice of default, until the date of recordation of a notice of sale, so long as the noticed default continues, Subordinating Partyshall have the right, but notthe obligation, in lieu of curing any default under the Borrower Loan Documents, to purchase the Funding Loan Note and the Funding Loan Agreement and Bank's rights as agent thereunder subject to Subordinating Party satisfying any requirements under the Funding Loan Agreement to purchase the Funding Loan Note. Such purchase will be accomplished by Subordinating Party paying to Bank the outstanding principal amount of the Borrower Loan, plus all accrued and unpaid interest thereon and any prepayment premium, together with reasonable expenses incurred by Bank in connection therewith (including reasonable attorneys' fees and costs), in exchange for the assignment of the Funding Loan Note without recourse or warranty, except that Bank will warrant that it owns and has all requisite authority to transfer the Funding Loan Note at the time of the transfer. Subordinating Party acknowledges and agrees that Subordinating Party's right to purchase the Funding Loan Note shall unconditionally be and remain at all times subordinate to any right of any senior lender with lien priority to purchase the Funding Loan Note. Borrower acknowledges and agrees, by executing the joinder attached hereto, that after the Funding Loan Note has been assigned to Subordinating Party or its nominee, Bank shall be relieved from all liability to Borrower under or in connection with the Borrower Loan Documents. 6. BANK RIGHT TO CURE DEFAULT UNDER SUBORDINATING PARTY'S LOAN. Upon the occurrence of a default under the Subordinating Party's Loan, Subordinating Party shall: (a) concurrently with notifying Borrower of the occurrence of such event of default, notify Bank at its address set forth above of the occurrence of such default or event of default; (b) permit Bank to cure or correct (provided that such event of default is curable) any such event of default within thirty (30) calendar days after receipt of such notice ("Bank Cure Period"); provided, however, that Subordinating Party has the continuing right to commence to pursue its remedies under the Subordinating Parry's Loan Documents on account of such default during the Bank Cure Period, Including but not limited to the right to accelerate the Subordinating Party's Loan, record a notice of default and to obtain a receiver; provided further, that if the cure is completed during the Bank Cure Period, Subordinating Party will rescind any notice of default after reimbursement of all of its costs incurred in connection with the default, including, without limitation, attomeys' fees and court costs; and (c) accept all payments and all acts done by Bank on behalf of Borrower within the Bank Cure Period as though the same had been timely done and performed by Borrower, so that such acts and payments shall fully and totally cure and correct all such defaults, breaches, failures or refusals for all purposes. 7. SUBORDINATION TO PERMANENT FINANCING. Subordinating Party acknowledges that it has been advised by Borrower that Borrower intends to repay a portion of the amount outstanding under the Borrower Loan, In whole or in part, by obtaining permanent financing In the future by one or more lenders, which permanent financing would be secured by, among other things, a deed of trust or deeds of trust encumbering the Project which would be senior to the effect of Subordinating Party's Security Documents (but not to the Restrictions, other than Sections 3.4 and 18 of the Restrictions. In order to enable Borrower (or its successors or assigns, "Borrower's Successor") to obtain permanent financing to repay the Borrower Loan, Subordinating Party hereby agrees that within twenty (20) days after written request by Borrower or Borrower's Successor, Subordinating Party shall execute a subordination agreement (In form and substance substantially similar to this Agreement) subordinating the effect of -4- 4825-9439-0424v.3 0096250-000020 80A-266 EXHIBIT 5 Subordinating Party's Security Documents to the lien and effect of one (1) or more deeds of trust encumbering the Project in an amount not to exceed //![$8,800,000]1//. 8. RECEIPT AND APPLICATION OF INSURANCE PROCEEDS AND CONDEMNATION AWARDS: RECEIPT AND APPLICATION OF PROCEEDS FROM BONDS. (a) Receipt and Application of Insurance Proceeds and Condemnation Awards. Notwithstanding anything stated to the contrary in any of Subordinating Partys Security Documents, so long as the Deed of Trust continues to encumber all or portions of the Project, all Insurance proceeds that may become available from time to time as a result of damage or destruction to all or portions of the Improvements and all condemnation awards that may become available from time to time as a result of the condemnation of all or portions of the Project shall be held by Bank, disbursed by Bank and applied by Bank in accordance with the terms and conditions of the Deed of Trust and the other the Borrower Loan Documents and Subordinating Party shall have no right to hold, disburse or apply any of such proceeds and/or awards. Without limiting the generality of the foregoing, the Bank shall have all approval, consent and oversight rights in connection with any Insurance claims or condemnation proceedings related to the Property and any decision regarding the use of insurance proceeds after a casualty loss or condemnation awards and Subordinating Party shall have no right to object to any such action or approval taken by Bank and shall consent thereto and be bound thereby. Subordinating Party shall execute such documents as Bank may require from time to time in order to assure compliance with the provisions of this Paragraph 8(a). (b) Receipt and Application of Proceeds from Bonds. With respect to all labor and material bonds and/or completion bonds that are Issued from time to time to assure payment and completion of the Improvements and which name Governmental Lender, Bank and Subordinating Parry (or any other party) as dual obligees, all proceeds that may become available from time to time under such bonds shall be held by Bank and disbursed by Bank and Subordinating Party shall have no right to hold or disburse any of such proceeds. Subordinating Parry shall execute such documents as Bank may require from time to time In order to assure compliance with the provisions of this Paragraph 8(b). 9. NOTICES. Any notice, demand or request required or permitted to be delivered hereunder shall be deemed to have been duly and properly given at the time of such delivery if personally delivered (which shall include (1) delivery by means of professional overnight courier service which confirms receipt in writing and (It) transmission by telecopier or telefacslmlle machine capable of confirming transmission and receipt), or if mailed, forty-eight (48) hours after deposit In United States registered or certified mall, postage prepaid, return receipt requested, addressed to Subordinating Party, Governmental Lender or Bank, as the case may be, at their addresses set forth above, 10. ENTIRE AGREEMENT. This Agreement shall be the whole and only agreement with respect to the subordination of the effect of Subordinating Party's Security Documents to the lien or charge of the Deed of Trust and all disbursements and advances made thereunder, and shall supersede and cancel any prior agreements as to such subordination, including without limitation any provisions contained in Subordinating Party s Security Documents that provide for the subordination of the effect thereof to one or more deeds of trust. 11. JVALS AND ACKNOWLEDGEMENTS. Subordinating Party hereby agrees and acknowledges as follows: (a) For purposes of this Agreement, Subordinating Parry acknowledges that Subordinating Parry has been provided the opportunity to review the Borrower Loan Documents before executing this Agreement; (b) Governmental Lender and Bank, In making disbursements pursuant to the Borrower Loan Agreement, are under no obligation or duty to insure, nor has Governmental Lender or Bank represented that it will insure, the proper application of such proceeds by the person(s) to whom -5- 4825-9439-0424v.3 0096250-000020 80A-267 EXHIBIT 5 Governmental Lender or Bank disburses such proceeds, and any application or use of such proceeds for purposes other than as provided in any such agreement shall not defeat or render invalid, in whole or in part, the subordination provided for in this Agreement; (c) Governmental Lender and Bank have not made any warranty or representation of any kind or nature whatsoever to Subordinating Party with respect to (i) the application of the proceeds of the Borrower Loan being made by Governmental Lender to Borrower upon the security of the Deed of Trust, (11) the value of the Property, the Improvements to be constructed thereon pursuant to the Borrower Loan Agreement, or the marketability or value thereof upon completion of such construction, or (it!) the ability of Borrower to honor Its covenants and agreements with Governmental Lender, Bank or Subordinating Party; (d) Governmental Lender's and/or Bank's release of any security for the Borrower Loan, including, without limitation, the reconveyance of any portion(s) of the Project from the lien of the Deed of Trust shall not constitute a waiver or relinquishment of Subordinating Party's unconditional subordination of the liens or charges of Subordinating Parry's Security Documents against the Project to the lien or charge of the Deed of Trust; (a) Governmental Lender would not make the Borrower Loan to Borrower absent the execution of this Agreement by Subordinating Party; (f) Governmental Lender and Bank have no duty to disclose to Subordinating Party any facts Governmental Lender or Bank may now know or hereafter know about Borrower or the partners or successors of Borrower, regardless of whether (1) Governmental Lender or Bank has reason to believe that any such facts may Increase materially the risk beyond that which Subordinating Party Intends to assume, (ii) Governmental Lender or Bank may have reason to believe that such facts are unknown to Subordinating Party, or (III) Governmental Lender or Bank has a reasonable opportunity to communicate such facts to Subordinating Party, it being understood and agreed that Subordinating Party is fully responsible for being and keeping Informed of the financial condition of Borrower and/or any partners or successors of Borrower and of all circumstances bearing on the risk of non-payment of any indebtedness of Borrower to Governmental Lender described in this Agreement; (g) Subordinating Party has made such independent legal and factual inquiries and examinations as Subordinating Party deems necessary or desirable, and Subordinating Party has relied solely on said independent inquiries and examinations In entering into this Agreement; (h) The Subordinating Party's Loan Documents as described in Exhibit V attached hereto are all of the documents evidencing, securing or pertaining to Subordinating Partys Loan, true, correct and complete copies thereof have been delivered to Bank and the Subordinating Parry's Loan Documents have not been amended or modified except as reflected thereon; (1) As of the date set forth above, the Subordinating Party has no offset, defense, deduction or claim against Borrower under any of the Subordinating Party's Loan Documents, Borrower is not in default under any of the Subordinating Parry's Loan Documents and the Subordinating Party knows of no event that has occurred or is continuing which, with the passage of time or the giving of notice, or both would constitute a default under any of the Subordinating Party's Loan Documents; 0) Each and every covenant, condition and obligation contained in the Subordinating Parry's Loan Documents required to be performed or satisfied as of the date hereof, and each and every matter required to be approved the Subordinating Party as of the date hereof, has been satisfied and/or approved and/or waived as applicable, Including, without limitation, all conditions precedent to Borrower's right to commence construction of the Improvements, all of which conditions have been satisfied and/or approved and/or waived, as applicable, as of the date set forth above; -8- 4825-9439-0424v.3 0096250-000020 FOOTITMKTIOI EXHIBIT 5 (k) Under Subordinating Party's Loan Documents, Borrower is not obligated to commence construction of the Improvements until . 20_, and construction of the Improvements need not be completed until 20_, subject to extension for force majeure; (1) Notwithstanding anything stated to the contrary in the Subordinating Parry's Loan Documents, (i) the limited partner in Borrower shall have the right at any time and from time to time, without the approval or consent of the Subordinating Party, to assign, sell or otherwise transfer to any third party Its limited partnership Interest in Borrower, provided that Borrower provides notice to the Subordinating Party of such assignment, sale or transfer concurrently with such assignment, sale or transfer, and (11) the general partner in Borrower shall have the right, without the approval or consent of the Subordinating Party, to pledge or otherwise encumber Its partnership Interest in Borrower to Govemmental Lender and Bank and the foreclosure of such pledge by Governmental Lender or Bank shall not cause an event of default under the Subordinating Parry's Loan Documents; (m) Notwithstanding anything slated to the contrary In the Subordinating Party's Loan Documents, Subordinating Party's Interest in the plans and specifications and all data, drawings, contracts and agreements relating thereto and all contracts and agreements relating to the construction of the Improvements shall be subject and subordinate to Governmental Lender's and Bank's Interest in the same; (n) Notwithstanding anything stated to the contrary In the Subordinating Party's Loan Documents, Subordinating Party's rights in and to the leases and rents of the Property shall be subject and subordinate to the rights of Governmental Lender and Bank to same; and (o) Notwithstanding anything stated to the contrary in the Subordinating Parry's Loan Documents, the occurrence of an Event of Default under the Borrower Loan Documents shall not in and of itself constitute a default or an event of default under any of the Subordinating Party's Loan Documents unless the occurrence of such event shall constitute a separate default under the Subordinating Parry's Loan Documents. (p) The subordination of the Subordinating Partys Loan shall continue in the event that any payment with respect to any Borrower Loan Document (whether by or on behalf of Borrower, as proceeds of security or enforcement of any right of set-off or otherwise) Is for any reason repaid or returned to Borrower or its Insolvent estate, or avoided, set aside or required to be paid to Borrower, a trustee, a receiver or other similar party under any bankruptcy, insolvency or receivership or similar law under any bankruptcy, Insolvency, receivership or similar proceeding. In such event, the Borrower Loan or any part thereof originally Intended to be satisfied shall be deemed to be reinstated and outstanding to the extent of any repayment, return or other action, as If such payment on account of the Borrower Loan had not been made. (q) Subordinating Party shall not commence in or join with any other creditor In commencing any bankruptcy, insolvency, receivership or similar proceeding involving Borrower and Subordinating Party shall not initiate any action, motion or request in any such proceeding involving any other person or entity, which seeks the consolidation of some or all of the assets of Borrower into such proceeding. in the event of any such proceeding relating to Borrower or the Property or, in the event of any such proceeding relating to any other person or entity into which (notwithstanding the covenant in the first sentence of this clause) the assets or interests of Borrower are consolidated, then In either event, the Borrower Loan shall first be paid in full before Subordinating Party shall be entitled to receive or retain any payment or distribution with respect to the Subordinating Party s Loan. Subordinating Party agrees that (i) the Bank shall receive all payments and distributions of every kind or character In respect of the Subordinating Party's Loan to which the Subordinating Parry would otherwise be entitled, before the subordination provisions of this Agreement (including, without limitation, any payments or distributions during the pendency of any bankruptcy, insolvency, receivership or similar proceeding involving Borrower or the. Property) until the Borrower Loan is repaid in full, and (11) the subordination of the Subordinating Party's Loan and the Subordinating Party's Security Documents shall not be affected in any way by the Bank electing, under Section 1111(b) of the Federal Bankruptcy Code, to have its claim treated as being a fully secured claim. In addition, Subordinating Party hereby covenants and agrees that, in connection with -7- 4825-9439-0424v.3 0096250-000020 80A-269 EXHIBIT 5 such a proceeding involving Borrower, neither Subordinating Party nor any of its affiliates shall (I) make or participate In a loan facility to or for the benefit of Borrower on a basis that is senior to or par! passu with the liens and interests held by Governmental Lender and Bank pursuant to the Borrower Loan Documents and (!I) not contest the continued accrual of Interest on the Borrower Loan, In accordance with and at the rate specified in the Borrower Loan Documents, both for periods before and for periods after commencement of such proceedings. 12. ATTORNEYS' FEES. If either Subordinating Party, Governmental Lender or Bank shall bring an action against the other by reason of the breach of any covenant, provision, or condition of this Agreement, or otherwise arising out of this Agreement, the unsuccessful party shall pay to the prevailing party reasonable attorneys' fees, which fees shall be payable whether or not any action Is prosecuted to judgment. The term "prevailing party" shall Include, without limitation, a party who brings an action against the other by reason of the other's breach or default and obtains substantially the relief sought, whether by compromise, settlement, orjudgment. 13. ESTOPPEL CERTIFICATES. Either party shall, within twenty (20) days following the other party's written request therefor, execute and deliver to such requesting party an estoppel certificate in form and substance reasonably satisfactory to the requesting party. 14. GOVERNING JURISDICTION. This Agreement shall be governed by the laws of the State of California and shall be binding upon, and shall inure to the benefit of, the parties to this Agreement and their respective successors and assigns. 15. SEVERABILITY. In case one or more of the provisions contained in this Agreement shall for any reason be held to be Invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions hereof and this Agreement shall be construed as if such Invalid, illegal or unenforceable provision had never been contained herein unless the effect thereof would materially alter the benefits or burdens hereof to the parties hereto. 16. THIRD PARTIES. Subordinating Party recognizes that Governmental Lender and Bank may show copies of this Agreement to other Institutional lenders who are interested in the matters covered In this Agreement and Subordinating Party agrees that such other institutional lenders may also materially rely upon the representations, warranties and agreements made by the Subordinating Party In this Agreement. 17. COUNTERPARTS. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original but all of which together shall constitute but one and the same Instrument. 18, WAIVER OF JURY TRIAL. To the extent permitted by law, In connection with any action or proceeding, whether brought in state or federal court, the Subordinating Party and Bank hereby expressly, intentionally and deliberately waive any right they may otherwise have to trial by jury of any Claim (as defined below). 19. JUDICIAL REFERENCE. If the waiver of jury trial set forth herelnabove Is not enforceable under the laws of the state in which the Property Is located, then the parties hereby agree that all Claims, Including any and all questions of law or fact relating thereto, shall, at the written request of any party, be determined by Reference (as hereinafter defined) as set forth hereinbelow: (a) Selection Or Appointment Of Referee. The Bank and Subordinating Party shall select a single neutral referee, who shall be a retired state or federal judge. In the event that the Bank and Subordinating Party cannot agree upon a referee, the referee shall be appointed by the court. (b) Conduct Of Reference. Except as otherwise provided In this Agreement, the Reference shall be conducted pursuant to the laws of the state in which the Property is located. The referee -8- 4825-9439-0424v.3 0096250-000020 80A-270 EXHIBIT 5 shall determine all issues relating to the applicability, interpretation, legality and enforceability of the Borrower Loan Documents or Funding Loan Documents. The referee shall report a statement of decision to the court. The Bank and Subordinating Party shall equally bear the fees and expenses of the referee, unless the referee otherwise provides In the statement of decision. (c) Provisional Remedies, Self -Help And Foreclosure. No provision of this Agreement shall limit the right of any party to (i) exercise self-help remedies Including, without limitation, setoff, (il) foreclose against or sell any collateral, by power of sale or otherwise or (lii) obtain or oppose provisional or ancillary remedies from a court of competent jurisdiction before, after or during the pendency of the Reference. The exercise of, or opposition to, any such remedy does not waive the right of any party to a Reference pursuant to this Agreement. (d) No Decision By Jurv. The parties hereby acknowledge that If a referee Is selected or appointed to determine the Claims, then the Claims will not be decided by a jury. (e) Miscellaneous. In the event that multiple Claims are asserted, some of which are not subject to this Section, the parties agree to stay the proceedings of the Claims not subject to this Section until all other Claims are resolved in accordance with this Section. In the event that Claims are asserted against multiple parties, some of whom are not subject to this Section, the Parties agree to sever the Claims subject to this Section and resolve them In accordance with this Section. (f) Claim. "Claim" shall mean any claim, cause of action, action, dispute or controversy between or among the parties, whether sounding in contract, tort or otherwise, which arises out of or relates to: (1) any of the Borrower Loan Documents or the Funding Loan Documents; (ii) and negotiations or communications relating to any of the Borrower Loan Documents or the Funding Loan Documents, whether or not incorporated into the Borrower Loan Documents or the Funding Loan Documents or any indebtedness evidenced thereby; or (lil) any alleged agreements, promises, representations or transactions in connection therewith. (g) Reference. "Reference" shall mean ajudicial reference conducted pursuant to this Agreement and in accordance with the laws of the state in which the Property is located, as in effect at the time the referee is selected or appointed. [Signature Pages Follow] -g- 4825-9439-0424v.3 0096250-000020 80A-271 EXHIBIT 5 WHEREAS, this Subordination Agreement has been executed by the parties as of the date first written above. SUBORDINATING PARTY: CITY OF SANTA ANA Kristine Ridge City Manager ATTEST: Daisy Gomez Recording Secretary APPROVED AS TO FORM: SONIA R. CARVALHO, City Attorney Rya . Hddbe Assistant City Attorney RECOMMENDED FOR APPROVAL: Steven A. Mendoza Executive Director Community Development Agency (Signature Page to Subordination Agreement (City HOME Loan)] 4825-9439-0424r.3 0096250-000020 80A-272 EXHIBIT 5 BANK: MUFG UNION BANK, N.A., a national banking association 0 [Name] [Title] [Signature Page to Subordination Agreement (City HOME Loan)] U25-9439-0424v3 0096250-000020 80A-273 EXHIBIT 5 JOINDER Unless expressly defined herein, all capitalized terms used herein shall have the same meanings ascribed to them in the Subordination Agreement (the "Subordination Agreement") to which this Joinder is attached. The undersigned hereby acknowledges receipt of a copy of the Subordination Agreement and, as fee owner of the Property, hereby consents to, approves and agrees to be bound by all of the terms and conditions set forth in the Subordination Agreement. BORROWER: CORNERSTONE HOUSING PARTNERS LP, a California limited partnership By: JHC-Cornerstone II, LLC, a California limited liability company, its Managing General Partner By: Jamboree Housing Corporation, a California nonprofit public benefit corporation, its Managing e er By: Add [Name] cA [title] C�tCF DEUd2Dl�/LGNr �FC�GC1 [Joinder to Subordination Agreement (City HOME Loan)] 4825-9439-0424v.3 0096250-000020 80A-274 *W 11:311P ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California ) )as County of orr"d On 9174 , 2019 before me, a Notary Public, personally appeared M it i Ke-I M&-rslc who proved to me on the basis of satisfactory evidence to be the person (s) whose name (s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same In his/her their authorized capacity (les), and that by his/her/their signature (s) on the Instrument the person (s), or the entity upon behalf of which the person (s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. LAMMI , A MEDELLIN Notary Public - Calllornla Z orange County z commission # 2153187 My Comm. Ex Tres Jun 11. 2020 � Signaturee�^'d" t�l (Seal) 4825-9439-0424v.3 0096250-MO20 80A-275 EXHIBIT 5 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the Identity of the Individual who signed the document to which this certificate Is attached, and not the truthfulness, accuracy, or validity of that document. State of California ss County of On , 2019 before me, a Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person (s) whose name (s) is/are subscribed to the within Instrument and acknowledged to me that he/she/they executed the same In his/her their authorized capacity (!as), and that by his/her/their signature (s) on the instrument the person (s), or the entity upon behalf of which the person (s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 4825-9439-0424v.3 009G250-000020 80A-276 EXHIBIT 5 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California ) ) ss County of _ 1 On . 2019 before me, a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person (s) whose name (s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her their authorized capacity (ies), and that by his/her/their signature (s) on the Instrument the person (s), or the entity upon behalf of which the person (s) acted, executed the Instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 4825-943M424v.3 W96250-M020 80A-277 EXHIBIT 5 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the Identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California as County of On . 2019 before me, a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person (s) whose name (s) islare subscribed to the within Instrument and acknowledged to me that he/she/they executed the same in hislhertheir authorized capacity ([as), and that by his/her/their signature (s) on the instrument the person (s), or the entity upon behalf of which the person (s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seal) 4625-9439-0424v.3 0096250-000020 80A-278 EXHIBIT 5 EXHIBIT "A" LEGAL DESCRIPTION APN: EXHIBIT ON 4825.9439.0424v.3 0096250-000020 80A-279 EXHIBIT 5 EXHIBIT "B" SUBORDINATING PARTY'S LOAN DOCUMENTS 1. Amended and Restated HOME Loan Agreement dated 2019, by and between Subordinating Party and Borrower (the "Subordinating Party's Loan Agreement"). 2. Amended and Restated City HOME Loan Note Secured by Subordinated Deed of Trust to the City of Santa Ana, California dated , 2019, executed by Borrower to the order of Subordinating Party in the face principal amount of $5,121,731.32. 3. Amended and Restated City HOME Deed of Trust and Assignment of Rents dated , 2019, executed by Borrower for the benefit of Subordinating Party, recorded in the Official Records substantially concurrently herewith. 4. Amended and Restated Affordability Restrictions on Transfer of Property dated _ 2019, by and between Subordinating Party and Borrower, recorded in the Official Records substantially concurrently herewith. EXHIBIT "B" 4825-943M424v.3 0096250A00020 FO 1 • l EXHIBIT 5 APPENDIX I (Appendix I - Definitions) As used in the agreement to which this Appendix I Is attached, and as used In this Appendix I, the following terms shall have the indicated meanings: "Allocation Committee" shall mean the California Tax Credit Allocation Committee and any successor governmental agency appointed to carry out the obligations of the Allocation Committee. "Bank" shall mean MUFG Union Bank, N.A., acting in its capacity as holder of the Funding Loan Note and as assignee of and agent for the Governmental Lender, pursuant to the Funding Loan Agreement, Its successors and assigns. "Borrower° shall mean Cornerstone Housing Partners LP, a California limited partnership. "Borrower Loan" shall mean the ///[$17,250,000]/// construction and permanent loan to be made by Governmental Lender to Borrower, pursuant to the Borrower Loan Agreement. "Borrower Loan Agreement" shall mean the Construction and Permanent Loan Agreement (Multifamily Housing Back to Back Loan Program) dated September 1, 2019, executed by Borrower, Governmental Lender and Bank. "Borrower Loan Documents" shall mean the Borrower Loan Agreement, the Borrower Note, the Deed of Trust and all other documents evidencing, securing or pertaining to the Borrower Loan. "Borrower Note" shall mean the Promissory Note (Multifamily Housing Back to Back Loan Program) in the amount of ///[$17,250,000]//l dated September 1, 2019, executed by Borrower in favor of Governmental Lender. "Code(s)" shall mean the Internal Revenue Code of 1986, as amended from time to time, or the corresponding provisions of any successor federal income lax law and, If applicable, the California Revenue and Taxation Code, as amended from time to time, or the corresponding provisions of any successor state Income tax law. Any reference to a particular provision of the Code(s) shall include any amendment of such provision or the corresponding provision of any successor federal Income tax law or state Income tax law. "Deed of Trust" shall mean that certain Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (Construction Trust Deed) (Multifamily Housing Back to Back Loan Program) of even date of the Borrower Note, executed by Borrower for the benefit of Governmental Lender and Bank and encumbering the Property. "Funding Loan Agreement" shall mean the Funding Loan Agreement between the Governmental Lender and the Bank In connection with the Issuance of the Funding Loan Note. "Funding Loan Note" shall mean that certain Governmental Lender Housing Revenue Note (Cornerstone Apartments) 2019 Series A, executed by Governmental Lender In favor of Bank In the principal amount of///[$17,250,000]N/. "General Partner(s)" shall mean JHC-Cornerstone 11, LLC, a California limited liability company. "Governmental Lender" shall mean the California Municipal Finance Authority, a joint exercise of powers agency, duly organized and existing under the laws of the State of California. 4925.9439-0421v.3 0096250-000020 80A-281 EXHIBIT 5 "Improvements" shall mean a 126-unit low income apartment complex, together with related appurtenances now or hereafter located on the Property. "Partnership Agreement" shall mean that certain N[Agreement of Limited Partnershipy// of Borrower dated September _, 2019, as the same has been or may be amended from time to time. "Property" shall mean certain real property located In the City of Santa Ana, County of Orange, State of California, as more particularly described in the Deed of Trust. "Project° shall mean the Property and the Improvements. "Tax Credit Investor" shall mean "Tax Credits" shall mean low income housing tax credits allocated under Section 42 of the Internal Revenue Code of 1986, as amended, pursuant to the terms of the Tax Credit Allocation Documents. "Tax Credit Allocation Documents" shall mean the Tax Credit Application, the Preliminary Reservation, the Final Reservation and such other documents as have or may be Issued by the Allocation Committee from time to time with respect to the Tax Credits. "Tax Credit Application" shall mean the 20_ Low -Income Housing Tax Credit Application submitted to the Allocation Committee to apply for Tax Credits with respect to the Project. Borrower's address for purposes of notices is as follows:. Cornerstone Housing Partners LP c/o Jamboree Housing Corporation 17701 Cowan Avenue, Suite 200 Irvine, Californla 92614 Attention: Laura Archuleta Tax Credit Investor's address for purposes of notices Is as follows: Attention: _ Telephone No.: Telecopier No.: General Partner(s)' address for purposes of notices Is as follows: JHC-Cornerstone II, LLC c/o Jamboree Housing Corporation 17701 Cowan Avenue, Suite 200 Irvine, California 92614 Attention: Laura Archuleta Governmental Lender's address for purposes of notices Is as follows: California Municipal Finance Authority 2111 Palomar Road, Suite 320 Carlsbad, California 92011 Attention: John P. Stoecker, Finance Advisor 48259439-0424v.3 OD96250-000020 Icomemtom] 80A-282 EXHIBIT 6 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Davis Wright Tremalne LLP 865 S. Figueroa Street Suite 2400 Los Angeles, CA 90017 Attn: Nancy B. Clapp, Esq. ABOVE SUBORDINATION AGREEMENT (HOUSING SUCCESSOR AGENCY LOAN) NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR RIGHTS UNDER CERTAIN AGREEMENTS RELATING TO CERTAIN REAL PROPERTY BECOMING SUBJECT TO, AND OF LOWER PRIORITY THAN, THE LIEN OF A SECURITY INTEREST. THIS SUBORDINATION AGREEMENT (this "Agreement"), made as of the Is' day of September, 2019, by and between the HOUSING AUTHORITY OF THE CITY OF SANTA ANA SERVING AS THE HOUSING SUCCESSOR AGENCY TO THE FORMER COMMUNITY REDEVELOPMENT AGENCY ("Subordinating Party"), whose address is 20 Civic Center Plaza, Santa Ana, California 92701, and MUFG UNION BANK, N.A. ("Bank"), in its capacity as agent for the CALIFORNIA MUNICIPAL FINANCE AUTHORITY ("Governmental Lender"), whose address is MUFG Union Bank, N.A., Loan Administration Department, 3151 E. Imperial Highway, 1 6r Floor, Brea, California 92821, Attention: Manager, is made with reference to the following facts: A. Unless expressly defined herein, all capitalized terms used herein shall have the meanings ascribed to them in Appendix I or Exhibit B attached hereto and made a part hereof. B. Borrower is the owner (or, concurrently with the recording of this Agreement, will be the owner) of the Property, which Property is more particularly described In Exhibit A attached hereto and made a part hereof. C. Borrower and Subordinating Party have heretofore entered into or, concurrently herewith, are entering Into, those certain loan documents more particularly described in Exhibit B attached hereto (collectively, 'Subordinating Parry's Loan Documents"), pursuant to the terms of which Subordinating Party shall make to Borrower a and /100t" Dollar ($ 1 loan ("Subordinating Party's Loan") which Subordinating Party's Loan Is secured by, among other things, that certain ///[Amended and Restated Deed of Trust and Assignment of Rents]I// ("Subordinating Party's Deed of Trust") dated 2019, executed by Borrower for the benefit of Subordinating Party, and recorded substantially concurrently herewith in the Official Records of Orange County, Californla (the "Official Records"), and encumbering the Property and all Improvements to be constructed thereon and that certain ///[Amended and Restated Affordability Restrictions on Transfer of Property]I// (the "Restrictions") dated , 2019, and recorded substantially concurrently herewith In the Official Records, pursuant to the terms of which Borrower agreed, among other things, for itself and Its successors and assigns, to operate the Project as a low income apartment project in accordance with the terms and conditions set forth therein. Subordinating Party's Deed of Trust and Sections and of the Restrictions are sometimes hereinafter collectively referred to as "Subordinating Party's Security Documents". D. Concurrently herewith, Borrower, Governmental Lender and Bank are entering into the Borrower Loan Agreement, pursuant to the terms of which Governmental Lender shall make to Borrower 4920-2714•25&W.4 009625MC0020 80A-283 EXHIBIT 6 the Borrower Loan to cover a portion of the cost of constructing the Improvements and certain other costs related thereto, which Borrower Loan is evidenced by the Borrower Note, made by Borrower to the order of Governmental Lender, and secured by, among other things, the Deed of Trust, executed by Borrower for the benefit of Governmental Lender and Bank, and encumbering the Property and all Improvements to be constructed thereon. The Borrower Loan Agreement, the Borrower Note, the Deed of Trust and all other documents evidencing, securing or pertaining to the Borrower Loan are sometimes hereinafter collectively referred to as the "Borrower Loan Documents". All right, title and Interest of Governmental Lender with respect to the Borrower Loan and the Borrower Loan Documents have been assigned to Bank. E. As a condition precedentto Governmental Lender's and Bank's making the Borrower Loan, Governmental Lender and Bank requires that the Deed of Trust shall unconditionally be and remain at all times a lien or charge upon the Project which Is prior and superior to the liens or charges of Subordinating Party's Security Documents (but not to the Restrictions, other than Sections and of the Restrictions). NOW, THEREFORE, in consideration of Governmental Lender's and Bank's making the Borrower Loan to Borrower, and In consideration of the mutual promises and agreements hereinafter contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and In order to induce Governmental Lender and Bank to make the Borrower Loan to Borrower, the parties to this Agreement do hereby agree as follows: 1. SUBORDINATION OF SUBORDINATING PARTY'S SECURITY DOCUMENTS. The Deed of Trust, and any and all renewals or extensions thereof and all amendments and modifications hereafter made thereto, and any and all disbursements made by Governmental Lender to or for the account or benefit of Borrower the repayment of which is secured thereunder, shall unconditionally be and remain at all times a lien or charge against the Project that is prior and superior to the liens or charges of Subordinating Party's Security Documents (but not to the Restrictions, other than Sections and of the Restrictions), to the same extent and purpose as though Subordinating Party's Security Documents had been executed and recorded subsequent to the recording of the Deed of Trust and the making of each disbursement or advance made by Governmental Lender to Borrower the repayment of which Is secured by the Deed of Trust, regardless of whether Borrower, at the time of any such disbursement or advance, may have been In default under the Borrower Loan Agreement, the Deed of Trust, or any of the other the Borrower Loan Documents and regardless of whether Governmental Lender was obligated to make any such disbursement or advance. Notwithstanding the foregoing, Governmental Lender and Bank shall not amend or modify the terms of the Borrower Loan and/or the Borrower Loan Documents without the prior written consent of the Subordinating Party if such amendment or modification has the effect of: (1) Increasing or decreasing the amount of the Borrower Loan, except In the case of sums advanced by Governmental Lender or Bank In exercising their rights and remedies under the Borrower Loan Documents or as otherwise provided In Paragraph 2 of this Agreement; (il) Increasing the annual interest rate(s), including the default rate, above the rate(s) described in the Borrower Note; (iii) modifying the maturity date to be sooner than the stated maturity date of the Borrower Note; or (iv) having a materially adverse effect on Subordinating Party. For the avoidance of doubt, the Restrictions, except Sections and of the Restrictions, shall at all times be prior and superior to the Deed of Trust 2. ALL DISBURSEMENTS UNDER THE BORROWER LOAN SECURED BY THE DEED OF TRUST. Notwithstanding anything to the contrary set forth in the Borrower Loan Agreement or any other agreement among Governmental Lender, Bank and Borrowerwith respect to the disbursement of all or any portions of the proceeds of the Borrower Loan, any and all disbursements made by Governmental Lender to or for the account or benefit of Borrower or the Project In connection with the following, whether or not Governmental Lender is obligated to make such disbursements pursuant to the Borrower Loan Documents: (a) any costs or expenses incurred in complying with any laws, rules, regulations, or statutes or any directives of any governmental agencies or authorities having or exercising jurisdiction over the Project; (b) any sums advanced to pay for the cost of completing the construction of the Project, Project cost overruns and/or to lease -up and stabilize the Project made by Governmental Lender or Bank; and (c) any sums advanced by Governmental Lender or Bank for the payment of real estate taxes or assessments or Insurance premiums, or any other sums advanced or obligations incurred by Governmental Lender or Bank -2- 4820-2714-2560v.4 0096250-000020 F- ' • • I EXHIBIT 6 in connection with the protection or preservation of any security given to Governmental Lender or Bank with respect to the Borrower Loan, including, without limitation, interest thereon shall be deemed to be, and In all events shall be, secured by the Deed of Trust and, as so secured, and regardless of whether Borrower at the time of any such disbursements may have been in default under the Borrower Loan Documents and regardless of whether Governmental Lender or Bankwere obligated to make any such disbursements, shall be and remain a lien or charge against the Project that is unconditionally prior and superior to the lien and effect of Subordinating Party's Security Documents. 3. ' APPLICATION OF PAYMENTS UNDER SUBORDINATING PARTY'S LOAN. Until such time as all amounts outstanding under the Borrower Loan have been indefeasibly paid in full, prior to the occurrence of an Event of Default (as such term Is defined in the Borrower Loan Documents), Subordinating Party shall be entitled to receive and retain payments made pursuant to and In accordance with the Subordinating Parry's Loan Documents; provided, however, that no such payment Is made more than ninety (90) days in advance of Its scheduled due date. Upon the occurrence of an Event of Default under the Borrower Loan Documents, after Subordinating Party receives notice of such Event of Default from Bank with written instructions directing Subordinating Party not to accept payments from Borrower on account of the Subordinating Party's Loan (including, but not limited to, principal, Interest, additional interest, late payment charges, default interest, attorneys' fees, or any other sums secured by Subordinating ParVs Deed of Trust), all amounts (Including, without limitation, all insurance proceeds and condemnation awards) received by Subordinating Party from, or for the account of, Borrower under Subordinating Party's Loan shall be immediately remitted to Bank at the address set forth above to be applied by Governmental Lender in reduction of amounts outstanding under the Borrower Loan, in such amounts and In such order as Bank shall determine. In the event that any payment Is made to Subordinating Party which Is not permitted under this Agreement, such payment shall be held by Subordinating Party in trust for the benefit of Governmental Lender and Bank and shall be paid immediately to Bank for application to the payment of all of indebtedness and obligations remaining unpaid under the Borrower Loan. If Subordinating Party receives written notice from Bank that the Event of Default which gave rise to the Subordinating Parry's obligation not to accept payments has been cured, waived, or otherwise suspended by Bank, the restrictions on payment to Subordinating Party in this Section 3 shall terminate, and Bank shall have no right to any subsequent payments made to Subordinating Party by Borrower prior to Subordinating Party's receipt of a new notice from Bank of an Event of Default in accordance with this Section 3. Without limiting the complete subordination of the Subordinating Party's Loan to the payment In full of the Borrower Loan, in any bankruptcy, insolvency, receivership or similar proceeding, upon any payment or distribution to creditors, Governmental Lender and Bank shall be paid in full first in cash before the Subordinating Party shall be entitled to receive any payment or other distribution on account of or in respect to the Subordinating Party's Loan and, until the entire Borrower Loan Is paid in full in cash, any payment or distribution to which the Subordinating Party will be entitled but for this Agreement (whether in cash, property or other assets) shall be paid to Bank. 4. SUBORDINATION TO MODIFICATION OF BORROWER LOAN. If Governmental Lender and Bank extend or otherwise modify the terms of the Borrower Loan (including any amendment or modification which requires the Subordinating Party's priorwrltten consent pursuant to Paragraph 1 and for which Subordinating Party has granted such consent), Subordinating Party, upon 20 days' prior notice to Subordinating Party, shall execute a new subordination agreement, in the form of this Agreement, confirming Subordinating Party's subordination of the effect of Subordinating Party's Security Documents against the Project to the lien or charge of the Deed of Trust. In the event that consent from the Subordinating Parry is not required hereunder or such consent has been obtained, the execution of such new subordination agreement, however, shall not be a condition to the effectiveness of the subordination of Subordinating Party's Security Documents against the Project to the lien or charge of the Deed of Trust, which subordination shall be automatic. 5. SUBORDINATING PARTY'S RIGHT TO CURE DEFAULTS. Upon the occurrence of an Event of Default, Bank shall: (a) concurrently with notifying Borrower of the occurrence of such event of default, notify Subordinating Party at its address set forth above of the occurrence of such event of default; (b) permit Subordinating Party to cure or correct (provided that such event of default Is curable) any such event of default within thirty (30) calendar days after receipt of such notice ("Subordinating Party Cure -3- 4820.2714-2560v.4 0096250-000020 80A-285 I ON MW RD V. Period"); provided, however, that Governmental Lender and Bank have the continuing right to commence to pursue their respective remedies under the Borrower Loan Documents on account of such default during the Subordinating Party Cure Period, including but not limited to the right to accelerate the Borrower Loan, record a notice of default and to obtain a receiver; provided further, that if the cure is completed during the Subordinating Party Cure Period, Governmental Lender and Bank will rescind any notice of default after reimbursement of all of its costs Incurred in connection with the default, including, without limitation, attorneys' fees and court costs; and (c) accept all payments and all acts done by Subordinating Party on behalf of Borrower within the Subordinating Party's Cure Period as though the same had been timely done and performed by Borrower, so that such acts and payments shall fully and totally cure and correct all such defaults, breaches, failures or refusals for all purposes. Subordinating Party shall not be subrogated to the rights of Governmental Lender or Bank under the Borrower Loan Documents by reason of Subordinating Party having cured any default under the Borrower Loan Documents; however, Governmental Lender and Bank acknowledge that, to the extent so provided in the Subordinating Party's Security Documents, amounts advanced or expended by Subordinating Party to cure an event in default under the Borrower Loan Documents may be added to and become a party of the Subordinating Party's Loan. In the event that an Event of Default occurs and Bank has recorded a notice of default, then for the period from the date of recordation of the notice of default, until the date of recordation of a notice of sale, so long as the noticed default continues, Subordinating Party shall have the right, but not the obligation, in lieu of curing any default under the Borrower Loan Documents, to purchase the Funding Loan Note and the Funding Loan Agreement and Bank's rights as agent thereunder subject to Subordinating Party satisfying any requirements under the Funding Loan Agreement to purchase the Funding Loan Note. Such purchase will be accomplished by Subordinating Party paying to Bank the outstanding principal amount of the Borrower Loan, plus all accrued and unpaid interest thereon and any prepayment premium, together with reasonable expenses incurred by Bank in connection therewith (including reasonable attorneys' fees and costs), In exchange for the assignment of the Funding Loan Note without recourse or warranty, except that Bank will warrant that it owns and has all requisite authority to transfer the Funding Loan Note at the time of the transfer. Subordinating Party acknowledges and agrees that Subordinating Party's right to purchase the Funding Loan Note shall unconditionally be and remain at all times subordinate to any right of any senior lender with lien priority to purchase the Funding Loan Note. Borrower acknowledges and agrees, by executing the joinder attached hereto, that after the Funding Loan Note has been assigned to Subordinating Party or its nominee, Bank shall be relieved from all liability to Borrower under or in connection with the Borrower Loan Documents. 6. BANK RIGHT TO CURE DEFAULT UNDER SUBORDINATING PARTY'S LOAN. Upon the occurrence of a default under the Subordinating Party's Loan, Subordinating Party shall: (a) concurrently with notifying Borrower of the occurrence of such event of default, notify Bank at its address set forth above of the occurrence of such default or event of default; (b) permit Bank to cure or correct (provided that such event of default Is curable) any such event of default within thirty (30) calendar days after receipt of such notice ("Bank Cure Period"); provided, however, that Subordinating Party has the continuing right to commence to pursue its remedies under the Subordinating Party's Loan Documents on account of such default during the Bank Cure Period, Including but not limited to the right to accelerate the Subordinating Party's Loan, record a notice of default and to obtain a receiver; provided further, that If the cure is completed during the Bank Cure Period, Subordinating Party will rescind any notice of default after reimbursement of all of Its costs incurred In connection with the default, including, without limitation, attorneys' fees and court costs; and (c) accept all payments and all acts done by Bank on behalf of Borrower within the Bank Cure Period as though the same had been timely done and performed by Borrower, so that such acts and payments shall fully and totally cure and correct all such defaults, breaches, failures or refusals for all purposes. 7. SUBORDINATION TO PERMANENT FINANCING. Subordinating Party acknowledges that It has been advised by Borrower that Borrower intends to repay a portion of the amount outstanding under the Borrower Loan, In whole or in part, by obtaining permanent financing in the future by one or more lenders, which permanent financing would be secured by, among other things, a deed of trust or deeds of trust encumbering the Project which would be senior to the effect of Subordinating Parry's Security Documents (but not to the Restrictions, other than Sections and of the Restrictions. In order to enable Borrower (or its successors or assigns, "Borrower's Successor") to obtain permanent -4- 4820-2714-2660v.4 0096250-000020 EXHIBIT 6 financing to repay the Borrower Loan, Subordinating Party hereby agrees that within twenty (20) days after written request by Borrower or Borrower's Successor, Subordinating Party shall execute a subordination agreement (in form and substance substantially similar to this Agreement) subordinating the effect of Subordinating Party's Security Documents to the lien and effect of one (1) or more deeds of trust encumbering the Project in an amount not to exceed ///[$8,800,000]///. 8. RECEIPT AND APPLICATION OF INSURANCE PROCEEDS AND CONDEMNATION AWARDS: RECEIPT AND APPLICATION OF PROCEEDS FROM BONDS. (a) Receipt and Application of Insurance Proceeds and Condemnation Awards. Notwithstanding anything stated to the contrary in any of Subordinating Party's Security Documents, so long as the Deed of Trust continues to encumber all or portions of the Project, all Insurance proceeds that may become available from time to time as a result of damage or destruction to all or portions of the Improvements and all condemnation awards that may become available from time to time as a result of the condemnation of all or portions of the Project shall be held by Bank, disbursed by Bank and applied by Bank in accordance with the terms and conditions of the Deed of Trust and the other the Borrower Loan Documents and Subordinating Party shall have no right to hold, disburse or apply any of such proceeds and/or awards. Without limiting the generality of the foregoing, the Bank shall have all approval, consent and oversight rights In connection with any Insurance claims or condemnation proceedings related to the Property and any decision regarding the use of Insurance proceeds after a casualty loss or condemnation awards and Subordinating Party shall have no right to object to any such action or approval taken by Bank and shall consent thereto and be bound thereby. Subordinating Party shall execute such documents as Bank may require from time to time In order to assure compliance with the provisions of this Paragraph 8(a). (b) Receipt and Application of Proceeds from Bonds. With respect to all labor and material bonds and/or completion bonds that are issued from time to time to assure payment and completion of the Improvements and which name Governmental Lender, Bank and Subordinating Party (or any other party) as dual obllgees, all proceeds that may become available from time to time under such bonds shall be held by Bank and disbursed by Bank and Subordinating Party shall have no right to hold or disburse any of such proceeds. Subordinating Party shall execute such documents as Bank may require from time to time in order to assure compliance with the provisions of this Paragraph 8(b). g. NOTICES. Any notice, demand or request required or permitted to be delivered hereunder shall be deemed to have been duly and properly given at the time of such delivery If personally delivered (which shall include (1) delivery by means of professional overnight courier service which confirms receipt in writing and (ii) transmission by telecopler or telefacsimile machine capable of confirming transmission and receipt), or If mailed, forty-elght (48) hours after deposit in United States registered or certified mall, postage prepaid, return receipt requested, addressed to Subordinating Party, Governmental Lender or Bank, as the case may be, at their addresses set forth above. 10. ENTIRE AGREEMENT. This Agreement shall be the whole and only agreement with respect to the subordination of the effect of Subordinating Party's Security Documents to the lien or charge of the Deed of Trust and all disbursements and advances made thereunder, and shall supersede and cancel any prior agreements as to such subordination, including without limitation any provisions contained in Subordinating Party's Security Documents that provide for the subordination of the effect thereof to one or more deeds of trust. 11. SUBORDINATING PARTY'S REPRESENTATIONS, WARRANTIES, COVENANTS CONSENTS, APPROVALS AND ACKNOWLEDGEMENTS. Subordinating Party hereby warrants, represents, declares, agrees and acknowledges as follows: (a) For purposes of this Agreement, Subordinating Party acknowledges that Subordinating Party has been provided the opportunity to review the Borrower Loan Documents before executing this Agreement; -5- 4820-2714-2560v.4 0096250-000020 80A-287 OVA .: I W (b) Governmental Lender and Bank, in making disbursements pursuant to the Borrower Loan Agreement, are under no obligation or duty to insure, nor has Governmental Lender or Bank represented that it will insure, the proper application of such proceeds by the person(s) to whom Governmental Lender or Bank disburses such proceeds, and any application or use of such proceeds for purposes other than as provided in any such agreement shall not defeat or render invalid, in whole or in part, the subordination provided for in this Agreement; (c) Governmental Lender and Bank have not made any warranty or representation of any kind or nature whatsoever to Subordinating Party with respect to (I) the application of the proceeds of the Borrower Loan being made by Governmental Lender to Borrower upon the security of the Deed of Trust, (ii) the value of the Property, the Improvements to be constructed thereon pursuant to the Borrower Loan Agreement, or the marketability or value thereof upon completion of such construction, or (III) the ability of Borrower to honor its covenants and agreements with Governmental Lender, Bank or Subordinating Party; (d) Governmental Lender's and/or Bank's release of any security for the Borrower Loan, including, without limitation, the reconveyance of any portion(s) of the Project from the lien of the Deed of Trust shall not constitute a waiver or relinquishment of Subordinating Party's unconditional subordination of the liens or charges of Subordinating Party's Security Documents against the Project to the lien or charge of the Deed of Trust; (e) Governmental Lender would not make the Borrower Loan to Borrower absent the execution of this Agreement by Subordinating Party; (f) Governmental Lender and Bank have no duty to disclose to Subordinating Party any facts Governmental Lender or Bank may now know or hereafter know about Borrower or the partners or successors of Borrower, regardless of whether (i) Governmental Lender or Bank has reason to believe that any such facts may Increase materially the risk beyond that which Subordinating Party intends to assume, (11) Governmental Lender or Bank may have reason to believe that such facts are unknown to Subordinating Parry, or (111) Governmental Lender or Bank has a reasonable opportunity to communicate such facts to Subordinating Party, it being understood and agreed that Subordinating Party is fully responsible for being and keeping informed of the financial condition of Borrower and/or any partners or successors of Borrower and of all circumstances bearing on the risk of non-payment of any indebtedness of Borrower to Governmental Lender described in this Agreement; (g) Subordinating Party has made such independent legal and factual inquiries and examinations as Subordinatng Party deems necessary or desirable, and Subordinating Party has relied solely on said independent inquiries and examinations in entering into this Agreement; (h) The Subordinating Party's Loan Documents as described in Exhibit V attached hereto are all of the documents evidencing, securing or pertalning to Subordinating Party's Loan, true, correct and complete copies thereof have been delivered to Bank and the Subordinating Party's Loan Documents have not been amended or modified except as reflected thereon; (1) As of the date set forth above, the Subordinating Party has no offset, defense, deduction or claim against Borrower under any of the Subordinating Party's Loan Documents, Borrower Is not In default under any of the Subordinating Party's Loan Documents and the Subordinating Party knows of no event that has occurred or is continuing which, with the passage of time or the giving of notice, or both would constitute a default under any of the Subordinating Party's Loan Documents; G) Each and every covenant, condition and obligation contained in the Subordinating Party's Loan Documents required to be performed or satisfied as of the date hereof, and each and every matter required to be approved the Subordinating Party as of the date hereof, has been satisfied and/or approved and/or waived as applicable, including, without limitation, all conditions precedent to Borrower's right to commence construction of the Improvements, all of which conditions have been satisfied and/or approved and/or waived, as applicable, as of the date set forth above; -6- 4920-2714-2560v.4 0096250-000020 EXHIBIT 6 (k) Under Subordinating Party's Loan Documents, Borrower Is not obligated to commence construction of the Improvements until , 20 , and construction of the Improvements need not be completed until 20_, subject to extension for force majeure; (1) Notwithstanding anything stated to the contrary in the Subordinating Party's Loan Documents, (1) the limited partner in Borrower shall have the right at any time and from time to time, without the approval or consent of the Subordinating Party, to assign, sell or otherwise transfer to any third party Its limited partnership interest in Borrower, provided that Borrower provides notice to the Subordinating Party of such assignment, sale or transfer concurrently with such assignment, sale or transfer, and (ii) the general partner in Borrower shall have the right, without the approval or consent of the Subordinating Party, to pledge or otherwise encumber its partnership interest In Borrower to Governmental Lender and Bank and the foreclosure of such pledge by Governmental Lender or Bank shall not cause an event of default under the Subordinating Party's Loan Documents; (m) Notwithstanding anything stated to the contrary in the Subordinating Party s Loan Documents, Subordinating Party's Interest in the plans and specifications and all data, drawings, contracts and agreements relating thereto and all contracts and agreements relating to the construction of the Improvements shall be subject and subordinate to Governmental Lender's and Bank's interest in the same; (n) Notwithstanding anything stated to the contrary in the Subordinating Party s Loan Documents, Subordinating Party's rights in and to the leases and rents of the Property shall be subject and subordinate to the rights of Governmental Lender and Bank to same; and (o) Notwithstanding anything stated to the contrary In the Subordinating Party's Loan Documents, the occurrence of an Event of Default under the Borrower Loan Documents shall not in and of itself constitute a default or an event of default under any of the Subordinating Parry's Loan Documents unless the occurrence of such event shall constitute a separate default under the Subordinating Party's Loan Documents. (p) The subordination of the Subordinating Parry's Loan shall continue In the event that any payment with respect to any Borrower Loan Document (whether by or on behalf of Borrower, as proceeds of security or enforcement of any right of set-off or otherwise) is for any reason repaid or returned to Borrower or its insolvent estate, or avoided, set aside or required to be paid to Borrower, a trustee, a receiver or other similar party under any bankruptcy, insolvency or receivership or similar law under any bankruptcy, insolvency, receivership or similar proceeding. In such event, the Borrower Loan or any part thereof originally intended to be satisfied shall be deemed to be reinstated and outstanding to the extent of any repayment, return or other action, as if such payment on account of the Borrower Loan had not been made. (q) Subordinating Party shall not commence In or join with any other creditor in commencing any bankruptcy, insolvency, receivership or similar proceeding involving Borrower and Subordinating Party shall not initiate any action, motion or request In any such proceeding Involving any other person or entity, which seeks the consolidation of some or all of the assets of Borrower into such proceeding. In the event of any such proceeding relating to Borrower or the Property or, in the event of any such proceeding relating to any other person or entity into which (notwithstanding the covenant in the first sentence of this clause) the assets or interests of Borrower are consolidated, then in either event, the Borrower Loan shall first be paid in full before Subordinating Party shall be entitled to receive or retain any payment or distribution with respect to the Subordinating Party's Loan. Subordinating Party agrees that (1) the Bank shall receive all payments and distributions of every kind or character in respect of the Subordinating Party's Loan to which the Subordinating Party would otherwise be entitled, before the subordination provisions of this Agreement (Including, without limitation, any payments or distributions during the pendency of any bankruptcy, Insolvency, receivership or similar proceeding Involving Borrower or the Property) until the Borrower Loan Is repaid in full, and (11) the subordination of the Subordinating Party's Loan and the Subordinating Parry's Security Documents shall not be affected in any way by the Bank electing, under Section 1111(b) of the Federal Bankruptcy Code, to have its claim treated as being a fully secured claim. In addition, Subordinating Party hereby covenants and agrees that, in connection with -7- 4820.2714.2560v,4 0096250-000020 80A-289 such a proceeding Involving Borrower, neither Subordinating Party nor any of its affiliates shall (i) make or participate in a loan facility to or for the benefit of Borrower on a basis that is senior to or pari passu with the liens and interests held by Governmental Lender and Bank pursuant to the Borrower Loan Documents and (it) not contest the continued accrual of interest on the Borrower Loan, in accordance with and at the rate specified in the Borrower Loan Documents, both for periods before and for periods after commencement of such proceedings. 12. ATTORNEYS' FEES. If either Subordinating Party, Governmental Lender or Bank shall bring an action against the other by reason of the breach of any covenant, provision, or condition of this Agreement, or otherwise arising out of this Agreement, the unsuccessful party shall pay to the prevailing party reasonable attomeys' fees, which fees shall be payable whether or not any action Is prosecuted to judgment. The term "prevailing party" shall include, without limitation, a party who brings an action against the other by reason of the other's breach or default and obtains substantially the relief sought, whether by compromise, settlement, or judgment. 13. ESTOPPEL CERTIFICATES. Either party shall, within twenty (20) days following the other parry's written request therefor, execute and deliver to such requesting party an estoppel certificate in form and substance reasonably satisfactory to the requesting party. 14. GOVERNING JURISDICTION. This Agreement shall be governed by the laws of the State of California and shall be binding upon, and shall Inure to the benefit of, the parties to this Agreement and their respective successors and assigns. 15. SEVERABILITY. In case one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, Illegal or unenforceable in any respect, such invalidity, illegality or unenforceablllty shall not affect any other provisions hereof and this Agreement shall be construed as if such Invalid, illegal or unenforceable provision had never been contained herein unless the effect thereof would materially alter the benefits or burdens hereof to the parties hereto. 16. THIRD PARTIES. Subordinating Party recognizes that Governmental Lender and Bank may show copies of this Agreement to other institutional lenders who are interested in the matters covered in this Agreement and Subordinating Party agrees that such other institutional lenders may also materially rely upon the representations, warranties and agreements made by the Subordinating Party in this Agreement. 17. COUNTERPARTS. This Agreement may be executed In two (2) or more counterparts, each of which shall be deemed an original but all of which together shall constitute but one and the same instrument. 18. WAIVER OF JURY TRIAL. To the extent permitted by law, In connection with any action or proceeding, whether brought in state or federal court, the Subordinating Party and Bank hereby expressly, intentionally and deliberately waive any right they may otherwise have to trial by jury of any Claim (as defined below). 19. JUDICIAL REFERENCE. If the waiver of jury trial set forth herelnabove Is not enforceable under the laws of the state In which the Property is located, then the parties hereby agree that all Claims, including any and all questions of law or fact relating thereto, shall, at the written request of any party, be determined by Reference (as hereinafter defined) as set forth hereinbeiow: (a) Selection Or Appointment Of Referee. The Bank and Subordinating Party shall select a single neutral referee, who shall be a retired state or federal judge. In the event that the Bank and Subordinating Party cannot agree upon a referee, the referee shall be appointed by the court. (b) Conduct Of Reference. Except as otherwise provided In this Agreement, the Reference shall be conducted pursuant to the laws of the state in which the Property is located. The referee -8- 4820-2714-2560v.4 0096250-000020 80A-290 EXHIBIT 6 shall determine all issues relating to the applicability, interpretation, legality and enforceability of the Borrower Loan Documents or Funding Loan Documents. The referee shall report a statement of decision to the court. The Bank and Subordinating Party shall equally bear the fees and expenses of the referee, unless the referee otherwise provides In the statement of decision. (c) Provisional Remedies, Self -Help And Foreclosure. No provision of this Agreement shall limit the right of any party to (1) exercise self-help remedies Including, without [Imitation, set-off, (11) foreclose against or sell any collateral, by power of sale or otherwise or (III) obtain or oppose provisional or ancillary remedies from a court of competent jurisdiction before, after or during the pendency of the Reference. The exercise of, or opposition to, any such remedy does not waive the right of any party to a Reference pursuant to this Agreement. (d) No Decision By Jurv. The parties hereby acknowledge that if a referee is selected or appointed to determine the Claims, then the Claims will not be decided by a jury. (e) Miscellaneous. In the event that multiple Claims are asserted, some of which are not subject to this Section, the parties agree to stay the proceedings of the Claims not subject to this Section until all other Claims are resolved in accordance with this Section. In the event that Claims are asserted against multiple parties, some of whom are not subject to this Section, the Parties agree to sever the Claims subject to this Section and resolve them In accordance with this Section. (f) Claim. "Claim" shall mean any claim, cause of action, action, dispute or controversy between or among the parties, whether sounding in contract, tort or otherwise, which arises out of or relates to: (1) any of the Borrower Loan Documents or the Funding Loan Documents; (I[) and negotiations or communications relating to any of the Borrower Loan Documents or the Funding Loan Documents, whether or not incorporated into the Borrower Loan Documents or the Funding Loan Documents or any indebtedness evidenced thereby; or (III) any alleged agreements, promises, representations or transactions in connection therewith. (g) Reference. 'Reference" shall mean ajudicial reference conducted pursuant to this Agreement and in accordance with the laws of the state in which the Property is located, as in effect at the time the referee is selected or appointed. [Signature Pages Follow] 4820-2714.2560v.4 0096250-000020 80A-291 EXHIBIT 6 WHEREAS, this Subordination Agreement has been executed by the parties as of the dale first written above. ATTEST: [Name] [Title] APPROVED AS TO FORM: SONIA RCARVALLHO, City Attorney gjit::� [Na [Title] FOR APPROVAL: [Name] [Title] SUBORDINATING PARTY: HOUSING AUTHORITY OF THE CITY OF SANTA ANA SERVING AS THE HOUSING SUCCESSOR AGENCY TO THE FORMER COMMUNITY REDEVELOPMENT AGENCY [Name] [Title] [Signature Page to Subordination Agreement (Housing Successor Agency Loan)] 4820-2714-2560v.4 0096250-000020 80A-292 EXHIBIT 6 BANK: MUFG UNION BANK, N.A., a national banking association By: [Name] [Title] [Signature Page to Subordination Agreement (Housing Successor Agency Loan)] 4920-2714-2560v.4 0096250-000020 80A-293 EXHIBIT 6 JOINDER Unless expressly defined herein, all capitalized terms used herein shall have the same meanings ascribed to them in the Subordination Agreement (the "Subordination Agreement") to which this Joinder is attached. The undersigned hereby acknowledges receipt of a copy of the Subordination Agreement and, as fee owner of the Property, hereby consents to, approves and agrees to be bound by all of the terms and conditions set forth in the Subordination Agreement. BORROWER: CORNERSTONE HOUSING PARTNERS LP, a California limited partnership By: JHC-Cornerstone II, LLC, a California limited liability company, its Managing General Partner By: Jamboree Housing Corporation, a California nonprofit 9�biic benefit corporation, its Managirurt Merhber, n By: 114jr,4 I MA5616 mitrr. ija(SORP7£1A OFFiLGM [Joinder to Subordination Agreement (Housing Successor Agency Loan)] 4820-2714-2560v.4 D096250-000020 80A-294 EXHIBIT 6 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the Identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California ) ) ss County of y-A)n ., On 47g 2019 before me, �Arjl sl& a Notary Public, personally appeared. M i zIq a.& I JA PIE i t , who proved to me on the basis of satisfactory evidence to be the person (a) whose name (s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same In his/her their authorized capacity (!es), and that by his/her/thelr signature (s) on the Instrument the person (s), or the entity upon behalf of which the person (s) acted, executed the Instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. LARISSA MEDELLIN Notary Public • California a -c Orange County z z commission # 2153187 / My Comm. Ex Ires Jun 11, 2020 Signature_ �%ayj7-�''/ (Seal) 4820-2714-2564v.4 0096250-000020 80A-295 EXHIBIT 6 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. Slate of California ) ) ss County of ) On . 2019 before me, a Notary Public, personally appeared . who proved to me on the basis of satisfactory evidence to be the person (s) whose name (s) Is/are subscribed to the within Instrument and acknowledged to me that he/she/they executed the same In his/her their authorized capacity (ies), and that by his/her/their signature (s) on the Instrument the person (s), or the entity upon behalf of which the person (s) acted, executed the Instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph Is true and correct. WITNESS my hand and official seal. Signature (Seal) 4820-2714-2560v.4 0096250-000020 80A-296 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the Identity of the Individual who signed the document to which this certificate Is attached, and not the truthfulness, accuracy, or validity of that document. State of California ) ) ss County of ) On , 2019 before me, a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person (s) whose name (s) is/are subscribed to the within Instrument and acknowledged to me that he/she/they executed the same in his/her their authorized capacity (ies), and that by his/her/their signature (s) on the instrument the person (s), or the entity upon behalf of which the person (s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 4820-2714-2560v.4 0096250-000020 80A-297 EXHIBIT 6 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California ) ss County of On 2019 before me, a Notary Public, personally appeared . who proved to me on the basis of satisfactory evidence to be the person (s) whose name (s) Is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her their authorized capacity (ies), and that by his/her/their signature (s) on the Instrument the person (s), or the entity upon behalf of which the person (s) acted, executed the Instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seal) 4820-2714-2566v.4 0096250-000020 80A-298 EXHIBIT 6 EXHIBIT"A" LEGAL DESCRIPTION n., Qkq EXHIBIT"A" 4 B20-2714-2560v.4 0096250-000020 80A-299 EXHIBIT 6 EXHIBIT "B" SUBORDINATING PARTY'S LOAN DOCUMENTS N[TO BE UPDATED UPON RECEIPT AND REVIEW OF HOUSING AUTHORITY LOAN DOCUMENTSIN 1. Amended and Restated Housing Successor Agency Loan Agreement dated 2019, by and between Subordinating Party and Borrower (the "Subordinating Party's Loan Agreement"). 2. Amended and Restated Note Secured by Subordinated Deed of Trust to the City of Santa Ana, California dated 2019, executed by Borrower to the order of Subordinating Party In the face principal amount of $ 3. Amended and Restated Deed of Trust and Assignment of Rents dated 2019, executed by Borrower for the benefit of Subordinating Party, recorded in the Official Records substantially concurrently herewith. 4. Amended and Restated Affordability Restrictions on Transfer of Property dated 2019, by and between Subordinating Party and Borrower, recorded in the Official Records substantially concurrently herewith. EXHIBIT "B" 4820.2714.2560v.40096250-000020 80A-300 EXHIBIT 6 APPENDIX I (Appendix I - Definitions) As used in the agreement to which this Appendix I is attached, and as used In this Appendix I, the following terms shall have the Indicated meanings: "Allocation Committee" shall mean the California Tax Credit Allocation Committee and any successor governmental agency appointed to carry out the obligations of the Allocation Committee. "Bank" shall mean MUFG Union Bank, N.A., acting in Its capacity as holder of the Funding Loan Note and as assignee of and agent for the Governmental Lender, pursuant to the Funding Loan Agreement, its successors and assigns. "Borrower" shall mean Cornerstone Housing Partners LP, a California limited partnership. "Borrower Loan" shall mean the ///[$17,250,000]/// construction and permanent loan to be made by Governmental Lender to Borrower, pursuant to the Borrower Loan Agreement. "Borrower Loan Agreement" shall mean the Construction and Permanent Loan Agreement (Multifamily Housing Back to Back Loan Program) dated September 1, 2019, executed by Borrower, Governmental Lender and Bank. "Borrower Loan Documents" shall mean the Borrower Loan Agreement, the Borrower Note, the Deed of Trust and all other documents evidencing, securing or pertaining to the Borrower Loan. "Borrower Note" shall mean the Promissory Note (Multifamily Housing Back to Back Loan Program) in the amount of /1/[$17,250,000]1// dated September 1, 2019, executed by Borrower in favor of Governmental Lender. "Code(s)" shall mean the Internal Revenue Code of 1986, as amended from time to time, or the corresponding provisions of any successor federal income tax law and, if applicable, the California Revenue and Taxation Code, as amended from time to time, or the corresponding provisions of any successor state income tax law. Any reference to a particular provision of the Code(s) shall Include any amendment of such provision or the corresponding provision of any successor federal income tax law or state income tax law. "Deed of Trust" shall mean that certain Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (Construction Trust Deed) (Multifamily Housing Back to Back Loan Program) of even date of the Borrower Note, executed by Borrower for the benefit of Governmental Lender and Bank and encumbering the Property. "Funding Loan Agreement" shall mean the Funding Loan Agreement between the Governmental Lender and the Bank in connection with the Issuance of the Funding Loan Note. "Funding Loan Note" shall mean that certain Governmental Lender Housing Revenue Note (Cornerstone Apartments) 2019 Series A, executed by Governmental Lender in favor of Bank in the principal amount of ///[$17,250,000]///. "General Partner(s)" shall mean JHC-Comerstone ll, LLC, a Califomla limited liability company. "Governmental Lender" shall mean the California Municipal Finance Authority, a joint exercise of powers agency, duly organized and existing under the laws of the State of California. 4820-2714.2560v.4 0096250-000020 80A-301 EXHIBIT 6 "Improvements" shall mean a 126-unit low income apartment complex, together with related appurtenances now or hereafter located on the Property. "Partnership Agreement" shall mean that certain ///[Agreement of Limited Partnership]/// of Borrower dated September J 2019, as the same has been or may be amended from time to time. "Property" shall mean certain real property located in the City of Santa Ana, County of Orange, State of California, as more particularly described in the Deed of Trust. "Project" shall mean the Property and the Improvements. "Tax Credit Investor" shall mean "Tax Credits" shall mean low Income housing tax credits allocated under Section 42 of the Internal Revenue Code of 1986, as amended, pursuant to the terns of the Tax Credit Allocation Documents. "Tax Credit Allocation Documents" shall mean the Tax Credit Application, the Preliminary Reservation, the Final Reservation and such other documents as have or may be Issued by the Allocation Committee from time to time with respect to the Tax Credits. "Tax Credit Application" shall mean the 20 Low -Income Housing Tax Credit Application submitted to the Allocation Committee to apply for Tax Credits with respect to the Project. Borrower's address for purposes of notices Is as follows: Cornerstone Housing Partners LP c/o Jamboree Housing Corporation 17701 Cowan Avenue, Suite 200 Irvine, California 92614 Attention: Laura Archuleta Tax Credit Investor's address for purposes of notices is as follows: Attention: Telephone No.: Telecopier No.: General Partnegs)' address for purposes of notices is as follows: JHC-Cornerstone Il, LLC c/o Jamboree Housing Corporation 17701 Cowan Avenue, Suite 200 Irvine, Califomia 92614 Attention: Laura Archuleta Governmental Lender's address for purposes of notices is as follows: California Municipal Finance Authority 2111 Palomar Road, Suite 320 Carlsbad, California 92011 Attention: John P. 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